Business Report :
Rahim Textile Mills PLC – a concern of New Asia Group – has planned to expand its capacity with a projection of increasing its annual revenue by 24%.
According to the plan approved by its board, the company will install new accessories and seamless dyeing machinery at the existing factory premises.
With the machinery, civil construction, local expenses, and contingency works, it will invest Tk13.73 crore, according to a stock exchange filing on 30 April.
The proposed new machinery installation will be financed by funds from internal generation as well as loans from banks and other sources.
In the fiscal 2022-23, the firm suffered blows from increasing raw material prices, an unavailable gas supply, along with increases in gas and electricity prices, and losses in non-operating segments due to the high dollar exchange rate and adjustments to income tax provisions.
As a result, it incurred a loss of Tk12.47 crore and did not pay dividends to its shareholders.
It returned to profit in the current fiscal year, logging Tk60 lakh in gains from July to March, compared to its net loss of Tk8.61 crore a year ago.
The firm attributed its profit increase to a decrease in the cost of goods sold, reducing basic raw material prices, as well as a decrease in administrative and selling expenses compared to the previous period.
In the January-March quarter, it made a profit of Tk36.34 lakh, compared to a loss of Tk4.15 crore a year ago.
The expansion plan
According to the plan, the existing production capacity of Rahim Textile Mills is three crore yards (300 lakh yards) of dyeing, printing, and finishing per annum.
After the installation of new machinery, the capacity will be expanded for seamless dyeing of 19.44 lakh yards of cloth per year, and for accessory capacity with sewing thread of 31.50 lakh cones, draw cords of 45 lakh pieces, elastic of 252 lakh yards, twill tape of 45 lakh yards, Jacquard tape of 7.20 lakh yards, and heat seal of 300 lakh pieces per year.
As a result, sales revenue will increase by about 24%, and profitability will increase accordingly. The new machinery will enable the company to sell its products at higher prices and retain better margins, the disclosure reads. According to its website, Rahim Textile Mills is a 100% export-oriented industry in the textile sector engaged in dyeing, printing, and finishing fabrics. The company has pioneered the printing of knit and other fabrics.
The company was listed on the Dhaka Stock Exchange in 1988.