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Envoy Textiles Limited, a local publicly traded company, will receive $11.2 million in loan from the Asian Development Bank (ADB) to expand its sustainable textile production as well as create more employments.
To this end, the Asia regional lender signed a facility agreement with Envoy Textiles recently, according to a media statement issued Sunday.
Aiming to support and finance the purchase and installation of energy-efficient spinning machinery and other equipment to expand sustainable textile production and create local jobs, the ADB would give the local firm this loan.
The proceeds of the loan, according to the press statement, would be utilised to fund a second yarn spinning unit at Envoy’s manufacturing plant at Jamirdia in Mymensingh.
The new automated and more energy-efficient unit would have an annual yarn production capacity of 3,600 tonnes, mainly used for in-house production of denim fabrics.
The new spinning unit is also expected to create 250 fresh jobs.
“The readymade garment industry is a key driver of Bangladesh’s economy, accounting for over 80 per cent of the country’s total export receipts, and Envoy is a leading denim fabric manufacturer in the country, said Ashok Lavasa, ADB vice-president for private sector operations and public–private partnerships.
“Modern spinning equipment would increase the company’s yarn production capacity, reducing reliance on imported yarn and enhancing the industry’s efficiency, sustainability, and energy efficiency,” he added.
“This project marks ADB’s return to financing Bangladesh’s textile sector after two decades, and it would help bring in much-needed financing to this strategically crucial part of the economy,” Ashok continued.
The project would reduce electricity consumption and greenhouse gas emissions through the use of energy-efficient and modern equipment.
Moreover, the ADB would help Envoy to develop a gender action plan to boost career opportunities for women, promote gender-inclusive procurement, and promote gender inclusion in the workplace, according to the media statement.
“We are feeling happy by receiving our first-ever financing from an international lender, and it is even more meaningful that it comes from ADB because we share the same vision of quality of service, inclusivity, and sustainability as the Asian lender does,” said Kutubuddin Ahmed, chairman of Envoy Textiles Limited.
“Partnering with an internationally reputed financial institution like ADB is an affirmation of Envoy’s direction and an important step in our sustainable growth,” he added.
Envoy has an annual denim fabric production capacity of 52 million yards which is around 10 per cent of the country’s total capacity.
Envoy prides in the world’s first platinum leadership in energy and environmental design (LEED) denim manufacturing facility certified by the United States Green Building Council.
Earlier, the Bangladesh Securities and Exchange Commission approved the preference share proposed by Envoy Textiles.
Envoy Textiles was allowed to raise Tk 87 crore through private placements by floating fully redeemable, non-convertible cumulative preference share.
The tenure of the preference share is five years. The face value of each share is Tk 10, and the coupon rate ranges from 7 per cent to 7.50 per cent.
The company declared a 10 per cent cash dividend, including 5 per cent interim dividend, for its shareholders for the last fiscal year.
Incorporated in 1995, the company manufactures cent per cent export-oriented denim fabric. It is the first denim project in Bangladesh with rope-dye technology and one of the country’s leading companies in this sector.
Envoy Textile got listed on the exchanges in 2012. Its shares were traded at Tk 43.9 per share on the Dhaka Stock Exchange Sunday.
With a market capitalisation of Tk 736 crore, the company has a paid-up capital of Tk 167 crore with another surplus reserve of Tk 354 crore.
