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Alif Industries to take over 2 more companies

Staff Correspondent
28 Feb 2024 21:41:06 | Update: 28 Feb 2024 21:41:06
Alif Industries to take over 2 more companies

Alif Industries Ltd (AIL), a publicly traded vertically composite textile company producing 100 per cent export oriented knit and woven garments, plans to take over an export-oriented denim plant and a dredging company.

Back in October, 2021, the Bangladesh Securities and Exchange Commission (BSEC) allowed Alif Industries to acquire C&A Textiles, which listed on the country’s bourses, subject to complying with seven conditions, including the resumption of production at the ailing company.

Alif Industries had changed its name from Sajib Knitwear and Garments Ltd in March 2015. The company’s principal activities are knitting yarn, dyeing knitted fabrics, manufacturing garments out of those dyed fabrics, and exporting those garment products after packing and finishing.

According to a filing at the Dhaka Stock Exchange (DSE) on Wednesday, the company said its board has authorised Managing Director Md Azimul Islam to initiate the takeover process of Royal Denim Ltd – a 100 per cent export-oriented denim maker with a current capacity of 750,000 yards per month.

The factory is located in the Cumilla Export Processing Zone.

The company's board has directed the managing director to begin the takeover process after proper due diligence, while complying with relevant laws.

Through a similar process, the AIL board has authorised the company managing director to initiate the takeover process of Diamond Dredging Ltd.

The board has further directed Md Azimul Islam to submit all relevant documents, along with the detailed feasibility report, estimated cost of purchase, and mode of financing, to the board within 30 working days for further decision, AIL mentions in their filing.

The company did not disclose the amount associated with both deals.

Speaking to The Business Post, Md Azimul Islam said, “If the deal regarding Royal Denim Ltd goes through successfully, we will move on to Diamond Dredging Ltd.

“This will give us total vertical integration in the field of woven denim fabrics, which will be used to make denim wear for the export market, and we will also achieve 90 per cent value addition.”

He continued, “In essence, for both woven and knit, our only import will be raw cotton. It will help our country retain total USD earnings from our exports, as we do not have to buy much from outside parties in China or other countries.

“This initiative will also shorten the lead time for production as everything will be done in-house. In addition, we are also merging C&A textiles with AIL, which will increase our production capacity and export figures.”

As part of the company's diversification process, we are also planning to acquire two dredgers by acquiring Diamond Dredging LTD. As Bangladesh is a river centric country, the demand for such businesses will always be constant, he added.

Azimul Islam then pointed out, “We are looking forward to boosting our capacity in the woven sector via further acquisitions, and also increasing the capacity of our washing and dyeing activities.

Alif Industries has already taken steps to absorb Alif Manufacturing Company (AMCL) with AIL. AMCL is mainly in the business of producing 100 per cent export oriented yarn for both knit and woven garment fabric.

Once the amalgamation is executed, AIL will be a fully integrated garment manufacturer. Only imports required would be raw cotton, and ultimately export garments, as knitting, dyeing, printing, and garmenting will all be done by AIL in-house.

So the value addition would almost be 90 per cent.

The company’s only outside purchases will be accessories and a few other items. Given the current USD crisis in the market, this would increase our efficiency and help us avoid the obstacles arising from the USD crisis.

Alif Industries shares closed at Tk 94.50 per share on Wednesday on the DSE.