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Craftsman Footwear wants to raise funds for business expansion

Staff Correspondent
03 Dec 2023 22:09:48 | Update: 03 Dec 2023 22:09:48
Craftsman Footwear wants to raise funds for business expansion

Craftsman Footwear and Accessories Limited wants to increase its export volume significantly in next three years. It intends to construct new production buildings and separate warehouses.

The export-oriented shoemaker has planned to enter the stock market by raising Tk 5 crore from the public for its business expansion and repayment of bank loans.

The company has already sought approval from the Bangladesh Securities and Exchange Commission (BSEC) for listing on the SME board of the stock exchanges.

Talking to The Business Post, Sadat Hossain Salim, managing director of Craftsman Footwear, said the bank loan interest has already increased and might reach 15 per cent in the near future, which will impact sustainable business growth.

“That’s why we want to raise funds from the stock market for business expansion,” he said.

The company’s overall sales more than doubled year-on-year to Tk 73.3 crore in FY23, backed by higher exports. Its exports soared 237 per cent to Tk 71.1 crore while domestic sales dropped by 19 per cent to Tk 2.31 crore, indicating that the company focuses more on exports.

Craftsman Footwear exported around 340,000 pairs of shoes as of June 2023.

The company exports products mainly to Italy, Japan, the USA, Germany, Canada, Hungary, Austria, Poland, and Spain, while major buyers are Hush Puppies, Bata, Tata Italia, Parrotto, Unit, Fine Boys, and On Spirit Primadonna.

The company has two production units: Unit 1 produces for local sales, while Unit 2 manufactures for exports, which started operation in April 2021.

Craftsman Footwear has set a target of exporting shoes worth $12 million by next three years.

To achieve the target, it plans to introduce a double shift at its factory in Gazipur by next year. Currently, it operates three production lines--cutting, sewing, and lasting--manufacturing around 2,000 pairs of shoes daily.

Incorporated in 2017, Craftsman started commercial production in 2020 as a shoe manufacturer for the export market with 35 employees at a small factory unit at Joina Bazar in Sreepur upazila of Gazipur district.

Craftsman Footwear started its journey as a diversified business unit in leather segments and began manufacturing different types of “leather goods, crafts, and footwear."

Now, the company has a state-of-the-art manufacturing facility with a 100,000 square-foot factory area with more than 750 employees.

Its managing director mentioned that skilled designers at the Craftsman factory produce a diverse range of shoes that adhere to global standards. The production unit has cutting-edge machinery from Italy and Germany.

He said the company imports leather from some compliant tanneries in Asia to ensure compliance with shoe manufacturing.

The company might have to face stiff competition with its competitors. The availability of global products in the local market adds to the competition, challenging the profitability of the business.

“Though Bangladesh is a significant supplier of rawhide, we are losing to China, Pakistan, and India in the competitive market because we do not have enough LWG-certified leather producers,” said Salim.

Moreover, backward linkage supply is also limited and most of the components are imported from China, India, and Taiwan which lead to higher costs of production.

Green Delta Capital is acting as the issue manager.