HomeIndustry NewsShasha Denims to invest Tk155cr to increase production capacity

Shasha Denims to invest Tk155cr to increase production capacity

Shasha Denims Limited, an export-oriented denim manufacturer, has planned to invest an estimated amount of Tk 155 crore to expand its production capacity.

Shasha Denims to invest Tk155cr to increase production capacity

 

Under its expansion plan, the listed company’s board of directors decided to install 105 looms in its factory located in the Dhaka Export Processing Zone to increase the production capacity.

These looms will be installed in plot numbers 289–292 of the Dhaka EPZ allotted by the Bangladesh Export Processing Zone Authority (BEPZA). Once the installation is completed, the company’s annual exports will increase by approximately Tk 350 crore, as per a filing posted on the Dhaka Stock Exchange (DSE) on Thursday. Talking to The Business Post, Aslam Ahmed Khan, company secretary of Shasha Denims confirmed that their estimated investments would be Tk 155 crore.

Meanwhile, the board of directors of the company decided to invest in GA Garments Limited. Shasha Denims has called an extraordinary general meeting (EGM) through virtual platform on June 5 to seek approval from the shareholders over the mentioned issues. The record date has been fixed for May 11 for the share splits.

The investment in shares of GA Garments will be made in exchange for assets of Shasha Denims under a vendor’s agreement. The remaining amount will be paid through bank transfer, according to the DSE disclosure.

In February 2021, Shasha Denims had acquired an additional 18 per cent stake in EOS Textile Mills, an associate of Italian apparel maker. The acquisition was made at a cost of about Tk 21 crore.

Shasha Denims is engaged in manufacturing different types of classical indigo denim through an integrated manufacturing process of weaving, dyeing, and finishing. The company uses the most modern computerised slasher dyeing technology in its production process.

Its consolidated earnings per share (EPS) were Tk 0.77 for the October-December quarter of 2022 against Tk 0.47 for the same period in 2021. On the other hand, its consolidated EPS stood at Tk 1.33 for Jul-Dec’22 against Tk 0.91 for the same period in the previous year.

The gross profit of the company increased as it utilised the cost benefits of raw materials imported earlier. Shasha Garments (associate company) and EOS Textile Mills (subsidiary company) have also significantly contributed to increasing the consolidated earnings of Shasha Denims.

In 2021-22, Shasha Denims incurred losses worth Tk 122 crore due to the shutdown of its power plant despite making a profit of Tk 40 crore in its clothing business. The company had reported that its net profit stood at Tk 14 crore in the financial year 2020–21.

Sources said Energis Power Corporation Ltd, a subsidiary company of Shasha Denims, signed an agreement with the Bangladesh Power Development Board (BPDB) on December 28, 2008, for a three-year term to provide 55 MW of net electricity.

Commissioned on January 10, 2010, the 55-megawatt (MW) power plant started commercial operations on May 6 of the same year and supplied power to the national grid.

Shasha Denims paid a 10 per cent cash dividend to its shareholders for FY22, the same as in FY21. Each share of the company, which listed on the Dhaka bourse in 2015, closed at Tk 27 on Thursday at Dhaka Stock Exchange. The company has a paid-up capital of Tk 141 crore, while its authorised capital is Tk 225 crore.

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