Tosrifa set to build Tk 152cr dyeing unit

Tosrifa Industries will set up an eco-friendly dyeing unit by raising capital from the public, to become self-sufficient in fabric colouring and boost profitability.

The company, a unit of Northern Tosrifa Group, also plans to expand its sewing capacity by adding some 500 sewing machines.

The total cost of the projects is estimated at Tk 163.2 crore, of which Tk 152 crore will be used to establish the dyeing unit with the daily capacity of 15 tonnes of fabric.

The dyeing unit, which will be located at Sreepur in Gazipur, will be equipped with energy-efficient machinery, which will reduce its carbon footprints, said Mohim Hassan, managing director of Tosrifa Industries.

Tosrifa will also use a 'cold pad batch' dyeing mechanism that will consume 45 percent less power than conventional dyeing systems, he said.

The unit will also use much less water than other traditional systems, Hassan said.

“When the dyeing unit will become fully operational, our reliance on subcontracting will be dismissed and lead-time reduced, resulting in greater value addition, lower expenses and higher profit margins.”

“The project will enable us to get a strong foothold for expansion in the knit garment sector,” Hassan added.

The company needs a strong backward linkage to take advantage of the export growth, as the overall export of garments from Bangladesh is expected to increase in the next decade, he said.

“The investment will also help the company maintain better social and environmental standards, which will benefit the company in the long run.”

Of the Tk 163.2 crore, Tosrifa has already raised Tk 6 crore through a pre-IPO placement and Tk 61.88 crore will be raised through an initial public offering, which was approved by Bangladesh Securities and Exchange Commission on February 10.

The remaining Tk 95.32 crore will be sourced from debt financing or retained earnings.

The company is set to float 2.46 crore ordinary shares worth Tk 10 each for Tk 26, with Tk 16 as premium.

The IPO subscription that is being managed by IDLC Investments will begin tomorrow and end on March 31 for the public and April 9 for non-resident Bangladeshis.

Tosrifa Industries, a garment exporter located in Tongi in Gazipur, produces knitwear such as polo shirts, T-shirts and tank-tops.

The company, which employs some 1,350 workers, supplies to international apparel brands such as Juritex Import-Export, Delta-Sport Handelskontor, ZXY International, El Corte Ingles, Gina Tricot and MQ Retail.

In 2012 and 2013, Tosrifa exported merchandise worth Tk 79.94 crore and Tk 94.16 crore respectively.

The company's earnings per share as of December 2013 stood at Tk 2.49 with a net asset value of Tk 34.41.

Presently, 38 textile companies are listed on Dhaka Stock Exchange and account for around 5 percent of the bourse's total market capitalisation.

Northern Tosrifa Group is also engaged in knit and yarn manufacturing, airlines and shipping, freight forwarding, packaging and printing.