B Mirror Report:  Listed textile company Saiham Textiles Mills Limited has decided to suspend production at its spinning unit for around 18 months as part of a major modernisation and rehabilitation plan.

The decision was taken at a board meeting held on May 10, according to sources from the Dhaka and Chattogram stock exchanges.

The company said production at the spinning unit will be halted from June 1 due to aging machinery, declining production efficiency and rising manufacturing costs, which have turned the unit into a loss-making operation.

Saiham Textiles operates two units, including a spinning unit established in 1993 and a melange unit that began commercial production in 2013.

Over the past several years, the spinning unit has faced repeated operational challenges due to outdated machinery, resulting in lower yarn quality and reduced production capacity while costs continued to rise.

During the shutdown period, the company plans to carry out a full-scale BMRE (Balancing, Modernization, Rehabilitation and Expansion) programme. This includes demolition and reconstruction of factory buildings, installation of new automated spindle machines, commissioning, and trial production.

The company also decided to sell old machinery from the unit to facilitate the upgrade process.

Industry insiders say increasing competition in the textile sector has made it difficult for companies to survive with outdated technology, especially in export markets that demand higher quality standards.

While the decision may create short-term pressure on production and earnings, the company expects long-term gains through improved efficiency and higher output after modernization is completed.

Investors, however, remain cautious about the financial impact of an 18-month shutdown, noting that reduced production may affect revenue while the large investment required for new machinery could further strain finances.