B Mirror Report:  Envoy Textiles Limited, a listed company in the textile sector, has decided to invest Tk 1.79 billion to enhance its production capacity.

The decision was approved at the company’s 252nd board meeting held on April 26. The board also approved the purchase of land for factory expansion, according to sources at the Dhaka Stock Exchange (DSE).

Under the plan, the company will increase its open-end (rotor) spinning production capacity from 25 tonnes per day to 50 tonnes at its existing factory premises. The project aims to boost yarn production using recovered materials from the production process, which will be prioritized for use in the company’s own denim manufacturing, improving overall efficiency and integration.

The total cost of the project is estimated at Tk 1.79 billion, with 70 percent to be financed through loans and 30 percent through equity.

Based on current costs and market prices, the project is expected to generate sufficient cash flow to repay loans within seven years. The payback period is projected at around four years and eight months. Over a 15-year project life, the annual return on equity is estimated at 27.8 percent, while the overall annual return stands at 14.8 percent.

For future expansion, the company has also approved the purchase of 50.37 decimals of land near its existing factory in Bhaluka, Mymensingh, at a cost of Tk 80.9 million.

Listed on the stock market in 2012, Envoy Textiles has an authorized capital of Tk 4.75 billion and a paid-up capital of Tk 1.677 billion. The company holds reserves worth Tk 7.0097 billion and has a total of 167.73 million shares.

Of the total shares, 65.41 percent are held by sponsor-directors, 22.76 percent by institutional investors, 0.25 percent by foreign investors, and 11.58 percent by general investors.