Textile businesses stare at falling profits
Posted textile and garment makers are still experiencing falling profits, influenced by lower sales of clothing on the markets overseas amid the ongoing coronavirus pandemic.
On the other hand, this scenario of the sector possesses one exception: spinners. Yarn manufacturers listed at Dhaka Stock Exchange (DSE) logged higher income in the July-March period of the current time from that of this past year thanks to a cost hike of yarn.
Info from the DSE showed that of the 26 listed RMG, textile and spinning firms, 16 underwent a good drop in revenue. Some 10 manufactures reported a fall in gains.
The pandemic had a detrimental impact on the textile and RMG sector, so their profits fell, said Robiul Islam, company secretary of Paramount Textile.
As a result of pandemic, worldwide consumption reduced, so export was first hit, he said.
Between July and March of the existing fiscal year, Bangladesh acquired $23.48 billion from clothing shipments, that was 2.55 per cent less than that in the corresponding period keep going fiscal year, relating to info from the Export Promotion Bureau.
Only those companies that have a whole lot of reputation overseas could actually attract plenty of orders of exports, Islam said, adding that his company could become profitable for the top quality of its goods and reputation.
Paramount Textile booked bigger profits during the period than all the other companies, whose profit fell over 5 per cent to Tk 52 crore compared to the same period of the prior year.
The RMG and textile sector has also been adversely impacted for the bigger price of yarn, Islam added.
While textile and RMG were struggling, spinning mills availed the good thing about the price hike of yarn which turned out to be a big influencer of their higher income.
Among six listed spinners, four witnessed more significant profits and two could actually make a profit on incurring losses previously.
Malek Spinning logged the highest profit progress among all of the 26 listed textile companies. Its profit rose a lot more than eight situations year-on-year to Tk 39 crore in the 1st nine months of the existing fiscal year.
"Our revenue rose as in the time our sales were larger along with the prevalence of a higher price of yarn," explained Syed Saiful Haque, firm secretary of Malek Spinning Mills.
"Still the year's rates were good as a result we are producing better business," he said.
Cotton had been traded in $0.60 to $0.85 per kg on the average through the June-December period last year, which down the road ranged between $0.95 and $1.7 found in March, according to info of Bangladesh Textiles Mills Association (BTMA).
According to market insider, Bangladesh is principally reliant on China and India pertaining to cotton and other raw materials.
But China's industry was kept shut for the pandemic and then the cost of cotton rose. Then India increased the price alongside Bangladesh's local spinners.
The spinning mills attributed the hike in cotton prices to rising require for that globally and its source crunch, and upward costs of other related logistics following the emergence of the pandemic.
Due to the pandemic, cotton selling price rose in the world market which improved yarn prices. It finally had a direct effect on the local yarn market, stated Mir Ariful Islam, head of exploration of Prime Finance Asset Management Company.
So businesses which had shares of cotton booked a huge amount of profits through the period, he said.
So spinning mills produced higher profits this year, Islam added.
