Alhaj Textile Mills Limited, one of the oldest cotton yarn manufacturers in Bangladesh, has stopped its production for 30 days as the company faced severe business crisis including significant fall in sales amid lack of demand in the market, according to a Dhaka Stock Exchange web post.
DSE disseminated the news on Tuesday saying that the board of directors of Alhaj Textile Mills had decided to lay off the factory for 30 days with effect from June 25, 2019 to July 24, 2019.
The company also witnessed shortage of storage facilities for holding stock of finished goods in the warehouses and also faced severe blockage of working capital.
Share prices of the company plunged by lowest possible 9.90 per cent to close at Tk 63.70 per share following the factory shut down news.
Alhaj Textile chief financial officer and company secretary Shawkat Ali told New Age that the company was forced to lay off the factory as sale of yarn dropped significantly.
He said that the feeble and unregulated bonded warehouse facility was the main reason behind the fall of sales and demand.
The company has recently received Tk 35.84 crore from Agrani Bank in a dispute between Agrani Bank and Alhaj Textile, he said. The company kept the amount in the bank as FDR.
Local textile manufacturers in recent times said that they were losing business worth more than $6 billion annually in the domestic market due to smuggling of yarn and fabrics into the country and misuse of bonded warehouse facility.
The commercial import of yarn and fabrics was very negligible but more than 50 per cent of the local demand worth more than $6 billion was being met by foreign items, they said.
The operation in more than 40 per cent of spinning and weaving mills remained suspended due to lack of demand for local items.
Incorporated as a private limited company in 1962, the company was converted to a public limited company in 1967.
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