Metro Spinning Limited, a subsidiary of Maksons Group, has decided to prolong the suspension of its production operations for an additional year to complete factory renovations and expand its production capacity, according to a company statement.
The decision to extend the closure was disclosed in a filing to the stock exchange on Wednesday. The company’s share price took a hit following the announcement, falling by 9.74% to Tk13.90 on the Dhaka Stock Exchange.
Back in September 2023, Metro Spinning initially announced the shutdown of its facility for a year as part of a BMRE (Balancing, Modernization, Rehabilitation, and Expansion) project aimed at upgrading and expanding its operations.
While letters of credit (LCs) for essential capital machinery have been opened, LCs for auxiliary and utility machinery are still pending. The company attributed the delay to ongoing geopolitical tensions and the global economic slowdown, which has caused disruptions in the manufacturing and shipment of the necessary machinery.
Despite these setbacks, the company reported that civil construction work is underway. However, challenges such as the lingering effects of the Covid-19 pandemic, the Russia-Ukraine conflict, turmoil in the Middle East, rising foreign exchange rates, local political unrest, labor strikes, and internet disruptions have significantly slowed the progress of the BMRE project.
Furthermore, delays in receiving materials from suppliers have compounded the obstacles faced by the company.
As a result, Metro Spinning has decided to extend its production halt for another 12 months to complete the reconstruction of the factory, install the machinery, and begin trial production. The company aims to finalize the BMRE project within this extended timeframe and assured shareholders and regulatory authorities that they would be kept informed of the project’s progress and the resumption of commercial operations.
