Envoy Textiles to invest in sustainable waste fabric recycling

A meeting of the company’s board on Thursday made the decision on the new recycling plant at Envoy Textiles’ current factory site in Bhaluka, Mymensingh, according to sources from the meeting

Envoy Textiles Limited, recognized as the world’s first LEED Platinum-certified denim textile mill, has unveiled plans to invest in a waste fabric recycling plant, set to start commercial production by June 2025.

A meeting of the company’s board on Thursday made the decision on the new recycling plant at Envoy Textiles’ current factory site in Bhaluka, Mymensingh, according to sources from the meeting.

Kutubuddin Ahmed, founder and chairman of Envoy Textiles, told TBS that the project’s total investment is estimated at Tk23.70 crore, with 70% financed through loans and 30% through equity.

“We plan to start construction on the new project as soon as possible and will open letters of credit (LCs) to import capital machinery from Turkey. We have already toured several fully automated factories in Turkey,” he said.

“We anticipate that the plant will be fully operational by the end of this fiscal year, which will significantly enhance our production capacity and address the increasing sustainability requirements of our clients,” Ahmed added.

Envoy Textiles Managing Director Tanvir Ahmed said the plant will process both local and in-house pre-industrial and post-consumer waste fabrics, converting them into high-quality recycled fiber.

He added that once the plant is operational, the company will be able to replace externally sourced waste cotton with recycled fiber produced internally.

“This initiative will not only boost operational profitability but also address the growing demand from our buyers for environmentally sustainable production methods,” Tanvir explained.

He also mentioned that the new plant is expected to generate an additional revenue of over Tk50 crore annually for the textile mill.

Company Secretary M Saiful Islam Chowdhury told TBS, “Under favorable market conditions, the project is anticipated to yield annual profits of around Tk8 crore to Tk10 crore, making a significant impact on the company’s bottom line.”

He further noted, “This initiative aligns with our strategic goal of enhancing profitability while also meeting our social responsibility commitments.”

Founder and Chairman Kutubuddin Ahmed described the plant as a strategic move that will not only improve the company’s eco-friendly manufacturing practices but also bolster its export market position by enabling more competitive pricing through in-house recycled fiber production.

He noted that once operational, the plant is expected to increase earnings by an additional 5 to 8 cents per yard of exported fabric. The facility will process about 12 tonnes of waste fabric daily with an impressive 98% recovery rate, converting the material into recycled fiber.

Currently, Envoy Textiles sources up to 4 tonnes of usable waste cotton daily for yarn production, in addition to using imported virgin cotton.

With the new plant, the company will shift from relying on externally sourced waste cotton to utilizing in-house produced recycled fiber, further advancing its sustainability goals.

Envoy Textiles holds currently Global Recycled Standard (GRS) and Recycled Claim Standard (RCS) certifications, processing 130 tonnes of waste yarn per month. With the new project, the company aims to process approximately 350 tonnes of waste fabric monthly.

The company produces around 3.5 million yards of denim fabric annually and has an annual turnover of about Tk1,400 crore.

For FY2023-24, Envoy Textiles reported a profit of Tk60 crore, reflecting an 83.45% increase year-on-year.

As of 30 June 2024, the company’s Net Asset Value (NAV) per share was Tk51.93, up from Tk 38.57 a year earlier. Earnings per Share (EPS) also rose significantly to Tk3.58 from Tk1.95 the previous year, according to data from the DSE.