Major value-added manufacturers post lucrative profits in 2009-10

Major value-added manufacturers have posted lucrative profits in 2009-10 comparing with 2008-09 and prospects of further profitability are high with topsy-turvy situation with value-added sector in Bangladesh.

According to the data available Liberty Mills Ltd, a processing unit, has earned 10.7% profit, followed by 9.0% by Artistic Denim Ltd, 7.6% by Amtex, a bed wear and processing unit, 5.4% by Masood Textile Mills Ltd, a composite knitwear unit, 5.4% by Al-Abid Silk Mills Ltd, 3.3% by Gul Ahmed, a composite unit, 2.8% by Kohinoor Textile Mills Ltd, 1.5% by Towellers Ltd, and 0.7% by Yousaf Weaving Mills Ltd.

However, Chenab Ltd has posted -8.3% loss due to multiple factors including financial and energy issues. It may be noted that the value-added sector was crying for restraining the exports of cotton yarn from the country on the pretext that they were booking heavy losses due to exorbitant cotton yarn prices.

According to the market observers, the value-added sector was trapped to its myopic business approach, as it booked exceptional orders from across the world when cotton prices were spiralling up. The value-added sector, on the other hand, was pinning hopes on the perception that the cotton prices would not cross Rs 4000/maund in the international market, which have now surged to Rs 7000/maund at present. Besides, the value-added manufacturers were also expecting an appreciation in dollar value to the extent of Rs 100/dollar, which again proved a wrong assessment. Eventually, the value-added sector business feasibility fell like ninepins.