January 15, 2020: Interloop Limited has apprised the Pakistan Stock Exchange (PSX) about the implementation progress of two of its projects, i.e. Denim Unit in Lahore and Hosiery Division V in Faisalabad.
According to the quarterly progress report issued by the company, the Denim Division in Lahore has been mobilized in November 2019 as originally planned. The first phase of this project has been completed and currently installed capacity of 500,000 units a month (20.000 units per day) has been commissioned. The plant has shipped approximately 360,000 units in December 2019 to customers in Europe and North America. Production stands at 16,500 units a day with the target of achieving full capacity of 20,000 units by Q3 of FY2020.
After completion of 2nd phase during the last quarter of Calendar Year 2020, total capacity will be 40,000 units per day.
From an operational perspective, manpower has been upskilled with productivity improving each month. All sewing lines are operational and ancillary machinery in the laundry has been commissioned.
Initially, the company allocated the budget of Rs. 6.75 billion for Denim. It has been enhanced to Rs. 7.7 billion due to the depreciation in PKR and some cost overruns including preproduction expenses / trial run losses. The increase in cost is being financed by internal cash generation.
Regarding the Hosiery Division V, the company said that the Phase 2 of pilot unit of Plant 5 has been completed successfully within the existing infrastructure for the time being to cater for the demand of the buyers. The unit is currently operating with 210 knitting machines, 600 personnel and produced 212,000 dozen in December 2019. Another 90 knitting machines have been ordered and hiring is underway to strengthen the team further. By end of March 2020, the Pilot unit will be operating at 15,000 dozen per day with approximately 900 personnel.
Building a layout for main Plant has been prepared. It will house 1,200 knitting machines with daily production capacity of approximately 42,000 dozen. Main project is under civil work and structural planning phase.
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