October 14, 2020 (MLN): Interloop Limited has updated the Pakistan Stock Exchange regarding the progress of two of its major projects, i.e. Denim Division and Hosiery Division.
In a detailed report that was published recently, the company said that the building and infrastructure work on its Denim Division was 97% complete. Located at 8 km Mangwa Raiwind Road, Lahore, the division has been functional since November 2019 as originally planned.
The company successfully completed the first phase of the project by installing a capacity of 20,000 units per day. The project started its commercial operation in the Second Quarter of FY2020. Covid-19 pandemic has affected the marketing activity and ramp-up plans of the company. However, the project is gradually making its place in European and North American markets.
In the second phase, it is planned to enhance the capacity to 40,000 units per day. The project is completed in terms of infrastructure since almost 82% of the budget has already been consumed. However, considering the impact of COVID-19 which has adversely impacted the economies and demand all across the globe, the project activities have been slowed down.
The project cost has been enhanced to PKR 8.325 billion from the initial estimate of PKR 6.75 billion for the Denim Project due to the devaluation in PKR and trial run losses. The increase in cost will be finance by internal cash generation.
Regarding the Hosiery Division, the report said that Phase 2 of the Pilot Unit for Plant 5 had been completed successfully and the unit is currently operating with 330 knitting machines utilizing existing infrastructure. During First Quarter 2021, the company successfully installed and commissioned 120 machines. The company in line with its plan to enhance the capacity has ordered 100 knitting machines. These machines will be expected to receive by end of the Second Quarter FY2021. This will boost up production capacity from 10,000 to 12,000 dozens per day, which equates to roughly 29% capacity of the main plant being designed to produce 42,000 dozens per day.
The management is gradually increasing the pace of the project considering diligently market demand and global economy moves. Land for the project has been procured. The building layouts and schematics have already been finalized. To date, a total of PKR 1,312 million has been incurred on the project.
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