Report on Export & Import Analysis of Square Textiles Ltd.
Square stands for ceaseless efforts. The philosophy of never standing still, slowing down, never stop thinking & never compromise with quality made Square the most progressive & dynamic business leader in the country.Square believes in using advanced technology to cope with the changing world. Motivation & diversification is the its major strength.
It all started in 1958 with the establishment of a pharmaceutical company & now after 46 years Square is the leader in pharmaceutical industry & textile industry. Square first ventured in the textile sector with the establishment of the first unit of the Square Textiles Ltd. in 1997. One year later the establishment of the second unit followed. It invested US$ 20.00 million for the first unit & US$ 13.00 million for the second unit. Its target market was export oriented garments industry.
Square constructed its state of the art manufacturing facility at Saradaganj, Kashimpur, Gazipur with high tech machinery from Europe. It has four dormitories for the work force & two residential buildings for the management staff provide more than 80% housing for the employees. Square is the 1st of its kind in Bangladesh to provide accommodation facilities to its employees. Production & accommodation facilities include full time supply of drinking water, adequate lighting & ventilation facilities.
Free meals, free transportation, 24 – hours medical center, on-site sports & recreation facilities encourage the motivated team to serve customers full heartedly.
ETI codes according to the local law (Bangladesh) are very strictly practiced in its manufacturing facilities.
It has biological treatment & energy conservation program. State of the art technology has been used in the effluent treatment plant for the biological treatment of the waste.
In 1997, Square entered the textile sector with its manufacturing facilities of cotton yarn. Combining modern technology with skilled manpower under Square’s unique inspiring, atmosphere, and this new Square venture soon rose to the top of the local textile industry. Today it has one of the most sophisticated vertically integrated set-ups.
Square first ventured into the textile sector with the establishment of the first unit of the Square Textile Ltd. in 1997. A year later the establishment of the second unit followed.
¨ Year of establishment : 1994
(In corporate as a public limited company)
¨ Year of operation : 1997
¨ Stock exchange listing (Dhaka & Chittagong): 2002
¨ Award Oeko-Tex Standard 100 : 2000
¨ Award ISO-9002 Certified : 2000
¨ Business Lines : Manufacturing &
Marketing of Yarn
¨ Authorized capital : Tk. 1000 Million
¨ Paid up Capital : 251.90 Million
¨ Number of employee :1223
48, Mohakhali C/A
Mascot Plaza (11th – 12th Floor)
Plot # 107/A,
Sector # 7
Uttara Model Town
Saradaganj, Kashimpur, Gazipur.
Export Oriented Readymade Garments Industry
Our conception of the business germinates from our vision which sees it is as a means to the well being of the investors, stakeholders, employees and members of the society at large by creating new wealth in the form of goods and service that go to satisfy the wants of all of them without disturbing or damaging the socio-economic balance of the mother earth and that process of human civilization leading to peaceful co-existence of all the living beings.
Our mission is realization of vision through maximum production of goods and services strictly on ethical and moral standards at minimum costs to the society ensuring optimum benefits to the shareholder and other stakeholders
¨ Sister concern of Square group with high technical support.
¨ High amount investment in machine and factory.
¨ No workers unrest because of location facility.
¨ Own dormitory for staff and workers.
¨ Sophisticated high-tech machinery’s used for production and Quality control.
¨ Cost of yarn is high for high quality.
¨ Raw cotton is not available in local market.
¨ Unstable price of Raw cotton in the international market.
¨ Huge scope for export.
¨ Operational efficiency.
¨ Provision for capacity expansion.
¨ Invasion of Indian yarn through black market.
¨ Unstable economic situation of our country.
¨ Unstable political condition.
FACTORY DETAILS Capacity
Unit 1: 36,288 spindles with daily production capacity of 30,000 kgs.
Unit 2: 23,184 spindles with daily production capacity of 14,000 kgs.
Unit 1: Combed and Carded yarn from a count range of Ne. 10 to
Unit 2: Combed Ring Yarn from a count range of Ne. 20 to Ne. 40.
Name of Machines Country of Origin
Back Process : Rieter-Switzerland
(Blow room :: Carding :: Drawing :: Combing)
Simplex / Fly Frame : Toyoda-Japan
Ring Frame : Toyoda-Japan
Autocone Winding : Schlafhorst–Germany
QC Equipment : Zellwegers Uster- Switzerland
Humidification Plant : Luwa-Switzerland
Air-Cooling / Chiller : McQuay-USA
Square Textiles Ltd is a 100% export oriented Yarn manufacturing company. They mainly produce Yarn and export it to Fabrics manufacturing company and fabrics manufacturing company export it to garments industry through Back to back L/C and garments Garment industry export this fabrics against master L/C after certain process in this sance Square Textiles Ltd is Exporter of yarn. But in the commercial term these kinds of exporter are called deem exporter. As main job of Square Textiles Ltd is to manufacturing and exporting of Yarn so they need some raw materials and axillaries to manufacturing this product. Main raw materials of square Textiles Ltd are various types of raw cotton. As Square is a vertical integrated company. So they have forward and backward linkage facility e,i. they have fabrics manufacturing company and they have garments manufacturing company. Square Knit Fabrics Ltd get 100% L/C from their own garments Industry and Square Textiles ltd. Get 60% L/C from their own company Square Knit Fabrics Ltd and another 40% get from other company. So that the buyers of Square Fashions & Others garments industry are the ultimate buyers of Square Textiles Ltd. Square Textiles Ltd mainly procure their raw cotton by 100% cash L/C.
As the main raw martial of Square Textiles Ltd is raw cotton. so the procure their raw materials under two ways
1) Local import
2) Foreign Import
As Square Textiles Ltd. is a largest finest yarn manufacturing company of Bangladesh so they need various type of raw cotton. But we cannot produce high quality of raw cotton in our country so we 100% depended on imported cotton so that Square Textiles . Local import is nil.
As we know that to produce high quality of yarn need high quality of raw cotton. High quality of raw cotton means which cotton exists length fiber is long and fibers are matured. To produce high quality of raw cotton mainly needs favorable weather condition but we have not. So ultimately we depended fully imported raw cotton for our textiles mills. Square Textiles Ltd mainly procure central Asia’s cotton e,i. Uzbekistan’s, Turkmenistan’s, Kazakhstan’s, and Tajikistan’s raw cotton as per their buyers satisfaction. Though the price of central Asia’s raw cotton are higher than the others cotton. Square Textiles also procure raw cotton from Zimbabwe, Syria, USA, India, West African, Indonesia, and Thailand etc through cash L/C.
COMPARISON TO OTHERS COMPANY WITH IMPORT POLICY:
Square Textiles Ltd think, though customers like central Asia’s cotton at higher price and most of the spinning mills go for central Asia’s cotton as per their customers satisfactions. But this trend is not continuing for long period. Because may central Asia’s companies think they will produce yarn in their own country or others company like square think they established a plant in central Asia’s country. Then central Asia’s cotton are not available then what will do the others company. Square Textiles Ltd always think different. For this reason to face this problem they use 60% to 50% CIS cotton and 40% to 50% others cotton which quality is same like CIS cotton to overcome future any problem. Square textiles do not follow others so allover the year they procure cotton for two or three month advance. So that over the year they can maintain average cotton price and they do not loss hues and they do not gain hues. But on the other hand others company they forward book all over the year so if the cotton price is higher then they gain hues and cotton price is down they losses hues.
LAST THREE YERS IMPORT POSITION
QUANTITY IMPORT IN THOUSAND (TAKA)
2004 2003 2002
Raw materials Import 1293112 1069660 1293012
Total Sales 1293112 1069660 1293012
Direct export of Square Textiles Ltd is so little because they import 100% raw cotton from abroad so their yarn price is higher than the others country
As a deem exporter Square Textiles Ltd export their 60% yarn to their own sister concern Square Knit Fabrics Ltd and balanced yarn they export to the others textiles industry through back to back L/C. Square Knit Fabrics Ltd mainly export their 100% fabrics to their another sister concern Square Fashions Ltd which is a world class garments manufacturing company and others textiles industry export their fabrics to others garments company in our country. Square Fashions ltd and others garments company have strong marketing tem they visit all over the world to market their product to world class buyer like Puma, Nike, Asda, Matalan. Allmart, Mark & Spencer, Kitaro, Redfild, H&M, Ashcity, Mexx etc Square Fashions Ltd and others garments company Mainly collect L/C from those world class buyer and Square Fashions Ltd give L/C to Square Knit Fabrics Ltd and others garments company give L/C to another Fabrics manufacturing company to collect fabrics. As well as Square Knit Fabrics Ltd and others textiles mills give L/C to Square Textiles Ltd to collect yarn for producing fabrics. As Square Textiles is a deem exporter so the export their yarn to Square knit Fabrics and others textiles industry Square Knit Fabrics and others textiles company export their fabrics to Square Fashions and others garments industry and garment companies are direct exporter so in this scence Square Textiles Ltd is 100 % export oriented yarn manufacturing company. Square Textiles Ltd also sale a little portion of yarn in locally which is produce by wastage cotton. These types of yarn are “B” Grade and it is not meet the export quality.
COMPARISON TO OTHERS COMPANY WITH EXPORT POLICY
Square’s policy is always different from the others companies policy. So Square Textiles follow some technique to increase their export. Like in production they use heterogeneous system to create a big lot e,i. As same quality of cotton they mix as bellow:
Uzbekistani’s Cotton 2 Bells
US Cotton 1 Bell
Syrians Cotton 2 Bells
West African’s Cotton 3 Bells
Indonesia’s Cotton 1 Bell
Total 9 Bells
And create a big lot 90 tons to 100 tons, so that big customers always prefer to use same lot of yarn to get better result in dyeing and there no shade variation for their big production. Square Textiles always try to produce same quality of yarn allover the year for this reson buyers always prefer Square textile’s Yarn but others company follow general system Where they use Same cotton e’i. When they use Uzbek cotton then they use only Uzbek cotton. So that their yarn lot is always small e,i. 30 to 40 tons and allover the year they cannot maintain the same quality, so big buyer do not prefer their yarn for their hues production.
Square Textiles Ltd follows another technique e,i. they always try to meet customer’s shipment on due date but on the other hand others company always cannot do that. So Square Textile’s sales always in creasing.
LACKING OF POLICY
Square Textiles Ltd always use Heterogeneous system e,i. They use mix cotton to produce yarn, so their production cost is less and others company use general system e,i. They use 100 % Uzbekistani’s cotton it is costly so their production cost always high. If in the market create a rumer that square textiles do not use 100% Uzbek cotton but their yarn rate is higher than the others it is bad for them and they can loose their big market.
HOW CAN OVERCOME THIS LACKING
Square Textiles can avoid Heterogeneous system and they can increase their dependency on Central Asia’s cotton.
They can reduce their yarn price and convince customers that though square use heterogeneous system but their result is same like central Asia’s cotton.
They can also convince their customers to reduce dependency on CIS cotton to absorb any shock in future.
QUANTITY SOLD IN THOUSAND (KG.):
2004 2003 2002 2001
Local sales 99 527 539 453
Export sales 14554 13417 1312912705
Total Sales 14653 13944 13668 13158
QUANTITY SOLD IN THOUSAND (TAKA)
2004 2003 2002 2001
Local sales 9455 32576 46956 43881
Export sales 2093214 1756441 2029968 2054190
Total Sales 2102669 1789017 2076924 2098071
Shamim Spinning Mills Ltd. 30%
Padma Textiles Ltd. 25%
Square Textiles Ltd. 20%
Mother Textiles Ltd. 15%
Prime textiles Ltd. 05%
SQUARE TEXTILES LTD.
As at 31 December 2004.
AMOUNT IN TK.
FixedAssets 121,73,31,766 132,66,42,613
Stocks 32,90,15,503 25,05,79,314
Trade Debtors 84,00,66,283 74,68,96,100
Adv. Deposits & Payments 4,66,13,570 4,88,12,438
Cash & Bank Balances 6,83,69,954 91,24,736
Short Term Loan 113,01,54,432 99,75,36,568
Long Term Loan-Current Portion ————- 11,28,97,588
Sundry Creditors 7,08,81,052 5,84,02,645
Liabilities For other Finance 4,73,56,925 3,95.84.188
Provision for Income Tax 1,91,10,742 ___ 57,51,014
Share Holders Equity:
Share Capital 25,19,00,000 25,19,00,000
Tax Holiday Reserve 33,96,71,397 29,69,28,100
General Reserve & Surplus 64,23,22,528 59,77,80,098
SQUARE TEXTILES LTD.
For the year ended 31 December 2004.
AMOUNT IN TK.
Sales 210,26,70,263 178,90,18,386
Less: Cost Of Goods Sold 173,70,55,759 150,02,81,590
Gross Profit: 36,56,14,504 28,87,36,796
Less: Operating and
financial expenses 17,55,24,220 19,78,35,510
Operating Income 19,00,90,284 9,09,01,286
Other Income 2,25,844 6,63,215
Net Profit Before WPPF 19,03,16,128 9,15,64,501
Allocation For WPPF & WF 90,62,673 43,60,214
Net Profit Before Tax 18,12,53,455 8,72,04,287
Less: Provision for
Income Tax 1,33,59,728 57,51,014
Net Profit For the Year 16,78,93,727 8,14,53,273
SQUARE TEXTILES LTD.
Cash Flow Statement
For the year ended31 December 2004.
AMOUNT IN TK.
Cash Flow from
Collection From Sales 200,95,00,080 186,13,50,517
Others 2,25,844 6,63,215
Purchase of Raw and
Packing Materials (139,80,91,956) (104,62,25,984)
Operating Expenses (33,94,18,521) (32,32,02,946)
Interests (11,44,33,862) (14,26,12,064)
Workers Profit Participation Fund (42,62,961) (81,73,177)
Net Cash Provided by
Operating Activities 15,35,18,624 34,17,99,561
Cash Flow from
Purchase of Fixed Asset (1,78,17,640) (1,95,36,204)
Less: Disposal of Fixed Asset 57,06,958 40,00,000
Net Cash Used in
Investing Activities 1,21,10,682 1,55,36,204
Cash Flow from Financing Activities:
Long and Medium
Term Loan-Repaid 13,41,72,588 17,52,92,648
Dividend Paid 8,06,08,000 7,40,59,553
Short Term Loan-Received (13,26,17,864) (8,04,32,598)
Net Cash Used in
Financing Activities 8,21,62,724 32,97,84,799
Cash Bank Balance 5,92,45,218 35,21,442
Cash and Bank Balance
at Opening 91,24,736 1,26,46,178
Cash and Bank Balance
at Closing 6,83,69,954 91,24,736
NAME OF STRATEGY
Square follows the following organizational strategy for his organization:
1) Business diversification strategy
2) Best cost strategy
3) Nich marketing strategy
1) In present they are diversified business giant in Bangladesh.
2) They always provide improved quality of product for their customers
with lower price and they never compromise with their quality.
3) On the part of their business diversification strategy the always
tried to making their product for nich market Ex: Square harbal
Ltd. (A harbal medicine Company)
REASON FOR SUCCESS/FAILURE
Most of the cases they are successful because they are committed to his customers and Bangladesh for their quality product. Square believes in using advanced technology to cope with the changing world. Motivation & diversification is its major strength.
- Square Textiles mainly use mix cotton to produce yarn but on the other hand others company use Uzbek cotton.
- Square Textile’s yarn price is higher than the others company
- Square Textiles do not forward booking to procure cotton but others company do that.
- They do not arrange get together for their big buyer at least one time a year.
- They do not invite their big buyer to visit their factory.
- As square Textiles use mix cotton so they can reduce their yarn price
- Square Textiles can follow the others company e,i. they can only use CIS cotton.
- Square Textiles can convince their buyer to reduce dependency on CIS cotton to absorb any shock in future.
- They can arrange get together for their buyer at least one time a year where buyer can freely discuss their problem and they can give their advice to overcome this problem.
Square Textiles Ltd. is one of the largest companies in the textile sector of the country. It has a most modern and sophisticated equipment with a group of professional peoples who posses a high standard of technical know how. This company produces a high quality of yarn of which 95% is exported to foreign countries and this has been possible as the company is very conscious in maintaining the high standard of quality. Presently the company’s progress is upwards. Finally we can say this company has set a milestone in the textile sector in the country.
Square Textiles Ltd. has reached to its present stable and profitable position due to its operational activities in the right way managed by a group of professional and technical experts. The company’s people are well motivated and working under a healthy congenial environment. Here all facilities are available for smooth operations of the company. On the other hand the company is contributing to the national economy by employing a lot of people and earning foreign currency for which we feel proud for having such a company in our country.
q Annual Report & Brochure
- Annual Report
1. Income Statement: A Financial Statement that presents the revenues & expenses
2. Balance Sheet: A Financial Statement that reports the assets, liability & owners equity at a specific date
3. Cash Flow Statement: A Financial Statement that summarizes cash inflow & outflow
4. Liability: Creditorship claim on total assets
5. Blow Room: It is the first stage of yarn manufacturing process to clean raw materials (Cotton)
6. Combed Yarn: When yarn production processes gone through the combed machine (Best quality yarn)
7. Count: Measurement of yarn thickness
8. Chiller: System to cool the air temperature
9. Hosiery Plant: The yarn used for hosiery products
10. Humidification: This is the system of air handling with control of moisture in the air
11. ISO: International Standard Organization
12. OEKO: TEX Standard law. US based certification body for controlling health-hazard
13. Paid up Capital: It is the part of the authority capital, which are initiates invested in the business
14. Spindle: This is the unit of a final production process in textile industry
15. Span: The process to make yarn from stable fiber
16. Yarn: Fine fiber raw cotton
Balance Sheet : 27
Blow Room : 17
Cash Flow Statement : 29-30
Chiller : 17
Combed Yarn : 16
Count : 16
Humidification : 17
Income Statement : 28
ISO : 11
Liability : 27
OEKO : 11
Paid up Capital : 11
Spindle : 16
Yarn : 11,16