Standard Chartered (StanChart) has arranged syndicated financing for Modern Syntex Limited’s Continuous Polymerisation Plant via an Export Credit Agency (ECA) backed term loan of EUR 38 mn and a commercial BDT syndicated term loan of BDT 4,505 mn.
Modern Syntex Limited’s Continuous Polymerisation Plant is the first full-scale production facility for man-made fibre in Bangladesh – which will play a significant role in boosting export diversification across the nation’s Readymade Garments (RMG) sector, says a press release.
The Polymerization Plant utilizes Chlorine and either Naphtha or Ethanol to produce Plastic which is required for Snack, Medical Equipment, Disinfectant, PCB for Electronics II, Consumer Electronics, Microchips, and more.
With an investment of $131 mn, Modern Syntex Limited’s Continuous Polymerisation Plant will manufacture polyester staple fibres (PSF), textile grade polyester chips (PET chips), draw textured yarn (DTY), and fully drawn yarn (FDY).
The production of these materials provides backward-linkage support that helps meet local demand across a variety of industries, including RMG, textile, footwear and vehicle making. This demand is currently being met via import from China, Indonesia, Taiwan, Malaysia, India, and other markets. The newly minted plant has the potential to meet a significant percentage of the present annual demand for PSF, PET chips, and other textile-related products.
The facility is located in Bangabandhu Sheikh Mujib Shilpa Nagar in Chattogram and has been established with technological assistance from Germany-based Oerlikon (Barmag).
To mark the start of commercial operations at the plant, a crest handover ceremony recently took place in Dhaka. Naser Ezaz Bijoy, Chief Executive Officer, StanChart Bangladesh; Enamul Huque, Managing Director and Head of Corporate, Commercial and Institutional Banking, Standard Chartered Bangladesh; Abu Sufian Chowdhury, Managing Director and Chairman, Modern Syntex Limited; and other senior officials from both organisations were present for the event.
Naser Ezaz Bijoy said: “This timely investment will not only reduce the dependency on imported manmade fibre (MMF) – saving foreign exchange and transportation costs – it will also enable our RMG sector to diversify their product basket for export of more high-value-added MMF products, such as technical textiles, functional apparel, and smart textiles.
We are proud to support Modern Syntex Limited in this landmark achievement and will look forward working together to help the nation’s textile and RMG sectors scale ever greater heights.”
Abu Sufian Chowdhury, Managing Director and Chairman, Modern Syntex Limited, said “The project will save foreign exchange of approximately USD 60 million per year. It will also create about 1,500 direct employments and shall positively contribute to the MMF industry which is expected to grow exponentially driven by increased demand for synthetic textile worldwide”.
StanChart was the sole lender on the ECA backed term loan facility. The Bank provided end-to-end structuring and arrangement services to all stakeholder – the borrower, the guarantors, Euler Hermes (ECA) and the supplier. The Bank’s product expertise enabled the Bangladesh-based client to access German government support, competitive pricing, and extended tenor for their project financing.
