The mill’s parent company, Malek Spinning Mills Limited, cited the unit’s “instability” as the reason for its shuttering, noting that it’s been underperforming since its inception in 2014. Its performance, coupled with the building’s expiring lease, prompted the closure. The company will sell Salek’s assets to pay off its liabilities, and managing director A Matin Chowdhury told the publication that workers’ salaries have been paid.
Malek Spinning Mills launched in 1991 and went public almost two decades later in 2008. It sources cotton from the U.S., and exports its yarn to apparel retailers around the world.
Chowdhury told The Business Standard that denim exports suffered during the last two years as a result of the Covid-19 pandemic. And while data from the Commerce Department’s Office of Textiles & Apparel (OTEXA) indicated that U.S. imports from Bangladesh fell 11 percent in value at the end of last year, the nation is slowly bouncing back in 2021. Recent trade data from Bangladesh shows that the South Asian nation dispatched $18.8 billion worth of apparel exports in the first seven months of the year, reclaiming its position as the second largest clothing exporter aside from China. Compared with the same period in 2019, Bangladesh underperformed by 7.7 percent, and numbers are expected to decline once again as a result of the Covid-19 delta variant’s impact on shipments from South and Southeast Asia.
In April of this year, Salek Textile was further set back by a fire at its facilities, despite receiving funds from an insurance claim.
Malek Spinning’s share price took a hit on Sunday after news of the closure went live on the Dhaka Stock Exchange (DSE) website, but have since stabilized.