Cotton spinning and yarn production form the foundation of Bangladesh’s textile industry—the country’s largest export sector. From the dense industrial zones of Gazipur and Narayanganj to the growing textile hubs of Bogura and Cumilla, spinning mills have powered Bangladesh’s rise as one of the world’s leading apparel producers.
This article provides a complete project profile for establishing a cotton spinning and yarn production plant in Bangladesh, including market overview, project cost, production capacity, machinery list, profit analysis, and bank loan feasibility.
Importance of Cotton Spinning Industry in Bangladesh
The spinning sector converts cotton and synthetic fibers into yarns that feed the country’s massive weaving and knitting industries. Most importantly, without strong spinning capacity, Bangladesh would remain dependent on imported yarn—reducing value addition in garments.
Because of this, investment in spinning mills ensures job creation, import substitution, and foreign exchange savings. It also supports local farmers, transporters, and exporters.
Market Overview
Current Scenario
Bangladesh has around 450+ active spinning mills, producing more than 3,000 million kilograms of yarn per year. Still, the country imports around 1.2 million tons of yarn annually, mainly from India, China, and Vietnam.
This gap creates a big opportunity for new investors in the yarn and spinning sector—especially if they can ensure high-quality, consistent output.
Yarn Demand
| Yarn Type | Annual Demand (Million Kg) | Domestic Supply (Million Kg) | Import (Million Kg) |
|---|---|---|---|
| Cotton Yarn | 2,000 | 1,200 | 800 |
| Polyester / Synthetic Yarn | 1,200 | 600 | 600 |
| Blended Yarn | 800 | 400 | 400 |
| Total | 4,000 | 2,200 | 1,800 |
Source: BTMA & Export Promotion Bureau, Bangladesh (2024)
Project Summary
| Particular | Description |
|---|---|
| Project Title | Cotton Spinning and Yarn Production Plant |
| Project Location | Tongi / Cumilla / Bogura Industrial Area |
| Land Requirement | 2.5 acres (approx.) |
| Production Capacity | 12,000 kg yarn per day |
| Operating Days | 330 days per year |
| Raw Materials | Raw Cotton, Polyester, Viscose, Nylon |
| Finished Product | 30s to 60s count cotton yarn |
| Project Type | 100% Automatic Spinning Unit |
| Power Requirement | 1.2 MW |
| Project Implementation | 12 months |
| Target Market | Local knitwear, export-oriented RMG industries |
Estimated Project Cost
The total investment for a medium-sized cotton spinning mill (12,000 kg/day) is shown below:
| Cost Components | Estimated Cost (BDT) |
|---|---|
| Land and Land Development | 6,00,00,000 |
| Building and Civil Construction | 15,00,00,000 |
| Spinning Machinery (Ring Spinning, Carding, Combing, etc.) | 45,00,00,000 |
| Humidification & Air Conditioning System | 2,50,00,000 |
| Power Plant & Generator | 2,00,00,000 |
| Electrical Installation & Panel | 1,50,00,000 |
| Fire Safety & ETP System | 50,00,000 |
| Office, Furniture & Vehicles | 1,00,00,000 |
| Pre-Operational & Consultancy Expenses | 1,00,00,000 |
| Working Capital (3 months) | 10,00,00,000 |
| Total Project Cost (Approx.) | 85,50,00,000 BDT |
Machinery List and Specifications
| Machine Name | Quantity | Origin | Unit Price (BDT) | Total (BDT) |
|---|---|---|---|---|
| Blow Room Line | 1 Set | China / India | 3,50,00,000 | 3,50,00,000 |
| Carding Machine | 6 Sets | China / Germany | 1,20,00,000 | 7,20,00,000 |
| Comber Machine | 2 Sets | India | 1,50,00,000 | 3,00,00,000 |
| Draw Frame | 3 Sets | Germany | 1,00,00,000 | 3,00,00,000 |
| Simplex (Speed Frame) | 4 Sets | China | 75,00,000 | 3,00,00,000 |
| Ring Frame (1200 Spindles Each) | 12 Sets | China / Japan | 2,50,00,000 | 30,00,00,000 |
| Auto Cone Winding Machine | 2 Sets | Japan | 2,00,00,000 | 4,00,00,000 |
| Humidification System | 1 Set | China | 2,50,00,000 | 2,50,00,000 |
| Air Compressor | 2 Units | China | 25,00,000 | 50,00,000 |
| Generator (1000 KVA) | 1 Unit | UK / China | 2,00,00,000 | 2,00,00,000 |
| Total Machinery Cost | 59,70,00,000 |
Raw Material Requirement per Year
| Material | Annual Requirement (MT) | Rate (BDT/MT) | Total Cost (BDT) |
|---|---|---|---|
| Raw Cotton | 3,600 | 2,50,000 | 90,00,00,000 |
| Polyester / Viscose Fiber | 600 | 2,00,000 | 12,00,00,000 |
| Packaging Materials | – | – | 50,00,000 |
| Lubricants and Consumables | – | – | 30,00,000 |
| Total Annual Raw Material Cost | 1,02,80,00,000 |
Manpower Requirement and Annual Cost
| Position | No. of Employees | Monthly Salary (BDT) | Annual Cost (BDT) |
|---|---|---|---|
| Factory Manager | 1 | 1,50,000 | 18,00,000 |
| Production Engineers | 3 | 80,000 | 28,80,000 |
| Technicians | 10 | 40,000 | 48,00,000 |
| Operators | 30 | 20,000 | 72,00,000 |
| Helpers | 25 | 15,000 | 45,00,000 |
| Security & Admin | 6 | 18,000 | 12,96,000 |
| Total Manpower Cost (Yearly) | 75 | 2,24,76,000 |
Utilities and Overheads
| Particular | Annual Cost (BDT) |
|---|---|
| Electricity (1.2 MW x 20 hrs x 330 days) | 3,50,00,000 |
| Water and Maintenance | 25,00,000 |
| Fuel (for Generator) | 60,00,000 |
| Transportation & Delivery | 40,00,000 |
| Marketing & Administrative Expenses | 50,00,000 |
| Insurance & Miscellaneous | 30,00,000 |
| Total Utilities & Overheads | 5,55,00,000 |
Production & Revenue Forecast
| Description | Year 1 | Year 2 | Year 3 |
|---|---|---|---|
| Production Capacity Utilization (%) | 70% | 85% | 100% |
| Yarn Production (kg/year) | 27,72,000 | 33,66,000 | 39,60,000 |
| Average Selling Price (BDT/kg) | 420 | 420 | 420 |
| Total Sales Revenue (BDT) | 11,64,24,000 | 14,13,72,000 | 16,63,20,000 |
Profit and Loss Projection
| Particulars | Year 1 (BDT) | Year 2 (BDT) | Year 3 (BDT) |
|---|---|---|---|
| Sales Revenue | 11,64,24,000 | 14,13,72,000 | 16,63,20,000 |
| Raw Materials | 8,50,00,000 | 9,70,00,000 | 10,50,00,000 |
| Salaries & Wages | 2,25,00,000 | 2,50,00,000 | 2,75,00,000 |
| Utilities & Overheads | 5,55,00,000 | 5,75,00,000 | 6,00,00,000 |
| Total Operating Cost | 16,30,00,000 | 18,00,00,000 | 19,25,00,000 |
| Gross Profit | (4,65,76,000) | (3,86,28,000) | (2,61,80,000) |
| Depreciation | 3,00,00,000 | 3,00,00,000 | 3,00,00,000 |
| Interest on Loan | 1,50,00,000 | 1,30,00,000 | 1,00,00,000 |
| Net Profit Before Tax | 1,65,76,000 | 3,43,72,000 | 5,38,20,000 |
| Income Tax (25%) | 41,44,000 | 85,93,000 | 1,34,55,000 |
| Net Profit After Tax | 1,24,32,000 | 2,57,79,000 | 4,03,65,000 |
Break-Even Analysis
| Particular | Value |
|---|---|
| Fixed Cost (BDT) | 7,00,00,000 |
| Variable Cost (per kg) | 320 |
| Selling Price (per kg) | 420 |
| Contribution Margin (per kg) | 100 |
| Break-Even Quantity (kg) | 70,000 |
| Break-Even Sales (BDT) | 2,94,00,000 |
Financial Indicators
| Indicator | Value |
|---|---|
| Payback Period | 4.5 years |
| Internal Rate of Return (IRR) | 21% |
| Net Present Value (NPV) | Positive |
| Return on Investment (ROI) | 17% |
SWOT Analysis
| Strengths | Weaknesses |
|---|---|
| Strong demand from RMG industry | High power consumption |
| Availability of skilled labor | Raw cotton fully imported |
| Competitive labor cost | High initial investment |
| Opportunities | Threats |
|---|---|
| Export potential to India and EU | Exchange rate fluctuation |
| Value addition in local textiles | Raw material price volatility |
Sustainability Considerations
Modern spinning mills are moving toward energy-efficient motors, LED lighting, and solar-assisted power to cut operational costs. Using recycled cotton fibers and ensuring zero wastewater discharge can also attract global buyers focusing on green compliance.
Government Support and Incentives
Bangladesh government provides:
- Duty-free import of textile machinery.
- 5% cash incentive on export of yarn and fabrics.
- Low-interest term loans from banks under industrial policy.
- Bonded warehouse facilities for export-oriented units.
These supports make spinning mills a highly bankable and sustainable investment in the country.
Implementation Schedule
| Activity | Duration |
|---|---|
| Land Development & Civil Work | 4 months |
| Machinery Procurement | 2 months |
| Installation & Commissioning | 3 months |
| Trial Production | 1 month |
| Commercial Operation | Within 12 months total |
Key Success Factors
- Using modern high-speed ring frames for quality consistency.
- Maintaining humidity and temperature control in production halls.
- Employing experienced textile engineers.
- Building strong linkages with local knitwear factories for continuous orders.
- Ensuring regular preventive maintenance to avoid machine downtime.
Challenges and Risk Factors
- Global cotton price volatility.
- Rising energy tariffs in Bangladesh.
- Dollar rate instability affecting imports.
- Skilled operator retention challenges.
- Strong competition from India, China, and Vietnam.
Mitigation: Long-term supply contracts, efficient energy systems, and currency hedging help reduce these risks.
Conclusion
The cotton spinning and yarn production industry in Bangladesh remains one of the most stable and profitable manufacturing sectors. With steady domestic demand, government support, and a growing export market, investors can expect sustainable returns within 4–5 years.
A properly designed bankable project profile ensures accurate financial planning, smooth loan approval, and investor confidence.
Call to Action
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