Meko Fabrics (Pvt.) Limited (formerly Meko Textile Industries (Pvt.) Limited) was incorporated as a private limited Company on February 17, 2023, under the Companies Act, 2017.

The Company is a business venture of the Mekotex Group, which is wholly owned by the three sons of Mr. Abdul Majeed: Mr. Khalid Majeed, Mr. Shoaib Majeed, and Mr. Ashraf Majeed. Established in 1971, Mekotex (Pvt.) Limited began as a modest fabric trading operation and has since evolved into a prominent player in the textile sector. The Group’s sustained growth and diversification have been driven by the entrepreneurial leadership of the three brothers, with increasing involvement from the next generation. In FY24, the Group underwent a strategic restructuring as part of its broader business diversification strategy. As a key element of this initiative, the Group’s local business operations, previously managed by its flagship company, Mekotex (Pvt.) Limited were transferred to Meko Fabrics (Pvt.) Limited. This transition was aimed at streamlining operations and enhancing strategic focus across its business segments.

The Company is engaged in the processing, manufacturing, and trading of both finished textile products and raw materials. Its registered office is located at WH-25, Korangi Creek Industrial Park, Korangi, Karachi. Looking ahead, a significant chunk of the spinning and weaving operations currently owned by Mekotex (Pvt.) Limited will be gradually transferred to Meko Fabrics (Pvt.) Limited as part of the Group’s ongoing restructuring strategy which is anticipated to have a significant operational and financial impact, aligning with the long-term objectives.

The Company's entire shareholding rests with the sponsoring family through individuals. The Company’s major stake (75%) is vested equally with Mr. Khalid Majeed and his two spouses, Ms. Roshan Bano and Ms. Safoora Nazli. While the remaining (25%) stake of the Company is held by his brother, Mr. Shoaib Majeed.

The Company’s ownership structure is expected to remain stable in the foreseeable future, supported by a clearly defined family constitution and the strategic transfer of shareholding to the next generation following the passing of Mr. Ashraf Majeed. This transition is guided by the Group’s long-term vision for continuity and strong governance within the family enterprise.

With an operational legacy spanning over five decades since its inception in 1971, the sponsors have established a considerable presence in the textile industry. Over the years, the Group has demonstrated resilience and adaptability through various economic cycles and market fluctuations, consistently expanding and diversifying its business portfolio. Strategic investments and gradual penetration into high-potential segments, such as denim, home textiles, and value-added fabric processing have significantly enhanced the Group’s overall market positioning.

The financial strength of Meko Fabrics (Pvt.) Limited (MFPL) emerges from the Group’s notable presence across multiple segments of the textile value chain. Beyond MFPL, the Group actively operates within the local textile industry through two additional companies: Mekotex (Pvt.) Limited, specializing in fabric processing and home textile, and Meko Denim Mills (Pvt.) Limited, focusing on denim manufacturing.

Overall control of the Board is vested in two members of the sponsoring family, and the current structure lacks an independent oversight function. However, the inclusion of an independent director would strengthen the Company’s corporate governance framework.

Mr. Khalid Majeed started his business and industrial career after completing his Master’s in Business Administration from Clayton State University. During his studies, he was already involved with the family’s industrial ventures, gaining practical experience in reputable textile spinning and weaving units. He initially joined Arif Industries, where he continues to serve as a Partner. In 1991, he founded a textile spinning unit named Mekotex (Private) Limited and has since been serving as its Managing Director. In this role, he has overseen the company’s expansions and managed marketing, human resources, procurement, finance, and technical operations. Additionally, he supervises the development of quality standards to meet ISO 9002 certification requirements and is currently working towards ISO 14000 and SA 8000 certifications.   Mr. Shoaib Majeed graduated with a degree in Business Administration in 1994 and promptly joined the family business. His initial role involved managing and establishing the home textile division, Kam International, founded in the same year. Since 1995, he has also overseen procurement and finance operations at Arif Industries. He joined the Board of Directors of Mekotex in 2002, where he manages the purchasing department and oversees the Group’s finances. Beyond his corporate responsibilities, Mr. Shoaib is actively involved in various social and industry organizations. Notably, he served as Vice Chairman of All Pakistan Textile Processing Mills Association (APTMA), Zonal Chairman of the All Pakistan Bedware and Upholstery Manufacturers Association, and holds executive committee memberships in the Landhi Association of Trade and Industry, Karachi Chamber of Commerce, and S.I.T.E Association.

The Company lacks a formal Board structure and does not maintain official minutes of Board meetings. Key financial data and business decisions are presented to the Board through Excel-based reports. The Board meets quarterly to review the Company’s financial performance, assess operational efficiency, and monitor progress toward its targets.

To uphold high standards of transparency, Crowe Hussain Chaudhary & Co. Chartered Accountants have been appointed as the external auditors of the Company. They expressed an unqualified opinion on the financial statements of the Company for the period ended June 30th, 2025. The firm is QCR-rated by the Institute of Chartered Accountants of Pakistan (ICAP) and is classified in Category 'A' by the State Bank of Pakistan (SBP) panel of auditors.

The Company’s organizational framework is divided into several departments to ensure a smooth flow of operations. Each department is headed by a strategic manager who reports directly to the Board of Directors. These departments cover both operational and support functions, enabling comprehensive oversight and coordination across the business. The primary operational departments include Marketing, Production, Processing, Spinning, and Accounts.

The Company's strategic managers, each with more than two decades of experience, contribute to the effective management of operations. The CEO, Mr. Khalid Majeed, an MBA graduate, has around 36 years of experience in the respective industry and serves as the Managing Director. He is responsible for driving key areas such as business expansion, marketing, human resources, and other critical operations. Mr. Ismail Qaiser, the Chief Financial Officer, is a qualified member of ICMA. He is well-versed in the textile sector and has been associated with the Company for around 24 years.

The Company currently does not have formal management committees in place. Management meetings are held on an ad-hoc basis, as and when required. The effectiveness of management could be improved through the establishment of formal committees with clearly defined roles and responsibilities.

The Company has implemented a customized, in-house version of Oracle 11g, which is fully operational and supports comprehensive financial reporting functions. The system facilitates the generation of Management Information System (MIS) reports on a monthly basis. These reports are reviewed by senior management to guide strategic planning and monitor overall performance.

The Company has maintained an adequate control environment, underpinned by a combination of an experienced marketing team, well-defined quality control procedures, and a comprehensive Health, Safety, and Environment (HSE) framework. This approach ensures operational consistency, adherence to regulatory standards, and the promotion of a safe and compliant workplace culture across all levels of the organization.

Textile exports reached USD 17.9 billion in FY25, a modest rise from USD 16.7 billion the previous year, reflecting a 7.2% year-over-year growth. The largest contribution came from the composite and garments segment, at USD 14 billion, which included the weaving segment at USD 1.8 billion and the spinning segment at USD 0.7 billion. The production of cotton cloth in FY25 declined by approximately 0.7% year over year, reaching around 877.1 million square meters. During FY25, about 25.3% of the cotton cloth produced was exported (compared to roughly 27.2% in FY24), with the rest used for the domestic market. The country's fabric exports fell by approximately 4.4% in FY25 (FY24: up about 5.8% YoY), with approximately 23.4% of Pakistan's cotton cloth exports going to Bangladesh (compared to about 19.9% in FY24), followed by the USA with about 8.1% of cotton cloth exports (compared to approximately 7.8% in FY24). In FY25, the transition from the final tax regime to the normal tax regime is expected to affect the profitability of export-oriented units, with a 29% tax on profits and a super tax of up to 10%. The recent removal of GST exemption (Finance Bill, 2025) on textile inputs for exporters registered under the Export Facilitation Scheme (EFS) will offer tax protection and create a level playing field for domestic cotton and yarn producers. Currently, internat ional cotton prices are higher than the price of locally produced cotton. The gap has widened to approximately 9.8 cents per pound (as of July 18, 2025), resulting in an average increase of about USD 36.8 per bale of imported cotton. A greater reliance on imported cotton could Lead to higher raw material costs, ultimately impacting yarn prices and profit margins for the sector. Conversely, energy and finance costs are expected to stay within a range, given the projected reduction in interest rates and the absence of any major energy tariff increases. Considering the current climate change, flooding in major cotton regions, and shifting crop patterns, the target of approximately 10.2 million bales for FY26 appears challenging.

The Company, having recently begun operations, is currently operating with limited production capacity. As a result, it is categorized as a small-tier player in the respective universe.

The Company primarily derives its revenue from the domestic sales. The product portfolio mainly comprises yarn, grey fabric, dyed fabric, printed and embroidered unstitched dresses for women. During 9MFY26, the Company’s topline experienced a remarkable growth and stood at PKR 3.9bln, primarily driven by higher sales volumes. The Company maintains a notable presence in the domestic market, serving a diversified customer base that includes Eden Apparels (Pvt.) Limited, Al Tayyiba Apparel, Tawakkal Fabrics, Dabiha International Company, and other established players. Customer concentration among the top clients remained slightly elevated; however, the associated risk is mitigated by the Group’s long-standing business relationships and recurring order flow. Going forward, the Company is actively engaged in onboarding several prominent customers to further diversify its revenue base and strengthen its market position. The management remains focused on enhancing sales volumes and expanding market outreach, which is expected to support business growth over the medium term.

During 9MFY26, the Company maintained a strong gross profit margin of 12.7%, supported by effective cost management and controlled production expenses. Administrative and General expenses remained contained at PKR 20mln, translating into an operating profit margin of 12.2%. Finance costs primarily comprised markup on short-term borrowings and bank charges. Additionally, the Company also incurred a taxation expense of PKR 182mln during the period. Consequently, the Company reported a PAT of PKR 239mln, translating into a net profit margin of 6.0%. Overall profitability remained supported by improved operational efficiency and higher sales volumes.

As part of the Group’s ongoing restructuring initiative, approximately 64,000 spindles have been transferred to the Company, strengthening its operational profile and enhancing business integration. Furthermore, the Company has established a new embroidery unit to reduce reliance on third-party vendors through greater in-house processing capabilities. In line with its focus on energy cost risk, the management has also invested in renewable energy sources, comprising solar and wind power projects. Currently, a 17.5MW solar power facility is operational, while the 7.5MW wind turbine project is expected to commence commercial operations by September 2026. All these initiatives are anticipated to boost the Company's profit from core business operations.

The Company primarily meets its working capital requirements through internally generated cash flows and short-term borrowings. As of 9MFY26, the net working capital cycle extended to 235 days (FY25: -44 days), mainly due to an inventory holding period of 304 days (FY25: 44 days), following the commencement of commercial operations and inventory buildup undertaken to cater increasing orders. The Company’s short-term trade leverage stood at 45.4% (FY25: 40.1%), indicating a moderate reliance on the short-term funding. Nevertheless, the liquidity profile remained strong, with the current ratio sustaining at 3.2x as of 9MFY26.

As of 9MFY26, the Company’s Free Cash Flow from Operations (FCFO) improved, primarily supported by higher EBITDA generation. Going forward, cash flow generation is expected to strengthen further as operational efficiencies from the newly established units materialize and production volumes scale up. Despite an increase in total debt, the Company’s interest coverage and core operating coverage ratios remained at adequate levels, reflecting a moderate debt-servicing capacity.

The Company maintains a strong capital structure with a minimal reliance on external debt burden. As of 9MFY26, the equity base increased significantly to PKR 5.1bln (FY25: PKR 1.0bln). The growth was primarily driven by a PKR 4.7bln subordinated loan from sponsors, recognized as equity, along with retained earnings of PKR 242mln accumulated from profits generated since the commencement of commercial operations. Consequently, the Company’s capitalization profile remains strong, providing adequate support to the ongoing business expansion plans.