From losses to big profits, Deshbandhu Polymer does an about-face
Deshbandhu Polymer Limited – a manufacturer of woven polypropylene (PP) bags for local markets and exports – posted a surprise profit in the April-June quarter, although the industry struggles to weather the pandemic shock .
The fourth quarter profit helped the Deshbandhu Group company recover from the losses it suffered in the first nine months of fiscal year 2020-2021.
Finally, the company reported a profit of Tk1.21 crore – an increase of 95%, compared to Tk62 lakh in the previous year.
Deshbandhu Polymer, which was listed on the capital market in 2011, recommended a 5% cash dividend for its shareholders – excluding sponsors and directors – for fiscal year 21.
According to company officials, imports of raw materials were disrupted during the pandemic and met demand from local sources.
Due to an increase in raw material prices in the local market, the PP woven bag manufacturer suffered a loss of Tk2 crore during the July-March period.
“While imports remained on hold for the pandemic, to meet demand, we bought raw materials from local sources but the price was very high. As a result, the costs increased,” told The Business Golam Rahman, Managing Director of Deshbandhu Polymer. Standard.
“However, as the raw materials are now imported, the cost has come down. This has led to an increase in profits, allowing the company to pay dividends.”
According to its financial data, in fiscal year 21, earnings per share (EPS) amounted to 0.20 Tk, compared to 0.10 Tk the previous year.
The net asset value (NAV) per share amounted to Tk 18.07, compared to Tk 10.48 during the previous financial year.
The company said its annual general meeting (AGM) will be held on December 15 via a digital platform while October 28 has been set as the registration date.
Deshbandhu Polymer factory, which started commercial operations in 2007, was established to produce 100% PP woven bags for packaging of sugar, fertilizer and cement industries as well as all types of food grains, white flowers, chemicals, animal feed. , fish food, rice and more to pack.
Its consumers include Kafco (BCIC), Zia Fertilizer Company, Jamuna Fertilizer Company and Deshbandhu Sugar Mills.
Industry sources said the PP woven bag manufacturing sector was struggling to resume operations after the pandemic shock.
A number of these companies have been able to continue their operations in part to meet local demand as exports are still very low.
During the pandemic, most companies’ exports halved while others had to shut down after losing buyers.
In addition, the raw material prices and shipping costs last year increased by more than 50% from normal.
Market insiders said the overall investment in the sector, with around 100 companies involved, is around Tk 3,000 crore.
Currently, the sector is growing by 20% per year.