Olympic to get Tk 42cr to expand biscuit production
Olympic Industries, a listed supplier and retailer of consumer goods, is set to improve its biscuit creation capacity by more than 10 per cent.
The maker of popular brands such as for example Energy Plus, Tip and Nutty will invest around Tk 42 crore to expand its gross annual production capacity by 12,442 tonnes, the business said in a disclosure on the Dhaka Stock Exchange (DSE) website.
The stock of the company closed 1.21 % higher at Tk 175.60 yesterday.
At present, the business can produce 117,214 tonnes of baked goods yearly.
To improve its production potential, Olympic will import a fresh 1.80-metre-large cracker and hard biscuit line, filled with ancillary and packing machinery, flour and sugar handling systems and a gas generator.
The new line will produce the same biscuits that are being made by the business's existing facilities, said Md Nazimuddin, company secretary of Olympic Industries.
"With the brand new machinery, which is brought from Italy, China, Hong Kong and India, production increase to an excellent extent," he added.
The neighborhood biscuit industry has been growing by about 15 % annually, indicating that there is enormous potential in this market.
So, Olympic is seeking to grab the ability with this new expenditure, which has attracted buyers to the company's stocks aswell, according to stock trader Khorshed Alam.
"We expect that it'll continue to provide higher dividends because the pandemic has designed a chance for the bakery sector," he added.
Olympic's overall revenue between April and September stood at Tk 859.3 crore, up 19.7 per cent year-on-year.
The business had announced 52 % cash dividends for the year that ended on June 30.
With market share of around 23 %, the top rated biscuit maker logged earnings of Tk 202.5 crore in the 2019-20 financial year, up 8.2 % from that in the year before.
The brand new line will be jointly financed through the business's funds as well as bank loans.
"The board's decisions can help control costs, stabilise and improve top quality of goods, create the capability for huge count varieties and thereby increase overall development capacity," the business explained in the disclosure.
Last month, Olympic had made a decision to invest around Tk 4.92 crore to increase the packaging of its biscuits and different confectionary items.
The business will import brand-new equipment from China to create PET sheets and trays for packing baked goods.
Bangladesh produces about 475,000 tonnes of biscuits every year. The country produced practically Tk 6,000 crore worth of biscuits in 2018, in line with the Bangladesh Auto Biscuit & Bread Manufacturers Association.
Annual per capita biscuit consumption on Bangladesh is going to be 1.8 kilogram although it is 4 kg in Sri Lanka. Meanwhile, the total amount is usually 2.2 kg in India and 2.5 kg in Pakistan, relating to IBISWorld, a US-based industry research firm.
Olympic also informed that it had accepted Tanveer Ali as being the nominated director for its foreign shareholder, Kingsway Fund-Frontier Buyer Franchises, which owns approximately 11.38 % share of the business.
