Rahima Food set to start over after long gap

Rahima Food Corporation Ltd, a re-listed company, is planning to make a comeback in business operation in full swing by June this year following a gap of seven years.

The company had been out of business since 2013.

The company authorities hope that it will be able to fully run after changing the nature of its business -- from refined edible oil to coconut oil.

Setting up of a new coconut oil plant is in progress which is expected to be complete by May 2021.

After a big loss, Rahima Food Corporation made a profit of about Tk12 lakh and its earnings per share (EPS) stood at Tk0.06 in the first quarter (Q1) -- July-September period -- in fiscal year 2020-2021.

The company's loss stood at Tk3.42 crore while its loss per share was Tk1.71 in the same period a year ago.

In the entire fiscal year 2019-2020, Rahima Food incurred a loss of Tk2.40 crore while its negative EPS stood at Tk1.20.

But in FY19, the company made a profit of Tk47 lakh and its EPS was Tk0.24.

In order to return to business operation, the company opened Letter of Credit (LC) in August 2019 to import machinery from China, but due to the pandemic, they are yet to arrive in the country.

The company has already set up gas and electricity connections, updated trade licences, TIN and BIN certificates and other necessary documents.

Shahidur Rahman, chief financial officer of Rahima Food Corporation Ltd, told The Business Standard, "We hope to go into full operation by June 2021. We have followed all procedures for the purpose."

"We opened LC for importing machinery from China but the pandemic brought the move to a halt. All machinery is expected to arrive in the country by February-March."

"After the factory has been set up, it will operate in full swing. The company was out of business, but its earnings came in the form of interest from our investment, and we made some profit," he added.

Rahima Food Corporation Ltd was incorporated on 6 June 1990 as a private limited company, and in 1997, it entered the share market through Initial Public Offering (IPO).

But on 19 July 2018, the Dhaka Stock Exchange (DSE) delisted its share trading because the company was not in operation for a long time.

Its share trading resumed in DSE on 29 December last year under the 'A' category after a break of more than two years, while the trading started on Chittagong Stock Exchange (CSE) on 28 December.

In November 2020, the BSEC sought an explanation from the DSE for delisting the company.

It also issued a directive to the CSE to withdraw its suspension order immediately.

Therefore, on 12 November last year, the port city bourse withdrew its suspension order.

City Group, a leading conglomerate and consumer goods manufacturer in Bangladesh, is helping Rahima Food Corporation make a comeback in business, acquiring a 37.38% share of Rahima's sponsors and directors.

The company used to produce edible oil and vegetable ghee in its own refinery.

According to an official of the corporation, in December 2017, the board of the company was reformed by the City Group. The new management decided to set up a coconut oil plant.

Rahima Food's paid-up capital is Tk20 crore. Sponsors and directors hold 37.38%, institutions 20.67%, foreign investors 4.99% and general investors 36.96% of the company's shares.

Marico Bangladesh is the market leader with 80% market share of the hair oil industry.

Besides, foreign brands Dabur and Emami also dominate the market.

According to the market insiders, the domestic market size stood at $41.3 million in 2019 and is expected to grow by 5.5% to $54 million till 2025.