Anwar Galvanizing to expand business investing Tk27cr
The company is planning to expand its market share of galvanised iron-pipe fittings (GI Fittings) from existing 25% to 52%.
Anwar Galvanizing Ltd, a sister concern of Anwar Group, has decided to double its production by investing Tk27.37 crore.
The company is planning to increase production to expand its market share of galvanised iron-pipe fittings (GI Fittings) from existing 25% to 52%.
"The demand for the GI fittings has been increasing gradually in the recent years due to the infrastructure development in both public and private sectors," said Tauhidul Islam, company secretary of Anwar Galvanizing Ltd.
"Besides, the import of GI products from China had decreased significantly during the pandemic. As a result, the company is going to make new investments to grab the market," he added.
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GI fittings are an important part of the construction and housing sector. The bulk of the local demand for these products is met by imports from China.
But, the novel coronavirus pandemic that led to a halt in export-import activities for several months has paved the way for the local manufacturers of these products to increase sales, said the people involved in this industry.
The investment plan of Anwar Galvanizing
Anwar Galvanizing Limited went into operation in the mid-1980s with the production of galvanised corrugated sheets.
The company was the country's first and leading manufacturer of GI Fittings and brake drums.
To meet the growing GI fittings demand, the company had halted producing brake drums in 2019.
Now the company is going to increase its production capacity by 2,417 metric tonnes per annum, according to the disclosure published on both stock exchanges on Tuesday.
After the implementation of the new plan, its total production capacity will be 4,725 metric tonnes per annum.
The additional 2,417 metric tonnes of GI fittings shall directly replace the products that are currently being imported to the country, said the company.
"After doubling the production, the company's market share will increase, which will impact its financials and revenue," said Tauhidul Islam.
The new expansion project shall be financed from a mix of own resources and borrowed finance.
The new investment plan is expected to be in operation by the fourth quarter of 2022.
The company said they have received a sanction letter on 23 May from the Dhaka Electric Supply Company Ltd (Desco) for an additional power supply of 1 MW that will support the expansion.
"The demand of our products increased gradually before the pandemic. After the pandemic started, the demand has grown significantly. We have been in a monopoly position in the in GI fittings products market for quite some time. In the recent times some companies came into the business but they were significant," said Tauhidul Islam.
Significant growth in revenue and profit amid pandemic
As product demand increased amid the pandemic, its revenue and profit rose significantly.
In July 2020 to March 2021, its sales rose by 11% and profit by 49% compared to the same time of the previous year.
In this period, its sales reached Tk43.77 crore and profit Tk3.24 crore, which was Tk39.43 crore and Tk2.17 crore respectively.
Earlier, in FY20 its sales grew by 23% to Tk53.42 crore and its profit jumped by 35% to Tk2.95 crore.
Its sales amounted to Tk43.34 crore and profit Tk2.19 crore in FY19.
Based on its financials, the company had paid a 10% cash and 5% stock dividends for its shareholders for FY20.
Anwar Galvanizing got listed on the Dhaka Stock Exchange in 1996. Its paid-up capital is Tk14.52 crore. Of the company's total shares, sponsors and directors hold 35.32%, institutional investors hold 23.51% and general investors hold 41.17%.
Its share price rose by Tk9.8 or 2.94% on Tuesday, closed at Tk343 each on the Dhaka Stock Exchange (DSE).
