Rahima Food suspends coconut oil production amid low demand

Rahima Food Corporation, a concern of City Group, has suspended operations at its coconut oil production plant, according to a disclosure filed with the Dhaka Stock Exchange (DSE). 

The suspension will remain in effect until further notice. Following the announcement, the company's share price dropped by 1.87%, closing at Tk83.80 today (2 July). 

Shahidur Rahman, chief financial officer of Rahima Food, told The Business Standard that demand for coconut oil from the company's factory has declined in recent years, resulting in a significant stockpile of unsold products. "Due to this, the management has decided to suspend the plant's operations," he said.

He added that cashew nut processing remains the company's core business, while coconut oil contributes only marginally to overall revenue. "Therefore, the closure of the coconut oil plant is not expected to significantly impact the company's overall performance."

In the first nine months of FY25, Rahima Food earned over Tk5 crore from cashew nut sales, compared to just Tk19 lakh from coconut oil. However, the company's overall revenue fell by 49% year-on-year to Tk5.71 crore during the July–March period, while net profit dropped 69% to Tk0.51 crore.

Established in 1990 as a private limited company, Rahima Food went public in 1997 and was listed under the food and allied sector. The company has a paid-up capital of Tk20 crore.

However, on July 19, 2018, the DSE delisted the company's shares due to prolonged inactivity. In fiscal year 2016–17, City Sugar Industries – a concern of the City Group conglomerate – acquired the sponsor shares with a plan to revive the business. Subsequently, Rahima Food was relisted on the DSE in 2020.