Aziz Mohammad Bhai's second generation enters Olympic board

Infographic: TBS

The second generation of businessman Aziz Mohammad Bhai has entered the board of Olympic Industries Limited, a leading biscuit manufacturer of the country, through the appointment of his son and nephew as directors.

According to sources within the company, Asar Aziz M Bhai, son of Aziz Mohammad Bhai, has been nominated by Ambee Limited, which holds a 3.29% stake in Olympic Industries while Ahad Mohammad Bhai, son of Aziz's late brother Raja Mohammad Bhai, has been appointed as shareholder director.

Ahad is also chief executive officer of Bongo BD – video-on-demand streaming service provider, while Asar's current profession is unknown.

Aziz Mohammad Bhai's father Mohammad Bhai started the company in 1979 with a battery business called Bengal Carbide Limited. Later, the name of the company was changed to Olympic Industries Limited. And in 1996, the company entered the business of making biscuits.

Mohammad Bhai brought his sons and daughters into the ownership of the company. Besides, he appointed his brother Mubarak Ali as managing director to run the company.

Mohammad Bhai died in 2018. At this time, he was the chairman of the company. After that, there was no other member of this family except Aziz Mohammad Bhai on the board of the company.

However, Mubarak Ali's son, Munir Ali, had already joined the company. And Mubarak Ali died this year.

According to company sources, the post of chairman and managing director of Olympic is currently vacant. Besides, the director of the company, Aziz Mohammad Bhai, is living in Thailand. He does not attend any meetings of the company.

Mubarak Ali used to run the company until his death. Now Aziz Mohammad Bhai's sister's son Samad Miraly look after it. And now the board will be complete with Aziz Mohammed Bhai's son and nephew joining the company, the sources added.

The new directors could not be reached for comment.

Meanwhile, in the last three years, Olympic Industries has invested around Tk155 crore for product diversification and business expansion.

EBL Securities, in its equity note on Olympic, said the company has made significant investments to enter various major segments such as instant noodles, dry cakes, soft cakes, chocolate-enrobed wafers, filled candies, toffees, toasts, and rusks, and savoury snacks.

These investments clearly point out the company's expansion strategy, reads the equity note.

A researcher at a brokerage firm earlier said that investors deemed Olympic a good fundamental stock. But from 2021 to mid-2022, its share prices dropped over 50% owing to a bearish sentiment in the market fuelled by economic uncertainties.

But Olympic's business was not hurt much by the economic crisis. Rather, the company kept on investing in business expansion, even amid the crisis, which helped boost investor confidence, he added.

According to the Bangladesh Auto Biscuit and Bread Manufacturers Association and the Bangladesh Bread Biscuit-O-Confectionery Prostutkarak Samity, Olympic ranks first among its peers with a 22% market share in the snacks industry and around a 25%-30% share in the auto biscuit manufacturing industry.

Areas of concern

At a time when the instant noodles market was already crowded with giants such as Nestle (Maggi), Unilever (Knorr), New Zealand Dairy (Doodles), Pran (Mr. Noodles), and Bashundhara, Olympic too started a noodle production line with an initial capacity of 8,316 tonnes. Now, it plans to expand this production line as well and increase the capacity to 19,008 tonnes.

But the revenue contribution from this segment has not been up to par.

In addition, EBL Securities said Olympic's new biscuit line and cupcake manufacturing unit will add only Tk250 crore to the company's annual revenue. Its revenue was Tk2,143 crore at the end of the fiscal year 2021-22.

EBL Securities report also reads that, as per a recent media report, Olympic's management has expressed its intention to sell the company, but because of the high price of shares, the parties did not agree.

Such speculations can undermine investor confidence in the company and create a risk of potential losses, it added.