Dollar crisis, gas shortage squeeze paper firms' earnings
While demand for tissue and art paper holds, most firms struggle with raw materials and rising costs
Once thriving amid growing demand, Bangladesh's paper industry is now grappling with rising costs, shrinking sales, and gas shortages, raising fears of a sector-wide collapse. Most listed firms three out of five reported a decline in profit for the second quarter (October–December) of the current fiscal year, while market leader Bashundhara Paper Mills incurred a heavy loss.
Of the six paper firms listed on the bourses, five have published financial statements for the first six months through December 2025. Khulna Printing and Packaging, however, has remained non-functional and has not released its financials for a long time.
Industry insiders said high inflation, gas shortages, and banking constraints for importing raw materials have severely hurt the sector.
Sector under pressure
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Mustafa Kamal Mohiuddin, secretary general of the Bangladesh Paper Mills Association (BPMA) and chairman of Magura Multiplex, told The Business Standard, "The country's paper industry is almost on the verge of collapse due to three main reasons: the dollar crisis for importing raw materials, the gas shortage, and banking constraints. Most mills are closed, and only 10–15 are operating at lower capacity. Entrepreneurs are struggling to stay afloat."
He added that insufficient gas supply has forced mills to seek alternatives like LNG and coal imports, but banking restrictions have hindered these efforts. Mohiuddin also noted that digitalization has reduced overall paper demand, though specialized papers such as colour, art paper, hardboard, and tissue continue to see steady demand.
Performance of listed firms
In Q2 (October–December), Sonali Paper & Board Mills reported a 20% decline in revenue to Tk77.22 crore and a 17% drop in net profit to Tk10.15 crore compared to the same period last fiscal year. In H1 (July–December), however, the company recorded modest growth, with revenue up 4% to Tk159.60 crore and profit rising 7.64% to Tk19.44 crore, driven largely by first-quarter performance.
Md. Rashedul Hossain, company secretary, attributed the Q2 decline to seasonal factors, including school closures.
Hakkani Pulp & Paper Mills saw an 18% fall in Q2 revenue to Tk26.75 crore and a 9% drop in profit to Tk32 lakh. H1 revenue declined 6.58% to Tk58.05 crore and profit fell 7% to Tk52 lakh. The company attributed the decline to higher costs of sales, despite an increase in tissue segment sales, while revenue from newsprint dropped.
Mixed results for Magura Group firms
Two Magura Group concerns posted mixed results. Magura Multiplex reported a 7.4% rise in profit in H1, while Monospool Bangladesh saw a 3.56% drop to Tk4.71 crore and Tk7.55 crore, respectively.
Both firms recorded growth in Q2, with chairman Mustafa Kamal Mohiuddin attributing H1 performance to effective cost control.
Bashundhara faces big los
Bashundhara Paper Mills suffered a massive Tk249 crore loss in H1 FY26, citing raw material shortages, rising utility and borrowing costs, and price hikes.
The company had also recorded a Tk330 crore loss in the previous fiscal year. Its loss per share in Q2 reached Tk14.34, up from Tk5.84 in the same period last year. H1 revenue plunged 72% to Tk113 crore, down from Tk410.47 crore in FY25, while finance costs soared 31% to Tk204 crore.
An official, speaking on condition of anonymity, said, "Operating profitability declined sharply due to raw material scarcity, higher utility costs, rising input prices, and increased borrowing costs. As a consequence, EPS has decreased significantly."
As of December, Bashundhara Paper Mills' long-term loans stood at Tk2,118 crore, with short-term borrowings of Tk581.85 crore.
