Fu-Wang Foods lays off factory amid gas shortage, raw materials cost hike

Fu-Wang Foods Limited, a publicly listed packaged food producer, has declared its factory lay-off driven by an acute gas shortage and a spike in raw material prices, according to a stock exchange filing.

The lay-off for six months with an effect from 22 August, the filing stated on Sunday on the stock exchanges website. 

Citing a board decision made on Saturday, Fu-Wang Foods said the lay-off was caused by inadequate gas pressure and surging raw material costs.

While the company did not disclose how many workers would be affected, its latest annual report for FY2023-24 listed a workforce of 1,126. The factory is located in Gazipur.

According to a previous report by The Business Standard, a severe gas shortage is disrupting production across Gazipur's industrial belt, forcing factories to run costly diesel generators, shut gas-dependent units and resort to manual processes normally handled by machines.

Gazipur has around 2,500 registered export-oriented garment factories, more than 400 of which depend entirely on gas, industry sources said. Textile, dyeing, finishing, denim, knitting and woven units need 7-8 PSI to operate, but pressure at many factories has fallen below 2 PSI, with some meters showing nearly zero.

Mohammad Zaman, company secretary of Fu-Wang Foods, told The Business Standard, "We aren't getting the required gas supply, which forced us to close the factory."

He added, "Raw material prices have also risen significantly. Given the gas shortage and higher costs, the board decided to shut the factory for six months. Before the closure, it operated partially whenever gas pressure improved."

Fu-Wang Foods was listed on the bourse in 2000 after being incorporated in 1997. It manufactures bread, biscuits, noodles, snacks, mini-snacks, chocolates, energy drinks, and other food products.

Once profitable, the company has been struggling to remain operational in recent years.

In 2022, Minori Bangladesh, a subsidiary of Japanese farming company Minori Co Ltd, took over Fu-Wang Foods by acquiring 7.61% of the shares held by its sponsor-directors.

The previous board was reconstituted by the capital market regulator, with new independent directors appointed. Since then, the company has been operating under the new management.

In April 2025, the new management of Fu-Wang Foods filed a case against Arif Ahmed Chowdhury, the company's former managing director, accusing him of extortion.

The new owner of Fu-Wang Foods also filed an arbitration case against the listed company's former owners, accusing them of failing to disclose liabilities worth Tk70.84 crore during the sale of their shares.

Non-compliance

Despite having a factory in operation, Fu-Wang Foods has become a non-compliant company due to its failure to publish quarterly financial statements and hold annual general meetings on time.

According to its disclosures, the company last published its third-quarter financial statements for FY2024–25, covering the period ended March 2025.

The 2025-26 fiscal year ended in June, but the company has yet to publish any quarterly financial statements, leaving investors without updated financial information and violating listing rules.

It has also failed to hold its AGMs regularly. Its last AGM was held in December 2024 for FY2023–24. The company did not pay any dividend to shareholders for that year.

Due to its failure to hold AGMs, the Dhaka Stock Exchange downgraded the company to the 'Z' category. 

According to its third-quarter report for FY25, Fu-Wang Foods posted revenue of Tk90 crore in the first nine months of the fiscal year.

Amid declining sales, it incurred a loss of Tk3.73 crore, with a loss of Tk0.33 per share.

Fu-Wang Foods is also non-compliant with the requirement for sponsor-directors to hold at least a 30% stake in the company. As of July this year, its sponsor-directors held just 7.85%, according to DSE data.

General investors held the majority stake at 82.56%, while institutional investors held 9.58% and foreign shareholders held 0.01%.

Fu-Wang Foods shares closed at Tk11.10 each on the DSE today (23 August), down 0.89% from the previous trading session.