Olympic secures Tk50cr Jica-funded project loan for expansion

Infographic: TBS

Olympic Industries PLC, the country's largest biscuit manufacturer, has signed a Tk50 crore loan agreement under a Japan-funded project to expand and modernise its factories, further consolidating its leadership in the fast-growing processed food sector.

The agreement was signed on 14 September in Motijheel between Olympic Industries and Bangladesh Infrastructure Finance Fund Limited (BIFFL), the implementing agency of the Japan International Cooperation Agency (Jica)-funded Food Value Chain Improvement Project. 

A disclosure filed with the Dhaka Stock Exchange (DSE) today said the loan, carrying a tenure of up to 10 years at 6% interest, will be used for the BMRE – balancing, modernisation, rehabilitation and expansion – of Olympic's existing facilities at its two Narayanganj plants located in Lolati, Sonargaon, and Madanpur, Bandar.

The company said the financing will enable it to strengthen production capacity to meet rising domestic demand for biscuits, confectioneries and bakery items while also enhancing competitiveness in regional markets. Olympic, which already enjoys a dominant share in the country's branded biscuit market, noted that the project aligns with its strategy to remain a reliable supplier in an increasingly competitive food industry.

Olympic has been aggressively expanding since 2019, investing around Tk200 crore in new production lines while also purchasing land worth nearly the same amount for future expansion.

The company has ventured into a wide range of products beyond biscuits, including chanachur, noodles, chocolates, cakes and bakery items, in an effort to diversify its portfolio.

Its annual production capacity currently stands at 1.48 lakh tonnes across biscuits, confectionery and tasty saline. In FY24, actual output was 1.15 lakh tonnes, slightly lower than 1.19 lakh tonnes recorded in FY23, indicating some headroom for further utilisation once expansion is complete.

Financially, Olympic continues to deliver steady growth. For the first nine months of FY25 (July–March), revenue rose 10% year-on-year to Tk2,143 crore, while profit edged up to Tk159 crore despite a challenging cost environment. 

The company attributed its performance to effective management measures aimed at maintaining revenue growth even as it faced higher material costs, increased operating expenses and the impact of a higher VAT rate imposed in January this year.

In FY24, Olympic posted revenue of Tk2,593 crore, marking a marginal 0.55% rise over the previous year. Profit, however, jumped 18% to Tk183 crore. 

Despite the earnings boost, the company declared only a 10% cash dividend—the lowest in its history—citing a conservative payout policy to preserve liquidity for ongoing expansions.

On the stock market, Olympic's shares fell marginally by 0.19% to Tk159.50 on Sunday, giving the company a market capitalisation of Tk3,189 crore.

Food value chain improvement project

The loan comes under the $105.1 million Food Value Chain Improvement Project, which BIFFL is implementing with Jica funding. The initiative, scheduled to run until September 2026, aims to improve credit access for agribusinesses and food processors, enhance their capacity for food safety, and foster stronger value addition in agricultural products.

The project is expected to contribute to the creation of a circular economy within Bangladesh's food sector by addressing gaps in post-harvest technology and food safety assurance, areas often cited as bottlenecks in agribusiness growth, according to the BIFFL.

The processed food market in Bangladesh is projected to grow at about 7.2% annually over the next five years, according to BIFFL, reflecting rising consumer demand amid urbanisation and lifestyle changes.

However, value addition remains limited compared to regional peers. Jica and BIFFL expect the project to stimulate investment in food processing, improve supply chain efficiency, and generate both rural and urban employment opportunities.

Eligible sectors under the programme include fruit and vegetable processing, spice milling, rice and grain processing, edible oil production, seed processing, organic fertiliser and biological pesticide production, as well as wholesale, logistics and retail industries. A single borrower can access up to Tk50 crore under the scheme with an interest rate capped at 6 percent and a loan tenure ranging from five to ten years.

According to BIFFL's 2024 annual report, the lender disbursed Tk25.04 crore from the fund last year to three projects – Shetu Pesticides Ltd for seed processing, Banga Flavour & Fragrance Ltd for food ingredients, and ACI Logistics (Shwapno) in the retail industry. In FY23, about Tk100 crore was disbursed under the project, while in FY22 disbursement was Tk215.20 crore. The fund remained idle during FY20 and FY21.