Political tensions, funding woes delay Econo Ball Pen factory renovation
GQ Ball Pen Industries, known for its brand Econo Ball Pen, recently announced delays in its factory renovation plans, citing political tensions, funding difficulties, and import hurdles as key obstacles.
The company communicated the current status in response to a letter from the Dhaka Stock Exchange (DSE) on 29 June and reiterated updates previously shared in April 2024.
According to the company, a series of uncontrollable external factors have hampered the progress of the renovation initiative. Attempts to secure financing from banks were unsuccessful, further complicating the project timeline.
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Adding to the complications is the fact that most of the company's machinery is sourced from India, which has become inaccessible due to recent diplomatic strains.
A major hurdle, the company said, stems from the fact that most of its machinery is of Indian origin.
Since August 2024, political relations between Bangladesh's interim government and India have soured, leading to the suspension of Indian visa issuance for Bangladeshi nationals.
The company stated that despite multiple attempts by GQ Ball Pen's Plant Manager to obtain an Indian visa for on-site inspections and negotiations, no response has been received from the Indian High Commission.
This has prevented the company from physically inspecting, negotiating, and procuring the necessary machinery and components, significantly delaying the renovation, said the company in its statement.
Exploring alternative suppliers in Germany or China is deemed financially unfeasible due to substantially higher costs, which would exceed the company's budgeted renovation expenditure, the statement read.
During the renovation period, GQ Ball Pen has maintained limited-scale production for organisational sales and contract manufacturing.
Earlier plans outlined in April 2024 estimated an investment of approximately Tk9 crore toward the factory's modernisation, with operations to resume post-BMRE, aiming to halt further losses.
In the last decade, the company, which started its business in 1981, suffered a staggering 90% drop in sales. In the fiscal 2023-2024, the revenue stood at just Tk5 crore, down from Tk30 crore ten years ago. Its close competitor Matador Ballpoint Pen, which started business in 1998, dominates the market at present.
Despite the challenges, GQ Ball Pen's share price closed 2.18% higher at Tk173.30 today.
