Carew keeps buzzing with Tk190cr liquor profits despite sales slowdown
The state-owned distiller’s stellar performance comes largely on the back of strict import restrictions on foreign liquor and high-margin local operations that continue to fuel its bottom line
Highlights:
- Carew posts record Tk190cr profit in FY2024-25
- Liquor unit drives profits, offsetting sugar unit's heavy losses
- Import restrictions boost demand for Carew-branded alcohol
- Distillery profit margin strong at 43%, sugar remains unprofitable
- Revenue dipped 3% amid political unrest but rebounded later
- Sugar unit modernisation project delayed, profitability still uncertain
Carew and Company (Bangladesh) has defied a sales slowdown to post a record profit of Tk190 crore in FY2024-25, its highest in nearly nine decades.
Bite-Sized: How did Carew make record profits despite sales slowdown?
The state-owned distiller's stellar performance comes largely on the back of strict import restrictions on foreign liquor and high-margin local operations that continue to fuel its bottom line.
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Even after absorbing a Tk62 crore loss from its struggling sugar unit, Carew's consolidated net profit stood at Tk128 crore, up 52% year-on-year. The distillery alone saw its profit surge by about 32% from the previous fiscal year, underscoring how the company's liquor business has become its financial backbone.
However, the distiller's gross revenue in FY2024-25 dropped by 3% to Tk444 crore, as production and consumption fell during the July-September quarter amid political volatility in July and August last year.
But the numbers are still close to the previous two years. With FY25, for three consecutive years, the company has consistently generated over Tk400 crore in gross revenue and more than Tk100 crore in net profit from its distillery unit, which produces a dozen varieties of liquor, according to its financial reports.
As profits surged alongside revenue growth, data from the past seven years, since FY19, show that each year surpassed the previous one in profit. The distillery unit's net profit margin stands at 43%, highlighting the unit's efficiency, while the sugar business remains unprofitable.
The net profit margin indicates a company's profitability by showing what percentage of its total revenue remains as profit after all expenses have been deducted. A higher net profit ratio signifies greater efficiency and financial health, indicating that the company retains more earnings from its sales.
Carew and Co (Bangladesh), established in 1938 and nationalised in 1972, primarily operates a sugar mill, and additionally operates a licenced distillery to produce locally made alcohol from sugar molasses in Bangladesh and is located at Darshana.
Besides that it produces bio-fertiliser from crushed sugar cane and also has commercial firms, and a pharmaceutical unit.
Company officials said demand for Carew-branded alcohol has surged since 2021 after the government tightened restrictions on foreign liquor imports. To meet the rising demand, Carew had to expand capacity and increase production.
Carew's Managing Director Rabbik Hassan told The Business Standard, "The company has never made such a high profit from its distillery unit in its history. Due to strict restrictions on the import of foreign liquor, the demand for locally produced Carew-branded alcohol has been rising steadily. To meet the growing demand, we have had to increase production."
"Not only the distillery unit, but Carew's other business segments – the farm, bio-fertiliser, and pharmaceutical units – have also recorded their highest-ever profits this year," he added.
Regarding the decline in sales despite higher profits, he said sales had dropped slightly last year due to political unrest and changing circumstances, but it picked up towards the end of the year, which contributed to higher profits.
"We were able to sustain profit growth through several initiatives, including cost control within the factory and the collection of outstanding dues from the distillery unit. Moreover, we also increased the prices of liquor last year," he added.
Sugar unit's BMRE with Tk102cr
Despite the strong profit from liquor, Carew's sugar operation continues to weigh heavily on the company's balance sheet, with a Tk62 crore loss in FY25 pushing total accumulated losses to over Tk931 crore.
"We are unable to produce sugar in line with market demand. As a result, the sugar produced from crushed sugarcane is causing major losses. Additionally, high interest expenses on loans are further worsening the sugar unit's losses," the managing director explained.
With the hope of revival of its sugar unit, Carew has been modernising its sugar production unit with Tk102 crore, of which Tk92 crore from the government fund and Tk10 crore by its own.
The BMRE project, launched in 2012 as a two-year plan, has faced repeated delays and, 13 years later, is yet to complete a trial production run. The timeline has been extended by another year until June 2026 after a trial run failed when the cane-crushing season ended prematurely.
Asked whether the investment could turn the sugar unit profitable, Rabbik said, "The government has taken an initiative for modernisation. After it's done, the new project will be launched next year. Only then will it be possible to say whether it will actually be profitable or not."
