BD Thai losing business despite expansion of aluminium market

In 2016, Bangladesh Thai Aluminium Ltd held almost 50 percent of the country's aluminium extrusion products market.

However, the company has since been losing its market share, gradually, despite more than five percent annual growth of the global aluminium market and a decrease in the price of raw materials.

As a result, general investors are losing their confidence in the company and switching their investments.

The company said it has been losing business because of higher competition on the market.

In 2018-19, the company's turnover reduced by more than 24 percent. At the same time, its net profit decreased 41 percent and the cost of goods sold decreased 30 percent.

During the period, the company purchased raw materials of Tk61.41 crore, which is less than 41.66 percent from the previous year.

Professor Rubina Hamid, chairman of Bangladesh Thai Aluminium Ltd, said the company has been losing market share because of increased competition.

She said, "A number of companies have entered the market in recent years. We are losing a fair amount of our profits to these companies."

The chairman said aluminium profiles are now being imported for high rise buildings. As a result, we are losing customers who construct high rise buildings.

Additionally, some unscrupulous traders are importing aluminium profiles, via misdeclaration, at a lower price – and supplying the market. We have been compelled to reduce the price of our product's value because of their unlawful acts, she added.

BD Thai's financial performance 
Bangladesh Thai Aluminium Ltd paid no dividend for its investors in the last fiscal year that ended on June 30, 2019.

The company's net profit was Tk6.97 crore last year, which was Tk11.77 crore in the previous year. Meanwhile, the company's gross profit was Tk9.07 crore, which was Tk14.19 crore.

In 2018-19, the company's earnings per share was Tk0.56, and the net asset value was Tk27.36.

Last year, the company's net sales decreased to Tk160.41 crore from Tk121.22 crore the previous year.

Company's declining share price 
The company's share price reached Tk31.40 on January 11, 2018, but has been decreasing ever since.

On January 8, 2020, its share price on the Dhaka Stock Exchange closed at Tk9.90.

The company's sponsors and directors have failed to jointly hold a minimum of 30 percent of the company's shares. This is a violation of the joint ownership rules that require a minimum of 30 percent shares be held by the company's sponsors and directors.

The latter jointly hold 28.38 percent shares, while general investors hold 50.75 percent.

History of raising Bd Thai's capital
Bangladesh Thai Aluminium Ltd commenced operations on June 18, 1979.

The company was listed on the Dhaka Stock Exchange in 1991 and issued two lakh shares. The price of every share was Tk100 and it collected Tk20 crore to repay loans.

Further, the company collected Tk8.38 crore in 2001, Tk75 crore in 2010 and Tk52 crore in 2016 to repay loans and expand the company.

Bangladesh Thai Aluminium Ltd manufactures high quality aluminium profiles for: doors, windows, curtain walls, partitions, false ceilings, automobiles, railway windows, vertical blinds, signboards, ladders, etc.

Currently, Thai Aluminium has a reserve and surplus of Tk84.74 crore and its paid-up capital is Tk124.5 crore.

It has 12.41 crore shares with a face value of Tk10 each.

The company has a short-term loan of Tk119.53 crore and a long-term loan of Tk35.61 crore.

Profile: The aluminium market
The market for aluminium extrusion products has been rapidly expanding. The market has now grown at around Tk600 crore a year.

A scarcity of wooden materials has been prompting buyers to purchase aluminium extrusion products such as aluminium: doors, windows, staircase handrails and supports, as well as railings for verandas and corridors.

KAI Bangladesh Aluminium, BD Thai Aluminium, Chung Hua (formerly Fu-Wang Aluminium), and Dhaka Thai are the leading players in the industry.