Metrorail brings National Tubes back on moneymaking track

The lone state-owned pipe manufacturer, National Tubes Limited, has returned to profit after three years as it secured a pipe supply contract to the country's Metrorail project.

The company posted a net profit of Tk91 lakh in the first three quarters of the current fiscal year. But National Tubes was a loss-making venture even in the same period last year with a loss of Tk57 lakh.

Securing a tender of pipe supply to the Metrorail project has changed the prospect of the company – bringing the state-owned pine manufacturer back on the profit-making track.

The company says its sales dropped owing to the suspension on new gas connection to commercial establishments. Followed by the suspension, National Tubes turned to a loss-making corner since 2016-17 fiscal year.

Later, the Dhaka Mass Transit Company Limited (DMTCL) agreed to use National Tubes products for construction of the sewerage network and some other parts of the project.

However, National Tubes Managing Director Sa M Ziaul Huq said, "Our pipes can also be used in other ongoing government projects alongside the Metrorail."

"I hope for the time being that the company's profit-making trend will continue. We have taken up the factory repair works to get involved in other projects too," he added.

According to the Ministry of Industries, the company posted loss in three straight years from 2016-17 to 2018-19 fiscal year. The losses in the consecutive years were Tk7.48 crore, Tk5.90 crore and Tk49 lakh respectively.

The net profit of the company in the 2015-16 fiscal year was only Tk71,000. However, the company provided the government with revenue and the shareholders with 10 percent cash dividend.

National Tubes manufactures Mild Steel (MS), Galvanized Iron (GI) and American Petroleum Institute (API) specification pipes. The international standard MS and GI pipes are used in the real estate and irrigation sectors. Besides, National Tubes is manufacturing API pipes for oil and gas transmission and distribution.

Industries ministry says that the National Tubes is also producing steel sheds, billboards and steel structures to diversify its manufacturing basket. National Tubes Limited has recently set up a modern galvanizing plant at its factory.

Apart from supplying to the government organizations, the company manufactures pipes and steel structures for ship-building, ship-repairing and private industrial entities.

The Ministry of Industries recently has taken up a project titled "Modernization of National Tubes Limited Mill 3" with an estimated cost of Tk3,087 crore.

The project will be completed by June 2022 where the government will assign Tk2,482 crore and National Tubes will finance the rest of the fund.

Established as a private entity in 1964, National Tubes went public in 1972. The company was listed with the share market in 1989. National Tubes' authorized capital and paid-up capital are Tk100 crore and Tk2,877 crore respectively, while the reserve is Tk534.24 crore.

Sponsor directors hold 0.50 percent share of the company while the government, institutional and general investors have 51 percent, 13.10 percent and 35.40 percent shares respectively.

The last trading price of National Tubes' share was Tk103 at the Dhaka Stock Exchange.