Olympic Industries is in an enviable position when it comes to cash reserves – Tk 10 billion as of March this year – and it has been leveraging that to strengthen its market position even further.
In its sustained drive to accelerate business growth, it has recently decided to purchase 503.5-decimal more lands adjacent to its factories at Kanchpur and Narayanganj out of its retained earnings. The purchases will cost the company Tk 222.5 million.
Meanwhile, in the first nine months through March of FY25, Olympic Industries gained a more than 10 per cent year-on-year growth in revenue to Tk 21.43 billion. But profit rose only 1.27 per cent to Tk 1.59 billion due to cost escalation and an increase in VAT since January this year.
“The land acquisition is part of a larger strategic investment plan for future business expansion,” said Mintu Kumar Das, company secretary of Olympic Industries.
The latest announcement of land acquisition came after the company bought six pieces of land comprising 273 decimals at Kanchpur and Narayanganj at the expense of Tk 170 million two months back.
The company has been investing in land to develop and diversify its product line. Mr Das said they had witnessed a growth in demand, which was why they were focusing on building capacity to produce more and new food products in near future.
Over the last six years, Olympic Industries has invested around Tk 4 billion.
Apart from land purchase, it has spent money on building storage capacity and to import machinery.
Recently, the company decided to import brand-new capital machinery for a multi-functional chocolate plant along with standard accessories worth Tk 136.64 million, with production capacity of 3,300 tonnes per year.
In August last year, Olympic Industries imported capital machinery for a plant to manufacture snacks, specifically chanachur, for Tk 227 million.
The company will cover all registration costs, including value added tax and other government charges, with its own funds, said the company secretary.
The cash surplus company had also invested in properties in strategic locations across the capital city — Bashundhara,Tejgaon, Purbachal and Narayanganj — to facilitate expansion and get a wider market share.
Due to the pouring of investments, the value of the company’s assets went up to Tk 15.98 billion by March this year from Tk 10.98 billion in FY19.
Olympic’s performance so far
The company’s domestic sales rose 10 per cent while exports jumped more than 19 per cent year-on-year in the nine months through March this year. Currently, it exports products to over 32 countries, including the USA, UK and Australia.
The company’s business diversification strategy enabled it to achieve record revenue of Tk 25.92 billion in FY24, doubled in 5 years since FY19.
Listed in 1989, the biscuit manufacturer has shown consistent business growth. It is considered one of the best performing blue-chip stocks.
Even when most stocks were languishing on the floor due to the imposition of price movement restriction [not allowing any stock to go below the minimum price set], shares of Olympic Industries traded at prices above the floor price.
The stock’s performance in the secondary market accompanied by the company’s promising business attracted foreign investors who hold more than 34 per cent stake in the company, according to Dhaka Stock Exchange data updated as of March this year. That is the highest foreign stake in any listed company in Bangladesh.
The stake of overseas investors in Olympic Industries was 23.97 per cent in June last year.
Olympic Industries has diversified its product line. It launched biscuit and confectionery items in 1996 and entered the ball pen industry in 2008. Last year, it also started manufacturing testy saline.
The market for biscuits is worth Tk 50 billion-Tk 60 billion, with large and well-known brands taking up a major share, according to industry insiders.
Olympic Industries is the largest biscuit manufacturer in Bangladesh, capturing more than 30 per cent market share, and holds the second position in the battery market in Bangladesh.
The local biscuit industry has expanded by about 15 per cent annually in the last few years, according to an analysis by EBL Securities.
EBL Securities, in its equity note on Olympic, stated that Olympic Industries has made significant investments to enter various major segments, such as instant noodles, dry cakes, soft cakes, chocolate-enrobed wafers, filled candies, toffees, toasts, rusks, and savory snacks.
“These investments are a clear indication of the company’s expansion strategy,” EBL Securities noted.
https://thefinancialexpress.com.bd/stock/bangladesh/pubali-bank-to-issue-bonds-to-collect-tk-15b
