According to its reports, in the first half of the current fiscal year (July to December), its production costs increased by around 8% due to rising gas and electricity prices, while finance costs for loans surged by 108% to Tk155.92 crore
Bashundhara Paper Mills, one of the major players in the paper industry and the leader in the tissue market, has suffered a significant setback in the first half of the current fiscal year, slipping into the red with a Tk101 crore loss.
Once a consistently profitable paper and tissue products maker of Bashundhara Group, the paper mills has now found itself in hot water due to rising costs in utilities, procuring raw materials, and financial expenses from higher interest rates, all of which have contributed to lower sales.
According to its reports, in the first half of the current fiscal year (July to December), its production costs increased by around 8% due to rising gas and electricity prices, while finance costs for loans surged by 108% to Tk155.92 crore.
It owed Tk1,796.79 crore in long-term loans to several banks.
Meanwhile, its revenue fell by 40% in H1 compared to the same period of the previous fiscal year.
In the first half of FY25, its revenue declined to Tk410.47 crore, and it incurred a loss of Tk101.48 crore.
In the entire fiscal year of FY24, the paper firm made Tk1,315 crore as revenue and posted a profit of Tk19.15 crore.
In its unaudited report for the half-year, the paper firm explained, “We have been severely affected by external economic variables like the increase in the exchange rate of the foreign currency, the price hike of raw materials, import restrictions, reluctance to open letters of credit (LC) by the bank, the increase in bank interest rates from 9% to 14.50%, and the availability of the US dollar.”
“Due to unavoidable political and economic circumstances, we were not able to open LCs for raw materials, which led to a huge loss in business,” it said.
“Negative developments in trade policy or global trade—including sanctions, import duties, and other trade restrictions between countries—could directly or indirectly affect sourcing inventory products and the company’s profitability,” it added.
It also said, “Significant or unforeseen fluctuations in the prices of other important production inputs such as energy and chemicals, and problems related to their availability, could erode profitability and threaten business continuity.”
“An unprecedented government-ordered nationwide internet and mobile connectivity blackout blocked social media, blocked raids, and several days of general holidays, shut down and closed educational institutions, which led to the economy as well as the business coming to a sudden stop,” it said.
“As a result, revenue has decreased by 40.11% for the year 2024-2025 from the same year of 2023-2024,” it added.
“While due to the economic and political variability, sales decreased by Tk274.95 crore during the July to December quarter of the year 2024-2025 from the same period of fiscal 2023-2024,” it concluded. https://www.tbsnews.net
