Home ›› 05 Sep 2021 ›› Stock
About 62 per cent of Agricultural Marketing Company Limited’s (AMCL PRAN) total production capacity has been laying unused due to declining market demand of several products and some other issues.
According to its annual report for financial year 2019-20, the publicly traded company in average utilized 38 per cent production capacity of its Narsingdi factory — its lone manufacturing unit.
The factory used 58.58 per cent of its total capacity to produce ice pop, mango bar and other similar food items.
It used 42 per cent of its soft drinks and juice production capacity and 22.27 per cent mineral water production capacity.
Md Eleash Mridha, managing director of the company, told The Business Post, “Our Narsingdi factory is too small to accommodate more products. On the other hand, the demand of some products is in decline in the market.”
Besides, in order to balance the profit margin, the company stopped production of some high-cost items, said the MD.Using glass-bottle juice as an example, Mridha mentioned the company suspended production of the product due to a low market demand.
“The factory used to produce a lot of mango juice in glass bottles. But now PET (polyethylene terephthalate) bottles are more popular. Though the factory still has the capacity to produce glass bottles, it is no longer utilised as before,” he said.
He also mentioned high transportation cost as another reason behind low production.
However, low production did not impact the company’s profit to a great extent.
According to the company’s five financial reports from FY16 to FY20, it made the highest profit of Tk 5.84 crore in FY19.
AMCL PRAN was hit hard by the first wave of the coronavirus as most of businesses were shut across the country for several months in the first half of 2020.
In FY20, the company gained a profit of Tk 4.56 crore, which was 22 per cent lower from that of FY19.
The company returned to profit in the first nine months of last financial year when it reported a profit of Tk 4.77 crore for July-March period, which was 4.6 per cent higher than the same period of FY20.
In this context, Md Eleash Mridha said, “When the pandemic appeared in the scene last year, all the shops were closed for about three months. Then our sales were severely impacted, which eventually affected the income and profit.”
Besides, he added, “The company has been facing some problems exporting products to India, which also negatively impacted the company’s income.”
According to its annual report, the company tried to recover from pandemic-induced damages, by increasing sales but avoided price-hike of consumer goods considering public interest.
AMCL PRAN is now focused on increasing exports. As per the annual reports, the company exported the highest in FY18 earing Tk 128 crore.
Although, its earnings from exports dropped to Tk 88.23 crore In FY19 rose to Tk 110 crore in FY20, despite the Covid restrictions.
Moreover, the company’s export earnings were almost 50 per cent of its total revenue in FY20.
“We are trying to increase our export earnings. The pandemic interrupted exports to some extent,” he said, adding that they were trying to recover from Covid shock.
AMCL PRAN was listed in the stock exchange 1996. The ‘A’ category company regularly issues dividends. In FY20 and FY19, it issued 32 per cent cash dividend.
According to Dhaka Stock Exchange data, the company’s market capitalization is around Tk 188 crore, while the paid-up capital is Tk 8 crore.
Throughout the last one year, the company’s share price moved from Tk 180 to Tk 238.80 and has been in an upward trend since July.
The price, which was Tk 192 on July 5, increased by 22 per cent and stood at Tk 235.5 on August 2.
