Home ›› 09 Nov 2021 ›› Stock
Aziz Pipes Limited, which reopened in the previous month after an eight-month shutdown, has announced to halt its production for an indefinite period.
“Shortage of working capital, complexities in bank loans, financial crisis, loan liabilities, raw material crisis, and lack of reserves forced it to take the decision,” said the company in a filing with the Dhaka Stock Exchange on Monday.
The reopening decision will be made once the situation becomes favourable, said the PVC pipe manufacturer.
On August 22, the company announced to resume production from October 01, 2021, leaving a positive impact on its share price.
Its share gained 26.92 per cent since the production announcement, according to the DSE data.
In January, it stopped production as the raw material prices skyrocketed due to the pandemic.
The company had said the PVC supplier was not supplying resin (raw materials) on time due to coronavirus and the stock had run out.
On the other hand, the prices of raw materials in the local market rose abnormally due to the pandemic. That’s why the board of directors of the company decided to stop production from January 10.
At that time, the company said, “The production will resume if the condition of PVC resin improves.”
The company suffered losses worth around Tk 44 lakh in fiscal 2020-21 due to the pandemic. However, its profit was Tk 14 crore in the previous financial year. It has been making profits since FY17.
The company declared no dividend in the financial year and 1 per cent cash dividend in the previous fiscal year.
Listed in 1986, the company has Tk 24 crore in negative reserve, indicating it is a loss-making company now.
According to its latest annual report, the auditor commented that the equity of the company is negative consecutively, and debt service and interest service ratio is low. Hence, it expressed doubt about the company’s ability to continue the production.
Aziz Pipes was incorporated in 1981. It has started its commercial production in 1985 from its Faridpur’s Sibrampur factory.
