BSEC steps in to turn around loss-making Usmania Glass

The Bangladesh Securities and Exchange Commission (BSEC) has moved to convert the state-owned loss-making entity Usmania Glass Sheet Factory into a profitable one.

The company operated by the Bangladesh Chemical Industries Corporation incurred losses of Tk 44 crore in the last six financial years since 2014-15, according to its financial reports.

As part of the move, the BSEC called a meeting with the board of directors and senior executives of Usmania Glass last month. BSEC Commissioner Shaikh Shamsuddin Ahmed chaired the meeting.

The BSEC took four decisions to bring the company back from the losses, according to the meeting. The decisions were sent to the company on February 10.

Usmania Glass may comply with the requirement of maintaining a minimum of Tk 30 crore of paid-up capital through the conversion of their quasi-equity loan from the government to equity capital, according to the minutes of the meeting.

The other decisions included recruiting some sector-specialist (engineers) as independent directors on the company’s board, bringing competent persons in their senior management team for the betterment of their management efficiency.

A follow-up meeting can be arranged six months after the first meeting, said the minutes.

The BSEC also asked the company if it has any plans to halt the losses as the company’s present condition looks no good.

“It’s not possible to turn around the company from the losses with its ancient machinery, which is almost 60 years old,” said Usmania Glass Sheet Factory Managing Director Md. Mohiuddin.

The Chattogram-based publicly-traded company paid no dividends since 2018 when it disbursed a 10 per cent stock dividend to the shareholders.

Listed in 1987, the company is the government's lone manufacturing plant producing glass sheets since 1959.

One year into the suspension of production caused by a fire accident on June 24, 2020, it resumed its production on August 6 last year.

It has been serving as one of the major glass suppliers in the country for a long time. A total of 300 people are now employed in the company.

In the private sector, PHP Group, Nasir Group, and MEB Group are currently producing high-quality glasses with their modern equipment.

While private companies are increasing their production capacity and making high profits, the losses of the state-owned company are rising every year.

According to the annual report, the company set a target to produce 145 lakh square feet of the glass sheet in FY20, but the actual production stood at 109 lakh square feet, which is 75.65 per cent of the production target.

On the other hand, the sale target of the factory was 145 lakh square feet, but the actual sale was 92.89 lakh square feet, which is only 64.06 per cent of the target.

On Sunday, the company’s share price rose 2.43 per cent to Tk 63.2 on the Dhaka Stock Exchange.