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RAK Ceramics (Bangladesh) is investing almost Tk 200 crore to set up plants aiming to boost its manufacturing capacity.
With its latest investment decision, its total investment announcement stood at Tk 1,150 crore in the last nine months.
“The board of directors has decided to invest in faucets business by establishing a new plant with production capacity of 1,500 pcs per day at an estimated investment of Tk 95 crore,” said the company in a filing with the Dhaka Stock Exchange on Thursday.
The company announced to invest Tk 902 crore to enhance its tiles production through a Greenfield project on June 14, 2022 and Tk 52.50 crore to increase its tiles production capacity by upgrading machinery in their existing factory on October 27, 2021.
RAK Ceramics (Bangladesh) company secretary Muhammad Shahidul Islam told the Business Post, “The company is expected to benefit from Tk 902 crore investment decision in the next three years and Tk 52.5 crore investment decision in the next one year.”
“The return from the latest investment decision will take time. Besides, we’ve decided to invest Tk 100 crore to increase production of sanitary tiles,” he said.
The company already bought 33.91 acres of land in Gazipur at a cost of more than Tk 62.73 crore to establish new manufacturing facilities, according to him.
In the second quarter of this year, RAK Ceramics’ sales increased by 16.35 per cent from around Tk 3,27 crore to over Tk 3,80 crore, said the company in the regulatory filing.
However, settlement of multiple import bills in the reporting period causing vendor payment was more compared to collection. As a result, its net operating cash flow per share decreased.
After the completion of the Tk 902-crore project, the company’s tiles production capacity will increase by 15,000 square meters per day. The company is expected to complete the project by two years, said the company.
According to the company’s latest financial report, the earnings per share (EPS) for the second quarter (January-June) fell by Tk 0.01 as compared to the same period of the previous year.
RAK Ceramics manufactures tiles and sanitary ware under several brand names. It has four tile plants in Bangladesh with an annual production capacity of 12.30 crore square metres and annual sanitary ware production capacity of 14 lakh pieces.
RAK Ceramics share price declined 1.82 per cent to Tk 43.20 on the Dhaka Stock Exchange on Thursday.
The company has Tk 1,883 crore market capitalisation while its paid-up capital is Tk 427 crore and surplus reserve Tk 174 crore.
RAK Ceramic was incorporated in Bangladesh in 1998 and got listed with the stock exchanges in 2010.
The country’s total ceramic market size is Tk 6,000 crore. The industry is expected to be a major export earner within the next five years, according to the company’s latest annual report.
Currently, there are more than 60 ceramics manufacturers in the country with 20 more facilities in the pipeline, including those making tableware, tiles and sanitary ware.
