Fu Wang Food to invest in puffed rice production

As part of its expansion plan, Fu Wang Food Limited, a poorly run publicly traded company, decided to invest in the production of puffed rice.

The processed food manufacturer, according to a filing posted on the website of the Dhaka Stock Exchange (DSE) on Tuesday, said it would go into commercial production of puffed rice in February next year.

To this end, the listed firm would invest Tk 30 lakh to install the necessary machinery for setting up a separate production line in its existing Gazipur-based factory.

Once the project is completed, the company would have the capacity to produce 10 tonnes of puffed rice per day.

The listed firm would market the puffed rice under the brand name—Fuwang Muri, according to the DSE filing.

Sharif Al Mahmood, company secretary of Fu Wang Food Limited told the Business Post that the company was currently involved in the manufacturing of confectionary items, especially cakes and biscuits.

“The key raw materials of confectionary items are flour, and oil— two import-dependent goods. But in recent times, prices of these items went up many times, pushing us into hot water. This is because we are now eying to diversify our product portfolio for better business,” he added.

“In this situation, we have decided to produce puffed rice because its key ingredient is rice which is available in the local market. The puffed rice production could generate a good profit for us,” Sharif continued.

Following many irregularities by the previous management as well as the board, the Bangladesh Securities and Exchange Commission (BSEC) in February last year, handed the company a new investor – Minori Bangladesh – saying it would invest Tk 20 crore to make it viable and ensure compliance.

The company posted huge losses in the fiscal year 2021-22.

But Sharif Al Mahmood said that loss partly was the legacy left by the previous board.

Therefore, the company also appointed an auditor to review its financial report for the July-December period of the last year.

Some officials familiar with the matter, however, said a full-year audit would also be conducted separately for the fiscal year 2021-22.

Minori Bangladesh, a subsidiary of Japanese farming company Minori Co Ltd, after taking over the scam-hit firm, took several initiatives to upgrade Fu-Wang Food’s factory facilities and expand its marketing channels.

The listed firm registered a 35 per cent year-on-year slump in its net profit in the first quarter (July-September) of the fiscal year 2022-23.

It posted a net profit of TK 0.44 crore in July-September of the current fiscal against TK 0.68 crore in the same period last fiscal which was also its lowest quarterly profit in the past four years.

The food manufacturer’s earnings per share stood at Tk 0.04 for the latest quarter from Tk 0.06 for the same quarter last fiscal.

Minori Bangladesh bought a 7.61 per cent stake in Fu-Wang Food and secured three seats on the company’s board by replacing the firm’s previous three directors.

Minori Bangladesh had nominated Miya Mamun, Md Afzal Hossain, and Sidratul Mahabub Hasan as directors on Fu-Wang Food’s board replacing the then managing director Arif Ahmed Chowdhury and directors Afsana Tarannum and Lubaba Tabassum.

Listed with the capital market in 2000, Fu-Wang Food used to pay stock dividends to its shareholders till 2018.

Later, it paid only a 2 per cent cash dividend for FY19 and 1.65 per cent cash for FY20 and FY21 each.

It, however, declared no dividend for the fiscal year 2021-22.

Fu Wang Food shares were traded at Tk 23.5 per share on the trading floor of the Dhaka Stock Exchange (DSE) on Tuesday.