Steelmaker Appollo to spend Tk 200cr on tech upgrade
Appollo Ispat Complex, a leading steelmaker, will spend Tk 200 crore to introduce environment-friendly technology in May next year to help cut production costs and boost capacity.
The technology will reduce production costs by 30 percent, while increasing capacity by 20 percent from its existing 1.20 lakh tonnes a year, said Abdur Rahman, deputy managing director of Appollo.
Germany's radiant tube furnace technology will help Appollo produce lead and acid free corrugated iron sheets in a non-oxidising furnace at its Narayanganj plant.
The radiant tube uses a rapid heating furnace that cuts out hydrochloric acid and lead usage during the galvanising process.
“Eliminating lead and acid usage during the final stages of production also makes the process cost effective and environment friendly, mostly used in developed countries. These CI sheet will soon be available in the local market,” Rahman said.
The finished product will be shinier, more durable and environment friendly, he said.
The local market size is around Tk 7,000 crore, of which Appollo holds nearly 20 percent, he said. Bangladesh needs six lakh tonnes CI sheet a year to match the local demand, he said.
“Appollo Ispat Complex has been steadily progressing. Even though it has not been listed for long, it is one of the leading engineering sector companies in terms of share transaction,” he said.
Appollo recently signed an agreement with world-famous Japanese steel maker Marubeni-Itochu, he said.
Appollo's net profit rose 3 percent to Tk 37.36 crore for the year ended June 30, 2014 from the previous year, and it consequently gave out 15 percent dividends to shareholders. The company's earnings were Tk 1.84 per share with a net asset value Tk 31.37.
“Our revenue saw a decline of 2.36 percent to Tk 495 crore due to political turmoil that hit production very badly,” said SK Abul Hassan, executive director of the company.
However, the company logged increased profits despite a fall in revenue as liability also declined in the period, he said. Appollo is trying to reach targets despite all hurdles including global recession and lack of supply of power and gas, Rahman said. “All these problems will be resolved soon.”
Appollo has authorised capital of Tk 500 crore of which Tk 250 crore is paid up. It raised Tk 220 crore by offloading 10 crore primary shares through initial public offerings. The proceeds were utilised to repay bank loans. The offer price of each share was Tk 22 including Tk 12 in premium.
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