Olympic to invest Tk 42cr to expand biscuit production

Olympic Industries, a listed manufacturer and retailer of consumer goods, is set to enhance its biscuit production capacity by more than 10 per cent.

The maker of popular brands such as Energy Plus, Tip and Nutty will invest around Tk 42 crore to expand its annual production capacity by 12,442 tonnes, the company said in a disclosure on the Dhaka Stock Exchange (DSE) website.

The stock of the company closed 1.21 per cent higher at Tk 175.60 yesterday.

At present, the company can produce 117,214 tonnes of baked goods per annum.

To enhance its production capacity, Olympic will import a new 1.80-metre-wide cracker and hard biscuit line, complete with ancillary and packing machinery, flour and sugar handling systems and a gas generator.

The new line will produce the same biscuits that are being made by the company's existing facilities, said Md Nazimuddin, company secretary of Olympic Industries.

"With the new machinery, which will be brought from Italy, China, Hong Kong and India, production will increase to a great extent," he added.

The local biscuit industry has been growing by about 15 per cent annually, indicating that there is enormous potential in this market.

So, Olympic is looking to grab the opportunity with this new investment, which has attracted investors to the company's stocks as well, according to stock investor Khorshed Alam.

"We expect that it will continue to provide higher dividends since the pandemic has created an opportunity for the bakery industry," he added.

Olympic's overall sales between April and September stood at Tk 859.3 crore, up 19.7 per cent year-on-year.

The company had announced 52 per cent cash dividends for the year that ended on June 30.

With a market share of around 23 per cent, the leading biscuit maker logged profits of Tk 202.5 crore in the 2019-20 financial year, up 8.2 per cent from that in the year before.

The new line will be jointly financed through the company's funds as well as bank loans.

"The board's decisions will help control costs, stabilise and improve quality of products, create the capacity for high count varieties and thereby increase overall production capacity," the company said in the disclosure.

Last month, Olympic had decided to invest around Tk 4.92 crore to improve the packaging of its biscuits and other confectionary items.

The company will import brand-new equipment from China to make PET sheets and trays for packing baked goods.

Bangladesh produces about 475,000 tonnes of biscuits each year. The country produced nearly Tk 6,000 crore worth of biscuits in 2018, according to the Bangladesh Auto Biscuit & Bread Manufacturers Association.

Annual per capita biscuit consumption in Bangladesh is 1.8 kilogram while it is 4 kg in Sri Lanka. Meanwhile, the amount is 2.2 kg in India and 2.5 kg in Pakistan, according to IBISWorld, a US-based industry research firm.

Olympic also informed that it had accepted Tanveer Ali as the nominated director for its foreign shareholder, Kingsway Fund—Frontier Consumer Franchises, which owns approximately 11.38 per cent share of the company.