Intraco to invest Tk31.50cr for LPG cylinder production
Though some local companies make cylinders, the gap between the local demand and production is vast
The Intraco Refueling Stations Limited will invest Tk31.50 crore for making cylinders for Liquefied Petroleum Gas (LPG).
The company will buy a 40,000-square-feet LPG bottle production unit in Cumilla. The facility is capable to manufacturing 2,000 LPG cylinders per day.
Intraco will purchase the unit from the fund it raised through Initial Public Offering (IPO) in 2018. As the company then said that it would build a LPG bottling facility in Chattogram, the change in decision now for the Cumilla plant will need the approval of the shareholders.
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The revised proposal will be placed before the annual general meeting slated for 24 December. Company Secretary of the Intraco Refueling Stations Limited GM Salahuddin told The Business Standard that they have decided to invest in making LPG bottles as the LPG market is gaining momentum.
The country's LPG market is growing exponentially. Bangladesh Petroleum Corporation (BPC) data say that use of the LPG has increased by 397 percent over the last four years.
In 2017-18 accounting year, 5.37 lakh metric tonnes of LPG was bottled while the sale volume in 2014-15 was 1.30 lakh metric tonnes. LPG cylinders are mainly imported from China.
Locally, Bashundhara LPG Limited, BM Energy (BD) Limited, Omera LPG Limited, TK Cylinder Limited, Petromax Cylinder Limited, G-Gas LPG Limited, Navana LPG Limited, Jamuna Spacetech Limited, Universal LPG and Cylinder Limited, Fresh LPG Limited, Delta LPG Limited, Unitex LPG Limited and GMI LPG Limited are in the LPG business in Bangladesh.
However, the gap between demand of LPG cylinder and local production is huge and the Intraco Secretary Salahuddin said they "want to take the chance".
The company recommended a 10 percent stock dividend for its shareholders in 2018-19 accounting year. The record date has been set at November 18.
The Intraco Refueling Stations Limited posted a net profit of Tk9 crore in last accounting year, while the year-on-year profit was Tk6 crore.
Company Secretary Salahuddin said the stock dividend will be used as working capital and a portion of it will be spent in buying the new unit in Cumilla. Intraco Refueling has a paid-up capital of Tk79 crore while its current reserve stands at Tk18 crore.
The company has applied to the High Court seeking the permission for merging its five subsidiaries. Those are — Abbas & Elias Enterprises, East End Automobiles Ltd, M Hye & Co CNG Refueling Station Ltd, Good CNG Refueling Station Ltd and Nessa & Sons Ltd.
The merger will enable Intraco the corporate 10 percent tax waiver. And the subsidiaries will be able to float their shares in the stock market once they are merged.
Currently, companies which are listed with the bourses enjoy the 10 percent tax waiver while the subsidiaries have to pay 35 percent corporate tax.
The price of Intraco Refueling share was Tk53.60 in 2018 and soon it jumped up to record high Tk55.80. The closing price of Intraco share was Tk14.60 on Monday.
The company recorded a 74 percent price fall on its share in last one year.
