National Polymer to invest Tk18 crore to boost production

National Polymer Industries Ltd will invest Tk18 crore to build infrastructures in order to boost its production. 

It is planning to build another three-storey building on its existing premises. To finance the project form its own source, the company in the outgoing fiscal recommended 22 percent stock dividend for its shareholders.   

From stock dividend, the company obtained around Tk7 crore, which will be invested in the BMRE (Balancing, modernisation, rehabilitation and expansion) project. The remaining fund will come from banks as loan.  

Md Omar Faruk, chief financial officer of National Polymer, told The Business Standard that the demand for its products is increasing on the local and foreign markets. 

Therefore, they are investing in BMRE project to boost its production in order to meet the growing needs, he said. 

BMRE project requires big investment; therefore, board of directors of the company has also recommended raising capital by issuing rights shares, he said.      

At present, total production capacity of National Polymer is 34,362 tonnes.   

The company has recommended issuing rights share at 1R:1 (one rights share against one ordinary share). It has offered the rights share at Tk20 each (including premium of Tk10 per share).

The company wants to raise Tk60 crore as paid-up capital by issuing rights share. The authorised capital of the company will be increased from Tk50 crore to Tk300 crore.   

Therefore, the board will hold AGM (annual general meeting) on October 15 to get the recommendation involving stock dividend approved by the shareholders. 

The same day, an EGM (extraordinary general meeting) will also be held to get the recommendations approved by shareholders relating to issuing rights share and increasing authorised capital.

After the shareholders approve the rights shares issue proposal, the company will await approval of the Bangladesh Securities and Exchange Commission. 

AAA Finance and Investment Ltd will act as issue manager. 

National Polymer produces PVC pipes and fittings, doors, sheets, plastic products and furniture.

In the last six fiscal years from 2013-14 to 2018-19, the revenue of the company increases 103 percent to Tk300 crore. During the same period, net profit after tax has increased by 225 percent to Tk13 crore. 

Meeting the local demands, National Polymer is exporting PVC accessories to India, Nepal, Bhutan, and Saudi Arabia.  

In the 2018-19 fiscal year, the company exported PVC products worth Tk6 crore. It started its export operations from 2014, with exporting products worth Tk20 lakh that year. However, in the last five years, the company's export growth has increased by 2,900 percent.  

In this regard, National Polymer's Chief Financial Officer Omar Faruk said the demand for PVC products is increasing on the international market. Therefore, they are working on to explore market of their products in countries including Thailand, Myanmar and Sri Lanka.

Existing paid-up capital of the National Polymer stands at around Tk30 crore. The state-run Investment Corporation of Bangladesh holds 23.70 percent shares of the company.  

On Monday, at the Dhaka Stock Exchange, the closing price of National Polymer's share was Tk85.90. 

The highest price of the company's share was Tk133.90 while the lowest was Tk67.30 in last one year.