PP woven bag maker sinks on falling exports
Khan Brothers almost halved its business in the last fiscal year
Khan Brothers has drastically reduced its business by more than 50 percent in the last fiscal year, because of scarcity of orders from foreign buyers.
Due to a slump in the exports of (Polypropylene) woven bags, the main product of the export-oriented company, its net profit has dropped by 66 percent during the period.
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Besides, the company, which produces woven bags for packaging fertiliser, food, chemicals, textile, cement, sand and poultry feeds, incurred a net loss of Tk0.63 crore in the first six months of the current fiscal year.
Last year, Khan Brothers PP Woven Bag Industries Ltd failed to provide dividend to its shareholders.
Officials of the company listed in the stock market in 2014, said they did not receive any big orders from foreign buyers during the period.
They admitted weaknesses in their marketing – including lack of skilled people.
But the company has no initiative at this moment to strengthen the marketing, they said, replying to a question about their future plan.
The company's Chief Financial Officer and Company Secretary Tapan Kumar Sarker said, "The company exports its products mainly to Singapore, Norway and the UK. But the markets are not favourable for us now."
"Currently, we do not have big buyers who will offer us a good price," he said to The Business Standard. "We go into production when we get orders."
He admitted that they have laid off almost half the workers due to a low production.
Several firms are engaged in manufacturing PP Woven Bags for fertiliser, food, chemicals, textile, cement, sand and poultry feeds in Bangladesh.
United Fiber Industries, Sino Bangla Industries, Miracle Industries, Sovon Woven Bag Industries and Desh Bondhu Polymer Ltd are the main competitors of Khan Brothers.
Unlike Khan Brothers completely depending on exports, the other companies supply their products to both local and international markets.
Financial performance of Khan Brothers
After first six months of the current fiscal year, Khan Brothers' loss per share was Tk0.06.
In fiscal year 2018-19, the company's net profit was Tk2.43 crore, which was 65.58 percent lower than that in 2017-18.
During the year, the company's earnings per share was Tk0.25 and net asset value per share was Tk12.64.
Company's short-term bank loan was Tk9.11 crore in the last fiscal year.
The share prices have fallen gradually over the years.
On March 16, the company's shares were last traded at Tk6 each.
Sponsors and directors hold 30.13 percent shares, institutional investors 24.67 percent, and general investors 45.20 percent share of the company.
Journey of Khan Brothers
Khan Brothers PP Woven Bag Industries was incorporated as a private limited company in 2006 and went into operation in the following year.
Its main business is to manufacture different types of woven bags.
According to Bangladesh Plastic Goods Manufacturers and Exporters Association, in Bangladesh around 70 factories are engaged in manufacturing PP woven fabrics, PP woven bags, FIBC bags and other types of bags.
The overall investment in Bangladesh's woven bag manufacturing sector is approximately Tk3,500 crore.
