Fu-Wang Foods to produce puffed rice targeting Ramadan

Fu-Wang Foods, a publicly traded bread and confectionary foods manufacturer, has decided to set up a puffed rice production line in preparation for the upcoming Ramadan.

Also, the company has decided to appoint Shiraz Khan Basak & Co, chartered accounting firm, as an auditor to conduct performance evaluations from July to December of 2022.

Fu-Wang Foods manufactures breads, biscuits, noodles, snacks, mini-snacks, chocolates, energy drinks, and other food items.

Minori Bangladesh, a subsidiary of the Japanese farming company Minori Co Ltd, took over Fu-Wang Foods by acquiring 7.61% of the sponsor-directors' shares last year, hoping for good potential.

According to the decision, the company will install a production line at its existing factory premises in Gazipur to make puffed rice under the brand name "Fuwang Muri".

The total investment has been estimated at Tk30 lakh, while the daily production capacity will be 10 tonnes.

Fu-Wang Foods hopes the new product will be available at the end of February this year.

Md Afzal Hossain, chairman and director of Fu-Wang Foods, told The Business Standard, "We are launching the new product targeting Ramadan because the demand for the food item remains high in that month. The new product is being introduced in the market to exploit that demand."

Regarding the appointment of the auditor, he said, "Minori Bangladesh acquired the company last year. It has been decided to appoint an auditor for the evaluation of ongoing business operations. Besides maintaining the current market, a decision will be made on what can be done to increase business."

Costly raw materials drag the company into losses  

After the change in management last year, Fu-Wang Foods has reported record revenue in fiscal 2021–22, according to its annual report, amid the ongoing crisis and inflation.

The hope of record revenue got upset when the raw materials price hike amid the Russia-Ukraine war pulled it into huge losses.

As a result, its gross profit declined by 71% over the previous fiscal year, it fell into operating losses, and finally, it incurred a loss of Tk24 crore in FY22.

The revenue of the company increased to Tk110 crore, which is 31.13% growth over fiscal 2020-21.

Fu-Wang Beverage Industry, a subsidiary of Fu-Wang Foods, also witnessed a 25% growth in revenue, but unfortunately, it also incurred a loss for the year.

After getting acquisition approval from the Bangladesh Securities and Exchange Commission (BSEC), Minori Bangladesh entered the board of Fu-Wang Foods in February last year.

According to sources, the acquisition cost Minori Tk10 crore. Of the amount, Fu-Wang's former directors will get Tk4 crore, and Tk6 crore will be invested in the company to deal with the financial anomalies regarding its inter-party transaction with its subsidiary.

In addition, Minori will inject a fresh investment of Tk20 crore to run Fu-Wang Foods.

Founded in 1997, Fu-Wang Foods Limited was fully owned by foreign investors who wanted to do business in the food processing industry in Bangladesh.

In 2000, it was listed on the stock exchanges. But later, the foreign investors sold the company to local investors.

Since its inception, the company has had confectionery items: cakes, breads, biscuits, toasts, snacks, and instant noodles.