MJL to acquire Taj Jute Mills’ plot for expansion

Infographic: TBS

MJL Bangladesh PLC, the largest lubricant company in the country, is set to acquire the plot of Taj Jute Mills in Narayanganj for future expansion.

The fuel and power sector firm will invest Tk95 crore to purchase the 50 bigha of land, according to a stock exchange disclosure.
MJL Bangladesh has conditionally signed a memorandum of understanding (MoU) with the seller as all documents related to this property are found transparent and legitimate, it added.

Company officials said they are prioritising booking the land first because of its strategic location. Subsequently, it will determine the use of the land.

"No concrete expansion plan has been formulated yet. We are currently focused on securing the necessary land at a strategic location for potential future expansion," Azam J Chowdhury, managing director at the company, told The Business Standard.

The land is on the bank of the River Shitalakshya, and it would be suitable for inland water transportation of bulk goods, he said, adding that they had earlier bought a similar plot from Allied Jute Mills on the bank of the same river.

The businessman said some plots were initially purchased at a lower cost in Chattogram and were subsequently used for constructing warehouses. He added that MJL currently does not have any plans to expand into new sectors.

New oil tanker in 2026

MJL Bangladesh is buying a brand new oil tanker for $75 million (equivalent to Tk800 crore) to carry petroleum products in bulk.

Azam J Chowdhury said on Sunday that the tanker was being built to be delivered in the first quarter of 2026. One-third of the cost would be provided by the company, and the rest of the amount would be borrowed.

He added that the tanker was expected to be a currency-hedged business as both the investment and expected revenue would be in foreign currency.

Business performance

The publicly listed firm has been making handsome revenue and profit over the years, and annual turnover has been over Tk2,000 crore in the last three years with significant growth, while also paying handsome dividends to its shareholders.

According to its audited financials for fiscal 2021-22, its net revenue grew by 19% to Tk2426 crore, but its net profit declined by 24% to Tk188 crore.

As a result, the company paid a 50% cash dividend, down from 55% in the previous fiscal year.

Following the previous year's growth, the company has reported a 20.5% growth in net revenue to Tk2216 crore, and profit grew by 5% to Tk160 crore in the first nine months of fiscal 2022-23.

About MJL Bangladesh 

MJL Bangladesh PLC is a joint venture company between EC Securities Limited, a subsidiary of East Coast Group, and the state-owned Jamuna Oil Company.

The journey of blending world-class lubricants in Bangladesh started in 1998 when Mobil Corporation, later known as Exxon Mobil Corporation, decided to set up Mobil Jamuna Lubricants Limited in partnership with Jamuna Oil.

The company's self-operated core business of Mobil and Omera-branded lubricants and shipping, the liquefied petroleum gas (LPG) cylinder manufacturing business operated by a subsidiary. 

MJL Bangladesh entered the stock market in 2011.

East Coast Group owns more than half of the firm, while Jamuna Oil holds nearly one-fifth of the company's shares.

At present, MJL has the capacity to produce around 150,000 barrels of blended lube a year and imports about the same quantity of finished lube oil, which are mostly absorbed by the domestic market.

MJL products are mainly divided into two categories: locally blended products and imported finished products.

The company caters to the demands of a wide range of customers from different sectors by providing 17 types of product lines.

Other than Mobil-branded products, MJL has been establishing its own brand, Omera, in other categories where Omera products will not be in direct competition with Mobil products.