Shut for 9 months, paper company posts 244% profit growth!   

• Bangladesh Paper Processing and Packaging factory closed for 9 months  
• But the firm posted 144% growth in revenue, 244% in profit in FY22
• The paper processor entered main market in June 2021
• Share price jumped to Tk313 Feb this year from Tk17 in 2021 

A paper processing company, which was re-listed with the Dhaka Stock Exchange (DSE) last year, experienced 144% revenue and 244% profit growth in FY22 despite having the production units shut since February this year.

The share price of the company, Bangladesh Paper Processing and Packaging Company Limited, also surged by 18 times in eight months after returning from the OTC (Over the Counter) market to the main market.

When the share price of the company was skyrocketing, the Bangladesh Securities and Exchange Commission (BSEC) favoured the company owners to sell their shares by giving exemption from lock-in period.

And with the exemption, the directors of the company took out over Tk15 crore by selling their shares. Now, retail investors suffer with the paper shares as the price makes a nosedive thanks to suspended production.

The Business Standard found that the paper processor in Dhamrai, a concern of Magura Group, has been out of production since February this year due to a raw material crunch.  

Price of the Bangladesh Paper Processing and Packaging Company Limited was around Tk17 in 2021 when the company entered the main market, according to the Dhaka Stock Exchange. The rate jumped to Tk313 in February this year, which now hovers below Tk200 each.    

The stock regulator approved the three sponsor directors for the share sales in April this year while the prices were on an uptrend. But according to law, the sponsor directors were not supposed to sell off the shares within three years of returning to the main market.      

While approving the share sales, Professor Shibli Rubayat Ul Islam told The Business Standard that the permission relaxation was meant for repaying bank loans by the paper processor.     

"The sponsor directors will be allowed to sell shares just to repay the loans."

However, the company gave Tk15 crore interest-free loans to some of the companies of the group.

No work, but still in profit

Officials at the Magura Economic Zone in Dhamrai's Srirampur confirmed The Business Standard that the Bangladesh Paper Processing and Packaging Company Limited is out of production since February due to pricier dollar and LC opening issues. 

"Besides, the factory could be resumed due to lack of work orders," Magura Economic Zone Officer Saiful Islam (Human Resources and Administration) told The Business Standard. 

He, however, claimed that the company is profitable even if there is no work for now. "There are few regular workers and the operational cost is also low."

But, Company Secretary Mustafizul Rahman claimed the company is not out of production and there is no issue over raw materials. 

The Paper Processing and Packaging Limited was established in 1989. Its printing and packaging portfolio includes a wide range of products such as books, stationary and offset printing, photocopy paper, register, diary, calendar, magazine and annual reports.

The company's revenue declined in FY21 due to the pandemic, but it surged in FY22 and surpassed the pre-pandemic label.

"The business was not good last year [2020-21]. But it turned around in FY22 tremendously, driving up both the revenue and profit," said the company secretary.

The company's profit has grown by 11.39% in the July-September quarter of the current fiscal year. 

Magura Economic Zone in Dhamrai, spanning about 130 bigha, has four factories. Three of them were found closed except Bangladesh Monospool Paper running.

A worker said all the factories were in operation before the pandemic. As the Covid waned they started pulling down the shutter one after another.