Ananda Shipyard to go public by year-end to finance its expansion
Kayes M Sohel | Sunday, 31 August 2008
Bangladesh's pioneer shipbuilder Ananda Shipyard and Slipways Limited (ASSL) would go public by year-end to raise fund from the country's stock markets to finance its massive expansion drive, its chief executive said Saturday.
The move is a boost for the country's stock markets which have been struggling to woo potential new companies despite a two-fold rise in their market capitalization over the last two years.
"We are deluged with orders from European countries. But we don't have enough fund to expand our manufacturing capacity," Abdullahel Bari, chairman of ASSL told the FE.
The company, which has export orders of 22 ocean-going vessels worth US$150 million till 2012, borrowed Tk 1.81 billion from AB Bank last week to finance part of the expansion drive.
"But still, we need more fund to set up more slipways and manufacturing facilities. At present, we can build ships weighing 10,000 tonnes a year. We want to increase the capacity to 35,000 tonnes a year," he said.
"By going public, we will also be able to cut operational costs as we will enjoy a corporate tax benefit," he said, adding the new facilities would raise the company's number of workers from 1000 to 2500 by November this year.
Ananda Builders, an engineering firm, established its first shipbuilding yard, primarily focused on building river-going launches and ferries, on the Buriganga River near the capital in 1983.
With growing volume of business, the yard was shifted to its present location on the river Meghna, Narayanganj two years later.
In early 2007, the company became the first Bangladeshi shipbuilder to win orders to manufacture ocean-going ships for a European buyer. Last week, the company exported its first ship to Denmark.
The success of Ananda has already put Bangladesh on the global shipbuilding map, with two more companies winning orders worth another $200 million.
Experts said Bangladesh with its vast number of cheap yet skilled labour and a massive riverine network is set to emerge as a top builder of small ships, whose global market is around $200 billion a year.
"Our industry is still at a nascent stage. But we are growing fast and if we continue to progress this way, we can easily make ships worth $10 billion a year by 2015," Bari, a marine architect, said.
Top fund-manager Yaweer Sayeed hailed the planned listing by Ananda as a landmark for the country's capital market.
"Shipbuilding is a new success story for Bangladesh industry. Ananda's going public would obviously boost our fast-growing stock market which is hungry for quality shares," Sayeed, managing director of AIMS of Bangladesh, said.
"I think it's a landmark event for the capital market. Ananda is now an established name in the world of shipbuilding. Their listing would encourage other potential but hesitant companies to follow suit," he added.
The country's main Dhaka Stock Exchange has 271 listed companies, with engineering firms accounting for very small segment of the total.
Stock brokers said if listed, Ananda would be the largest of the 13 engineering companies now being traded at the DSE.
The move is a boost for the country's stock markets which have been struggling to woo potential new companies despite a two-fold rise in their market capitalization over the last two years.
"We are deluged with orders from European countries. But we don't have enough fund to expand our manufacturing capacity," Abdullahel Bari, chairman of ASSL told the FE.
The company, which has export orders of 22 ocean-going vessels worth US$150 million till 2012, borrowed Tk 1.81 billion from AB Bank last week to finance part of the expansion drive.
"But still, we need more fund to set up more slipways and manufacturing facilities. At present, we can build ships weighing 10,000 tonnes a year. We want to increase the capacity to 35,000 tonnes a year," he said.
"By going public, we will also be able to cut operational costs as we will enjoy a corporate tax benefit," he said, adding the new facilities would raise the company's number of workers from 1000 to 2500 by November this year.
Ananda Builders, an engineering firm, established its first shipbuilding yard, primarily focused on building river-going launches and ferries, on the Buriganga River near the capital in 1983.
With growing volume of business, the yard was shifted to its present location on the river Meghna, Narayanganj two years later.
In early 2007, the company became the first Bangladeshi shipbuilder to win orders to manufacture ocean-going ships for a European buyer. Last week, the company exported its first ship to Denmark.
The success of Ananda has already put Bangladesh on the global shipbuilding map, with two more companies winning orders worth another $200 million.
Experts said Bangladesh with its vast number of cheap yet skilled labour and a massive riverine network is set to emerge as a top builder of small ships, whose global market is around $200 billion a year.
"Our industry is still at a nascent stage. But we are growing fast and if we continue to progress this way, we can easily make ships worth $10 billion a year by 2015," Bari, a marine architect, said.
Top fund-manager Yaweer Sayeed hailed the planned listing by Ananda as a landmark for the country's capital market.
"Shipbuilding is a new success story for Bangladesh industry. Ananda's going public would obviously boost our fast-growing stock market which is hungry for quality shares," Sayeed, managing director of AIMS of Bangladesh, said.
"I think it's a landmark event for the capital market. Ananda is now an established name in the world of shipbuilding. Their listing would encourage other potential but hesitant companies to follow suit," he added.
The country's main Dhaka Stock Exchange has 271 listed companies, with engineering firms accounting for very small segment of the total.
Stock brokers said if listed, Ananda would be the largest of the 13 engineering companies now being traded at the DSE.