Renata to take foreign loan to overcome dollar crunch

FE REPORT
Renata is going to sign an agreement with International Finance Corporation (IFC) for a loan of $60 million so it can overcome the dollar shortage in imports of raw materials.
The fund will be received as working capital with a repayment period of six years, according to a stock exchange filing on Thursday.
The drug maker already received approval of its board to go for the deal with the IFC, a member of the World Bank Group.
"The fund will be used mainly for importing raw materials, which will enable the company to mitigate the prevailing dollar crisis," said company secretary Md Jubayer Alam.
The US dollar is still dearer and banks rarely agree to open letters of credit (L/C) for importing much-needed raw materials until they are offered an above-market rate for dollars, he said.
"Due to the prevailing dollar crisis, banks are demanding 150 per cent L/C margin nowadays."
The taka lost its value by more than 30 per cent in 2023 alone because of the dollar crunch, making imports costlier.
Renata, one of the fastest growing drug manufacturers in Bangladesh, manufactures and markets medicines, nutritional products, and vaccines for humans as well as animals.
It is also the contract manufacturer for UNICEF and SMC for general products, such as birth control pills, oral saline, and micronutrient powders.
The drug maker's profit rose more than 21 per cent year-on-year to Tk 720 million in the January-March quarter while sales increased 9 per cent to Tk 9.21 billion.
Renata has been focusing on research and development (R&D) of complex generics for several years and invested in expanding capacity and new technologies.
Last week, it exported its first shipment of Terbinafine tablets to the UK market. With the new types of drug shipment, the export basket of Renata increased to 17 products for the UK market.
Three months back in April this year, the drug maker started exporting medicines to the US market, becoming the sixth pharmaceutical manufacturer from Bangladesh to directly ship products to the world's largest market.
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