FE Report
Olympic Industries is set to invest Tk 500 million to expand its existing production facilities, using a JICA-funded loan under the Food Value Chain Improvement Project.
Company secretary Mintu Kumar Das said the loan would be utilized for the BMRE (Balancing, Modernisation, Rehabilitation and Expansion) of the company's food processing units located in Kanchpur and Madanpur.
The expansion is designed to enhance production capacity, meet growing demand, and strengthen competitiveness in both the local and regional food industries.
Mr Das elaborated that the new investment will finance a multi-functional chocolate plant and a new cookie production line to increase output and diversify the company's product range.
"Since the demand for our branded products is growing, the board has decided to expand the existing production facilities," he said.
The company will avail of the credit at a 6 per cent interest rate for eight years.
"The loan is low-cost in the current context," Mr Das added. The company expects its annual production of cookies to increase by 9,048 tonnes and chocolates by 3,300 tonnes.
Food value chain project
The Food Value Chain Improvement Project (FVCIP) is a JICA-funded initiative in Bangladesh, implemented through the Bangladesh Infrastructure Finance Fund (BIFFL). It aims to improve access to credit for agribusiness and food processing sectors to enhance productivity and quality across the food chain.
BIFFL provides concessional loans at a maximum 6 per cent interest rate for medium- and long-term investments to eligible industries, helping them expand production capacity.
Investment in land and machinery
Alongside capacity expansion, Olympic Industries has been investing heavily in land acquisition for future growth.
In April and May this year, the company purchased 776 decimals of land worth Tk 400 million in Kanchpur and Narayanganj.
"The land acquisition is a part of a larger strategic investment plan for future business expansion," said Mr Das.
In addition to land, Olympic has spent significantly on storage capacity and machinery.
In May, it invested Tk 132 million to purchase and import a new multi-colour cookie production line to manufacture premium cookie varieties. Earlier, in February, it purchased capital machinery for a multi-functional chocolate plant, worth Tk 136.64 million.
In August last year, the company imported machinery worth Tk 227 million for a snack food manufacturing plant dedicated to chanachur.
Over the last six years, Olympic Industries has invested more than Tk 4 billion in factory expansion to diversify its business and establish a strong foothold in the confectionery industry. Its total assets stood at Tk 15.98 billion in March this year, up from Tk 10.98 billion in FY19.
The company, which entered the biscuits and confectionery industry in 1996 and ventured into the ball pen industry in 2008, has also diversified into saline production, plastic products, and cartons (mainly for internal use).
Financial performance
Olympic Industries is regarded as one of the best-performing blue-chip stocks, with consistent revenue and profit growth.
Its revenue grew over 10 per cent year-on-year to Tk 21.43 billion in the nine months through March this year, while profit rose 1.27 per cent year-on-year to Tk 1.59 billion. Domestic sales increased 10 per cent, and exports jumped 19 per cent during the same period, compared to the same period a year ago. The company currently exports to more than 35 countries, including the USA, UK, and Australia.
For FY24, revenue reached a record Tk 25.92 billion, nearly double from FY19, while profit grew 18 per cent year-on-year to Tk 1.83 billion.
Foreign investors currently hold 33.42 per cent of the company's shares-the highest among listed firms. On Monday, Olympic's stock closed at Tk 159.5, down 0.19 per cent from the previous day.
Popular brands such as Energy Plus and Tip biscuits continue to lead the market, with Olympic producing biscuits, candy, and other confectionery items.
In an equity note, EBL Securities highlighted the company's expansion drive: "Olympic Industries has made significant investments to enter various major segments such as instant noodles, dry cakes, soft cakes, chocolate-enrobed products, cookies, and savory snacks. These investments are a clear indication of the company's expansion strategy."
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