Most listed chemical producers are struggling to make income for the reason that the pandemic even as lingering macroeconomic demanding situations, a stronger dollar, and runaway inflation have endured to adversely affect their commercial enterprise.
The corporations, that sell products, especially to local small and medium corporations (SMEs), hold to stand a decline in sales as home consumption dropped sharply amid inflationary stress. Many small groups have been going for walks operations partly to survive, while some others have suspended operations after the outbreak of the Russia-Ukraine battle in February 2022.
Industry insiders blame the excessive dollar-taka alternate charge, difficulties in commencing letters of credit score, and a decline in production for the dismal overall performance of listed chemical manufacturers. Rising interest prices upload to the economic woes, increasing enterprise charges.
The interest charge of Treasury bonds lately jumped to a fifteen-yr high of 12.75 in line with the cent even as bank deposit and lending costs additionally started out mountaineering after the Bangladesh Bank scrapped the SMART (six-month transferring average price of Treasury payments) components to make hobby quotes fully marketplace-based totally.
The losses of Global Heavy Chemicals – a producer and distributor of Sodium Hydroxide (Caustic Soda), Chlorine, and other chemical products – nearly tripled yr-on-12 months to Tk 300 million in the 9 months through March this year.
“Cost of income extended notably because of the concentrated effect of rate escalation of raw materials and frequent boom in the greenback charge further to the unusual hike of software payments,” stated the company in its earnings notes.
Although raw fabric fees eased a piece within the recent months, many agencies are still dealing with challenges in opening letters of credit score for imports due to the greenback disaster.
Global Heavy Chemicals said that no matter an upward thrust in sales in the nine months through March this year, in comparison to the equal duration a year in the past, the agency could not avoid losses as operating constant price, which includes depreciation, labor value, and finance price was better.
“If essential steps are not taken to improve the production efficiency, the business enterprise can also struggle to continue the business profitably,” stated the auditor of Global Heavy Chemicals.
Wata Chemicals, a producer of numerous acids, witnessed a 32 according to cent year-on-yr decline in earnings to Tk 15 million in the nine months through March this 12 months.
Company secretary Shamsul Huq said the call for his or her products in various sectors became down, leading to decrease income.
Wata Chemicals’ sales plummeted 31 percent 12 months on 12 months to Tk 536 million in the nine months through March this year.
Also, finance costs have been up at some point of the length from the corresponding duration of the last year due to better interest prices.
However, promoting and administrative fees had been contained, stated the agency secretary.
Wata Chemicals produces and sells alum and zinc sulfate, magnesium sulfate, sulphuric acid, primary chrome powder, and linear alkyl benzene sulphonic acid.
Sulfuric acid is usually used in the production of fertilizer, in refining water and petroleum, and in manufacturing different chemicals, consisting of hydrochloric acid, nitric acid, sulfate salts, artificial detergents, and dyes and pigments.
Active Fine Chemical pronounced that its earnings halved year-on-12 months to Tk 29 million in the 9 months through March this yr. The company became sent to the “Z” category in March this yr because the organization didn’t hold the annual standard meeting timely.
Its sponsor-directors jointly maintain the handiest 12.04 consistent with cent stocks, an awful lot lower than the minimal shareholding requirement of 30 according to cent.
Meanwhile, Far Chemicals managed to return to earnings, with an income of Tk 40 million within the 9 months via March this year, after its merger with export-orientated yarn-spinning business enterprise SF Textile in January remaining 12 months.
The corporation suffered a lack of Tk 83 million within the equal length the year earlier.
The organization has been within the pink, counting an aggregated loss of Tk 363 million in the three monetary years to FY23.
Far Chemicals took over all property and liabilities of SF Textile Industries. SF Textile Industries is a one hundred percent export-orientated yarn-spinning organization that has been in operation in view that 2016.
“The enterprise again to earnings after the merger as manufacturing capacity jumped to 75,600 spindles from 33,000 spindles,” said Abu Talha, standard supervisor of Far Chemicals.
Salvo Chemicals, which produces sulphuric acid, sulfate, battery-grade water, and glucose, has said a 39 in step with cent higher profit to Tk 128 million for the nine months through March this year, in comparison to 12 months earlier, driving on better income.
Its income surged forty-six in keeping with cent yr-on-year to Tk 1.71 billion at some point of the length.
In FY23, Salvo’s profit plunged 26 percent 12 months-on-yr to Tk ninety-six million.
Kohinoor Chemicals, one of the oldest producers of soaps, cosmetics, and toiletries within the United States, should maintain its increase trajectory in this unfavorable business climate, riding on recognition of its products among the middle elegance and rural people.
Kohinoor noticed a 16 consistent with cent 12 months-on-12 months boom in income to Tk four.65 billion while its profit surged 20 percent to Tk 330 million within the nine months via March this year.
Most of the products of Kohinoor Chemicals are acknowledged using the legendary logo called Tibet. The corporation’s different brands are Sandalina, Ice Cool, Fast Wash and Bactrol.
