Aziz Pipes – one of the oldest plastic pipe makers in the country – has once again shuttered its factory just one month after getting back into production on 1 October.
Earlier, the company remained out of production for nearly 10 months from January this year owing to a shortage of raw materials.
This time the company faced several challenges including the shortage of working capital and raw material.
The publicly listed company also suffered complexity with bank loans, financial crisis, and loan liability, and lack of reserves, according to its disclosure on the Dhaka Stock Exchange website on Monday.
The decision to close the factory will remain effective until the situation becomes normal and favourable, says the company.
Being a loan defaulter, Aziz Pipes has not been able to import raw materials since 2005.
Since then, the company had been purchasing raw materials for pipes at a high cost from the local market.
But, the novel coronavirus pandemic in the last year has worsened the raw material crisis in the local market.
The company is a loan defaulter, its block loan amount is Tk17.17 crore, of which Tk15.39 crore from Uttara Bank and Tk8.17 crore from Dutch Bangla Bank, according to its latest financials.
Both the loan are classified and the cases are pending in the Artha Rin Adalat.
It also has a Tk12.41crore term loan, of which Tk5.72 crore from the Uttara Bank and Tk6.69 crore from the Dutch Bangla Bank.
In the 2020-21 fiscal year, the company incurred a loss of Tk43.93 lakh. In the previous fiscal year, its profit was Tk13.91 lakh.
Its revenue fell by 33% to Tk15.23 crore from Tk22.70 in the previous fiscal year.
However, the company has decided not to pay any dividend to its shareholders for FY21 due to incurring losses.
In the previous year, it had disbursed a 1% cash dividend to its shareholders.
Aziz Pipes was incorporated in 1981 to manufacture PVC Rigid Pipes and started commercial production in 1985 with a yearly installed capacity of 1,200 tonnes.
In 1995, the company diversified its production line for manufacturing PVC flexible corrugated conduit pipes.
Aziz Pipes Ltd got listed on the Dhaka Stock Exchange in 1986.
Although it is a financially weak company, its share prices soared abnormally from June to September this year.
Its shares price increased from Tk97 each in June to Tk168.3 each on 19 September.
After that, its share prices are on the decline.
On Monday, its shares prices decreased by 5.22% to Tk96.30 from Tk101.60 each on the previous trading session.
Sponsors and directors jointly held 23.93%, institutional investors held 8.88%, and general investors 67.19% shares in the company till 30 September 2021.