IBN Sina Pharmaceutical Industry Ltd plans to set up a new subsidiary company - IBN Sina Natural Medicine Ltd - in order to expand its business in natural medicines.
The pharma company will invest Tk12 crore as equity and retain 100% stake in the new subsidiary company.
A senior official of IBN Sina Pharma told TBS that the general acceptability and consumption of natural medicine has significantly increased - both locally and globally - in relation to synthetic medicines.
According to company sources, IBN Sina Pharma has already taken Tk37 crore from Al-Arafah Islami Bank to import capital machinery for the new project. The new unit will be built on the company's existing factory premises in Gazipur.
The pharma company has also invested Tk100 crore to expand into food, polymers, and the Active Pharmaceutical Ingredients (API) businesses.
The senior official also said, "We are investing in these three emerging sectors to diversify our business. We hope all the projects will be up and running in the next two years."
"The investments will generate more profits for the company and the shareholders will get more returns," the official added.
IBN Sina Pharma will produce API - the primary ingredient to make medicines. It is already setting up IBN Sina API Ltd, a subsidiary company in the API business.
The pharma company is building a plant at API Park in the Gajaria area of Munshiganj.
The paid-up capital of IBN Sina API is Tk10 crore and IBN Sina Pharma holds 99.99% of the shares of the API company.
According to a company official, IBN Sina API has finalized a good number of API molecules during the product development phase and is waiting to start trial production by the middle of 2021.
The official also said that in 2017, the government had announced a duty-free facility for API business and established the API industrial park. More than 90% of the required raw materials are currently being imported for medicine production.
IBN Sina Pharma also wants to engage in the polymer market for business diversification, and has already formed a subsidiary company called IBN Sina Polymer Industry Ltd.
The construction work for the factory of this subsidiary company is currently ongoing in Gazipur, with joint investments from IBN Sina Pharma and IBN Sina Trust.
IBN Sina Polymer's paid-up capital is Tk10 crore and IBN Sina Pharma holds 65% of the shares of the polymer company.
The subsidiary company will produce and market plastic products and pet-bottles.
According to the Bangladesh Plastic Goods Manufacturers and Exporters Association, the size of the plastics market in Bangladesh reached approximately Tk25,000 crore in 2017.
Consumer products project
Due to the significant annual growth in demand, IBN Sina Pharma will also start a consumer product business, e.g., confectionery items.
The pharma company has set up a subsidiary company called IBN Sina Consumer Products Ltd in Manikganj.
IBN Sina Pharma has invested Tk4 crore as capital for IBN Sina Consumer Products, and paid-up capital for the subsidiary company is Tk10 crore.
Pharma company performance
IBN Sina Pharma is performing well in the pharmaceutical business. Its revenue increased by 96% to TK619 crore in the last five years, up to the fiscal year 2019-20. Its net profit also rose by 121% to Tk39.25 crore during that period.
In the fiscal 2019-20, the company posted 18% growth in sales despite the coronavirus, where the pharma industry saw only 4% growth.
The company also paid a 38.50% cash dividend to its shareholders for the last fiscal year.
In the first quarter of the current fiscal year, the company's revenue increased by 12% to Tk172 crore.
IBN Sina Pharma was listed with the Dhaka Stock Exchange in 1989. Its share price stood at Tk244 each at the end of Wednesday's trading session.
Of the total shares of the company, sponsors and directors hold 44.44%, institutional investors 21.49% and the general investors 34.07%.