The country's leading drug manufacturer Square Pharmaceuticals will invest Tk250 crore to expand its production capacity to meet the growing demand for its products both at home and abroad.
The pharma giant, which has achieved 300% growth in sales in the past decade, will also buy land adjacent to its factories in Gazipur and Pabna for future expansion.
The board of directors of the company made the decision at a meeting on Thursday.
Square Pharmaceuticals, which grew by double digits over the last few years, achieved just 4% growth in its sales revenue in the 2019-20 financial year as its business got disrupted by the novel coronavirus pandemic.
However, the demand for its products is increasing daily. That is why the company has several manufacturing contracts with different companies like Renata Oncology and Apex Pharma to meet the increased demand.
"The investment is part of our regular operation and expansion plan as per the growth of the pharma market. Each year we allocate a portion of our profit for that," said Khandaker Habibuzzaman, company secretary of Square Pharmaceuticals.
In February this year, the pharma giant decided to set up a subsidiary company, named Square Lifesciences Ltd, at a cost of Tk350 crore in order to manufacture Oral Solid Dosage products. Square Pharma expected that the project would be completed by June 2023.
Meanwhile, in October last year, Square Pharma invested Tk200 crore to upgrade and set up new machines as well as acquire land for expansion.
The pharma market size of the country was Tk25,200 crore at the end of April this year, and it has been growing by 15% every year, according to the Bangladesh Association of Pharmaceutical Industries.
Square Pharma controls 17% of the market.
The late Samson H Chowdhury started the drug business by setting up Square Pharmaceuticals Ltd in 1958 when the country's medicine market was dominated by multinational companies.
As per the accounting year ending 30 June 2020, the pharmaceutical company posted 4% growth in its consolidated revenue of Tk5,293 crore. It also posted net profit and earnings per share of Tk1,336 crore and Tk15.82, respectively; which was 6% higher than the previous year.
At present, the company produces 858 types of medicine, with Seclo, a drug for gastric ailments, leading sales.
Square Pharma became the country's first company to start exporting medicine in 1987. Now it exports drugs to 42 countries and has earned Tk149 crore from drug exports in the 2018-19 financial year.
Square Pharmaceuticals' board of directors recommended 47% cash and 5% stock dividends for its shareholders for the financial year 2019-20 that ended on 30 June.
The paid-up capital of Square Pharma, which was listed on the share market in 1995, is Tk844 crore. Sponsor directors hold 34.57%, institutional investors 11.43%, foreign investors 17.02%, and general investors 36.98% of the company's shares.
Square Pharma, which is known as a blue-chip company to stock investors, has been providing handsome returns to its investors since it was listed on the stock market.
The company's share prices have fallen by 32% following a sharp drop in stock prices at the Dhaka Stock Exchange (DSE) in December last year. The share price of the company went down to its lowest level of Tk162 in January this year.
Amid this, four directors of the company bought 12 crore of shares worth around Tk22 crore to protect the interest of general investors. As a result, Square Pharma bounced back from its declining phase.
The closing price of its shares at the DSE was Tk205.10 on Thursday.