The tube-well and irrigation pump business of Rangpur Foundry Ltd, widely known as RFL, recorded growth in fiscal 2020-21, but the growth could not reach the expected target due to government restrictions imposed to contain the Covid-19 outbreak.
In the annual report, the Chairman of the company Ahsan Khan Chowdhury said, "A good sales outcome mostly depends on a strong and prompt distribution network. But the sales and distribution lost their rhythm due to several restrictions imposed by the government to curb the pandemic. Besides, competition and consumer choice created difficulties to reach the expected growth during the 2020-21 fiscal year."
Despite the barrier, the sales force tried to reach the undeveloped remote areas to ensure availability of our products at every corner of the country, he added.
RFL's tube-well sales rose by 2.34% to Tk127.29 crore in fiscal 2020-21. But they did comparatively better in the irrigation pump business that year, recording a 168% growth with sales value at Tk9.56 crore in this segment.
The company officials explained that farmers were reluctant to buy irrigation pumps in the fiscal year 2019-20 as they could not gain profit by harvesting crops. Besides, supply disruption was one of the major reasons behind the business slump. But, in the last year, the government introduced several new facilities for the farmers and the company, which helped the company to achieve such growth.
The company also said that RFL started its journey in 1980 with tube-wells, and currently, more than 30 million families are using RFL tube-wells in different parts of Bangladesh.
After meeting the local demand, the company also exports tube-well. At the end of the last fiscal year, its export value stood at Tk3.9 crore, 25% higher than the previous year.
According to the Department of Public Health Engineering, only 105 people on average use a tube-well in the country's rural areas.
In January last year, the government took up a Tk8,850 crore project intending to bring down the number of average users of a tube-well to 50 from 105. The project starting in January 2020 is scheduled to be completed in June 2025.
Meanwhile, the agriculture ministry recently launched a project, titled "Irrigation Infrastructure Rehabilitation", to develop the irrigation system and facilitate the expansion of irrigation management to produce an additional 3.26 lakh tonnes of crops annually.
This project will be implemented in 120 upazilas under 16 districts of the Rajshahi and Rangpur divisions.
Barind Multipurpose Development Authority (BMDA) will implement the Tk323 crore project by June 2026, according to the sources.
Under the project, 1,358 deep tube wells and 5,296 pump houses will be restored for irrigating croplands. Electricity connections will be provided to 1,358 irrigation tube wells. Of the pump houses, 2,309 will be rebuilt, and 2,987 will be renovated.
Those projects will help the company business to recover from the pandemic shock, hoped a senior RFL official.
Rangpur Foundry Limited was listed on the stock exchanges in 1999. Its paid-up capital is Tk10 crore.
Meanwhile, the securities regulator directed the companies to submit the plan to maintain a minimum paid-up capital at Tk30 crore.
After the regulator's direction, RFL's share price jumped 27% since 29 November at the Dhaka Stock Exchange (DSE). At the end of
Tuesday's trading, its share price closed at Tk167.20 each.