After a business meltdown, animal feed manufacturers are now celebrating an increase in sales on the back of growing demand for livestock products.
The feed manufacturing business – which had declined owing to the 66-day shutdown at the onset of the coronavirus outbreak in the country – has rebounded rapidly.
Animal feed makers Aman Feed Limited and National Feed Mill Limited, both listed on stock exchanges, have posted significant growth in sales and profit after the shutdown.
Their business rebounded mostly in the second quarter of the current fiscal year.
Aman Feed saw a 15% and National Feed a 67% growth in sales compared to the same period of the previous fiscal year.
According to businessmen in this sector, the animal feed industry has registered around 25% expansion in the last decade on the back of a surge in poultry, fish, and cattle farming.
Annually, the sector grew by 12-15% and witnessed a 161% jump in feed production over the last seven years, they added.
Currently, more than 200 companies are engaged in manufacturing animal feed and the investment in this industry is around Tk10,000 crore.
Md Ahsanuzzaman, general secretary of the Feed Industries Association Bangladesh (FIAB), has recently told The Business Standard, "During the shutdown, feed makers faced a problem as product demand decreased, but now the business is going well and the sales also increased."
National Feed saw a 270% profit growth
The National Feed Mill – a manufacturer of all kinds of feed for poultry, shrimp, fishery, and cattle – saw a 270% year-on-year profit growth in the second quarter of the current fiscal year.
The sales of the company increased by 67% to Tk31.86 crore and the profit was Tk2.81 crore, up from Tk76 lakh in the same period of the previous fiscal year.
In the first half of fiscal 2020-2021, the company saw a 46% and a 186% year-on-year growth in sales and profit respectively.
In the July-December period, the sales stood at Tk58.72 crore, profit at Tk5.05 crore, and earnings per share (EPS) at Tk0.59, which was Tk40.2 crore, Tk1.76 crore, and Tk0.21 respectively at the same time of the previous year.
In fiscal 2019-2020, the company made a profit of Tk1.47 crore and paid a 2% cash dividend and an 8% stock dividend to its shareholders.
However, sponsors were not provided with the cash dividend.
The company, which got listed on stock exchanges in 2015, has three units, each having a production capacity of 5-8 tonnes per hour, with its monthly sales reaching up to 5,000 tonnes.
Aman Feed sales increased by 15%
Aman Feed Limited is primarily engaged in manufacturing poultry, fish, shrimp, and cattle feed with the capacity of 10 tonnes per hour.
It saw a 15% growth in sales in the second quarter of FY21 compared to the same period of the previous year.
In the first half of FY21, the company posted a profit of Tk21.21 crore and EPS stood at Tk1.66, which was Tk20.44 crore and Tk1.60 respectively in the same period of the previous fiscal year.
In the second quarter, it reported a profit of Tk9.83 crore, which was Tk9.53 crore in the previous fiscal year.
In the July-September quarter, the revenue of Aman Feed decreased by 10% from 195.59 crore to Tk174.52 crore and the profit was 5% higher from Tk10.84 crore to Tk11.42 crore compared to the same period of the previous fiscal year.
"During the lockdown, feed product sales decreased but after the lockdown, sales increased by around 15%," said Md Monirul Islam, company secretary of Aman Feed.
The company, which got listed on stock exchanges in 2015, failed to disclose its financials in fiscal 2019-2020.
However, the animal feed manufacturers posted a profit of Tk47.87 crore and paid a 12.5% cash dividend to shareholders in the previous fiscal year.