Covid-19 a boon for Olympic confectionary

When the huge impacts of the novel coronavirus struck the overall economy, the biscuit industry was among a few exceptions to expand its business by catering to people who were holed up at home during the pandemic.

Cashing in on this opportunity, biscuit manufacturing company Olympic Industries Ltd has registered growth in both revenue and profit since the outbreak of Covid-19 in the country.

Along with the increase in sales of goods on the domestic market, the company's exports have also risen.

The demand for branded biscuits or packaged biscuits has increased primarily because people are avoiding hotel, restaurant and outside food due to fears they will contract Covid-19.

Currently, Olympic is increasing its production capacity to meet growing demand.

According to the company's financial statements, the revenue of Olympic Industries has increased by 16.55%, and profit by 2.17%, in the first six months of the fiscal year 2020-2021 as compared to the first six months of the previous fiscal year.

The company's revenue grew 17% in the July-September quarter following the Covid-19 shutdown.

Earlier in the April-June period of 2019-2020, it witnessed a 22% increase in sales.

Sources in the industry said most biscuit and bread companies have registered 20% growth during the pandemic, although the sector's growth was not more than 10-12% even in normal times.

Domestic sales of Olympic products have increased by more than 16% and exports by 36%.

During the July-December period of the current financial year, the revenue of the company was Tk932.92 crore, which was Tk800.44 crore during the same period of the previous fiscal year.

The net profit of the company was Tk107.37 crore – an increase from Tk105.08 crore.

The company had domestic sales of Tk917.82 crore in the first six months – up from Tk789.38 crore in the same period of the previous year.

In the first six months of this fiscal year, the company's exports were Tk15.10 crore, up from Tk11.05 crore in the same period of the previous year.

The company's revenue for the October-December quarter increased by Tk62.95 crore and profit after tax by Tk1.04 crore.

The company had total revenue of Tk467.05 crore and a profit of Tk50.36 crore in the second quarter.

During the same time of the previous year, the total income was 404.10 crore and the profit was Tk49.32 crore.

Company Secretary of Olympic Industries Md Nazimuddin recently told The Business Standard, "I think that there are two reasons for increasing revenue and profits. One is the quality of products and the other is Covid-19 pandemic."

"During the Covid-19 pandemic, people are avoiding eating at hotels and restaurants and, as an alternative, prefer branded biscuits," he added.

To increase the production capacity in order to meet growing demand, the company has declared it will import PET Sheet Line and PET Tray Making Machinery from China at a cost of Tk4.92 crore.

In November last year, Olympic Industries decided to import a 1.80-metre wide cracker and hard biscuit line – from Italy, China, Hong Kong, and India – at a cost of Tk42 crore.

With a 25% share, Olympic Industries leads the biscuit market, followed by Pran.

According to the Bangladesh Auto Biscuits and Bread Manufacturers' Association, the country's biscuit and confectionery market size amounts to around Tk6,000 crore.

Haque, Al-Amin and Danish have 5% of the market share each. They are followed by: Bongos, Romania, Deco, Globe, Fu-Wang, Bonoful, Kishowan, Thai Food, Bengal, Gold Mark, Mashafi, and New Olympia, each accounting for a 2-3% stake.

Other companies – including Ifad, Cocola, Pinnacle, Kakoli, Shifa, and Kohinoor Industry – have also occupied a sizable portion of the market.

In 1989, Olympic Industries was listed on the stock exchange.

Sponsors and directors hold 39.34%, institutional investors 17.55%, foreign investors 28.34%, and general investors 14.73% of the company's shares.