Local GI fittings industry thrives amid pandemic

Galvanised iron (GI) fittings business saw a significant growth amid the Covid-19 pandemic due to low imports from China during this period.

GI fittings are a small but important part for the construction and housing sector. They are classified as plain elbow, plain tee, plain socket, union, reducer elbow, reducer tee, reducer socket, plain cross, way elbow, hex nipple, bend plug and so on.

The bulk portion of the local demand for these products is met by importing from China. But, the novel coronavirus pandemic that led to a halt in export-import activities for several months has paved the way for the local manufacturers of these products to increase sales.

Anwar Galvanizing Ltd – a sister concern of Anwar Group, which is doing this business as the sole corporate company in this sector in Bangladesh, posted a 56% year-on-year growth in sales in the January-March quarter of the fiscal, when the world especially China was on lockdown because of the pandemic.

The company recorded a 12% year-on-year growth in sales even in the fourth quarter (April-June) of the last fiscal year, when the country underwent a 66-day general holiday in the wake of the novel coronavirus outbreak.

Overall in the fiscal year 2019-20, the company posted a 23% year-on-year growth and its total sales stood at Tk53.42 crore.

Meanwhile, in the post-general holiday period or the July-September quarter of the current fiscal, the company recorded a 44% year-on-year growth in sales.

Anwar Galvanizing is the major local manufacturer of GI fittings and has over 1,457 wholesalers spread over almost all the districts across the country. Its factory is located in Tongi industrial area. A few other local manufacturers produce these products on a limited scale.

Gopal Chandra Ghosh, chief financial officer of Anwar Galvanizing, told The Business Standard that local manufacturers witnessed a significant increase in their business in this segment amid the pandemic, which is primarily attributable to the fact that they could grab the market demand created in the wake of reduced supply of imported Gl fittings from China during the period.

However, there is no official data on the total market size and demand of GI fittings in the country. The chief financial officer Anwar Galvanizing said they maintained some data on the demand for these products but did not disclose those mentioning that the data are confidential.

Pointing at the infrastructure and housing sector in the country is growing day by day, he said GI fittings business has bright prospects here.

Nonetheless, PVC or plastic fittings are the major threat to GI fittings.

Referring to this issue, Gopal Chandra Ghosh said, "The use of PVC fittings is increasing in the country. Many big entrepreneurs also invest in PVC products. But, there is no substitute of GI fittings in some areas of the construction and housing sector."

The company shut down "brake drum" production to enhance GI fittings business in 2019.

Against the backdrop of a significant increase in business, its board of directors recommended 10% cash and 5% stock dividends to its shareholders for the fiscal year 2019-20. It posted earnings per share of Tk2.03 for the last fiscal, which was 34% higher than the previous fiscal year.

Anwar Galvanizing got listed on the Dhaka Stock Exchange in 1996. Its paid-up capital is Tk14.52 crore.

Of the company's total shares, sponsors and directors hold 35.32%, institutional investors hold 22.97% and general investors hold 41.71%.

The closing price of Anwar Galvanizing was Tk129.90 each on the DSE on Sunday. The highest share price of this company was Tk151 within the last one year.