Quasem Industries, the country's largest dry cell battery manufacturer, is going to expand its business to artificial quartz production.
With demand for dry cell batteries declining a lot in recent times due to change of technology, the company is now eyeing business expansion through manufacturing more and more consumer products.
In this context, Quasem Industries is going to set up a 100% export-oriented artificial quartz production manufacturing unit at Gorai area in Tangail.
The company is investing around Tk91 crore in collaboration with Sunstone International LLC in the USA. After setting up the unit by 2021, the company expects to make a good profit in future.
It is mentionable that artificial quartz, also called engineered quartz, is a manmade product created mostly from natural materials. The most common application of artificial quartz is indoor flooring and walls, while the quartz-based product is used primarily for kitchen countertops as an alternative to laminate or granite.
Quasem Drycell Company, which obtained its International Standards Organisation (ISO) certificate in 1980, was enlisted in the stock market in 1988 as a Blue Chip Company.
After conducting business for over two decades, to bring about variety in its products, Quasem Drycell changed its name to Quasem Industries Limited in 2017.
Drifting towards product variety
In 1973, Quasem's first product was a UM-1 (R-20) D-shaped battery for flashlights, radios, cassette players, emergency lights and camping lights. UM-3 battery was added in 1993 for use in calculators, remote controllers, cameras, calling bells, toys and watches. The company marketed its battery brand Sunlite in 2006.
A sharp decline now in demand for dry cell batteries has forced the company into moving towards consumer products. At present, the company is manufacturing flashlights, high pressure cans, air fresheners, body sprays, sunlight gas lighters and potato chips. It plans to bring a few more products to the market very soon.
According to company sources, despite the demand in the past years, demand for battery is now declining day by day with the change of technology. Business diversification is being brought in to keep the financial situation on the right track.
Once demand for dry cell battery started declining, in 2007, the company introduced battery-powered LED flashlights. Battery sales increased a bit after flashlights were introduced in the market.
Sunlite brand gas lighters were launched in 2008. The company started manufacturing battery-powered reading and bicycle LED lights and consumer product Sun Chips from 2010.
The company made its entry into the metal printing manufacturing sector in 2013. It is now producing cans for Asian Paints, Aqua Paints, RAK Paints, Red Arrow, Fibers & Chemicals and BRAC Dairy.
Wave brand body sprays and air fresheners were launched in 2018 and shaving cream in 2019. Since last September, the company has introduced Sunlite Aerosol for eradicating mosquitoes.
The decreased income
Decline in demand for products has also been affecting the income of the company. For the last four years, profits of the company have been in decline, affecting its share prices in the stock market.
In January 2019, the company's share price was Tk56, which is now Tk39.
In fiscal 2016-2017, net profit of the company was Tk9.56 crore. Earnings per share (EPS) were Tk2.15 and shareholders received 18% bonus dividends.
In fiscal 2017-2018, the profit decreased to Tk7.93 crore while EPS was Tk2.15, with shareholders getting 18% bonus dividends.
In fiscal 2018-2019, the profit was TK4.87 crore, dropping by almost half in a year. EPS was Tk0.63 and shareholders got 12% dividend, of which 6 percent was bonus and 5 percent was cash.
The financial situation did not improve in the 2019-2020 financial year also with a Tk4.42 crore profit.
Tasvir Ul Islam, managing director and CEO of Quasem Industries Limited, told The Business Standard, "At present, we are putting emphasis on achieving sustainable growth of the company by safeguarding the interests of the shareholders. Besides the dry cell battery production, we are stressing product diversification. A number of products have been launched in the last few years, boosting the company's revenue."