To meet the growing demand for its products, Olympic Industries Limited – the leading biscuit manufacturer in the country – has expanded its cracker and hard dough biscuits line with an investment of Tk42 crore.
It is the 11th biscuits production line for the company which got into the biscuit industry by setting up its first production line in 1996.
In a stock exchange filing on Wednesday, Olympic said the newly installed line was successfully commissioned from Tuesday.
"Olympic Industries used to produce these products on a small scale but now the production capacity has been increased as their demand surged," said Md Nazimuddin, executive director and company secretary of the biscuit manufacturer.
Founded in 1979 and listed on the Dhaka Stock Exchange (DSE) in 1989, battery manufacturer Bengal Carbide Limited was renamed Olympic Industries Limited after its business diversification.
Seeing a good prospect in consumers' daily lives, the company had diversified its business and ended up becoming the market leader, earning more than 95% of its total annual revenue from its biscuits and confectionery products.
Md Nazimuddin said that the business of the company grew significantly amid the pandemic, and it is still on the upward trajectory."
"But the biscuits industry is now facing increased costs due to hikes in raw and packing materials, which has been impacting the company's profit," he added.
According to the company's half-yearly financials for fiscal 2021-22, despite an 11% growth in revenue, its net profit fell by 33% to Tk72.12 crore from a year earlier.
High costs of raw and packaging materials have pushed up its costs by 18%.
The eleventh line
After diversifying its business from the battery industry to consumer products since the mid-1990s, the company has expanded its business portfolio to biscuits, confectionery, bakery, and snacks in the last 25 years.
In November 2020, the company decided to establish its eleventh production line of cracker and hard dough biscuits for a cost of Tk42 crore thru cash and bank financing, but it faced delays due to the Covid-19 pandemic.
At that time, the company said it would import a new 1.80-meter width plant, complete with ancillary and packing machinery, flour and sugar handling systems, and a gas generator from Italy, China, Hong Kong and India.
Olympic also said it will procure some items from local sources to produce new premium varieties of crackers and hard dough biscuits of around 12,442 tonnes per annum.
At present, it has 1,23,439 tonnes of production capacity with the tenth production line, and it was able to produce 1,17,420 tonnes in the 2020-21 fiscal year.
The company targets rearranging the total existing and upcoming facilities to ensure the production of 1,29,656 tonnes of biscuits, and bakery items annually.
In fiscal 2020-21, its revenue rose to Tk1803 crore, a 13.45% increase from a year ago.
Its cost of goods sold increased by 17.78% over the previous fiscal year, and profit after tax slightly rose to Tk203.74 crore from Tk202.49 crore in FY20.
In the first half of fiscal 2021-22, its revenue rose to Tk1035 crore, and profit Tk72.12 crore, while in the corresponding period of the previous fiscal year, it was Tk933 crore, and Tk107.38 crore, respectively.