Aramit Ltd, a roofing material company listed at both the stock exchanges, has been losing its market despite a 10 percent annual rise in the demand for roofing material.
The company, once a leading producer of cement sheets in the country, is finding it difficult to compete with other producers in the market.
While its competitors are using modern automated technology, Aramit is still in the age of semi-automation.
The company decreased the price of its products several times in the last few years to compete with other companies, but that approach has not worked.
The sale of the company's main product – lightweight corrugated sheets – has decreased by eight percent. Its revenue is also down by 13.12 percent.
Sayed Kamruzzaman, company secretary of Aramit, told The Business Standard, "Aramit dominated the cement sheet market from the beginning. But the situation is gradually changing because of high competition."
He said Anwar Cement Sheet, Woodland Cement Sheet and Mariam Cement Sheet are now taking over the market.
The company is taking various measure to come back on track, including improving the quality of its products, he added.
Decrease in sales
The company produced 41.38 lakh tonnes of products in 2017, with a market price of Tk48.35 crore.
In 2019, the company produced 37.67 lakh tonnes of products worth Tk44 crore.
The production of the company decreased 8.97 percent in these two years, and the value of its products also decreased by 8.99 percent.
In 2019, the company produced lightweight corrugated sheets worth Tk38.94 crore. In the same year it produced mouldings worth Tk1.67 crore, large-section corrugated sheets worth Tk1.09 crore and flat-sheets worth Tk34 lakh.
Downfall in every indicator
The company earned revenue of Tk44 crore in the financial year that ended on June 30, 2019. This was a drop of 13.12 percent from that in the previous financial year.
The net profit of the company was Tk1.96 crore in the 2018-19 financial year, down from Tk6.11 crore in the previous financial year. Its net profit decreased by 67.92 percent in this period.
In 2018-19, the Earnings Per Share (EPS) of the company was Tk3.27, down from Tk10.20 a year earlier. During the period the EPS of the company decreased by 67.94 percent.
Though the board of directors of the company has proposed paying 50 percent cash dividend to shareholders for the period, the investors' interests are being compromised because of the company's successive fall in share price.
Aramit in the market of cement sheets
The current market for cement sheets is around Tk1,000 crore, and this is increasing by 10 percent every year.
Anwar Cement Sheet has taken over more than 50 percent of the market, while Aramit Ltd has 25 percent. Woodland and Mariam have 10 percent each of the cement sheet market.
Aramit Ltd has a reputation for making products from scratch. It produces large-section corrugated sheets, lightweight corrugated sheets, flat-sheets, mouldings, and pipes.
The company was listed on the Dhaka Stock Exchange in 1984 and on the Chittagong Stock Exchange in 1995.
The authorised capital of the company is Tk10 crore and paid capital is Tk6 crore. The company has a total of 60 lakh shares.