Paper business recovering from pandemic shocks

The paper industry – one of the biggest victims of the Covid-19 pandemic – has been bouncing back riding on an increase in demand since the reopening of educational institutions in September last year.

Paper companies had earlier gone through a hard time as schools, colleges and universities – the main consumers of paper products – remained closed for around 18 months since March 2020 as the coronavirus struck the country.

Absorbing the pandemic shocks, three out of the six paper companies listed on the capital market have posted big jumps in their revenue and profits in the first half of the current fiscal from a year earlier.

Bashundhara Paper Mills – market leader in the tissue industry, and one of the major players in the paper industry – has reported a 23% rise in revenue. 

Also, Paper Processing and Packaging, and Bangladesh Monospool Paper Manufacturing Company – two concerns of Magura Group – have witnessed big jumps in revenue and profits.

Two other listed paper firms are incurring losses. Of which, Hakkani Pulp and Paper Mills witnessed a fall in sales, and Khulna Printing and Packaging Limited's factory was shuttered down temporarily after a court order to freeze all its bank accounts. 

Another company, Sonali Paper and Board Mills – a concern of Younus Group – has not yet published its financials for the July-December period.

A source in the Bangladesh Paper Mills Association (BPMA) said, "During the pandemic, the paper industry had faced a blow due to the closure of educational institutions which are the main consumers of paper products."

"After reopening the economy, and educational institutions, the business of the paper companies are now bouncing back although it has yet not reached the pre-pandemic levels," he added

He said the industry will take more time to fully rebound, but again, the tension is growing among the businesspeople due to the spreading of Omicron, a new variant of Covid-19.

Bashundhara Paper sees booming tissue sales

Tissues and hygiene products made of paper in the Bashundhara Paper Mills (BPML) boosted the company's profit and revenue in the July-December period of the current fiscal year.

It reported a 23% year-on-year growth in revenue and 42% in profit.

In the first half of fiscal 2021-22, its revenue stood at Tk540.30 crore, which was Tk437.71 crore a year ago.

In which, 38% or Tk205.85 crore came from the sales of paper products, and 37.67% or Tk203.56 crore from tissue products.

Bashundhara Paper Mills' profit rose to Tk18.13 crore, and earnings per share to (EPS) Tk1.04, which were Tk12.75, and Tk0.73, respectively a year ago.

Company Secretary M Mazedul Islam told The Business Standard, "The reopening of educational institutions has helped the paper industry boost the sales."

He said, "When schools, colleges, and universities were closed, the demand for paper products fell drastically, but now the demand is on the rise."

Magura Group firms see significant jumps

Two Magura Group manufacturers of paper, and paper products that have returned to the mainboard of stock exchanges from over-the-counter (ITC) reported huge jumps in revenue, and profit riding on increasing demand.

Paper Processing and Packaging – which produces various educational equipment, and exercise books – reported 297% jumps in revenue and a 452% in profit in the July-December period of this fiscal year.

Its revenue and profit rose to Tk27.54 crore and Tk2.21 crore, respectively, up from Tk6.92 crore and Tk4 lakh in the first half of the previous fiscal year.

Another firm in this sector – Bangladesh Monospool Paper Manufacturing Company – reported a 96% jump in revenue to Tk30.73 crore, and profit rose 529% to Tk1.07 crore. 

In the July-December of FY21, its revenue was Tk15.64 crore and profit Tk17 lakh.

Mustafizur Rahman, company secretary of the firms, told TBS, "In the last fiscal year, our business was hampered badly due to the Covid-19. But since the reopening of the educational institutions, the business has been getting back."