Usmania Glass plans to set up a new container glass plant

In a hope to revive its business, Usmania Glass Sheet Factory – a pioneer in the country's glass industry – is planning to set up a new container glass plant at its factory premises with modern technology.

With the successful implementation of the project, the state-owned losing concern expects to overcome its present crisis and return to profit again.

The company has been passing through a crisis because of a suspension in its operation for one year and its plants remained out of production since 2018 due to lower demand for its products.

Finally, one of its plants has been in operation since August last year.

The container glasses are widely used in food and beverage packaging, pharmaceuticals, laboratory, and hygienic sectors in both local and foreign markets, says the company.

In its existing factory, the modern machinery will be installed and production capacity will be 120 tonnes per day.

According to its latest annual report, as part of establishing the container glass plant, the company had conducted a market survey and economic feasibility study through a reputed firm and received a draft report.

Now, the management will take necessary steps to implement the new project, and will take over the existing facilities as much as possible, reads the report.

The journey and present status of Usmania Glass

Usmania Glass Sheet Factory started its journey before the independence of Bangladesh in 1959 in Chattogram.

It was the country's first glass manufacturing industry which had an aim to meet local demand at an affordable price.

With the rise of the private sector in the glass industry after the independence of the country, Usmania Glass Sheet Factory gradually lost its market share.

Officials said the company is now 60 years old and most of the machinery is outdated, which failed to meet the targeted production and the old machinery are creating a burden with high production costs.

As a result, the company has been incurring huge losses and the demand for its products is on the decline.

According to its financials, the company was a profitable entity in fiscal 2013-14 with a Tk3.91 crore profit.

Since then, it incurred losses for eight years up to fiscal 2020-21.

Khan Wahab Shafique Rahman and Co – chartered accountants of the company – said the production technology of Usmania Glass has become backdated compared to its peers in the industry.

For that, its production cost has exceeded the selling price, resulting in operating losses for a few years including the current fiscal year. The accumulated loss of the company reached Tk59.63 crore.

The company has two plants for manufacturing glasses furnace-1, and 2 with the capacity of 2.01 crore sqft (2mm basis). Furnace-2 plant's production capacity is 1.34 crore sqft.

The furnace-1 plant is closed as there was an overstock of finished goods that remained unsold due to lower market demand.

Also, due to a fire accident, the production of the furnace-2 plant was shut down for one year.

In August last year, the furnace-2 plant resumed production with short cold repairing by local experts.

As the factory was closed down, there was no production for fiscal 2020-21.

As a result, the company had incurred a loss of Tk11.59 crore.

In its annual report, regarding the economic impact, the company said the new container plant will be energy efficient and produce high value-added products, consume domestic materials, generate employment and reduce the use of waste generating plastic.

Usmania Glass got listed on the capital market in 1987.

As of February this year, the sponsor-directors held 2%, the government 51%, institutional investors 9.54%, and general investors 37.46% shares of the company.

On the last trading session on Thursday, its share price was Tk60.30 each.