Anwar Galvanizing, an affiliate of Anwar Group, is poised to lease approximately five bighas of land from Fresco Steel Mills, as part of its strategic plan to augment production capacity.
The decision to execute the lease deed was made during a board meeting on January 30, with the lease tenure set at 17 years and a security deposit of Tk1 crore. Anwar Galvanizing, specializing in galvanized iron-pipe (GI) fittings, intends to construct sheds for godowns, steel structures with concrete floors, and install heavy machinery on the leased land.
Company Secretary Tauhidul Islam shared, “The existing factory of the company is very small; that’s why the management has decided to expand its capacity.” The proximity of the leasehold land to the current factory facilitates the seamless expansion of the production facility.
While Islam refrained from divulging detailed investment plans, he highlighted the expansion’s alignment with the company’s strategic growth objectives.
Financial Snapshot and Expansion Plans:
According to its July-December 2023 financials, Anwar Galvanizing reported a 3% year-on-year decline in revenue to Tk32.25 crore. However, net profit demonstrated a noteworthy 30% increase, reaching Tk6.60 crore. The company attributed this success to a reduction in manufacturing costs, resulting in an improved gross profit margin.
For the fiscal year 2022-23, Anwar Galvanizing witnessed a 1.87% growth in revenue, albeit experiencing a 69% dip in profit compared to the previous year. In FY23, revenue reached Tk79.79 crore, while profit stood at Tk5.95 crore, as opposed to Tk72.43 crore and Tk19.34 crore, respectively, in the preceding fiscal year.
The company’s board of directors has proposed a 10% cash dividend for shareholders in FY23, pending approval at the annual general meeting scheduled for February 4, 2024.
Bond Issuance for Further Expansion:
In a bid to fuel business expansion, Anwar Galvanizing has outlined plans to issue a bond worth Tk50 crore. The company envisions that 90% of the bond units will convert into shares, with the remaining 10% remaining as non-convertible redeemable coupon-bearing bond units with a five-year tenure. The coupon rate is anticipated to range from 9% to 11% per year, offered semi-annually. Approval from the Bangladesh Securities and Exchange Commission and other regulatory bodies is a prerequisite for the bond issuance, which targets potential investors including banks, non-bank financial institutions, insurance companies, corporate entities, high-net-worth individuals, existing shareholders, and the general public.
