Omera Renewable Energy Limited signs a contract with BEXIMCO Group

Omera Renewable Energy Limited, a subsidiary under the aegis of East Coast Group Company, has forged a partnership with BEXIMCO Group, a preeminent business conglomerate in Bangladesh, to deploy a 9.23 MW Grid-Tied Rooftop Solar System at the BEXIMCO Industrial Park situated in Gazipur.

 

The Power Purchase Agreement was ceremoniously inked at the East Coast Centre in Gulshan, Dhaka, as announced in a press communiqué.

Dilruba Chowdhury, director at East Coast Group, and Anil Kumar Maheshwari, chief financial officer of BEXIMCO Textiles Division, signed the 20-year Power Purchase Contract.

Amin Sabir Khan, executive director of Power Generation, Distribution, and Utility, Saqib Shakoor, executive director of BEXIMCO, and Masudur Rahim, chief executive officer, along with AKH Hasif Sowdagar, fcma, fca, chief financial officer, Capt Minhazur Reza Chowdhury, chief operating officer, Khan Ashique Rahman, manager, and Umme Jahan Mishi, assistant manager of East Coast Group, were in attendance at the signing ceremony, accompanied by the project working and communication team.

Omera Solar, with a history of installing over 60 MW of Rooftop Solar Systems across various industrial rooftops, aims to promote the ethos of “Go green today for a brighter tomorrow.”

The installation of the 9.23 MW solar system by Omera Solar is anticipated to generate 10.78 GWh of clean energy annually, translating to a savings of Taka 104.46 million per year for BEXIMCO in electricity costs, while concurrently reducing CO2 emissions by 7,223 tonnes.

BEXIMCO Textiles & Apparel Ltd, renowned as the most advanced composite mill in the region, boasts a weaving section equipped with 288 high-speed air-jet looms and a state-of-the-art dyeing and finishing division capable of producing 100,000 yards of finished fabric daily. The company operates within the BEXIMCO Industrial Park.

Beximco Pharmaceuticals Limited gets loan for business expansion

Beximco Pharmaceuticals Limited has procured a substantial loan of €24.9 million (over Tk300 crore) from the German financial institution ODDO BHF SE, intended to augment its manufacturing capabilities, thereby amplifying its presence in both domestic and international markets.

As per the company's disclosures, Beximco Pharma formalized an agreement with the German bank in February to secure the loan for procuring machinery and equipment by 31 December. The loan will predominantly be allocated towards replacing and maintaining machinery, with a segment earmarked for the expansion of the company's production facilities.

Furthermore, Beximco Pharma has attained authorization from the Bangladesh Investment Development Authority (Bida) to secure the foreign loan, the company announced.

In its disclosure, the company specified that the loan, which will be remitted directly to the suppliers of the machinery and equipment, carries an interest rate of the 6-month Euribor (Euro Interbank Offered Rate) plus a margin of 1.3%. Repayments are scheduled to be made in semi-annual installments over a five-year period, commencing in June 2025.

The 6-month Euribor interest rate is the rate at which a consortium of European banks lends funds to one another, denominated in euros, for a tenure of six months.

Previously, Beximco Pharma had acquired a loan of €19.05 million from the same bank for business augmentation, which was completely repaid in January this year.

The company has persistently enhanced its production capacity, including the establishment of a third manufacturing facility, Unit-3, which commenced operations in 2021 following an investment exceeding Tk1,000 crore. Additionally, Beximco Pharma has acquired the local operations of multinational pharmaceutical companies Nuvista Pharma and Synovia Pharma, both of which now operate as its subsidiaries.

An equity analysis on Beximco Pharma by EBL Securities noted that the company derives a significant portion of its revenue from domestic drug sales, which constituted an average of 90% of its total revenue from FY19 to FY23. During this period, the company earned an average of 9.4% of its total revenue from exports and 0.2% from contract manufacturing.

Zuhaier Shams, a senior research associate at EBL Securities, conveyed to The Business Standard that Beximco Pharma is the foremost pharmaceutical exporter in the country, reaching 68 destinations, including highly regulated markets such as the US and Europe. From FY19 to FY23, Beximco Pharma contributed an average of 20% to the total pharmaceutical exports of Bangladesh.

He predicted that the company's profitability would improve due to a recent 50% reduction in the price of active pharmaceutical ingredients (API) in the Chinese market, marking the most significant decline since the pandemic. Beximco Pharma primarily imports APIs from China and India.

Consequently, the gross profit margin for Beximco Pharma, along with other pharmaceutical companies, is anticipated to increase this year due to the lower API prices, he added.

The EBL Securities equity report stated that the pharmaceutical industry in the country is valued at Tk31,200 crore as of March 2024 and is predominantly concentrated among the top ten pharmaceutical companies, which collectively held a 71.6% market share during this period.

Beximco Pharma has consistently ranked third among the top ten pharmaceutical companies over the past decade, holding a 9.6% market share as of March 2024, the report added.

The company's consolidated net revenue surged by over 13%, reaching Tk3,305 crore in the July-March period of FY24 compared to the same period the previous year. It also recorded a 23% growth in consolidated profit, reaching Tk437 crore during the same timeframe compared to the previous year.

The company had disbursed a 35% cash dividend to its shareholders for FY23.

FBCCI wants to strengthen economic ties with China

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has sought to strengthen trade and economic ties with China. FBCCI thinks that it would benefit the local companies and industries. Top Bangladeshi companies including Beximco group can also collaborate with Chinese top companies.

The FBCCI also called for greater collaboration with its Chinese counterpart such as the China Council for the Promotion of International Trade (CCPIT) and the China Chamber of International Commerce (CCOIC). FBCCI President Mahbubul Alam made this call at a meeting with the leaders of CCPIT and CCOIC held at the China World Summit Wing, Shangri-La Circle, in Beijing. During the meeting, the FBCCI President extended an invitation to Chinese businessmen to invest in Bangladesh, highlighting the array of facilities and incentives available for foreign investors. Mentioning Bangladesh's robust infrastructural development, strategic location and favourable business policies, Mahbubul Alam assured the Chinese business leaders that Bangladesh offers a conducive environment for investment while FBCCI would provide all kinds of support to the Chinese investors to facilitate their business in Bangladesh. "The Special economic zones, tax exemptions, and skilled workforce are the key advantages that make Bangladesh a lucrative destination for Chinese ventures," he added.

The FBCCI President stressed the potentials for future collaborations with the CCPIT and CCOIC in several sectors, including information technology, garments, textiles, light engineering, and joint research initiatives to explore market opportunities. The FBCCI President also sought support from Chinese businesses for technology transfer. He also invited the Chinese investors to visit Bangladesh in the future. During his speech, Secretary General of CCPIT Sun Xiao appreciated the recent infrastructural development of Bangladesh. He highlighted CCPIT's work on building a global corridor to facilitate seamless trade and investment flows, reinforcing the mutual benefits of a strengthened economic partnership between China and Bangladesh.

Business Leaders of FBCCI, CCPIT and CCOIC reaffirmed their commitment to deeper economic collaboration for growth and prosperity of both Bangladesh and China.

Beximco Pharma has a new MD

Aiming for strategic growth Amid leadership shift, Beximco Pharmaceuticals, appointed Iqbal Ahmed as new managing director. Iqbal Ahmed has been a long-serving director at the company.

The appointment of Iqbal Ahmed as managing director marks a significant milestone in Beximco Pharma's history. Ahmed, who has been an integral part of the company's board since 1985, steps into his new role, taking over from Nazmul Hasan, who resigned following his appointment as a government minister. The transition is poised to steer Beximco Pharma towards a new phase of growth and innovation, pending shareholders' approval at the forthcoming annual general meeting.

Having served on the board for nearly four decades, Ahmed brings a wealth of experience and a deep understanding of the pharmaceutical industry's dynamics. This leadership change comes at a critical time when the company is looking to bolster its market position and expand its global footprint. Under Ahmed's guidance, Beximco Pharma is expected to harness new opportunities and navigate challenges with renewed vigor and strategic acumen.

Stakeholders are keenly watching the leadership transition, anticipating its impact on the company's performance and strategic direction. Ahmed's appointment is viewed as a positive move, reflecting the company's commitment to continuity and stability. Investors, employees, and partners are optimistic that the new managing director's vision will translate into enhanced operational efficiency, innovation, and profitability. With the pharmaceutical industry facing rapid changes and increased competition, Ahmed's leadership is considered pivotal in driving Beximco Pharma's growth and sustainability.

The appointment of Iqbal Ahmed as the new managing director of Beximco Pharmaceuticals signifies more than a change in leadership; it heralds a strategic shift towards future readiness and growth. As the company navigates through the complexities of the global pharmaceutical landscape, Ahmed's seasoned leadership and strategic vision are anticipated to drive Beximco Pharma towards achieving its long-term objectives, ensuring its continued success in an ever-evolving industry.

A fixed income opportunity: Beximco Green Sukuk

Investors in Beximco Sukuk received a periodic payment of 5.55% during the initial half of 2023. This translates to an annual rate of 11.1% based on the face value of Tk100 per unit. In the capital market, an intriguing situation has emerged where return-seeking investors seem to be disregarding the attractive rates offered by the sole listed Sukuk, an Islamic debt instrument.

With an impressive yield of over 13%, Beximco Green-Sukuk AL Istisna'a has been found to be the most alluring fixed income option in the local financial market. In comparison, Treasury bonds presently offer a yield of up to 9%, while individuals are placing their funds in banks for returns ranging from 6% to 8%. National savings certificates provide an interest rate between 7.7% to 11.76% annually.

According to analysts, an investor who had purchased this Shariah-compliant instrument from the exchanges at the floor price of Tk85 per unit would achieve an effective annual yield exceeding 13%. Despite this, exchange trading of Beximco Sukuk barely reflects any appetite among mass investors.

For months, there has been a scarcity of trades involving this instrument, and the price has not risen above Tk86 in the past five months, as reported by the Dhaka Stock Exchange (DSE).

Beximco Sukuk investors are guaranteed to have a 9% base rate against the face value each year. On top of that, the Sukuk offers added payments if Beximco's cash dividend for the year is higher than 9%. According to the Sukuk prospectus, one-tenth of the percentage point excess Beximco Ltd shareholders get as cash dividends over the Sukuk base rate would be added to the Sukuk payment rate. For example, Beximco's dividend was 30% for the last fiscal year and Sukuk investors' are getting periodical payments at 11.1% rate. 210 basis points added to the base rate of 9%.

If Beximco Limited shareholders get higher dividends, Sukuk investor's return will go higher and if Beximco's dividend rate is less than 9%, Sukuk investors will get periodical payments at 9%, still not less than the highest yield from the treasury bonds, and bank deposits nowadays. Fixed income investments have been popular among institutional investors in the country as they have informed investment professionals within teams.

However, there has been a significant lack of awareness and appetite among the retail investors, which is why the bond market has been a playground of institutional investors, while the equity market is mostly chased by individuals.

Of the 17.45 lakh beneficiary owner accounts in Bangladesh now, not even 17,000 are by institutional investors, according to the Central Depository Bangladesh. Floor price hurts confidence during equity conversion. Besides, the secondary market investors also seem to have been ignoring the lucrative option to convert the debt into the equity of Beximco Ltd that should have been only increasing the appeal of the Sukuk as Beximco offered the gradual conversion at 25% discount on the 20-day average market price of Beximco shares.

For instance, Sukuk investors who exercised their right to convert 20% of the Sukuk in Beximco equity at the end of 2022 – the first year of the five year instrument, their cost for a Beximco share was Tk86.70, while the stock has been stuck at the floor price of Tk116. Even if one, getting Sukuk converted into equity last year, had sold at a 10% discount from the floor in the block market, it was still an over 15% capital gain. Not even 20% of the eligible Sukuk investors applied for the conversion last year.

Analysts observed that the floor price deprived investors of liquidity and hurt their confidence. The floor price imposed by the Bangladesh Securities and Exchange Commission (BSEC) at the end of July last year to artificially hold prices of listed securities despite the economic challenges brought about by the Ukraine war.

Teesta Solar Ltd comes into operation

Prime Minister Sheikh Hasina inaugurated a 200-megawatt  solar power plant, the highest renewable resource-focused power generation capacity of a single facility in the country, built by Beximco Power Ltd.

Some $300 million was invested to set up the plant, named Teesta Solar Ltd, on 650 acres of a landmass formed through sedimentation in Sundarganj upazila of the northwestern district of Gaibandha, said a press statement.

The plant is expected to provide 200MW of electricity to the national grid daily, said the statement issued by Public Relations Officer Shafiqul Islam of the office of the adviser to the prime minister on private industries and investment.

The prime minister inaugurated the plant, which started trial operations from December last year, from a gathering on Rangpur Zilla School premises.

"We think this renewable energy sector will be very important for the future," said Shayan F Rahman, chairman of Beximco Power Limited. He further said they launched the first sukuk bond of the private sector in the country to finance this project.

A sukuk is an Islamic financial certificate, similar to a treasury bond and structured to generate returns in compliance with Islamic finance principles. "In the future we are thinking of setting up more solar power plants as per government plans," he noted.

Shops in Dhaka which are at risk of fire and accidents will be closed

Prime Minister’s Private Industry and Investment Adviser Salman F Rahman said that after Eid, some shops in Dhaka which are at risk of fire and accidents will be closed. According to a related source, the government is going to be strict against the markets, hospitals and buildings that are at risk of fire after Eid. The fire-prone building is currently under intelligence surveillance.  Salman F Rahman said, “We consider one or two shops unsafe and accidents can happen there.” We have to take strict action against them. Although Salman F. Rahman gave a message of strict action on behalf of the government, he did not name any market that will be closed.

 

Most of the buildings in the capital Dhaka have been constructed without fully complying with the fire service and civil defense instructions. There is no fire alarm system in these buildings. There is no adequate water and firefighting system. There are enough stairs but they are not open. Shops-warehouses have also been placed on stairs in commercial buildings. Even in the vicinity of the market-shopping mall building, there are hanging electrical cables and AC equipment connections. Altogether, 55 percent of Dhaka’s buildings are at risk. This information is available by reviewing a recently published fire service report. The report was prepared by inspecting various aspects of fire safety of buildings across the country from January 1 to December 31, 2022.

 

Recently, the dangerous market like Bangabazar in the capital was declared dangerous on April 10, 2019, but the building owners or businessmen did not pay attention to the notice of the fire service because they did not have the power to take punitive measures. And due to legal weakness, the organization could not take effective action against them. In the last few days, several big fires have shaken all quarters.

 

The fire service and civil defense have listed markets, shopping malls, hospitals, commercial and residential buildings in the capital that are at risk of fire. The list includes 1,305 markets and buildings including Gauchia Market, Noor Mansion, Rajdhani Super Market, Karwan Bazar Kitchen Market, Lily Plaza, Dhanmondi Hawkers Market. Of these, 450 buildings have been identified as high-risk. And there are more than four hundred hospitals including Dhaka Medical and Suhrawardy in this list.

 

The fire service has started sending warnings to these market authorities and building owners. All the owners of these buildings will receive warnings or notices, according to fire service sources. According to the fire service report, 24,102 fire incidents occurred in the country in 2022. 98 people were killed and 407 people were injured in these accidents. Among the dead are 13 fire service officials. According to the report, Tk 342.59 crore has been caused by fire in the year 2022. And the estimated value of recovered goods is Tk 1,808.32 crore. Besides, 9,517 fires were brought under control before going into operation.

 

The fire service inspected 5,869 buildings to prepare the report. It identifies 2,223 buildings as dangerous. Among them, there are 671 high-risk buildings and 1,606 vulnerable buildings. At the same time, satisfactory results are obtained in 3 thousand 96 buildings in fire safety. Dhaka has the highest number of 54.67 percent buildings and Mymensingh has the lowest number of 1.93 percent buildings under fire risk. 54.29 percent of buildings in Chittagong are at risk of fire. Besides, 29.62 percent in Barisal, 41.46 percent in Khulna, 24 percent in Rangpur, 19.76 percent in Sylhet, 14.97 percent in Rajshahi and 1.93 percent in Mymensingh are under fire risk.