Quasem Industries' much desired expansion project to boost its revenue and profit is getting delayed by a year owing to the coronavirus pandemic.
In February 2020, the dry cell industry leader had planned to set up a unit to manufacture artificial quartz products for 100% export to the USA.
The project completion target was June 2021 but Quasem Industries now expects the new unit will go into operation next year.
The technological advancement has put a squeeze on the business of Quasem Industries, resulting in gradual declines in profits for years.
Owing to the decrease in demand for dry cell products, in recent years the company has diversified its business to consumer goods like air freshener, body spray, shaving foam, and aerosols.
The new expansion project, and the business diversification plan have given hope to the company and its shareholders for better profits in the days to come.
"We see a great potential of these products," Tasvir Ul Islam, managing director of Quasem Industries Limited, said in its latest annual financial statements for FY20. "As the first company in Bangladesh, Quasem Industries enters the full-scale manufacturing of artificial quartz products."
"We have faced some delays due to lockdowns. The progress of this project is still in good shape, and we anticipate that we can start business activities within the next year," he added.
"We have faced some delays due to lockdowns. The progress of this project is still in good shape, and we anticipate that we can start business activities within the next year."
In collaboration with the American company Sunstone International LLC, Quasem Industries had planned to manufacture artificial quartz products using its existing factory premises in Tangail.
The project cost was estimated at Tk91.99 crore. In the first year, the net profit was targeted at Tk17.45 crore after completion.
In the existing business, the company made a profit of Tk9.16 crore in the 2020-21 fiscal year from dry cell batteries, consumer products, and by making cans.
As per the company's financials, half of the profit came from government compensation for acquisition of its factory land for constructing a road in Tangail.
Earlier, its net profit was only Tk4.41 crore in FY20, Tk4.87 crore in FY19, and Tk7.93 crore in FY18.
Officials said the development work to set up the new manufacturing unit had started in full swing. But the pandemic, which broke out in Bangladesh in March last year, had delayed the project. It will take more time to be completed.
"In September 2020, we broke ground on the most significant development project with some new international business partners," Dr Reyan Anis Islam, chairperson of the company, said in its annual financial statement.
"But many lockdowns that we have faced since then have caused some delays to the completion of the project. We are now very hopeful of beginning its operations in this sector in the coming year."
Quasem Dry Cell Company, which obtained its International Standards Organisation (ISO) certification in 1980, got listed on the stock market in 1988 as a blue chip company.
After conducting business for over two decades, to bring about diversification in its products, Quasem Dry Cell changed its name to Quasem Industries Limited in 2017.