Riding on tissue sales, Bashundhara paper logs record revenue
After two years of Covid pandemic, tissue segment now in the driving seat of the paper-maker’s revenue outlook
Bashundhara Paper Mills — a concern of Bangladeshi conglomerate Bashundhara Group that manufactures paper and different diversified tissue items — has been on a roll, as the company registered a record around Tk1,200 crore revenue in FY22.
Though paper sales had been limping during the Covid-led school closure, the tissue segment witnessed a huge growth thanks to a growing hygiene awareness among consumers, Mazedul Islam, general manager of Bashundhara Paper Mills, told The Business Standard.
In the first quarter of the current fiscal year, Bashundhara paper's net revenue grew by 56% to around Tk312 crore. During this time, the company's profit grew by 207% to Tk20.91 crore.
"Tissue segment is still on the roll," Mazedul added. Bashundhara's paper production lines comprise paper, tissue, paper sack and hygiene products.
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According to company documents, Bashundhara paper registered Tk51 crore in net profit last year, according to company documents. In FY22, the paper-maker posted 21% growth in revenue as its profit growth was 23.48%.
In FY21 amid the pandemic, the company witnessed 51% revenue growth in the tissue segment as paper revenue ticked down 29% compared to the previous year.
With the trend continuing in FY22 even though Covid has waned, tissue maintained a 32% growth as the paper business logged only a 17% growth.
In FY20 before the Covid outbreak, the tissue segment fetched the paper-maker Tk218 crore, paper revenue being Tk483 crore. But two years after the pandemic, the revenue outlook is brighter with tissue in the driving seat.
Mazedul Islam said the company did not raise tissue prices during the pandemic despite production costs spiralling significantly. It was the sales volume that pushed up the company profits.
Bashundhara officials said the average prices of all paper and tissue items are likely to tick up slightly this year.
They said the paper-maker invested in a diversified hygiene and toiletries portfolio in recent years. Production capacity has been ramped up substantially.
Incorporated in 1993, Bashundhara Paper Mills went into commercial production in 1997 as an import-substitute local paper manufacturer. At the time, Bashundhara's two other ventures – Bashundhara Newsprint & Duplex Board Industries and Bashundhara Tissue Industries – were also in the paper business.
In 2009, the two companies were amalgamated as Bashundhara paper – which now controls around 80% of the local tissue market.
The manufacturing units are located in Munshiganj's Gazaria – around a two-hour drive from the capital Dhaka.
After meeting local demand, Bashundhara paper is exported to 50 countries, including the UK, Australia, Bahrain, the United Arab Emirates, China, India and Bhutan.
In FY22, Bashundhara paper's export grew by around 18% to around Tk119 crore – up from Tk101 crore in the previous year.
The local tissue market doubled within a decade owing to rapid urbanisation, growing per capita income and increasing hygiene sense among consumers. Annual production capacity now hovers around 84,000 tonnes, up from 30,000 tonnes in FY17.
According to 2018 market data, per capita tissue consumption was about 4 kg.
