Back in 1981, GQ Ball Pen Industries Limited quite revolutionized handwriting practices in Bangladesh with its Econo brand ballpoints. In the last five years, though, the company with the legendary brand has been experiencing a slump in business.
GQ Ball Pen now plans to reinvent itself through a market comeback with plastic and commercial building rental businesses.
Uzzal Kumar Saha, Company Secretary of GQ Ball Pen, said the ball pen factory, ravaged in a fire in 2017, had been rebuilt and has resumed operation on a trial basis. It will go into commercial production next year.
"Besides, the construction of our 14-storied commercial building in Dhaka's Uttara area is going on. It will be completed in 2020, and we expect a handsome income by renting it for commercial purposes," he added.
Pen sale dropped
GQ Ball Pen began its journey in 1981 to meet local demands. The company had been doing good business for 30 years following its establishment. In the wake of multiple challenges, however, GQ began losing its market after 2012.
The company saw a 64 percent fall in sales in the last eight years. It posted earnings of Tk21 crore in the 2011-12 fiscal year. The amount dropped to Tk7.59 crore in the 2018-19 fiscal year.
The gradual fall in sales has had the company confronting losses. Investments in the stock market and fixed deposits are now the sole means of profit for GQ Ball Pen Industries Limited.
In the view of the company secretary, the local ballpoint market has been undergoing a tremendous competition. Moreover, illegal imports of ball pens have worsened conditions.
"We have withdrawn slow-moving items from the market and launched some new products. The outcome has been so positive that we have decided to import some new moulds," said Uzzal Kumar Saha.
He is optimistic about a sustainable growth for the company in the coming days.
Dull sales and a rise in the operating costs forced GQ Ball Pen to experience losses in the last two consecutive years. Nevertheless, the company was able to give dividends to stockholders from its reserves. Its sponsors and company directors are not taking any dividends.
In the 2018-19 accounting year, the company gave 10 percent cash dividends to shareholders. GQ Ball Pen incurred a loss of Tk1.72 in each share during the period. The annual general meeting of the company is scheduled for December 14.
The loss per share was Tk5.12 in the 2017-18 fiscal year.
The downtrend has continued in the current fiscal year, with the company's loss per share in the first quarter being Tk0.48.
Investing in associates
GQ Ball Pen Industries Limited invested Tk9.55 crore in its six associates from 2005 to 2010. Besides, it has an investment of Tk24.62 crore in the share market.
The closing price of GQ Ball Pen share was Tk71.80 at the Dhaka Stock Exchange on Monday. GQ share hit the record highest Tk97.70 in the last one year.
Meanwhile, the ballpoint manufacturer Olympic Industries, in a report, has said that as many as 4 crore students of the country buy 4 crore ballpoints every four days. Besides, numerous offices buy ball pens regularly.
Such local manufacturers as Matador, GQ, Olympic, Pran-RFL, Janani and Kumu Pens produce 25 lakh ball pens every day. Matador clearly dominates the market.
Demand for ball pens is also met through an entry of the items from India by legal as well as illegal channels.