Econo ball pen disappearing from the market

Once a popular brand of ballpoint pens, Econo, is now disappearing from the market as its owning company GQ Ball Pen has failed to modernise the product for the highly competitive environment.

In the last decade, the company, which started its business in 1981, suffered a staggering 78% drop in sales and has been incurring losses since 2016.

In fiscal 2020-2021, the revenue stood at just Tk7 crore, down from Tk30 crore ten years ago.

In GQ Ball Pen's fiscal 2019-20 financial report, its independent auditor Mahfel Huq & Co said the company's financial condition indicates that there is significant doubt about its ability to continue the business.

Its close competitor Matador ballpoint pen, which started business in 1998, dominates the market at present.

Uzzal Kumar Saha, company secretary at GQ Ball Pen, declined to make any comments over the company's falling trend.

GQ Ball Pen said in its fiscal 2019-20 audited report the management was trying to retrieve the business by using the latest technologies for producing modern products to grab the market, but due to the Covid pandemic, they could not do that.

A company insider said GQ Ball Pen was established by Qazi Saleemul Huq and Salma Huq. Among them, Quazi Saleemul Huq, locally known as Econo Kamal, was a former BNP lawmaker from Magura and in 2018, was jailed for 10 years in a corruption case.

A former officer at the company, seeking anonymity, said, Quazi Saleemul Huq is responsible for such a situation of the company.

"The company can still turn around by utilising its brand value. For this, it needs further investment but no financial institutions are interested in giving loans to the sick company," he added.

He said the factory had earlier more than 300 staffers and sales representatives all over the country, but the number has now come down to just 100.

GQ Ball Pen is one of the oldest listed companies in the capital market. It got listed on stock exchanges in 1986.

Although the company incurred losses for years, it paid cash dividends regularly to the shareholders from the retained earnings.

But its sponsors and directors are not taking any dividends. The declared dividend helped the company's shares to be traded under "A" category in the secondary market of the stock exchanges.

As a small-cap company, gamblers have a lot of interest in its shares.

Its share price was only Tk66 per share in June 2020 but in September last year, the share price jumped 276% to Tk248. The manipulation has occurred on a rumour that the BRB Group was going to acquire the company.

At the end of Monday's trading session, its shares closed at Tk104.50 each at the Dhaka Stock Exchange.

Ballpoint market

According to industry insiders, one crore students buy one crore ballpoints every four days. Besides, numerous offices buy ball pens regularly. But the total market size is not available as the business is mainly dominated by imported pens.

Among local companies, Pran-RFL, Janani and Kumu produce 25 lakh ball pens every day. Meghna Group entered the ballpoint pen business in 2019 and is selling the products under the "Fresh" brand.

Olympic Industries and Rose Heaven have closed the ballpoint pen production as the market became highly competitive due to the imported products.