Two listed jute firms have been incurring losses for years – one due to a halt in production and the other for poor demand from foreign buyers – leaving investors in mounting worries.
Out of the three firms listed on the stock market from the jute industry, only Sonali Aansh Industries – an exporter of jute products – posted a profit for fiscal 2020-21.
While the other two – Jute Spinners, and Northern Jute Manufacturing Company – are incurring losses.
According to sources, Northern Jute has gone out of production following a loan scam.
Its officials said there is no possibility of the company returning to operation very soon.
Jute Spinners’ losses increased because of lower demand for its products from foreign buyers during the Covid pandemic.
General shareholders own 84.91% of more than 21 lakh shares of Northern Jute, and 36.98% of 17 lakh shares of Jute Spinners.
Despite the loss and production halt, the share price of Jute Spinners, and Northern Jute mills skyrocketed as the stock market went up in September this year.
According to the Dhaka Stock Exchange (DSE) data, from June to September this year, the share price of Jute Spinners and Northern Jute Manufacturing rose 95% and 45%, respectively, despite weak financials.
Later, the share prices of both companies also declined significantly.
Ups and downs in prices
Jute Spinners – the manufacturer of Jute Yarn and Twine for 100% export — has witnessed a fall in export in recent years.