RAK Ceramics (Bangladesh), a UAE-Bangladesh joint venture company, is going to invest in faucets business by establishing a new plant at an estimated cost of Tk 950 million.
"The board of directors of the company has decided to invest in faucets business by establishing a new plant with production capacity of 1,500 pieces per day," said the company in a filing with Dhaka Stock Exchange (DSE) on Thursday.
Faucets business is widely known as bathroom fittings business.
The board of directors of one of the leading tile and sanitary ware manufacturers took the investment decision at a meeting held on Wednesday.
"The new plant is expected to go into operation in the next 15 months," Muhammad Shahidul Islam, company secretary of RAK Ceramics told the FE.
Recently, RAK Ceramics has also decided to increase the tiles production capacity by 15,000 square meters per day through green field projects at an investment of Tk 9,025 million to meet the growing demand for the construction material in the country.
The company has an investment plan of more than Tk 10 billion gradually for green field project for producing the value-added premium category tiles and the new faucets plant, said Mr Islam.
The company has already decided to buy 33.91 acres of land at Bhutulia in Gazipur worth Tk 627.30 million to set up the green field project and the new faucets plant, he added.
Regarding the source of funding, he said, they are working on the source of funds. It may be borrowed from banks or collected from the capital market, he said.
RAK Ceramics is a zero-debt company, which means it has no bank loans.
The market for tiles has been growing in the country as the real estate sector has witnessed a double-digit growth over the last decade.
Each share of the company, which was listed on the DSE in 2010, closed at Tk 43.20 on Thursday, losing 1.82 per cent over the previous day.
Its share traded between Tk 37.20 and Tk 63.30 in the last one year.
The company has reported consolidated earnings per share (EPS) of Tk 0.44 for April-June 2022 as against Tk 0.52 for April-June 2021.
The company disbursed 12.50 per cent cash dividend for the year ended on December 31, 2021. In 2020, it provided a 10 per cent cash dividend.
The company's paid-up capital is Tk 4.27 billion, authorised capital is Tk 6.0 billion and the total number of securities is 427.96 million.
Sponsor-directors own 72.08 per cent stake in the company while institutional investors 16.22 per cent and general public 11.70 per cent as on June 30, 2022, the DSE data showed.
RAK Ceramics (Bangladesh) is a UAE-Bangladesh joint venture project. Incorporated in Bangladesh in 1998, RAK Ceramics is the country's largest and renowned tiles and sanitary ware brand.
