/ STOCK & CORPORATE
FE REPORT | February 03, 2025 00:00:00
Advanced Chemical Industries (ACI) has decided to set up a new subsidiary — ACI Herbal and Nutraceuticals — to tap into the herbal medicine market amid growing demand.
The new entity will have an authorised capital of Tk 1 billion and a paid-up capital of Tk 100 million, said the business conglomerate in a stock exchange filing on Sunday.
ACI will hold an 85 per cent stake in the subsidiary.
The setting up of the herbal and nutraceuticals unit is subject to approval of the regulators concerned, including the Directorate General of Drug Administration (DGDA).
Nutraceuticals are foods or parts of foods that may have health benefits, being in use for disease prevention and treatment. The term comes from the words “nutrient” and “pharmaceutical”.
Industry insiders said the demand for herbal and nutraceuticals products had been growing rapidly due to lower side effects and clinical evidence supporting its effectiveness in treating various diseases.
The large pharmaceutical companies are gradually taking hold of this expanding market as people are opting for high-quality natural remedies with recognisable brand value.
Leading drug manufacturers, such as Square Pharma, Incepta and Acme Laboratories, have stepped into herbal medicine.
Last month, Navana Pharmaceuticals also announced plans to set up a herbal unit, with an investment of Tk 208.5 million.
“The medicine market is growing day by day,” said an ACI official, adding that considering future prospects, the board of the company decided to invest in the herbal medicine segment.
He, however, refused to give details, such as estimated revenue from the new subsidiary and when it will start commercial operation.
ACI, one of the leading conglomerates in Bangladesh, operates across the country through its four diversified strategic business units — Health Care Division, Consumer Brands Division, Agribusinesses Division, and Retail Chain Division.
Presently, ACI has 15 subsidiaries, three joint-venture companies and an associated company.
Financial Performance
Despite ACI’s sales revenue growth of 6 per cent year-on-year in the first half of FY25, it made a loss during the period. In fact, its losses escalated by 31 per cent year-on-year to Tk 646 million in July-December last year due to higher finance costs.
The company’s sales revenue from pharmaceuticals segment, animal health, consumers’ brand, seed and fertilizers segment rose 6 per cent, 9 per cent, 10 per cent, 13 per cent and 31 per cent respectively.
However, its finance expenses jumped 43 per cent year-on-year to Tk 4.43 billion in the first half of FY25 as borrowing costs shot up on the back of rising interest rates.
Meanwhile, the stock of ACI dropped 1.54 per cent to Tk 147.1 per share on Sunday on the Dhaka Stock Exchange.
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