The company wants to double its production capacity with the expansion
- Plans to finance new factory thru bank loans, own sources
- Production capacity will be 2.5 lakh litres per day
- 59.16 decimals of land acquired adjacent to its existing plant
- Lovello’s profit surged by 73% from January to March 2024
- Share price increased by 20% over the last seven working days
Lovello Ice-cream, a brand of publicly listed Taufika Foods and Lovello Ice-cream PLC, has announced an investment of Tk150 crore to set up a second ice cream manufacturing plant.
The expansion aims to increase the company’s production capacity to meet the growing demand for its products, according to a press release.
For the new plant, Lovello has acquired 59.16 decimals of land adjacent to its existing plant in Valuka, Mymensingh.
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The company will enter contracts with international suppliers—Tetra Pak Southeast Asia (Singapore), MEC Group (China), Teknoice (Italy), and Yantai Moon Co Ltd (China)—to purchase the necessary capital machinery for the new facility.
“This investment marks a significant milestone in Lovello’s growth,” said Md. Moheuddin Sarder, the company secretary. “With this expansion, we plan to more than double our production capacity and reach a larger market segment, in line with our goal of increasing market share.”
Once operational, the new plant is expected to produce 2,50,000 litres of ice cream daily, more than doubling Lovello’s current production capacity. The project is scheduled for completion by June 2025.
A senior executive said, “This expansion is a strategic move to strengthen our market position and support continued growth. We believe it will help us better serve our customers.”
Lovello plans to fund this investment through internal resources and bank financing. Additional details on the project’s progress and its financial impact will be discussed during the company’s upcoming earnings call.
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The company’s share price increased by 20% over seven working days, reaching Tk89.60 on the stock exchange as of Sunday.
In the January to March quarter of 2024, the Ice- cream manufacturer reported a 73% surge in profit attributing it to increased ice cream sales.
Lovello reported a profit of Tk6.01 crore from January to March 2024, compared to Tk3.47 crore at the same time in the previous fiscal year.
Its earnings per share (EPS) stood at Tk0.71, up from Tk0.41 at the same time of the previous fiscal year.
Regarding its profit growth, the company said the ice cream business is seasonal. From 1 January 2024 to 31 March 2024, ice cream sales increased as the summer commenced.
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However, in the first nine months of the 2023-24 fiscal year, from July to March, its profit increased to Tk10.85 crore, compared to Tk9.65 crore at the same time of the previous fiscal year.
In 2021, the firm raised Tk30 crore through an initial public offering (IPO) to expand its business.
Till 31 August 2024, sponsors and directors held 41.12%, institutions 17.88%, and general investors 41% of the shares in the company.
According to market insiders, the estimated market size of domestically organised branded ice cream in Bangladesh is around Tk1,400 crore. Its value could reach Tk2,600 crore by 2025.
