BATBC BD Investing BDT 1.5 bn to Construct Bonded Warehouse

Board of Directors of BATBC BD has approved the investment decision amounting to BDT 1.5 bn for the company’s Savar Factory Site.

Details of the investment are as follows:

· BDT 1.0 bn for construction of Bonded warehouse for the storage of wrapping material, leaf and finished goods with factory specification building standards

· BDT 245 mn for bonded warehouse utility

· BDT 214 mn for construction of site ancillary facilities for employee wellbeing

· BDT 19 mn for reinforced cement concrete road and underground drainage

The investment will be funded from internal sources and bank financing based on the cash flow of the Company.

The bonded warehouse will enhance the capacity and productivity of the company. Currently, BATBC BD has its own and rented bonded warehouses that are far away from its Savar factory, which results in the company’s cost of transporting goods to go up. It will also help the company to defer duties and taxes on imported raw materials (e.g. wrapping material). The company will pay the duties and taxes while releasing the goods from bonded warehouses within six months of import.

During 6M23 (Jan’23 – Jun’23), BATBC made a capex of BDT 1,433 mn. Construction of bonded warehouse will add BDT 1,508 mn as new capex. The company’s average annual capex stood at BDT 4,620 mn in last 5 years.