The e-commerce platform will sell food, grocery and medicine and will also provide hotel bookings and ticketing
Golden Harvest Agro Industries, the pioneer in Bangladesh’s frozen food business, is stepping into the e-commerce sector that got a massive boost amid the pandemic.
The e-commerce platform will sell food, grocery and medicine and will also provide bookings and ticketing.
Golden Harvest will own 45 per cent of the venture equivalent to Tk 5 crore.
“We have actually been in the business of IT-enabled services for 21 years now, so we wanted to leverage that,” Ahmed Rajeeb Samdani, managing director of Golden Harvest Group, told Dhaka Tribune.
The company, Golden Harvest InfoTech, works almost exclusively for the export market, which is why it is not too well-known locally.
Its clients include Google, Vodafone and hail from Germany, France, the UK and the US.
“So we thought of using our expertise to address the forward linkage problem in our food business,” Samdani said, adding that the e-commerce venture will take form in 4-5 months.
Meanwhile, the company also declared a 2 per cent interim cash dividend for its shareholders for its 2019-20 financial year, perhaps to prop up its flagging share price, which lost 54.1 per cent in value in the past two years.
The company had previously announced no dividend for the year after the pandemic bruised its top-line badly.
It logged in a profit of less than Tk 1 crore for the financial year, which runs from July to June. The company had posted a profit of Tk 24.3 crore in its 2018-19 financial year.
But the company’s fortune is not shining yet with the opening up of the economy since May 30 last year.
In the first half of its 2020-21 financial year, it logged in losses of Tk 13.6 crore. A year earlier, it posted a profit of Tk 20.9 crore.
“The pandemic has been a mixed bag for us,” said Ahmed Rajeeb Samdani, managing director of Golden Agro Industries.
On one hand, the demand for its frozen parathas and bread shot through the roof, but its other frozen food items like nuggets, sausages, samosas, chips as well as ice cream were hardly sought after by consumers.
Golden Harvest sells to three segments -- households, schools and hotels and restaurants, which account for 36 per cent of its sales.
“When the pandemic began in March, our revenue from two of those segments were gone for all intents and purpose. The hotels and restaurants are slowly welcoming back visitors now, but the schools are closed still.”
Golden Harvest provides breakfast sausages, nuggets, chips and other frozen food items to all upscale hotels and guesthouses in Bangladesh, according to Samdani.
Then the supermarkets have hoarded products from Golden Harvest anticipating supply disruptions during the countrywide shutdown enforced by the government from March 26 to May 30 to tame the fast and furious spread of coronavirus.
“When things have neutralised in June, those stock still served them and they did not place big orders.”
Another reason the company’s sales in the quarter has been lacklustre is that the pandemic has created a multitude of new entrepreneurs supplying homemade frozen food items to supermarkets and at rates much cheaper than that Golden Harvest can manage, Samdani said.
“This has created additional competition for us,” he said, adding that were there strict quality control and regulation in the country those items would not have made it to the supermarket shelves as those are not preserved properly.
Then the sales of one of its subsidiaries, the BLOOP-brand ice cream, is unlikely to return to normal until March next year.
Pohela Boishakh is the biggest sales event for the ice cream industry. At the beginning of the year, Golden Harvest had an ice cream sales target of Tk 18 crore for the month of April. But it made only Tk 36 lakh, according to Samdani.
“We have been a victim of disinformation. Many schools were giving out flyers to parents to not let their children have ice cream or else they would get COVID. This killed our sales when globally ice cream consumption soared as people stayed in, binge-watched and ate ice cream.”
From July onwards, ice cream sales have picked up but it is nowhere near the pre-pandemic level.
“By default, ice cream sales will spring back when schools and colleges reopen. All ice cream makers are waiting for that,” Samdani added.
Shares of Golden Harvest, which have been listed since 2013, closed at Tk 16.7 yesterday on Dhaka bourse, which is the same as in the previous session.