Rahima Food suspends production amid supply shortages and market challenges

The
announcement comes after the Dhaka Stock Exchange (DSE) sought clarification
from the company regarding its operations, following unusual movements in its
share price
Rahima
Food Corporation Limited has temporarily halted production at its coconut oil
and cashew nut processing plants, citing weak market penetration and raw
material shortages.
The
announcement comes after the Dhaka Stock Exchange (DSE) sought clarification
from the company regarding its operations, following unusual movements in its
share price.
In its
reply filed today, the company said it had launched coconut oil production and
marketing on 17 February 2022 with high expectations of profitability. However,
despite operating for over three years, the product has yet to achieve the
desired market penetration.
"We
view this as a valuable learning experience. To ensure long-term
sustainability, we have temporarily paused production while actively exploring
alternative strategies for optimizing both production and marketing," the
disclosure stated.
The
company expressed confidence that with the right approach, the coconut oil
project could be revitalised in the future.
Similarly,
Rahima Food began its cashew nut processing and marketing venture on 31 May
2022, which initially delivered encouraging profits. Traditionally, raw
materials were sourced locally during harvesting seasons, ensuring year-round
production.
But this
year, unfavourable climatic conditions severely disrupted supply, leaving the
company unable to secure sufficient raw materials. As a result, production was
suspended once existing stocks were depleted.
"Despite
this, we are actively pursuing alternative sourcing channels and remain
optimistic about resuming operations in the near future," the company
noted.
Meanwhile,
the firm is advancing its previously announced plan to bottle and market
soybean and mustard oil, disclosed on 14 February 2022. Rahima Food said
implementation is progressing steadily, and it expects to commence commercial
operations "very soon."
Following
today's disclosure, the share price fell by 2.48 percent to close at Tk157.60.
The
company's operational setbacks have coincided with volatile movements in its
share price. On 7 July, shortly after the suspension of its coconut oil plant,
Rahima's stock was trading at Tk82.20. Over the following 24 sessions, its
price more than doubled, hitting Tk168.90 on 11 August—its highest level in a
year.
On 12
August, Rahima Food's board formally decided to keep the cashew nut processing
plant suspended until further notice, according to disclosures published on the
stock exchanges.
















