Emerald Oil to start exporting rice bran oil to Japan in 3 months

Emerald Oil Industries is going to export crude rice bran oil to Japan within the next three months as it came into full production after remaining shut for five years due to the previous owner's loan scam.

It has already signed a memorandum of understanding with a Japanese private company named Be Born Co Ltd, according to a regulatory filing on Sunday.

The Japanese company initially agreed to buy 3,000 tonnes of crude rice bran oil for the first year for Tk 600 million.

After successful supply in the first year, the export volume will be increased gradually over the next few years, said Ashraful Alam, chief financial officer of Emerald Oil.

Subject to approvals of the authorities concerned, export is likely to begin within the next three months, he said.

Upon resuming operation, Emerald Oil has been producing only crude oil due to a lack of manpower and fund. Be Born Co showed interest in buying crude rice bran oil.

Export is expected to boost Emerald's profit, said Mr Alam.

On media reports on auctions of Emerald factories relating to a case filed by BASIC Bank, the CFO said the news was untrue. The company, however, held a meeting with bank officials on Sunday to discuss the loan issue, he said.

Previous owners of Emerald Oil had taken a loan of about Tk 600 million from BASIC Bank and then flew out of the country without repaying the loan. The bank filed the lawsuit against the company in 2017.

Emerald Oil had to halt operations just three years after its listing in the stock market in 2014. It had been struck hard by a shortage of working capital after its founder embezzled borrowed cash and fled the country.

As per the latest financial disclosure, the company suffered losses amounting to Tk 2.68 billion between 2017 and 2021.

In 2021, Japanese company Minori's Bangladesh arm got the stock market regulator's nod to bring the company back into production by investing nearly Tk 400 million.

Emerald Oil is one of the companies whose boards have been restructured following a decision by the Bangladesh Securities and Exchange Commission in 2021.

The new board started commercial operation in January 2022 using a new husk boiler and extended refining capacity to 70 tonnes per day from 30 tonnes.

The company also held board meetings that remained pending for three years on June 1 and approved audited financial statements for 2020, 2021 and 2022.

The company also returned to profit in FY22 after enduring losses for five straight years.

It paid out 2 per cent cash dividend to shareholders, except for the previous sponsor-directors, for FY22 as it secured a profit of Tk 12.12 million that year.

Emerald Oil also declared 5 per cent interim cash dividend for the nine months through March this year as it succeeded in securing profit for the second year.

It has reported a profit of Tk 52.06 million for the nine months to March, in contrast to a loss of Tk 27.14 million in the same period of the previous year.

STOCK PERFORMANCE

As the new owner rekindled hope among shareholders, the stock price began flying in the premier bourse three months back even before the announcement of the board meeting schedule.

The stock escalated almost 280 per cent in just three months to Sunday. Market analysts deem the price hike unusual.

However, Emerald's share price slid 1.03 per cent to Tk 163.4 each on Sunday despite the news on the export agreement.

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