Summary

  • In Bangladesh, Singer Bangladesh Limited has started its operation in 1905 – during the British colonial era.
  • In 1983 the company was listed with Dhaka Stock Exchange (DSE) and offered 20% of its total capitalization- 2,565 ordinary shares of Taka 100 each. In 2001, it was also listed with the Chittagong Stock Exchange (CSE).

  • Arçelik A. S. has acquired 57% stake of Singer Bangladesh Limited in 2019. The company is an Istanbul-based home appliance company.

  • International Appliances Limited is the only subsidiary of Singer Bangladesh Limited. The two companies amalgamated as per directions from the honorable High Court, effective from 01 February, 2021.

  • In the year 2020, ended 31 December, Singer has reported a revenue of Tk 14,958 million which was 15,370 million a year earlier, a 2.68% decline year-on-year.

  • The company has achieved a return on equity (ROE) of 24.36% in 2020 which was 32.32% in the previous year. Number of shares outstanding for the company is 99.70 million in both 2020 and 2019. Earnings per share of the company is Tk 7.85 in 2020, which was Tk 10.35 in 2019.

Company overview

History

Singer Bangladesh Limited (DSE:SINGERBD, CSE:SINGERBD) has started its journey in the hands of Sir Isaac Merritt Singer in 1851. The entrepreneur has borrowed $40 to start manufacturing a machine that will help in Singer Bangladesh Limited Logo

the making of clothing. Name of the company was I.M. Singer & Company and the sewing machine was the revolutionary product of the company. In 1876, the company has become the first multinational industrial company to produce sewing machine as it started its operation in Glasgow, Scotland. The company was headquartered in Singer Building, 149 Broadway, New York from 1908 to next 54 years. Currently, the company is headquartered in La Vergne, Tennessee, United States.

In Bangladesh, Singer Bangladesh Limited has started its operation in 1905 – during the British colonial era. The company set up two shops in Dhaka and Chittagong in 1920. After the partition of the sub-continent in 1947, two separate states emerged. Bangladesh became a part of Pakistan and formed its eastern wing. SINGER in East Pakistan operated as a branch of SINGER Pakistan and the products used to come from Western Pakistan. At the initial stage, marketing operation was carried out through only 10 shops, which increased to 43 by the late 1960s. After the emergence of Bangladesh on December 16, 1971, the East Pakistan Branch Office was elevated to a country Office and the Sewing Machines were made available from different Singer overseas sources. The number of shops was squeezed to only 23 because of low volume of business.

A change in the investment policy in 1979 created new business opportunities and SINGER registered as an operating company, with 80% of the share held by Singer Sewing Machine Company (SSMC), USA, and 20% by local shareholders. In 1983 the company was listed with Dhaka Stock Exchange (DSE) and offered 20% of its total capitalization- 2,565 ordinary shares of Taka 100 each. In 2001, it was also listed with the Chittagong Stock Exchange (CSE).

The management of the company realized that in Bangladesh, the sole product of the company, the sewing machine, will not be sustainable in the long-run. Therefore, the company has decided to diversify the product portfolio. The company has expanded to the consumer durables segment. The current products of the company include Refrigerators, LCD/LED TV, Color Televisions, Furniture, Air Conditioners, Fans, Washing Machines, Irons, Microwave Ovens, Rice Cookers, Motorcycles, Instant Power supply, Room Heaters, Air Coolers, Kitchen Appliances, Netbook, Laptop, Desktop Computers, Generators. The company has also moved its product diversification to manufacturing and marketing furniture in 2013.

Gradually, the company has expanded its role from manufacturer to retailer, to dealer, to corporate seller. As part of its multi-branding strategy, the company started transforming its Singer shops into ‘Singer Mega’, and ‘Singer Plus’ in 2006. The idea was to include products of other famous brands of the same products in the same shop or under the same roof. Thus, the Singer Mega, and Singer Plus shops now offer world famous brands like BEKO, Grundig, Apple, Samsung, Siemens, Skyworth, Videocon, Preethi, Singtech, Dell, Toshiba, Prestige, Lifestraw and many more alongside with SINGER.

The company runs 724 dealers across the country besides the largest retail chain for consumer electronics and home appliance. The dealers facilitate supply of the Singer products alongside the other brands to the consumers.

The acquisition

Arçelik A. S. has acquired 57% stake of Singer Bangladesh Limited in 2019. The company is an Istanbul-based home appliance company. The price of the transaction has been $75 million. Arçelik was founded in 1955 and has operations consumer durable goods industry and production. Rest of the shares of Singer Bangladesh Limited is held by the public (43%).

Corporate directory

Dr. Fatih Kemal Ebiclioglu is the chairman of the Board of Directors of the company. Operational head of the company is M. H. M. Fairoz, the Managing Director & CEO. Akram Uddin Ahmed is the Chief Financial Officer of the company. A. Qasem & Co. is the auditor of the company. Registered office of the company is located in 39 Dilkusha Commercial Area, Dhaka-1000 and corporate office is in 5B, Road No. – 126 Gulshan-1, Dhaka-1212. Manufacturing site of the company, Singer Manufacturing Complex (SMC), is located in Rajfulbaria, Jhamur, Savar, Dhaka-1347. The company has a subsidiary namely International Appliances Limited located in Koulashur, Hemayetpur, Savar, Dhaka-1348.

Amalgamation with International Appliances Limited (IAL)

International Appliances Limited (hereinafter referred to as the “Transferor Company” or “IAL”) was incorporated on 23 December 2014 under Companies Act 1994 as a joint venture with a local investor and another foreign investor. It has been an associate of Singer Bangladesh Limited (SBL) since inception. SBL acquired the Company as a subsidiary on 16 October 2017. On 27 February 2019 it became fully owned subsidiary of Singer Bangladesh Limited. The address of the registered office of the Company is Mousa Koulashur, Hemayetpur, Savar, Dhaka, Bangladesh.

IAL was incorporated for the purpose of carrying on the business of manufacturing and selling of refrigerators of different capacities, models and types with a brand of “Singer” for exclusive marketing by Singer Bangladesh Limited. The manufacturing plant of the Company is situated at Mousa Koulashur, Hemayetpur, Savar, Dhaka, Bangladesh.

As per the Judgment and order dated 01 February, 2021 passed by Hon’ble High Court Division of the Supreme Court of Bangladesh in the Company Matter No. 167 of 2020, acquisition date was March 14, 2021. Singer Bangladesh acquired 100% of voting interest of IAL.

The cited benefits of the amalgamation include increase in strength of Singer Bangladesh Limited (the transferee), achieving larger product portfolios, economies of scale, efficiency, optimization of logistics, improve synergies, and increase distribution network. Apart from that the transferee company will be able to optimize the cost minimizations. The benefits of the shareholders, employees, and creditors will increase compared to what would have been as separate entities. Earning per share will also increase for the shareholders. The employees of IAL will continue their employability and will keep lending their expertise to the transferee company.

Company in numbers

Singer has 424 retail outlets country-wide. Among these stores, 25 are MEGA stores, and 399 are Singer Plus stores. The company has 1088 Singer Pro dealers country-wide. Singer group staffs stood at 1767 as on the financial year 2020.

Mission, Vision and Objectives

Philosophy of the management is to work for the betterment of the society. Vision of the company is to be the most admired and respected family company in the country. Mission of the company is the improve the quality of life of the people by providing comforts and conveniences at affordable prices.

Objectives of the company are stated below –

  • To be the market leader in our product range and market segment.
  • Provide our consumers with the best services and shopping experience in the country.
  • Provide our consumers with products of latest technology.
  • Develop our employees to achieve their real potential.
  • Provide our shareholders with steady asset growth and return on investment above the industry norm.
  • Grow our revenue and profits at a rate above the industry norm.

Company objectives

The company segregates its values in the following way –

Consumers

We live up to the expectation of a responsible organization by contributing towards the improvement in the quality of life of our customers through outstanding product and services.

Employees

We respect each other as individuals and encourage cross functional teamwork while providing opportunities for career development.

Shareholders

We provide reasonable return to shareholders while safeguarding their investment.

Suppliers

We develop our suppliers as partners in progress and share our growth with them.

Competitors

We respect our competitors and recognize their contribution to market value.

Community

We conduct our business by conforming to the ethics of our country and share the social responsibility of the less fortunate.

Environment

We make every effort to ensure that the environment is protected and conserved for future generations.

Values of the company

Ownership structure

As per the year ended on 31 December, 2020, the company had 250 million ordinary shares authorised of Tk 10 each. A year earlier, the company had 100 million shares. The company has 997 million shares issued and paid-up, which was same for the previous year as well. Retail Holdings Bhold B.V. of the Netherlands holds 36.89 million ordinary shares and 19.93 million non-remittable shares (57% stake). Local shareholders hold 42.88 million shares (43% stake).1

Ownership structure of the company

Operation started1905
Stock market listing

1983 (DSE)

2001 (CSE)

Ownership structure

80% by Singer Sewing Machine Company (SSMC)

20% by general public

Product portfolioRefrigerators, LCD/LED TV, Color Televisions, Furniture, Air Conditioners, Fans, Washing Machines, Irons, Microwave Ovens, Rice Cookers, Motorcycles, Instant Power supply, Room Heaters, Air Coolers, Kitchen Appliances, Netbook, Laptop, Desktop Computers, Generators.
AddressSinger Bangladesh Limited
5/B, 126, Gulshan-1, Dhaka,
Bangladesh 1212
SubsidiaryInternational Appliances Limited
Company size1,767 employees

Industry Overview

The consumer durable goods market of Bangladesh currently stands at $2.35 billion and the industry has enjoyed a CAGR of roughly 14% in the years 2016-2020.2

The industry is expected to grow at a rate of 17% and achieve a position of $10 billion by 2030, according the market analysts.

If the products of the industry are divided into five categories – refrigerator, television, air conditioner, washing machine and kitchen appliances, Walton leads the market in first two categories while General leads the third and Samsung the rests.3

market share of companies in the industry

Industry demand drivers

Electricity production in the country is a major driver of the industry growth. In the country, about 99% of the population is brough under electricity coverage. Electricity production capacity of the country is currently about 25,000 MW but it will reach as high as 35,000 MW by 2030, as the country march forward to achieving its vision 2041. As electricity keeps easing the lifestyle of the people, the consumer durables are sneaking into the life of them to accelerate the easiness.

The second important growth driver of this industry is the increase in more disposable income of the people. As the economy grows, the people are enjoying the benefits of higher disposable income. Currently, per capita income of the country is $2,597.

The socio-economic condition of the country is also changing. Two aspects of it can be focused – participation of more women in the workforce, and increase in nuclear family. As women are becoming more interested in career, the need of ease in doing house chores is becoming more ardent. Therefore, they are turning to purchasing the consumer durables. Also, in the nuclear families, the demand of these products is high.

Industry supply drivers

Product diversification, rise of dispersed consumer classes and eases in financing has enhanced the ability of the companies to increase supply of the products. Since the demand of the products is flourishing, it is normal that the supply will also increase. Government policies such as tax exemption for 10 years of the new companies in this industry, VAT exemption on production of washing machines and kitchen appliances, reduction of advance tax from 4% to 3% on raw materials import.

From the relaxed government policies, the companies will be able to ramp up the local production at competitive prices. Also, the market players such as Walton and Singer will be benefitted from reduction in import duty of their raw materials – these companies import raw materials from abroad and assemble them. Technological advancement drives down the prices ever, which plays a significant role in improving condition of the supply side of this industry. Economies of scale and technological advancement has chased the price down and drove the demand up. Also, access to banking services of mass people in the country and mobile financial services has caused purchasing habit of the people to change.

The future of this industry is bright. The government is eying setting up of 100 economic zones (EZ) in the country. The rapid industrialization of the country will require support of the consumer durables industry as the people will be moving towards advance economy. Also, the production sites of the companies in this industry will be set up in those zones to ensure efficient production costs thus affordable prices.

Business Overview

Singer Bangladesh Limited is doing its business with the slogan “Embrace Life Now”. The company produces a range of consumer durable goods, electronics, and kitchen appliances. The main products of the company include refrigerator, air conditioner, television, washing machine, microwave oven, and kitchen appliances.

In the year 2020, ended 31 December, Singer has reported a revenue of Tk 14,958 million which was 15,370 million a year earlier, a 2.68% decline year-on-year. Apart from that the company has earned carrying charges of Tk 87 million which was Tk 114 million a year earlier, a 23.68% decline year-on-year. The revenue of the company has slightly declined because of the Covid-19 pandemic. During the period of extended lockdowns, consumer behaviour had changed as they were more prone to savings than spending. However, Singer managed to keep the sales to a good level despite all the challenges.

The cost of goods sold for the company during the latest year was Tk 10,982 million while it was Tk 11,102 million, a 1.08% decrease. The cost of goods sold also slightly decreased along with the revenue. Therefore, the cost of raw materials and others is remaining almost same over the years. Operating profit of the company has also decreased slightly during the year. All the figures are coherent and happened due to decrease in revenue in fact. However, finance costs of the company have increased from Tk 403 million in 2019 to Tk 443 million in 2020. Profit after tax of the company stood at Tk 782 million which was Tk 1,031 million a year earlier, an 24.15% decrease.

The company’s business can be segregated into four segments in terms of revenue. Maximum revenue comes from the home appliances sale, followed by consumer electronics, other appliances and sewing machines. The segregation is shown in the following graph –

market segments of the company

Total assets of the company have decreased slightly during the year due to a decrease in the property, plant, & equipment, right-of-use (ROU) asset, and deposits and prepayments. However, the company has increased its current assets balance at the end of the year.

Owners’ equity of the company during 2020 stood at Tk 3,209 million while it was Tk 3,192 million a year earlier. Long-term debts of the company have reduced from Tk 25 million to Tk 14 million. However, total long-term liabilities have increased during the year by almost Tk 151 million due to increase in other non-current liabilities – includes non-remittable accounts of Tk 1,562 million which is due to Retail Holdings Bhold B.V., The Netherlands. As per directives of Bangladesh Bank, the company neither remit this as dividend nor as capital.

The company has achieved a return on equity (ROE) of 24.36% in 2020 which was 32.32% in the previous year. Number of shares outstanding for the company is 99.70 million in both 2020 and 2019. Earning per share of the company is Tk 7.85 in 2020, which was Tk 10.35 in 2019. The company has declared a dividend of Tk 3.0 per share, which was Tk 7.7 per share a year earlier. Net cash flow of the company during the latest year is Tk 905.3 which was Tk 1,355.0 in 2019. Net operating cash flow per share of the company in 2020 is Tk 9.08 which was Tk 13.6 in 2019. Debt to equity ratio of the company in 2020 is 0.6 and it was same in the previous year. Overall, the performance of the company has slightly deteriorated due to the Covid-19 pandemic. But the company has maintained a consistency in all its major indicators that is, when sales has decreased, cost of goods sold has also decreased proportionately. Debt to equity ratio of the company remained the same during the year. However, financing cost increased slightly in the current year. Size of the company expressed in terms of number of employees in 1,767.

performance summary

Quarterly performance

Total revenue of the company for the first, second, and third quarter of 2021 is Tk 3,753.73, Tk 4,958.53, and Tk 4,605.96 million, respectively. Profit for the period is Tk 180.02, 287.67, and 127.3 million, respectively.

During the first quarter of 2020, of which only two months were pandemic-free, as Bangladesh reported its first case on March 08, the company’s turnover stood at Tk 3,064 million. In the first quarter of 2021, it has jumped to Tk 3,753 million. Sales of the company for second quarter of 2021 was Tk 4,958.52 million while it was Tk 2,978.07 million. This is either a big jump or a big fall for the year 2020. It seems more credible that a big fall in 2020 is the reason. During this second quarter of 2020, the pandemic hit hard the country. The panic was very high and the people lost their jobs, stopped spending money on luxury products. However, in the third quarter of 2021, the sales dropped compared to 1 year earlier. In third quarter of 2020, sales was Tk 6,251.94 million while it dropped to Tk 4,605.96 million in 2021.

Profit after tax of the company for the first quarter of 2021 is Tk 180 million, which was Tk 118 million during the same period a year earlier. In the second quarter of 2021, the profit reported is Tk 287.66 million while it was Tk 82 million a year earlier. However, during the third quarter of the latest year, the profit was Tk 127.29 million which was Tk 426.37 million during the same period a year earlier.

Recent developments

The company is yet to release its 2021 financial statements. However, in the 257th meeting of the Board of directors on January 25, 2022, the board approved the audited financial statements which has the following price sensitive information – net asset value per share stood at Tk 34.06 which was Tk 34.66 in the previous year. Earnings per share of the company stood at Tk 5.20 in 2021, but it was Tk 8.06 in the previous year. Net operating cash flow per share (NOCFS) in 2021 stood at Tk -21.37 which was Tk 10.25 in 2020. During the meeting, the board approved 60% cash dividend.

  1. ^ Annual report 2020, p.7 
  2. ^ https://ucbaml.com/bangladesh-consumer-durables-outlook/
  3. ^ https://ucbaml.com/bangladesh-consumer-durables-outlook/
Tags: BD:SINGERBD
Created by Wilton on 2022/03/07 20:46
     

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