Apex Tannery Limited, a leading leather manufacturer in Bangladesh, has announced its plan to reestablish agreements with three footwear exporters, signaling a significant step in its business strategy. The company expects these contracts to generate approximately Tk16 crore (USD 1.34 million) in annual sales, according to a disclosure issued yesterday.

This development had an immediate impact on the stock market, as Apex Tannery’s share price rose by 2.03%, closing at Tk70.50 (USD 0.59) on the Dhaka Stock Exchange (DSE).

Apex Tannery will be partnering with FB Footwear, Footbed Footwear, and Nuovo Shoes (BD), companies managed under a unified leadership.

Notably, this isn’t the first time the tannery has joined forces with these entities. Back in September 2020, the company entered similar agreements with an anticipated revenue of Tk21 crore (USD 1.76 million).

The collaboration benefits from shared management ties. Several directors of Apex Tannery are also involved with the three footwear companies.

According to the Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB), Hedayetullah Ron serves as managing director for all three footwear firms.

Apex Tannery disclosed that these contracts are part of its routine business operations. The agreements will see the sale of finished leather at market prices, tailored to various grades and qualities specified in the contracts.

The company estimates annual sales to the three exporters as follows:

• FB Footwear: Tk10 crore (USD 837,000)
• Footbed Footwear: Tk5 crore (USD 419,000)
• Nuovo Shoes (BD): Tk1 crore (USD 83,700)

However, the company clarified that actual sales may fluctuate based on market demand.

Despite ongoing challenges, Apex Tannery has recommended a 5% cash dividend for its general shareholders for the fiscal year 2023-24, amounting to Tk72.03 lakh (USD 60,300).

Sponsor-directors, however, will not receive any dividends, reflecting the board’s decision.

The company continues to face financial hurdles, reporting a net loss of Tk12.66 crore (USD 1.06 million) in FY24, slightly higher than the Tk12.44 crore (USD 1.04 million) loss recorded the previous fiscal year.

Loss per share also rose marginally from Tk8.17 (USD 0.068) to Tk8.31 (USD 0.069), based on DSE data.