Emerald Oil is planning to invest Tk 400 crore on a new plant in the Jamalpur Economic Zone to increase its production of rice bran oil for export.

The company has applied for land in the area and is planning to establish a factory that will ensure the production of 100 tonnes of rice bran oil per day.

It plans to begin commercial operations at the factory within March 2025.

As the country is contending with a gas crisis which may impact production, the company has opened a letter of credit (LC) to import husk broilers so it can ensure production, said Miya Mamun, chairman of Minori Bangladesh, a major shareholder of Emerald Oil.

Other than husk, they can also be run using coal, he added.

"We needed funds to finance the project, so we made a deal with Dubai-based Safa Capital," Mamun said.

Minori Bangladesh Ltd inked the deal in order to get funding within three years.

Some of the funding from Safa Capital can be secured by selling them shares and some can be secured through loans by keeping shares in lien, Mamun said.

"It will depend on the situation and the central bank's approval on how many sell shares we can sell and how much we can get by keeping shares in lien. We have to think about the repatriation of funds in the present situation. So, all the things will be depend on the central bank's confirmation," he added.

In a letter last month, the company sought approval from the Bangladesh Securities and Exchange Commission (BSEC) to allow keeping locked-free shares other than the 30 percent held by sponsors and directors as margin or pledge to any institutions.

The BSEC replied on January 23, allowing it to do so.

At present, the collective shareholding by sponsors and directors is 59.61 percent of the paid-up capital of the company, including the 39.69 percent stake held by Minori Bangladesh.

Emerald Oil Industries was struggling to continue production for many years until Minori Bangladesh decided to invest in it in 2022.

At present, Emerald Oil is producing around 56-60 tonnes of rice bran oil per day.

The additional rice bran oil from the new project will be exported to Japan as the company has come to an agreement with two Japanese companies, Mamun said.

In FY2022-23, its sales stood at Tk 111 crore, up from the previous year's Tk 43 crore. At the same time, profit rose to Tk 6.6 crore compared to Tk 1 crore the previous year, according to the company's financial statements.

Its stock rose 9.88 percent to Tk 85.6 at the DSE yesterday.