ACI Ltd is expanding its footprint in the pharmaceutical industry, as it announced the opening of a new subsidiary yesterday to capitalise on the growing demand for high-quality herbal medicine in Bangladesh.

The conglomerate disclosed the launch of the new subsidiary, ACI Herbal and Nutraceuticals Ltd, through a notification on the Dhaka Stock Exchange (DSE) website.

The new entity will have an authorised capital of Tk 100 crore and a paid-up capital of Tk 10 crore. ACI Ltd will hold an 85 percent stake in this new subsidiary.

The company aims to begin production by the end of this year, M Mohibuz Zaman, managing director and chief executive officer of ACI HealthCare Ltd, a subsidiary of ACI Ltd, told The Daily Star.

The sale of the non-chemical remedies will begin early next year, he added.

"We will manufacture tablets, ointments, syrups, and more at this new facility, which will be exclusively dedicated to scientific herbal medicine," said Zaman.

"Over time, we plan to expand our product range to cater to growing consumer demand," he said.

The decision to establish the new subsidiary was made at a meeting of the company's board of directors on January 30.

However, the formation of the new company is subject to approval from the relevant authorities, according to the company's disclosure.

The move comes as demand for herbal medicine has surged in Bangladesh, with consumers increasingly seeking natural remedies backed by scientific research.

Industry insiders estimate that the herbal medicine market in the country generates annual revenues of about Tk 2,500 crore, accounting for roughly one-tenth of the overall pharmaceutical sector.

Currently, leading pharmaceutical companies such as Square Pharmaceuticals, Beximco Pharmaceuticals, Incepta Pharmaceuticals, and ACME Laboratories cater to about 30 percent of the herbal medicine market, generating a total of Tk 800 crore in annual revenues.

In spite of the expansion decision, ACI Ltd reported a loss of Tk 17.68 crore in the October-December quarter of the current financial year, marking a 50 percent improvement year-on-year.

The company's loss per share stood at Tk 3.17 in the second quarter, down from Tk 5.51 a year ago.

Shares of ACI Ltd dropped by 1.61 percent to close at Tk 147 on the DSE yesterday.