Rahima Food Corporation Limited, a stock market-listed company, has finally revealed the good news of resuming production after a protracted wait. The company’s sponsor organization, City Group, has taken the initiative to resuscitate operations by utilizing Rahima Food’s idle assets after it had been entirely closed for a number of months. The group has made the strategic choice to use a contract-based manufacturing model to revitalize Rahima Food.

At a meeting of Rahima Food’s board of directors held on December 18, a five-year agreement with City Edible Oil was approved. Under the agreement, Rahima Food will use its existing bottling capacity to produce bottles for various City Edible Oil products. Essentially, by allocating a part of its supply chain to Rahima Food, City Group is bringing the company back onto a revenue-generating path without any additional capital expenditure.

Rahima Food’s factory in Narayanganj had remained inactive since July, after the coconut oil plant was shut down, followed by the closure of the cashew nut processing unit in August. As a result, during the July–September quarter of the current fiscal year, the company’s revenue dropped by about 77 percent to just BDT 6.7 million, and it incurred a loss of BDT 1 million. Market analysts believe that this “lifeline” from City Group will help stabilize the company financially during this critical period.

Even before the formal announcement, signs of City Group’s support led to a sharp rise in Rahima Food’s share price. Between November 14 and December 15, the company’s share price increased by nearly 53 percent, reaching BDT 144.80.

It is worth noting that despite the business downturn, the company has recommended a 2 percent cash dividend for the recently concluded fiscal year in order to maintain investor confidence. According to analysts, creating business opportunities in this way rather than through direct cash investment will play a long-term role in strengthening Rahima Food’s operational capacity.