Summit’s story started in 1973. Since his early years, Muhammed Aziz Khan had a dream to become a successful figure in the business arena of Bangladesh. During his university life, he borrowed Tk 30,000 from his father which was to become the seeds for his growing business. During the early years of his foray into business, Aziz used to transport caustic soda from Khulna and sell it in Old Dhaka. Since then, he has gone on to establish the globally recognized conglomerate giant, Summit Corporation Limited (formerly known as Summit Industrial and Mercantile Corporation Private Limited).
Summit Group is now recognized as the largest infrastructure group in Bangladesh employing over 7,000 people with investments in the energy sector, ports, shipping, hospitality sector and information technology. Under Aziz’s leadership, Summit set up the first Independent Power Plant of the country in 1998 – the Khulna Power Company Limited, a joint venture with Wartsila Corporation of Finland. Currently, Summit generates around 1,500 megawatts of electricity and is by far the largest independent power producer in Bangladesh. Summit has also set up the country’s first private off-dock facility, Ocean Containers Limited, now known as Summit Alliance Ports Limited which is currently handling about 20% of the country’s export and about 10% of the country’s import volumes.
Summit Power Limited, Summit Alliance Ports Limited, and Khulna Power Company Ltd. are subsidiaries of Summit Corporation and are currently listed in the Dhaka and Chittagong Stock Exchanges with a combined market capitalization of about Tk. 100 billion.
Muhammed Aziz Khan was born in 1955. He has an MBA from the Institute of Business Administration (IBA), University of Dhaka. He is also the Chairman of Siraj Khaleda Trust and was the founder past President of Bangladesh Scouts Foundation, Bangladesh Energy Companies Association, and Prothom Alo Trust. Aziz is currently the President of Bangladesh Association of Publicly Listed Companies (BAPLC) and the Honorary Consul General of Finland to Bangladesh.
Would you please give us an account of how you entered the entrepreneurial arena?
I have been an entrepreneur for around 45 years and established Summit in 1985. Initially, I was involved in the trade of chemicals. You can still find this trade taking place in Chawk Bazar and Urdu Road in Old Dhaka. Later on, I grew my business through the assistance of other renowned businessmen such as Anwar Hossain of Anwar Group and Din Mohammad of Phoenix Group. I also received helping hands from Pubali Bank and Rupali Bank. I received this assistance as they all saw the positive impact my business would generate in the future. Through this, I discovered the importance of establishing goodwill. If you can establish it, then financial mobilization will not be a problem for a business.
There have been tax anomalies in Bangladesh and now the tax administration is trying to make it business friendly. What are your thoughts on this?
Bangladesh is such a country where filing the correct returns may mean that you might have to pay exorbitant amounts to the government. Lots of organizations try to show lower profits so they can pay fewer taxes. However, this has the adverse effect of impacting their image for the banks who provide them with the necessary funding. So there’s a confusing problem where taxes will reduce their profits but if they try to evade taxes, they may not receive the required funding from banks. This dishonesty and tax avoidance occur due to the higher tax rates. Not only has this lead to irregularities in how a business should be conducted, but many young businesses have failed to flourish because of it. If businesses cannot run smoothly, how do you expect the economy to maintain its growth? A balanced tax rate is required in order to eradicate this problem.
What would you say is the highlight of your career as an entrepreneur?
My entire career is my highlight. There are two aspects of this. One is the journey, the other is reaching your destination. After conquering the Everest, people often stay there for a short time to absorb the enormity of their accomplishment. This is a time when people can sit back and think about the trials and tribulations after starting the journey. After reaching the destination, your joy is compressed into something new. This is similar to my experience as an entrepreneur. However, I feel, with this business, I can still climb higher. I am learning new things every day, especially from my daughters and grandchildren. If they fail at a task, they try again and again. Their persistence and perseverance have inspired me to think of how I can expand my business and go the extra mile, to find newer ways to serve Bangladesh.
What is the future vision of Summit Group?
Every business has an obligation to support Bangladesh’s development. Likewise, Summit Group also adheres to this in its efforts to remove poverty and create a sustainable, happy society. Towards this, we shall provide the physical infrastructures necessary for development. By 2021, we intend to provide 3,000 MW of electricity to cover the entirity of Bangladesh with 4G fiber optic networks and build our own international container port and river ports. We love Bangladesh and the system of free market economy. Thus, we intend to work with merit to create infrastructures, electricity, information technology and ports, so that our companies are profitable while supporting the growth and development of Bangladesh. We are working for the generation of low-cost, environmentally friendly electricity, efficient and world-class fiber optic infrastructure and international standard ports.
How would you assess the current economic landscape in Bangladesh?
Bangladesh is currently in a very prosperous period. The prices of petroleum products have dropped by 70% and the prices of metal and other raw materials have come down by almost 50%. Around 80 million people from our 160 million population do not have access to electricity. We have a $1,300 per-capita income, so we have a long way to go, developmentally speaking. If we can ride this wave of low-cost energy and commodities, it would lead us to a fundamental positive advantage.
Adding to that advantage is the fact that we are undergoing a digital internet revolution. Thanks to inexpensive and ubiquitous smartphones, our population can now access information, which was previously available only to the elites, whether they be the wealthy or certain religious groups. This combination can allow us the means to implement new infrastructure development projects which will enable our 160 million people to develop and grow in such a manner, unlike any other time in the past. We believe that we can break through the barrier of double-digit growth because of the times that we are living in and our hard working resilient people.
China had to perform its economic development on an average of $80 or $90 a barrel of oil. Today, we are at $30 per barrel. China had to develop using LNG at $8 per MMBtu. We are currently working with $3 per MMBtu. Coal has almost no value. These signs point towards the massive opportunity in front of us.
The efforts of the Bangladesh government deserve appreciation and encouragement. They have expanded all the infrastructures including social infrastructures such as education and health. Yes, much more needs to be done and at a faster pace, but, to me, it seems the hindrances arise from laws and regulations, created during the colonial era and an era without information technology. The best initiative of the government is “Digital Bangladesh”, perhaps a law and regulation reform is another necessity.
There is still a gap between electricity production and demand due to the lack of proper transmission lines. What is the requirement in this regard?
Transmission and distribution of electricity, as well as energy, oil and gas, are solely in the hands of government-owned entities. This deprives them of the efficiencies of a free market economy. I firmly believe the government should privatize part of these as they have done for power generation. Increased investment and faster decision making are necessary for these infrastructures to develop and meet the requirements of the people.
What scope do you see for a shift towards solar power?
What we need is electricity. And we need it to be cost-effective, in order for it to benefit the Bangladeshi people. The generation of electricity is becoming cheaper day by day because of the low cost of primary energy. The rationale, therefore, for green electricity is now a comparative financial analysis. Summit bases its businesses formally on social development with economic value. People invest to make money, and so does Summit. The evaluation criteria have changed with the low cost of primary energy while solar and wind energy has not had the same decrease in cost. In a free market economy, which Bangladesh is progressing towards, choices are made based on economic parameters. While businesses are based firmly on economic and social values, we, of course, analyze the larger global goals of the environment and the social good.
What can you tell us about your plans to increase river transport?
Bangladesh is the world’s largest delta. It is endowed with three excellent rivers – Padma, Meghna, and Jamuna, and the confluence of these rivers that come from the Himalayas has created natural channels. We want to take advantage of this delta, and we are doing so by setting up a river terminal. The river terminal, which is 100% ready, is yet to receive some licenses from the government, but once it is operational it will enhance the capacity of the exports of the country, decrease the cost of exporting, improve the competitiveness of exporters, as well as reduce the carbon footprint, as each ship will carry about 40 trucks’ equivalent in containers from Dhaka to Chittagong.
You have rolled out fiber-optic networks throughout the country. What contribution do you expect this to make to the Bangladesh’s development?
Information technology provides a huge opportunity for the development of the country. We have established about 30,000 km of fiber optic lines, but we are not alone. There are several other companies working in this area. We believe that this infrastructure would have a similar impact on the economy as the highways of the 1930s and 1940s did in the United States, and at a fraction of the cost.