Interviews

Making of a Dream

Bengal Group of Industries started its journey through their Chairman, Morshed Alam in 1969 when he established a light engineering unit which was based in a rented area in Old Dhaka. Since then the company has become renowned for its quality products across the globe, receiving export trophies and being recognized as a leader in plastic goods.

Md. Jashimuddin joined the Board of Bengal Group of Industries as a Director in 1983. He is currently their Vice Chairman. He holds a Graduate Degree in Business Studies. He is experienced in trade negotiations, sales and procurement. Being responsible for the operation and marketing division of the Group, he has been awarded the ‘Commercially Important Person’ (CIP) status by the Government of Bangladesh for his contributions to the country’s economy. When asked about the company’s journey over the years he elaborates, “During the start of this journey, we made spare parts for the Jute and Textile mills which were flourishing at the time. They used to import these parts from England, Japan, and Pakistan but we offered a cheaper alternative. The success of this industry wasn’t the same after Bangladesh’s liberation so we had to diversify. We started to produce various plastic items for institutes like Bangladesh Railway. Later we moved into producing plastic household products. During the 90s, the garments industry started to blossom so we decided to help it by producing plastic garment accessories. This is when we also decided to get into the export business. This marks a significant turning point in our Group’s timeline as now we are exporting approximately $45 million worth of plastic garments products every year.”

Bengal Plastics currently have eight plastic producing units and employ more than seven thousand people. After establishing themselves as the top garments plastic product producer, they started diversifying further by adding plastic crates, containers, and other items to their production line up. “We started supplying items and bottle crates for Cocoloa and Pepsico International. As for consumer plastic products, we are mainly producing them for the export market and corporate clients such as Nestle and Lever. In the meantime, we are becoming the licensees for hangers for Cartoon Network and two other American companies. Now we have numerous other concerns, including projects in real estate, the plastic pipe industry, the cement and food industry and so on. We are number one in terms of international sales and we are controlling 20% of the market share in the plastic market.”
As a company of such a large stature, long-term planning is obviously a top priority. Accordingly, the leading figures at Bengal Group already have a vision for how they must proceed over the next fifteen-twenty years. Jasim explains, “We are creating a roadmap which we will follow till 2030. The plastics being produced today will eventually become obsolete so we will have to come up with newer products. The bulk of the global plastic consumption occurs in the automobile industry where one car requires around 300-400 kgs of plastic. The vision of our government is to become a middle-income country by 2021 but to achieve this all the relevant industries must grow accordingly. Currently, we have a per capita consumption of plastic of 4-5 kgs. However, if we look at developed nations like the USA and Singapore, plastic consumption is around 100 kg and 130 kg per capita respectively. Thus, according to these indicators, our plastic consumption will also increase drastically as the country progresses along its development trajectory.”

“We are creating a roadmap which we will follow till 2030. The plastics being produced today will eventually become obsolete so we will have to come up with newer products.”

Due to this reason, it is imperative for the company to trace the areas where plastic consumption in Bangladesh will experience booms. Knowing which sectors to focus on, beforehand, will give them an advantage. “Whatever sector we are working with, we have to think about value added items and keep one eye fixed on what might happen in the future. We have to try to consider what kind of innovations can spring up in the future that might change the way our industry works. Currently, we are exporting household commodities whereas in the past we had never thought we’d be engaged in this particular trade. In the past, we were making import substitution products but now we’re producing items which not only meet the local demand but are also being sold abroad.”

However, they won’t draw the line just there. There are still numerous opportunities left to explore for Bengal Group. “Almost 95% of a cell phone is made of plastic so there’s a huge possibility in that area. Our country has a huge population with its small land mass, large population and rising consumption. Cement is now in demand in rural areas, steel companies are also expanding. The government development activities are expanding and there are vibrating trends in the rural areas.”

When discussing problems in the industry, Jasim added that the curtailing of the GSP facilities has put up a considerable roadblock. He also mentions that all their raw materials are imported so the rise and fall of oil prices may affect the raw material prices adversely, plastic items may take up more space when being transported so transportations costs are higher when compared to other products and their shipping costs are than that in China. “What we’re trying to do is invoke the Free Trade Agreement (FTA) with neighboring countries and expand exports there. The government already agreed to give 10% cash incentives to the plastic sector. However, we are still facing some bureaucratic complications. These two issues are essential for our expansion.”

Moving on with the topic, Jasim then focused on the main piece of the puzzle – the gas and power. He elaborates, “Many locations lack gas connections. On top of that, our industries are segregated and they receive power connections through the Rural Electrification Board (REB) whose transmission lines need to be of better quality. On average, many industrial areas lose power for around 3-4 hours. These problems need to be addressed immediately. The government has to prioritize what kind of power will be given where and how. They have mentioned that they will provide it in the Specialized Economic Zones (SEZs) but they have to be clearer on the matter. Based on this information, I will have to prioritize the establishment of our factories there.”

Industrialization cannot move forward smoothly without the right planning and programming. “Our power generation capacity has increased but transmission and distribution are also important areas which require our focus. For an industry I have to invest in numerous areas related to this field – gas generators, transmission of gas lines, fixing substations, CNG plant for standby facilities and procuring diesel facilities. If the requirement for a project is Tk 1 crore, we end up investing Tk 4 crore due to these issues. These problems need to be eradicated and only the government can help is in this regard. We have to make spaces for the Foreign Direct Investment. If our local investments are scared off, how will we attract FDI? So there is a positive trend but we have to be realistic regarding planning and implementation.”

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