“In its journey for more than half a century, Square Group has been strengthening its bond with the people of Bangladesh by delivering the best quality products and services and thereby improving the quality of life.”
Anjan Chowdhury, a business tycoon, is the Chairman of Sun Communications Ltd., Oracle Travels Ltd., and the Managing Director of Masranga Communications Ltd., Square Toiletries Ltd., Square Food & Beverages Ltd., Square Air Travel Ltd., Mediacom Limited, Aegis Services Ltd., and Square Securities Management Ltd. He is also the Director of multiple sectors of Square Ltd. including pharmaceuticals, textile, hospital, amongst many others. His father was business person, Samson H Chowdhury who was the founder of Square Group. Anjan is the President of the Aviation Operators Association of Bangladesh (AOAB) and Vice President of Bangladesh Olympic Association and the former President of Bangladesh Agro Processors Association. Recently in an introspective interview with IBT, he shared his thoughts on food safety, quality ensuring and the future of Square Food & Beverages Limited (SFBL).
How has being the flag bearer for such a large organization fared for you?
It is the discipline that my father and mother have taught us. Nobody reaches offices earlier than us. We were brought up with the idea that punctuality was imperative. Till this day, we have no labor unrest inside the factory. I saw my father maintaining a close rapport with union representatives which entailed having concern for their families. He would give them larger compensations if they needed it. This was the time when Pabna was the location for our factories. In our organization, taking care of our workers is something that has been embedded in the culture since its inception; we are fortunate to have inherited values such as this from my parents. Treating employees as the assets of the company and keeping them satisfied are keys to ensuring better production.
We often consume adulterated food which includes toxic additives. What is your take on this?
An immediate requirement for the growth of this industry is more R&D and technical updates. The necessity of good seeds for better yields is immense. Uncontrolled uses of chemical fertilizers and pesticides have ruined the quality of soils in many regions. For example, coriander produced in Fatikchhori is full of zinc, which is detrimental to health.
The manpower of BSTI (Bangladesh Standard Testing Institution) is not adequate to check the total food consumption of a massive city like Dhaka, let alone Bangladesh. What’s required is stringent action in those factories; especially those who don’t even have addresses to use on their labels. Usually, these kinds of facilities adopt unfair means while manufacturing their products. Besides, some of the laws of the Pure Food Act are not matching with BSTI food parameters, which eventually create confusion among manufacturers and law-enforcement agencies.
Even though we lose out to products from our neighboring countries having better and more attractive colors at times, we have always refrained from using additive or food colors. People must be cautious about all the foods they ingest – be it food cooked at home or restaurants. Due to random visits of government authority, the selling of carbide/formalin treated fruits and vegetables are waning, yet our citizens need greater awareness regarding the severe side effects of such adulterations.
How was being an entrepreneur been rewarding for you?
There are two prominent rewards from looking after the food and beverage industry. First has been observing the changing trend of how women who were once left alone at the mercy of our society are now earning the bread and butter for their families. There is a large number of women are working in our factory in Pabna. When I thought of employing more female employees in the plant, people didn’t take me seriously. I always tried to ensure a more comfortable environment for our women workers in the factory. Those who were employed initially actually spread the good word and now we have a good number of women working for us.
The second rewarding factor is producing something here in Bangladesh and selling it to the consumers around the world. Starting from the tiny grocery shops of a remote village in Bangladesh; the fact that Square goods have made their way to the expensive shops of the developed countries is something that truly makes me proud.
We are now at a critical stage of development, and we are facing more challenges than any time in the past. How do you see this?
The food and beverage sector requires the same support the government has given the RMG sector. Like all other sectors that deal with manufacturing, the demand for an adequate supply of gas and electricity is felt here, and government must ensure that. Land acquisition is another hassle for those who would like to invest heavily. Areas of tax exemption and tax rebates have to be clarified and implemented, as that will encourage people to reveal proper facts about their business. Without transparency in the private sector, achieving high-end goals will be difficult.
What was Square’s vision behind entering the food business?
In its journey for more than half a century, Square Group has been strengthening its bond with the people of Bangladesh by delivering the best quality products and services and thereby improving the quality of life. Its founder chairman, Samson H Chowdhury, believed that integrity, solidarity, and dedication which were the keys to success. SFBL has been functioning with those same principles at its core. As a sister concern of Square Group, SFBL is always liable to be honest, and sincere in each of its operations and to deliver the epitome of quality.
When Square Food & Beverage Limited (formerly Square Consumer Ltd.), started its journey in 2000, there were no branded quality packaged spices in the market. Within a short span of time, it managed to gain a strong foothold in the market by providing consistent quality products which guaranteed customer satisfaction. For its uncompromised dedication with quality and food safety management, the company had obtained the international quality standard ISO 9001, ISO 22000. Commitment to quality, innovative products, consumer satisfaction has given the company a unique position in the food business.
Square is currently one of the largest operators in the food and agro-processing sector. As such, what are your thoughts regarding the prospects of this sector?
Regarding our GDP, Bangladesh moved up to the 44th position in 2015 from the 58th position in 2013. The food and agro-processing industry played a vital role behind this development. The enormous potential attracts local players to enter and reap the benefits. People are seeking improved lifestyles and are willing to spend more thanks to a 3.55% annual rate of urbanization. Packaged foods are making life more convenient for people, so it’s a natural choice. 30% of the population of Bangladesh is in the age bracket of 10-24 years and are potential customers for snack items manufactured by the food industry. The backward linkage industries give the company a big boost. To my belief, standard ready food habit will enhance this booming business.
Nevertheless, food adulteration is a growing concern in our country. Maintaining the seamless supply of hygienic food is crucial. People die more in consuming adulterated food rather than starving. From farm to fork, food can be tainted at any stage of production. However, we also need to keep in mind that over-demand due to increased population and lack of purchasing power of quality food is encouraging some racketeers to enter into the food business with sub-standard products. The mobile food court is trying to resolve this problem. Safety Food Ordinance 2013 has recently been enacted. Only strict compliance with the ordinance and mass people awareness can ensure hygienic food.
What are the main challenges which are slowing the progress of this sector?
The dwindling quality of products resulting from expensive but sub-standard raw materials, the high cost of energy, the lack of proper food technology, and lack of skilled workers are some major issues for the sector to resolve. The unstable price of foreign raw materials and slow discharge from ports hamper production, as well. There is no alternate for R&D; innovations can improve the quality of food as well as help launch new products. Moreover, this will boost this industry providing economically sustainable products, which are also environment-friendly. Most of the Bangladeshi foods processing companies are barely able to meet international standards and safety requirements that cause slow penetration in the global markets.
There are a large number of operators in the market but its growth level is not satisfactory. What changes are required for the robust development of this sector?
To ensure sustainable growth in this industry, it needs to have positive changes from the raw material extraction to the packaging end. The prices and sources of raw materials are unstable. Pesticide and chemical contamination are the main challenges of getting quality raw materials. The government needs to control and check the misuse. In spite of the power crisis and unpredictable weather, our agriculture sector is growing. With the support of the Agriculture Ministry, the private sector should come forward to ensure further growth of this sector.
Transportation (both road and rail) facilities for raw and produced materials need to be more convenient, time saving and source oriented. However, some sluggishness in the bureaucratic processes is creating roadblocks. Unfriendly regulations are hindering growth and development of this sector. Smoother business policies will speed up the growth of this industry.
As a seasoned entrepreneur, heading a leading diversified business group, do you have any policy proposals for the growth of the agro-processing sector?
The growth of the agro-processing sector depends on business friendly policies. I have a few suggestions for the government, they include the following:
• Supplying capital on easy terms to the entrepreneurs with low interest (2% to 4%) and longer terms to help establish agro-processing industry and its supportive equipment. It can be mentioned that, the present interest rate for the agro-processing industry is about 18% all together.
• Reduce the present corporate tax from 35% to 20%.
• Withdraw 10% Supplementary Duty from all types of local seasonal fruits.
• Improve required infrastructure; especially in the northern region of the country where agro-based plants are mostly located. We emphasize that all agro-processing industries should have the same facilities that the EPZs are enjoying at present.
• Introduction of internationally accredited and affordable food testing labs. To modernize, elevate, and strengthen present BSTI, BCSIR and Nutrition and Food Science Department of Dhaka University.
• Reducing tariff and non-tariff barriers in export, and establish better brand image of the country.
• Widening the reach to foreign markets through govt. initiatives and extend exhaustive cooperation in the domain of exports through our foreign missions.
• Establish food safety in Supply Chain Management (ISO 22000:2005 – HACCP, Traceability, & others)
Square Group has had a long and prosperous history. What are their futures plans?
The agro-based food industry is a fast growing sector in Bangladesh, contributing 32% of the GDP and generating 63% of the total employment of the country. Future growth of this industry depends on fueling macroeconomic elements, infrastructure, government’s agro based projects and expanding export destinations. As adulteration is the main threat to this industry, therefore SFBL promises to produce and deliver adulteration free food to the doorsteps of every household of Bangladesh. Moreover, enhancing the strength and skill of the organization, SFBL will meet growing demands at local as well as global markets with quality products.