Edible oil to others: Adani’s growing footprint in Bangladesh

It was 1993 when Indian business tycoon Gautam Adani made his entrance to Bangladesh through his maiden investment in the edible oil business.

His business grew here over the course of time and expanded from food products to the power sector. 

The Adani Group registered a boom in its business here, particularly in the last eight years.  

Bangladesh is supposed to receive electricity from a power plant of Adani Group installed in the Indian state of Jharkhand in the forthcoming month, March. The group is also planning to invest in the economic zones and terminals here.  

Responding to queries by Prothom Alo, the Indian business conglomerate disclosed its business plan in Bangladesh, via e-mail.

Adani Group co-owns a leading edible oil processing company – Bangladesh Edible Oil Limited (BEOL) – with Singapore’s Wilmar International. It has been running the business here since 1993 and its popular oil brands are Rupchanda, Fortune, Kings, Meezan, and Veola. 

The edible oil company witnessed an annual turnover (sales) of Tk 21.55 billion in the fiscal year 2021-22, according to its annual report. Still, it incurred a pre-tax loss of Tk 280 million in the year. 

Adani Group later expanded its business to the power sector. Its 1600-megawatt power plant in Jharkhand is going to supply electricity to Bangladesh in the coming month. Bangladesh will buy electricity from the plant in the next 25 years under a deal signed between the two sides in 2017.

However, the power development board (PDB) here has dissented from the coal prices quoted by the Adani Group for the plant. According to the PDB, the Indian company is trying to fix a higher price than the market rate and it will eventually push up the electricity price for the consuming entity, Bangladesh. As it sought further negotiation over the issue, a technical delegation of Adani Group is scheduled to visit Dhaka soon. 

Adani Group has expressed its interest to invest in the Indian Economic Zone (IEZ) of Bangabandhu Sheikh Mujib Shilpanagar in Chattogram’s Mirsharai. It has already initiated the process of investment as a developer. 

Adani-Bangladesh Ports Limited, as a developer, will operate the economic zone and allot plots to the businesses. 

Shaikh Yusuf Harun, executive chairman of Bangladesh Economic Zones Authority (BEZA), said, “The term sheet with Adani Group has been signed. We have now invited them for bargaining. We would be able to initiate the process of signing the development agreement once they come.” 

The BEZA officials said the next step after signing the terms is the formation of a company through a joint investment agreement in negotiation with both parties. If it is finalised, the Adani company will formally be appointed as the developer. The process is likely to complete in the middle of the current year. 

Also, Adani Group expressed its interest to set up a jetty for the Indian economic zone but is yet to receive any positive response from the Bangladesh authority. 

In this regard, BEZA executive chairman Shaikh Yusuf Harun said the agreement signed with India for the economic zone contains a term allowing them to set up a jetty there. But there has been no further discussion over the issue. It will be discussed when the negotiation begins with Adani Group. 

The governments of Bangladesh and India signed a memorandum of understanding (MoU) to set up the economic zone in 2015. It was approved by the Executive Committee of the National Economic Council (ECNEC) in April 2019. The project is supposed to complete by June 2024. 

Meanwhile, an Indian company – Mahindra Construction – has been appointed as the consultant for the economic zone project. 

Adani Group has another plan to develop an industrial park in the Bangabandhu Shilpa Nagar, to produce processed food items, including edible oil. Some 100 acres of land have been selected for the project, but the activities did not advance as there is no jetty or road. 

Adani Group has offered to invest in the construction of three terminals – Bay Terminal, Patenga Terminal and Laldiya Terminal – at Chattogram seaport. They submitted the proposals to the Chittagong Port Authority in 2020. 

It, however, stepped back from the Laldiya Terminal project when the authorities refused its proposal for the Patenga Terminal project. And the government is yet to respond to the proposal for the Bay Terminal. 

Omar Faruk, the spokesperson for the Chittagong Port Authority, said there was a proposal from the Adani Group over the operation of Patenga Terminal, but it is not under consideration now. 

He disclosed that they have been in negotiations with the Red Sea Gateway Terminal of Saudi Arabia over the operation of the terminal on a public-private partnership (PPP) basis. And no discussion has taken place yet over the Adani Group’s investment in the Bay Terminal.

Adani Group is also interested in investing in the renewable energy sector of Bangladesh. It offered to invest in a 200-MW renewable energy power plant in 2020. But the proposal was nipped in the bud as the power division officials did not show any interest in the proposal. 

Also, Adani Group is interested in investing in the power transmission line and supply sector in Bangladesh. In the private sector, it shows interest in coal, liquefied natural gas (LNG) and liquefied petroleum gas (LPG) sectors. 

A spokesperson of Adani Group said via e-mail that they have investments in multiple sectors here, including power, food processing, and food products. The group invested the most in the fast-moving consumer goods (FMCG) and the power sector.

Adani Ports and Special Economic Zone is assessing the issue of investment and agreement to develop a terminal in the planned Indian economic zone at Mirsharai in Chattogram. Also, Adani Group is exploring business opportunities in natural resources and other commodities in Bangladesh.

Regarding the investment potential, the spokesperson said Bangladesh has a business-friendly environment along with talented and large manpower. This is why Adani Group, as a neighbour, sees Bangladesh as a place of great opportunities and potential for growth.

The spokesperson also said the electricity supply from Jharkhand to Bangladesh will start in March. They will be able to meet the excessive electricity demand here in the upcoming summer. It will benefit the people and trade in the country’s northern region. 

Adani Group is also interested in some other sectors in Bangladesh. They have submitted proposals to the authorities concerned, the spokesperson said, adding all the proposals are still at the discussion level. 

However, Prothom Alo asked about the outcome of the prime minister’s meeting with Gautam Adani,  s/he did not disclose any information in this regard.