It was July 1947. An official of United Kingdom’s Mercantile Bank of India Limited was dispatched to East Bengal. The official, Lionel Blanks, was visiting Dhaka, Narayanganj, Chandpur and Chattogram, looking into prospects of opening up a new branch of Mercantile Bank’s subsidiary Hong Kong Bank. The report he wrote upon completing his trip mentioned that a large business establishment, Ispahani, was looking to move from Calcutta and expand its business on a large scale in Chittagong. The Ispahani family had also bought Bishop House on the banks of Askardighi for them to live in. They had bought land all over the city.
The rest is history, a history of the Ispahani family’s extraordinary business success. The bank official too felt that Ispahani’s plans to expand its business in the port city, was clear indication of golden days ahead for Chittagong. And the Ispahanis not only expanded their business, after partition they relocated their head office from Kolkata to Chattogram.
This year, the 202-year-old Ispahani family business commemorates a platinum jubilee, 75 years of years of business in Chattogram.
The Ispahani business success is an integral part of this region’s business history and heritage. The Ispahani story is a rare one indeed. There are only around 60 countries around the world which have business or industrial establishments over 200 years old. In Asia, there are such establishments in seven countries including Bangladesh. In Bangladesh, it is only the Ispahani family on this list.
On 30 December last year, the seventh generation Ispahani heir, Mirza Salman Ispahani, sat in his office at the Ispahani building in Agrabad, Chattogram, sharing with Prothom Alo, anecdotes, stories and the long history of this business house.
From Isfahan to the Indian subcontinent
Persian merchants from way back in history would come for trading purposes to the Indian subcontinent. It was in 1820, towards the last phases of such trading, that Haji Mohammad Hashim travelled from Isfahan in Persia (present-day Iran), to set up business in Bombay of the British-ruled India. And it was he, 202 long years ago, that began the Ispahani business in this region. Down the years, Mohammad Hashim and his descendents, expanded their business, taking it to London, Egypt, Rangoon, Chennai, Kolkata, Dhaka and finally Chattogram.
Prior to partition, other than its tea and jute business, this group invested in airlines, banks and insurance companies. In 1947, the year of partition, the founder director of Muslim Commercial Bank established in Kolkata, was Mirza Ahmed Ispahani (MA Ispahani), grandfather of Mirza Salman Ispahani. Over the years, the descendents of Mohammed Hashim spread out for business or jobs all over world, in the UK, the US, Canada, Australia, Singapore, India and Pakistan. But the descendents who came from Kolkata, down to this day continue to expand the Ispahani business in this country.
Russian economist SS Baranov in his book, Characteristics of East Bengal Economic Development, wrote that the Ispahanis were among the pioneering groups and families to set up jute mills in East Bengal in the sixties
Beginning with big investment in jute mills and textiles
The founder of Ispahani Group in Bangladesh was MA Ispahani, grandfather of the group’s present chairman Mirza Salman Ispahani. Back then, he set up mills and factories, one after the other, in Chattogram. After partition, he dismantled the machinery of Victory Jute Mills in Kolkata to set up a jute mill by the same name in Kattali, Chattogram. Then in 1950 the Chittagong Jute Manufacturing Company Limited was established in Kalurghat.
Before Bangladesh became independent, Ispahani set up the Pahartali Textile and Hosiery Mills in Pahartali back in 1954. At the same time, as major shareholder of the Eastern Federal Insurance Company, MA Ispahani relocated the company from Kolkata to Chattogram in order to take Chattogram ahead. The group was also involved in power plants and shipping.
Once the Ispahani head office was set up at Chattogram, they established one factory after the other in quick succession and thus the Ispahani family became a firmly established large industrial group in erstwhile East Pakistan.
Russian economist SS Baranov in his book, Characteristics of East Bengal Economic Development, wrote that the Ispahanis were among the pioneering groups and families to set up jute mills in East Bengal in the sixties.
The Ispahanis also were pivotal to the setting up the two share markets in the country, Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE).
From tea marketing to production
Towards the beginning, tea was the main business of the Ispahani Group. They would basically export tea from the Indian subcontinent to various countries around the world. Coming to Chattogram, the MM Ispahani Group took up tea production too. The production began in 1960 on the Neptune tea garden land in Fatikchhari, Chattogram. Then they gradually took over the Zerin tea garden in Maulvibazar, the Gazipur tea garden and the Mirzapur tea garden. They finally expanded their tea business even further in 2005, buying up shares of the Finlay garden.
In 2020, four gardens of Ispahani produced 4.5 million kilograms of tea. With its production from four gardens on around 7,885 acres of land, the company now ranks at number four. It is also among the top three in terms of production per acre. This year the ministry for labour and employment introduced the environment-friendly factory award. Of the four tea gardens selected as the best environment-friendly gardens, two were of the Ispahanis.
Pathfinders for banks, insurance and airlines
It was through the Ispahani Group that on 23 October 1946 the first private sector airline of East Bengal, Orient Airways Limited, was established. However, a couple of years since it was established, the Pakistan government nationalised it towards the end of 1949.
Mirza Ahmed Ispahani was one of the founders of Muslim Commercial Bank in Kolkata. Before partition, he had also been the major shareholder of Eastern Federal Union Insurance Company.
Why did they not carry on with the airlines business despite experience in the sector? Mirza Salman Ispahani replied, “This business was started up by my grandfather MA Ispahani. After he passed away in 1986, no one else in the family had experience in this sector. That’s why this business was never taken up again.”
Investment and employment continues
Other than just holding on to many of its old businesses, the Ispahani Group ventures into few avenues of business too. This group now has business in tea marketing and production, textiles, housing, food products, agriculture, IT, container depot, packaging, jute baling, securities and tourism. There are 18 business establishments under this group. In its 202 years of business, the Ispahani Group has never opted for aggressive investment in any sector.
The Ispahanis have attractive projects in the housing sector. In collaboration with another company, they are setting up a 457-apartment condominium in the Ispahani colony in Moghbazar, Dhaka. And it took up the food product business two decades ago.
After the old jute mills, Ispahani is stepping up its investment in the textile sector too. A few years ago, at a cost of Tk 2.5 billion (Tk 250 crore), the Ispahani Group expanded the Pahartali Textile and Hosiery Mills in Pahartali, Chattogram. This has increased Pahartali Textile and Hosiery Mills' annual turnover to Tk 6 billion (Tk 600 crore) and the group’s annual turnover to Tk 20 billion (Tk 2,000 crore).
In 2018, the Ispahani Group, along with Summit Group and Alliance Holdings, set up a container depot on the Victory Jute Mills land in Kattali, Chattogram. The group has set up an ultra modern tea factory in Gazipur with an investment of Tk 1.3 billion (Tk 130 crore).
As for any advice for the young, Salman Ispahani said, there is no alternative to hard work. You have to start from the ground level to achieve success
The group now has 12,000 employees whom they consider to be part of the Ispahani family. The company ensures free education and medical treatment for the children of the workers and field-level employees as well as share in the profits for the workers. Even during the coronavirus pandemic, Ispahani hasn’t deprived its employees of promotion or other facilities and benefits. No one was made redundant.
Bangladesh’s future as Ispahani sees it
The German ambassador to Bangladesh recently visited Ispahani’s textile mills in Chattogram. While going around the factory, he remarked, “I feel like I’m in some factory in Europe.”
Speaking to Prothom Alo, the Ispahani Group chairman Mirza Salman Ispahani said, whenever there is an exhibition of new machineries in Europe, the first buyers are entrepreneurs from this country. The entrepreneurs of this country are daring when it comes to use the most advanced machinery and technology.
Mirza Salman Ispahani is also very optimistic about the young entrepreneurs of this country. He feels that the entrepreneurs of today are very skilled. They are skillful in their business negotiations with foreign business representatives. He is very confident about these young businesspersons.
As for any advice for the young, Salman Ispahani said, there is no alternative to hard work. You have to start from the ground level to achieve success. If you can grasp anything in depth, success is inevitable.
In conclusion
Back in 1947, Lionel Banks, the official of The Mercantile Bank of India (now acquired by the multinational bank HSBC), wrote in his report that the period of unrest before partition is not the time to open a branch of Hong Kong Bank in Chittagong. He also mentioned that, however, the Ispahanis had advised him to open a new branch of Hong Kong Bank there. This accurate farsightedness of the Ispahani family is now more than evident in the progress of Ispahani Group and the Chattogram-centered advancements of Bangladesh.
After the country won independence in 1971, all industries were nationalised and the Ispahanis’ tea gardens and factories were taken over by the government too. However, Bangabandhu Sheikh Mujibur Rahman’s government did not take too long to return these. It just took one letter for the government to return the gardens and factories to Mirza Salman Ispahani’s grandfather. And since then on, the Ispahani Group has been making continuous contribution to the economy, health, education and sports of the country.
While many countries and cities around the world were expanding and developing, 75 years ago Ispahani chose Chattogram, that is, Bangladesh, to set up its head office. The group has shown how business can be successfully carried out with integrity and ethics. It has taken the Bangladesh brand to the world. The 202-year-old family business is not just the pride of the Ispahanis, but of this country too.