Five local conglomerates enter billion-dollar club

An illustration shows deatils on five compnaies that imported products wotrth over a billion dollar in 2021-22 fiscal.
Prothom Alo illustration

Despite global price fluctuation and economic crisis, private sector continues to grow in the country and make new investment for business expansion to keep the economy vibrant.

As companies continue to import raw materials and machineries, five large industry groups entered the billion-dollar import club last fiscal.

These five business groups are Meghna Group of Industries (MGI), Abul Khair Group, City Group, BSRM and Bashundhra Group. Annual turnover of these companies is over Tk 1 trillion and more than 168,000 people are employed in these companies.

According to information of these industry groups, import volume of two of these five groups surpassed billion dollar two years ago and five top the list. Two factors mainly contributed to the rise in billion-dollar club. Firstly, business groups are expanding their factories or making new investment due to fast expansion of market. As a result, import of raw materials and machineries increased. Secondly, import price of raw materials and machineries was on the rise in international markets in 2021-22 fiscal.

This private sector companies has been in business for three to seven decades, but they largely expanded their business in last 5-10 years. These billion-dollar companies are leading in many industry sector, mostly in active production and service sector. Most of their produced goods are being marketed locally. They are exporting too. They also set up substitution factory of import in the country, thus, import of finished products decreased and import of raw materials increased as well as employment also saw a rise.

Regarding this, Centre for Policy Dialogue (CPD) research director Khondaker Golam Moazzem told Prothom Alo that import of billion-dollar raw materials and machineries of these industry groups was a positive sign in industrialisation. Foreign currency is being saved because of producing goods by importing primary and intermediary raw martials. Depth of industrialisation is also increasing as these industry groups have set a sight on value adding. Besides, they have played a big role to meet the demand of the local market, he added.

Golam Moazzem further said job opportunity is created due to small and medium entrepreneurs in the supply chain of billion-dollar industry groups. Industry will expand as much as small and medium entrepreneurs will be involved in the production network of big industry groups. That is why big business groups will have to step forward. Policy support of the government is also necessary. Besides, attention should also be paid so that competitive environment is not affected and consumers do not suffer due to sole dependency in product market.

Top five industry groups

Prothom Alo prepared this list of billion-dollar club with import data from the parent companies of leading business groups in Bangladesh. Top business groups' joint investment and sister concerns accounts are not included in this list. Exchange price of a dollar has been counted at Tk 86.30 for 2021-22 fiscal. So, value of $1 billion was about Tk 86.30 billion in last fiscal, which will now stand about Tk 100 billion after adjusting with existing market price.

Meghna Group of Industries (MGI)

Currently, Meghna Group of Industries (MGI) topped the billion-dollar club for importing raw materials and machineries of industry. Nothing including adversity during coronavirus pandemic and economic uncertainty became a barrier to new investment of this business group. That is why MGI surpassed others to come atop in importing raw materials and machineries in the last fiscal.

According to the National Board of Revenue (NBR), MGI imported 8.2 million tonnes of products, mostly raw materials of industry, at a cost of about $2.70 billion in the last fiscal. There are few sectors left where MGI did not invest. Meghna Group has investment in many sectors including raw materials of plastic industry PVC (polyvinyl chloride), aviation, ceramics, chemicals, essentials and consumer goods processing, cement, paper, ship building, ship operation in sea, liquified petroleum gas (LPG), steel structure, power, animal feeds, packaging and economic zone. The company markets products under six brands including Fresh brand.

Meghna PVC Factory Limited is the latest addition to its investment in its own economic zone in Meghna Ghat in Narayanganj. Some $400 million was invested in this factory and that is the largest investment in a single Bangladeshi factory. Import of raw materials began for this factory last fiscal. Preparation for production on trial basis is underway. Raw materials of plastic or PVC will be produced in this factory for the first time in Bangladesh. As a result, dependency on import will reduce.

The group stood second in ocean shipping industry in a very short time. They invested about $140 million in the last fiscal to buy six large vessels and floated these at sea. Now, the company has 18 ships in its fleet and the number will rise to 22 in the current fiscal.

Entrepreneur Mostafa Kamal started Meghna Group through Kamal Trading in 1976. Currently, Meghna Group operates 48 factories, employing 38,000 people and exporting products to about 25 countries.

City Group

City Group markets 30 per cent of main essential goods in the country. This group mainly import primary and intermediary raw materials of essentials. City Group stood second in the billion-dollar club with importing 3.4 million tonnes of products and machineries at a cost of about $2.18 billion in the last fiscal. This group operates business in various sectors including edible oil, sugar refining, flour and coarse flour factory, tea garden, shipbuilding, oilseed pressing factory, packaging, economic zone, ship operation. ‘Teer’ is the main brand of City Group.

City Group operates two economic zones – one is Hosendi Economic Zone in Gazaria, Munsiganj and another is City Economic Zone on the bank of Shitalakshya river in Rupganj, Narayanganj. New factories are opening in both economic zones. City Group opened a large factory of flour and coarse flour Rupshi Bangla Flour Mills in Narayanganj.

Entrepreneur Fazlur Rahman started City Group in 1972 and this group continues to open new factories since then.

Abul Khair Group

Based in Chttagram, Abul Khair Group came at third in the billion-dollar club. This group mainly leads heavy industry and has investment in cement, rod, corrugated iron sheet, tobacco and essential goods processing factories. Abul Khair Group leads the market in almost every product it produces.

Abul Khair Group imported 8.5 million tonnes of products and machineries at a cost of $1.75 billion in the last fiscal, with raw materials of cement topping its import chart. Its Shah Cement Factory has been recognised as the 79th largest factory in the world. Global Cement Magazine released this list in its December 2021 issue. Other than cement, Abul Khair Group also leads corrugated iron sheet and sanitary products. The group is also at second place in marketing iron rod and marketing tea.

Abul Khair founded Abul Khair Group in 1950 with a grocery shop. His children take the company to the top. Abul Khair Group now employs 50,000 people and pays large amount of tax to the government annually.

BSRM Group

BSRM Group, which leads steel sector, enters the billion-dollar club by importing raw materials and machineries in only one sector. This Group mainly produces iron rod. A wire rod factory is the latest addition to the operation of BSRM Group. According to the company and the National Board Revenue sources, BRSM Group imported 2.387 million tonnes of products at a cost of $1.37 billion in the last fiscal.

BRSM Group started its journey in 1952. Currently, it has eight factories with a production capacity of 1.6 million tonnes of rod and 1.8 million tonnes of iron billet. This group is the pioneer in producing high quality iron rod in Bangladesh. Iron was not imported for the construction of global standard infrastructures such as Rooppur Nuclear Power Plant and Padma Bridge in the country because of local conglomerates like BSRM Group.

Speaking to Prothom Alo, BSRM Group deputy managing director Tapan Sengupta said, “The group’s wire rod factory opened last year, that is why import crossed billion dollar, and we also increased import taking high risk so that work on the government big project is not disrupted.”

Bashundhara Group

Bashundhara Group started its business in housing sector. Now it has investment in various sectors including cement, paper, bitumen, LP gas, steel, tissue papers and essential goods processing factories.

This is the first time, Bashundhara Group entered the billion dollar import club. The conglomerate imported about 6.5 million tonnes of products at a cost of $1.29 billion in the last fiscal. The group has made new investment in bitumen production sector.

On way to billion-dollar club

Other than these five industry groups, import of many other groups, too, topped half a billion dollar, with Akij Group, Walton Group, Jamuna Group, S Alam Group of Chattogram waiting to enter the billion-dollar club.

This report appeared in the print and online edition of Prothom Alo and has been rewritten in English by Hasanul Banna