Bashundhara Group to fork out Tk 4,350cr to set up three factories at BSMSN
Bashundhara Group, one of the largest business groups in Bangladesh, is set to establish three new enterprises with a total investment of Tk 4,350 crore at the Bangabandhu Sheikh Mujib Shilpa Nagar (BSMSN) in Mirsarai, Chattogram.
“The expansion is a result of a bold decision by the government,” said Paban Chowdhury, executive chairman of the Bangladesh Economic Zones Authority (BEZA).
BEZA helped facilitate the project by leasing a 500-acre plot for the new economic zone that will feature the Bashundhara Pre-fabricated Building Manufacturing Industries, Bashundhara Multi Steel Industries and Bashundhara Chemical Industries.
The land was previously abandoned but now, investors are showing interest in the zone, Chowdhury said, adding that BEZA is standing by the investors even amid the ongoing coronavirus pandemic.
About 20 per cent of the project’s infrastructure development works is already complete, said Foyez Rahman, secretary to the vice-chairman of Bashundhara Group.
The factories will be able to go into full operation by the end of 2021.
Government’s policies play a major hurdle to industrialisation.
For example, the National Board of Revenue recently imposed a 15 per cent value-added tax (VAT) on land leasing at economic zones, providing yet another obstacle for attracting investment.
Frequent policy changes also impede any business process that was being conducted based on previous rules and regulations.
In regards to the financing of the project, Rahman said they have already sent their application for funding to Agrani Bank.
Through the new factories, Bashundhara Group is targeting to create about 3,852 jobs.
After considering the potential growth of the pre-fabricated steel sector, Bashundhara Group felt it prudent to invest in the industry.
The manufacture of pre-fabricated steel in Bangladesh has had an annual growth rate of about 15 to 20 per cent over the last 10 years.
In the past, the market value for pre-fabricated steel was only Tk 2,000 crore but now stands at Tk 4,000 crore, according to the Steel Building Manufacturers Association of Bangladesh.
Similarly, Bashundhara also wants to grab a greater share of the growing steel sector. The market size for steel is currently about Tk 55,000 crore but domestic demand continues to increase rapidly thanks to the various mega projects and infrastructure development activities being implemented across Bangladesh.
Likewise, the manufacture of chemical products is also a booming industry in the country.
Riding on the rising trend of garment exports, the textile chemical market is expected to reach a value of $1.38 billion by 2024. For now, the chemical sector is largely dependent on imports.
And with this backdrop, Bashundhara plans to begin producing such chemicals locally to grab a greater share of the domestic market.
Textile colourants dominate the market for chemicals used in the garment sector as they provide an aesthetic appearance and value for finished textile products.
With several large-scale textile mills operating in Dhaka, the capital accounts for most of the domestic demand.
With about 40 active steel manufacturers in Bangladesh, the sector has an overall capacity to manufacture nine million tonnes of steel each year. Of them, Abul Khair Steel, BSRM and KSRM meet more than half the domestic demand.
According to BEZA’s Chowdhury, this is only the beginning of Bashundhara’s investments in the country as the organisation plans to invest heavily in different sectors in the future.
Bashundhara may even bring in more foreign investment through joint ventures, he added.