Local conglomerate Meghna Group of Industries has invested $300 million (about Tk 2,500 crore) to set up eight new factories at its newly-built two economic zones at Meghnaghat in Narayanganj.
The new factories, which will take the group's total industrial units to 40, will create 3,500 jobs.
“People's buying capacity has been increasing and we want to strengthen our market share,” said Mostafa Kamal, chairman of the group, while explaining the rationale behind the big investment.
The new units, which will be inaugurated on Saturday, are for: beverage, edible oil refinery, tissue, pulp and paper, flour, chemicals, cement fibre, steel fabricate mills and a 40 megawatt power plant.
Presently, Meghna has operations in fast-moving consumer goods, cement, commodities, chemicals, seed crushing, fish and poultry feed, power generation, salt, bottled water, banking and some other industrial products.
Last year, the group's turnover crossed the $2.5 billion-mark.
With the new industrial units Meghna not only wants to fortify its position in the local market but also the export markets.
One of the new units is an extension of the plant to produce chemicals such as hydrogen peroxide, caustic soda and chlorine, which Meghna was the first to manufacture locally.
The expanded unit will allow Meghna to export the chemicals too.
“We are exporting some chemical products on a limited scale and we want to increase our exports, but we need government support for that,” said Kamal, who set up his first factory -- a vegetable oil mill at Meghnaghat -- in 1989.
As a non-traditional item, chemicals deserve export subsidy.
“Once we are on our feet we won't need the subsidy,” he said, adding that the subsidy will help Bangladesh to cut down on its overwhelming export reliance on garment.
Kamal also elaborated on the financing of the new industries.
He said he has borrowed from foreign sources for setting up the eight new industries, but a central bank's capping on interest rate for foreign borrowing often acts as a barrier.
“Bangladesh Bank has capped the interest rate at 5 percent for foreign borrowing, but the rate is on a rising trend now. The rate should be fixed on the basis on the London inter-bank offered rate that fluctuates depending on the demand.”
LIBOR or London interbank offered rate shot up to more than 2.22 percent on March 1 from 1.45 percent on September last year.
Meghna has set up at least one factory every year since 2001.
In the last several years, when businesses have shied away from taking up new ventures, Meghna has continued to put in money for establishing new lines of businesses.
Today, Meghna employs 25,000 people. Its consumer goods brands -- Fresh, No 1 and Pure -- have gone on to become household names, and as per Meghna itself, one household out of every two in Bangladesh uses its products.