Delta Agrofood to invest Tk 1,200cr in soy, flour production
Delta Agrofood Industries, a joint venture of SEACOM and Samuda, is set to invest Tk 1,200 crore in the production of various soy and wheat products with an aim to meet the country's growing demand for healthier consumer goods.
Under the fresh investment, Delta Agrofood will establish a new factory to produce both crude and refined soyabean oil, soybean cake, soya milk and flour.
"SEACOM decided to undertake this initiative as wheat has become the second most important food item in the country after rice," said Mohammed Amirul Haque, managing director of SEACOM.
"Since it is a basic industry for any country, we invested in wheat production with a view to develop the agro sector," he added.
As per a market assessment by Delta Agrofood, the domestic demand for wheat has more than doubled over the past six years due to changing food habits and increased export of baked goods.
This led to a 116 per cent rise in imports as local cultivation fails to meet the country's needs despite having witnessed many significant changes in production, industry insiders said.
Besides, whole grains are rapidly gaining popularity as a healthy alternative to traditional cereals in the face of a rising trend of diabetes and obesity, they added.
Statistically, the daily consumption of wheat has gone up by about 42 per cent from 72 grammes in fiscal 2014-15 to 125 grammes at present, according to the Directorate General of Food and various traders.
The country's annual demand for the cereal currently stands at around 77 lakh tonnes, 85 per cent of which is met through imports, as per data from the National Board of Revenue and Department of Agricultural Extension.
Similarly, the use of soybean oil and soybean cake has increased significantly over the years.
Soybean oil is now the preferred cooking medium in Bangladesh while soybean cake is used as animal feed in the fish and poultry farming industries.
The project, 40 per cent of which is being financed by Pubali Bank, will be developed across a 35-acre plot in Saidpur of Narayanganj. According to SEACOM's managing director, it was a strategic location owing to the presence of a strong distribution channel.
"We will be able to create around 1,200 jobs with the new production facility. Commercial production is expected to start by end of this year," Haque said.
The per capita consumption of soybean oil in Bangladesh is currently 9.2 litres per annum, which is far below the global average of 25.2 litres.
However, this figure continues to rise in line with peoples' increasing purchasing power, as per a market analysis by LightCastle Partners.
Against this backdrop, Delta Agrofood sees the potential to do well in the business in the coming days even though there are already a number of market players present in the country.
In its analysis, LightCastle also said the demand for edible oil in developing countries was set to surpass their developed counterparts within the next decade.
The business management firm pointed out the markets of China, India and Bangladesh as examples of places where the demand for edible oil was growing.
Just 30 year ago, the country's entire demand for soybean oil was met through imports but eventually, some entrepreneurs started to refine imported crude soybean oil to locally produce edible oil, said SM Nashir Uddin, general manager of Delta Agrofood.
Now though, some entrepreneurs produce the finished product wholly through local sourcing without making any import, he added.
According to the general manager, just 20 litres of edible oil can be produced from 100 kilogrammes of soybean seed while the leftover soybean cake can be used as food for fish or poultry.