Diversifying for success
Had Md Habib Ullah Meah been alive today, he would have been swelling with pride: the modest trading company he started in Chittagong's Khatunganj in 1947 now stands as a proud conglomerate of 21 companies with an annual turnover of $425 million.
The turning point came in 1984, when Meah's two younger sons Mahbub and Yasin Ali joined the business, which was then being helmed by their elder brother Yakub after their father's passing in 1981.
“When my elder brother Mahbub Ali and I came to the company, we had a different vision for it,” said Yasin Ali, Meah's youngest son and now the managing director of Habib Group.
The two brothers wanted to take the company away from the traditional form of business and towards manufacturing. “There are always ups and downs in business, so we did not want to put all our eggs in one basket.”
Subsequently, under Mahbub's directions the company forayed into the then fledgling garment sector, while Yasin steered it into the shipbreaking industry.
And, the brothers' risks paid off. Emboldened by the success, Habib Group then branched out to linkage industries like steel, textile and spinning and ventured into new avenues like cement, fertiliser and paper manufacturing, power generation and financial services.
The jewel in Habib Group's crown, though, is its airline company, Regent Airways, which has been going from strength to strength since it first took to the skies in 2010.
“Our next generation was gearing to make their entry into the corporate world and we wanted to keep them away from our bread-and-butter businesses. So we started the aviation business. Also, they would get international exposure and take Habib Group to the next level.”
Given the tough nature of the aviation business, Regent wants to proceed slowly and steadily. For instance, after over three years of market analysis, it launched international flights, with routes selected after much deliberation.
The company opted for Eastern destinations such as Kolkata, Kuala Lumpur, Bangkok and Singapore over the crowded Middle East route.
Habib Group's garment business is a great success story, with several awards from international retailers to its name. Its seven manufacturing units have exemplar workplace safety and enjoy enviable economies of scale owing to yarning, weaving, fabric dyeing, processing and washing all done in house.
Looking ahead, Habib Group recently completed the construction of its second power project, a 108-megawatt power plant in Ashuganj, with funding from the International Finance Corporation and Asian Development Bank.
The plant, which is scheduled to start power generation from next month, will offer the cheapest power tariff at Tk 2.03 per kilowatt, Yasin avows.
The company has recently set up a fertiliser factory in Jessore in a joint venture with the Indian and Bangladeshi governments to produce single super phosphate.
All set to start production, the plant will address the gap in the market for affordable but high-quality fertilisers. “More than business expansion, doing something for my countrymen was the inspiration behind this project," Yasin said.
The celebrated conglomerate saw 8-10 percent growth in the past ten years, with its profits last year hitting $25 million.
“Looking back, I would say our business mantra has been to go slow and steady. We never chased higher growth by compromising on our product and service quality.”
Yasin, who did his honours in marketing and master's in management from Chittagong University in the 1980s, said the company has an 'open door' policy for its 20,000 employees. The management is encouraged to maintain open communication and constructive criticism with its staff.
As for the group's future plans, he said they want to consolidate their position in the sectors they operate in at present and grow organically.
“Our ultimate vision is to turn them into world-class enterprises.”