City Group goes on expansion drive

Fazlur Rahman, chairman of City Group, and Syed Mahbubur Rahman, managing director of BRAC Bank, attend the deal signing ceremony of a syndicated loan of Tk 109 crore, at a programme in Dhaka recently. The bank has arranged the loan for a Tk 150-crore project of City Group to expand the capacity of the City Seed Crushing Industries Ltd at Rupshi in Narayanganj. Senior officials of other participating banks were also present. Photo: BRAC Bank

The City Group of Industries has rolled out a Tk 150 crore project to expand its seed crushing capacity, which will cut the country's reliance on imported animal feed.
BRAC Bank has arranged a syndicated loan of Tk 109 crore for the project to expand the capacity of the City Seed Crushing Industries Ltd in Rupshi, Narayanganj. For its part, City will finance Tk 40 crore.
The project, which is expected to start commercial production in 2012, will produce crude edible oil and oil cakes to meet rising demand for feed for poultry, fish and livestock.
“Our project will offer quality feed at competitive price,” said Biswajit Saha, general manager of City Group, an influential player in the commodity market.
The project -- the third seed crushing plant in Bangladesh and second owned by City -- will develop a backward linkage for import-dependent edible oil and feed industry.
After expansion, the plant will have a capacity of producing 800 tonnes of soybean cake, 180 tonnes of crude soybean oil, 416 tonnes of crude mustard oil, 368 tonnes of mustard oil cake and 36 tonnes of gum a day.
With the capacity expansion, City Seed Crushing will be able to meet 7.82 percent of demand for soybean oil, 50.47 percent of mustard oil, 44 percent of oil cake and 30.36 percent of mustard cake of the country, BRAC Bank said in a statement yesterday.
BRAC Bank arranged the loan with a repayment period of six years by teaming up with Eastern Bank, City Bank, Mutual Trust Bank, Pubali Bank and Saudi-Bangladesh Industrial and Agricultural Investment Company.
Bangladesh depends mainly on India to import soybean meal needed to produce feed for poultry.
Syed Mahbubur Rahman, managing director and chief executive of BRAC Bank, said the project will help develop backward integration in edible oil and feed industry.
“It will also reduce import dependency and reduce pressure on foreign currency. This project will also help control volatility of commodity market in the country,” he said.
BRAC Bank has also arranged a syndicated loan of Tk 112 crore for Meghna Group for the same purpose with the participation of five other banks.
Meghna Group of Industries is investing Tk 315 crore to set up an oilseed crushing mill to extract edible oil and soybean meal used by the local feed mills at nearly 100,000 tonnes a month.