Thanks to the opening of the Padma Bridge, which directly connects this part of the country to the capital, Dhaka, large companies have now begun to capitalize on previously untapped business potential in the southwest of the country.
Sheltech, Pran-RFL, Nitol-Niloy, TK Group, Envoy Group and Opsonin Pharma are among the big names now looking for land in the region to set up new factories.
What actually drives them to choose the region for investment is cheap labour, the availability of raw materials especially for agro-based industries, tax exemptions for industries outside of Dhaka and the newly established direct highway links via the Padma Bridge, industry insiders say.
In 2019, Sheltech Group established the country’s largest ceramics industry in Bhola with an investment of Tk700 crore, lured by Bhola’s natural gas reserves, cheaper land and easy communications following the opening of the Padma Bridge.
The business unit is now planning to set up a non-denim factory on the island, Kutubuddin Ahmed, chairman of Sheltech Group, told The Business Standard.
“We are also looking for land for a clothing factory in Barishal,” he noted, without revealing the amount of the investment.
The southern region had long been attractive for cheaper and easier water transport, but long delays in ferries crossing the Padma had discouraged entrepreneurs from investing there until the Padma Bridge was built.
“We believe that investments in the south will be most profitable now because of the Padma Bridge,” Kutubuddin Ahmed stressed.
Pran-RFL, a leading manufacturing company, has established 50 factories in the country and five factories abroad. But the corporate conglomerate doesn’t have a manufacturing hub in the southwestern districts.
“We have a plan to set up a food processing factory and light industry,” said Kamruzzaman Kamal, director of Pran-RFL Group.
Agribusiness most lucrative
TBS has learned that around 50 other major companies including Meghna Group, Ha-meem Group, East Coast Group, Mir Group and Indo-Bangla Pharmaceuticals are also planning to set up factories in south-eastern districts.
Dhaka-based Nitol-Niloy, a big name in the automotive industry, imports fully knocked down (CKD) vehicle units from India for assembly at its Gazipur and Kishoreganj plants.
“We are now planning to set up factories in Jashore and Barishal,” Abdul Matlub Ahmad, chairman of the Nitol-Niloy Group, told TBS.
“We are considering expanding our existing bus, truck and minibus assembly plant in Jashore.”
He also spoke of his plans to set up an export-oriented food processing operation that takes advantage of the availability of agricultural products in the region.
They are now looking for land in Barishal and Shariatpur for this purpose, he noted, adding: “We will venture as soon as we have gas connection.”
The former FBCCI vice president said after the Padma Bridge was built, almost all major industrial groups are interested in building factories in the southern region.
Barishal-Faridpur-Gopalganj region will be the next production hub if gas is made available there, he also said.
Mir Nasir Hossain, another business leader, said his company Mir Group has already opened a factory in Faridpur to take advantage of the direct road link with Dhaka.
Opsonin Pharma, a leading drug manufacturer in the country, began construction of the country’s largest facility on 500 hectares of land in Barishal in 2020, long before the Padma Bridge opened.
Abdur Rouf Khan, Managing Director of Opsonin Pharma Ltd, hopes the factory will employ more than 1,000 people with an investment of over Tk500 crore.
“I am investing a lot here as communication between Barishal and Dhaka which are connected by Padma Bridge is very easy now. It’s a very suitable place to build factories,” he said.
TK Group also plans to build an agro-based industry in the south. Previously, it had set up factories in the area to produce LPG cylinders and soybean oil since the Padma Bridge work began.
Mohammed Amirul Haque, chief executive of Seacom, part of TK Group, told TBS that the southern region is already a suitable location for businesses due to the ports of Benapole, Payra and Mongla.
“We plan to build an agricultural factory,” he said.
Dhaka-based East Coast Group aims to enter the export market by processing agricultural and fish products in the southern part of Padma Bridge.
Azam J Chowdhury, chairman of the East Coast Group, said many products, including onions, potatoes, legumes, nuts, mustards and vegetables, produced by Southwest farmers could not be processed without proper facilities.
Farmers do not get fair prices for their products. Many vegetables also rot because they don’t have enough storage facilities, he also said, adding that exports of such produce have the potential to bring in a lot of foreign currency.
“We will initially set up silos in areas near Dhaka and store agricultural products grown in the southwestern region. And we will set up a processing plant once we have the gas link, Azam.
To take advantage of the Padma Bridge, local entrepreneurs are signing up for investments in the area. Mubarak Ali Sikder, head of Janjira Upazila congregation in Shariatpur, is one of them. He builds a cold store on 10 bighas of land in the Kazirhat area of the Upazila.
“There are plenty of tomatoes growing in the area. I will store them for export,” Mubarak said.
Beza to set up 17 economic zones
Aside from the private sector, the Bangladesh Economic Zones Authority (Beza) has already drawn up a proposal to develop 17 economic zones in the southwestern region.
Beza CEO Shaikh Yusuf Harun said work on two economic zones in Mongla would start soon. Also, Gopalganj, Khulna, Madaripur, Satkhira and Kushtia economic zones will be implemented in phases.
Kushtia Economic Zone will be established on 382 acres of land in Bheramara Upazila district. Feasibility study is in progress.
Also, the proposal for a development project has been prepared to set up an economic zone on about 800 acres of land near Mawa in Nawabganj in Dhaka, he noted.
If these initiatives are implemented, the country’s planned industrialization, especially in the southwest region, will be more dynamic, he also said, adding that more than a million people will be employed in this region.
Meanwhile, the Bangladesh Investment Development Authority has started to mobilize large investments in energy, tourism, agriculture and ICT in the region.
Khulna again an attraction after several decades
In the 1960s, Khulna was one of the most important industrial cities in Bangladesh. Over time, the city saw the evacuation of almost all factories.
But now the opening of the Padma Bridge has reignited hopes of setting up new factories here. Many entrepreneurs have already bought land in the area for this purpose.
Former BGMEA President Abdus Salam Murshedy said: “I will seize this opportunity without a doubt. I intend to open a new clothing factory in Khulna. I also encourage my colleagues to invest in this region.”
How the Bangabandhu Bridge spurred industrial growth in the north
Pran-RFL Group started its pipe well business in 1981 by establishing a factory called RFL Foundry in Rangpur BSCIC. Because of communication problems, the group did not establish any more factories in the northern region for the next two decades.
In 2001, after the inauguration of the Bangabandhu Bridge, the industrial conglomerate set up a factory called Pran Agro Limited in Natore.
After that, eight more agricultural processing factories were established in Rajshahi, Dinajpur, Rangpur, Sirajganj and Pabna.
They also recently opened a bicycle factory in Rangpur’s Gangachara.
Square Group, Envoy Group and Nilsagar Group also set up factories in North Bengal.
Square Group has an industrial park in Pabna. The Envoy Group has set up a meat processing plant called Bengal Meat in the same district.
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