Promising prospects in agro-processing sector

Exporters’ effort to create innovative exportable products and robust marketing have helped processed foods win the hearts of Bangladeshis in the Middle East, Europe and other parts of the world, say industry insiders.

Export earnings from agro-processed food has grown 97.31 per cent to USD 291.82 million in first quarter (July-September) of the current fiscal year (2018–19), up from USD 147.90 million a year ago, buoyed mostly by a stream in the exports of dry foods, tea, fruit juice, biscuits and rice.  

AFM Fakhrul Islam Munshi, president of the Bangladesh Agro-Processors’ Association (BAPA), said the demand of Bangladeshi agro-processed food, especially dry food, was increasing in different countries of the world as a change in the attitude of expatriate Bangladeshis helped to increase export earnings. Foreigners also have interest in these foods.

Growing demand

 The demand of agro-processed foods is not only increasing internationally but also in the domestic market over the past few years, says the BAPA president.

 Citing the reasons behind the soaring growth, he said, “The country has an enormous prospect globally in this sector because we don’t have to import the raw materials such as grains, vegetables, meat, honey, and rice of agro foods from abroad. All the raw materials are available within the country.”

Citing an example, he said, “The price of raw potato per kg is Tk 15, if we process the potato into finished product like potato chips, then 15 gram potato would cost at Tk 15. Eventually, it means 1 kg of raw potato can be sold at Tk 1,000 by only by adding value.”

So, value addition is very important, he says, which means the process of changing or transforming a product from its original form to a more valuable commodity.

Value-added agriculture entailed changing a raw agricultural product into something new through packaging, processing, cooling, drying, extracting or any other process that differentiates the product from the original raw commodity, he explained.

Another reason of the export growth, he said, was the 20 per cent government incentive on agricultural products.

“We export 14 per cent agro-processed food to India; so a huge opportunity remains untapped in penetrating the Indian market,” he said.

When asked about the local market of agro-processed foods, he said the domestic market was expanding rapidly. Giving an example, he said, locally, chips worth Tk 30 crore were being sold by the companies every year.

 Bombay Sweets, a local snack-maker, processes 100 tonnes of ‘chanachur’ every day to meet the local demand. So, the local market, he says, has a huge demand for agro-processed foods.

Giving another example, he said, recently the ‘BAPA Foodpro International Expo’ was held in Dhaka where 149 foreign firms showcased their modern agro-food processing machinery having the latest technology, indicating Bangladesh had an enormous potential in this sector.

BAPA has 479 members, who export approximately $500 million worth of products to 144 countries each year, he said.

 

Challenges

 Pointing to some of the challenges, he said, “We need adequate policy support to increase export earnings. The rate of interest or cost of doing business should be lower so that Small and Medium Entrepreneurs (SME) can take loans at a lower rate from banks.”

 A lower interest rate would encourage more people to set up SME enterprises in the country and that would boost the rural economy, he said.

“India is a huge market for Bangladesh to export agro-processed food. We can create a bonding between the two countries. Indian companies can supply us agro-processing machinery and Bangladeshi firms can cater to the vast Indian market,” he added.

Suggesting some points, he said, “In order to dominate in the global market, a few things need to implemented such as the adoption of new technology to maintain quality and more investment in research and development, marketing, packaging and food safety.”

 If these steps were taken, Bangladesh's export of agro-processed foods could cross $5 billion in 2021, he felt.

According to the Export Promotion Bureau (EPB), the dry food sector has achieved an export earning of USD 51.70 million in the first quarter (July–September) of the current fiscal year (2018–19). This was up from USD 33.86 million for the same period in the previous financial year (2017–18), showing a robust growth of 52.69 per cent.

The products that are exported as dry food from Bangladesh include puffed rice, flattened rice, chanachur, potato chips and biscuits.

Dry food made in the country is exported to Saudi Arabia, United Arab Emirates, Oman, Kuwait and several Middle East countries.

 

Pran Group’s example

Kamruzzaman Kamal, director (marketing) of Pran-RFL Group, told The Independent that Pran was the country’s leading agro-processed products exporters. It adds around 70 per cent value to various food items.

When asked about the reason behind Pran’s spectacular export growth, he said, “Around 10 million of Bangladeshi expatriates working in various countries are the biggest market of our products.”

“Indians and Pakistanis also like our products; so that’s another reason behind our export growth,” he said.

 Pran mainly exports agro-processed food items to India, Africa, USA, Canada, UK, Singapore, Bhutan, Italy, France, Germany, Middle East, Malaysia and Australia.

“Our export is growing at a rate of 30 per cent per year. We export product items such as chips and crackers, noodles and pasta, nuts and pulses, ‘chira’ (flattened rice), fruit drink, ‘muri mua’ etc,” he said.

“Earlier, Pran used to promote its products through importers to penetrate a new international market. But now we export and promote our products by ourselves,” he said.

 The idea of introducing innovative ethnic food products abroad was the main reason behind this rapid growth, he said.    

Export Promotion Bureau (EPB) statistics show that Bangladesh's dry foods such as flattened rice, puffed rice and chanachur dominated half of the export basket for agro-processed foods, followed by spices, fruit juice and aromatic rice.

For the last couple of years, export earnings from dry foods doubled, while earnings from biscuits went up threefold.

Fruit juice and rice exports also rose.

Improvement in areas such as supply chain and packaging is needed to make local products more competitive. “Above all, an internationally recognised testing laboratory is essential to boost exports,” say industry insiders.

EA

Promising prospects in agro-processing sector

Exporters effort to create innovative exportable products and robust marketing have helped processed foods win the hearts of Bangladeshis in the Middle East, Europe and other parts of the world, say industry insiders. Export earnings from agro-processed food has grown 97.31 per cent to USD 291.82 million in first quarter (July-September) of the current fiscal year (201819), up from USD 147.90 million a year ago, buoyed mostly by a stream in the exports of dry foods, tea, fruit juice, biscuits and rice. AFM Fakhrul Islam Munshi, president of the Bangladesh Agro-Processors Association (BAPA), said the demand of Bangladeshi agro-processed food, especially dry food, was increasing in different countries of the world as a change in the attitude of expatriate Bangladeshis helped to increase export earnings. Foreigners also have interest in these foods. Growing demand The demand of agro-processed foods is not only increasing internationally but also in the domestic market over the past few years, says the BAPA president. Citing the reasons behind the soaring growth, he said, The country has an enormous prospect globally in this sector because we dont have to import the raw materials such as grains, vegetables, meat, honey, and rice of agro foods from abroad. All the raw materials are available within the country. Citing an example, he said, The price of raw potato per kg is Tk 15, if we process the potato into finished product like potato chips, then 15 gram potato would cost at Tk 15. Eventually, it means 1 kg of raw potato can be sold at Tk 1,000 by only by adding value. So, value addition is very important, he says, which means the process of changing or transforming a product from its original form to a more valuable commodity. Value-added agriculture entailed changing a raw agricultural product into something new through packaging, processing, cooling, drying, extracting or any other process that differentiates the product from the original raw commodity, he explained. Another reason of the export growth, he said, was the 20 per cent government incentive on agricultural products. We export 14 per cent agro-processed food to India; so a huge opportunity remains untapped in penetrating the Indian market, he said. When asked about the local market of agro-processed foods, he said the domestic market was expanding rapidly. Giving an example, he said, locally, chips worth Tk 30 crore were being sold by the companies every year. Bombay Sweets, a local snack-maker, processes 100 tonnes of chanachur every day to meet the local demand. So, the local market, he says, has a huge demand for agro-processed foods. Giving another example, he said, recently the BAPA Foodpro International Expo was held in Dhaka where 149 foreign firms showcased their modern agro-food processing machinery having the latest technology, indicating Bangladesh had an enormous potential in this sector. BAPA has 479 members, who export approximately $500 million worth of products to 144 countries each year, he said. Challenges Pointing to some of the challenges, he said, We need adequate policy support to increase export earnings. The rate of interest or cost of doing business should be lower so that Small and Medium Entrepreneurs (SME) can take loans at a lower rate from banks. A lower interest rate would encourage more people to set up SME enterprises in the country and that would boost the rural economy, he said. India is a huge market for Bangladesh to export agro-processed food. We can create a bonding between the two countries. Indian companies can supply us agro-processing machinery and Bangladeshi firms can cater to the vast Indian market, he added. Suggesting some points, he said, In order to dominate in the global market, a few things need to implemented such as the adoption of new technology to maintain quality and more investment in research and development, marketing, packaging and food safety. If these steps were taken, Bangladeshs export of agro-processed foods could cross $5 billion in 2021, he felt. According to the Export Promotion Bureau (EPB), the dry food sector has achieved an export earning of USD 51.70 million in the first quarter (JulySeptember) of the current fiscal year (201819). This was up from USD 33.86 million for the same period in the previous financial year (201718), showing a robust growth of 52.69 per cent. The products that are exported as dry food from Bangladesh include puffed rice, flattened rice, chanachur, potato chips and biscuits. Dry food made in the country is exported to Saudi Arabia, United Arab Emirates, Oman, Kuwait and several Middle East countries. Pran Groups example Kamruzzaman Kamal, director (marketing) of Pran-RFL Group, told The Independent that Pran was the countrys leading agro-processed products exporters. It adds around 70 per cent value to various food items. When asked about the reason behind Prans spectacular export growth, he said, Around 10 million of Bangladeshi expatriates working in various countries are the biggest market of our products. Indians and Pakistanis also like our products; so thats another reason behind our export growth, he said. Pran mainly exports agro-processed food items to India, Africa, USA, Canada, UK, Singapore, Bhutan, Italy, France, Germany, Middle East, Malaysia and Australia. Our export is growing at a rate of 30 per cent per year. We export product items such as chips and crackers, noodles and pasta, nuts and pulses, chira (flattened rice), fruit drink, muri mua etc, he said. Earlier, Pran used to promote its products through importers to penetrate a new international market. But now we export and promote our products by ourselves, he said. The idea of introducing innovative ethnic food products abroad was the main reason behind this rapid growth, he said. Export Promotion Bureau (EPB) statistics show that Bangladeshs dry foods such as flattened rice, puffed rice and chanachur dominated half of the export basket for agro-processed foods, followed by spices, fruit juice and aromatic rice. For the last couple of years, export earnings from dry foods doubled, while earnings from biscuits went up threefold. Fruit juice and rice exports also rose. Improvement in areas such as supply chain and packaging is needed to make local products more competitive. Above all, an internationally recognised testing laboratory is essential to boost exports, say industry insiders. EA