For the first time, Energypac Engineering Limited has received the National Export Trophy for 2016-17 fiscal year in electric and electronics industry.
The company earned a good reputation for the production of electric equipment not only in the country but also in abroad.
The Indian government awarded the Central Public Works Department’s certificate to Energypac in 2017 as the lone foreign company in the Indian market.
Energypac Chairman and Energypac Engineering Ltd Chief Executive Officer Rabiul Alam received the gold trophy for outstanding contribution in the country’s export from Prime Minister Sheikh Hasina on September 1.
The company exported products worth $20 million in 2016-17 fiscal year with a 69.20 percent export growth in a year.
In conversation with The Business Standard, Rabiul Alam spoke about success in the business and the award.
TBS: How successful is Energypac in the heavy industrial sector like capital machinery?
It is true that almost entire capital machinery sector in our country is depended on import and investment in heavy industry is very low. However, a number of entrepreneurs, including us, have invested a big amount in this sector. Now, we are in the top position in production and export of electric equipment. Apart from the big investment, recruitment of skilled staff and human resource development are the keys to our success. We have also acquired experience from the markets in China and Japan.
TBS: How is the market of electric products in Bangladesh and what is Energypac’s position there?
As the power sector of the country expanded on a large scale over the last decade, the market for electric products also grew, and we have a little share in the market.
Utilities used by government organisations usually have load capacity above 400KV and we occupy only 20 percent of that market. However, in the private sector our products occupy 70 percent of the market.
TBS: Tell us about the present business situation of Energypac.
Our factory is located in Gazipur on 100 bighas of land and more than 5,000 staff members are currently working in the engineering sector alone. Our annual turnover is around Tk1,700 crore while export revenue is around Tk200 crore. However, it is very small compared to the country’s electric market.
At present, we supply transformers to all power-supplying companies, especially including Bangladesh Rural Electrification Board, Bangladesh Power Development Board, Dhaka Electric Supply Company (Desco). We get the work after participating in tenders, competing with international organisations. Foreign organisations, including the Asian Development Bank, the World Bank, Japan International Cooperation Agency (Jica), are working with us.
All electric equipment used to be imported from the global markets before we started producing.
At present, we are producing power transformers up to 7,000MVA, distribution transformers up to 175,000MVA, switchgear panels up to 6,000 units, instrument transformers up to 23,000 units, oil type instrument transformers up to 4,700 units, and isolators up to 1,000 units.
TBS: Is Energypac successful in the international market? What are you exporting?
India is our main export market. Last month, we supplied transformers to India’s highest building. In last one year, we have exported 76 transformers to India. Energypac can participate in all government tenders in India after having the approval of India’s Public Works Department.
We can also participate in tenders in Nepal as the second largest foreign company. We have been exporting equipment to the country for the past eight years. We have set up 100 power plants with capacity above 100KV in Nepal. We also set up power plants in Yemen before the war.
TBS: What was the take-off of your business like and how did it grow?
Electricity equipment was once 100 percent dependent on imports. After eyeing the potential of expansion of the power sector, we took initiatives to produce distribution transformers in 1982.
In 1986, we started producing commercially. Our journey started with a small transformer of just 200MVA.
In 1990, Dhaka Power Distribution Company and Power Development Board started buying 200-300MVA transformers from us. Now, we are producing 33MVA power transformers and 400MVA distribution transformers. The government supplied electricity to rural areas using our transformers.
TBS: Is there any opportunity to export to other countries apart from India and Nepal?
We have scopes to export to anywhere except China and European countries, which are strong in heavy industry. Africa can be a big market for us if the government provides incentives in this sector like the garment sector. Chinese companies are dominating the African market currently.
TBS: Who do you think are your competitors in the local market and why are no other big companies developing here?
Only global organisations are the competitors of Energypac in Bangladesh market. However, BRB Cable Industries Limited and Walton Group are doing well in the market now.
Besides, 50 other companies are doing business in this sector in the country. But it is difficult to survive in this sector competing with German and Chinese companies.
TBS: What challenges do local companies have to face while competing with foreign organisations?
Raw materials and tariff policy are the biggest challenges for us. Foreign companies have to pay only 1 percent tariff for exporting to Bangladesh. These companies get incentives from their countries.
On the other hand, we have to pay advance tax for importing raw materials, which is affecting our profit. Moreover, it takes more than a year to get the refund of 30 percent tariff on the import of raw materials.
TBS: What do you think helped Energypac to get the export trophy?
The government has rewarded us because of our commitment towards the country. In addition to our transparency in business, the issue of internal compliance has also played a major role. The government has encouraged export of heavy industrial products like electric products by awarding us. There is also the issue of bringing export remittance that helped the country’s development.
TBS: What does Energypac do to ensure employees’ rights and corporate social responsibility?
All offices and factories of Energypac, including the head office, are environment-friendly and compliance. We give most importance to training of our staff and developing the quality of their lives. We provide healthy food in our factories and offices. We also provide health care facilities to the staff and their families. We run a school in Savar’s Kabirpur area as corporate social responsibility.
TBS: Thank you for giving The Business Standard your time.
Thank you, too. My best wishes for The Business Standard.