Anwar Group, one of the leading industrial companies of the country, is going to invest at least Tk5,000 crore in steel, denim and paper even amid fears of a global economic downturn.
"After every economic slowdown, there is a demand upsurge. We want to catch up with the new demand once the slowdown is over – we want to be ready and stay aggressive," the group Chairman Manwar Hossain explains.
He told The Business Standard that his group has already begun some of the projects including denim and steel and all the projects are expected to be completed by 2025, rolling out more than 6,000 new jobs.
"We are investing around Tk3,000 crore in steel manufacturing and the project will be completed by 2024. We are also bringing Tk1,400 crore investment in denim; the production will begin before 2025," said the Anwar Group chairman.
Manwar Hossain said he wants to ready an export-oriented carton and a paper manufacturing even before denim and steel. "The carton project might be completed in the third quarter of 2023, while the paper is next year."
The entrepreneur said they are charting out plans about how the group could be on the up curve during the economic slowdown and continue plowing money into their manufacturing.
Becoming the 2nd largest rod-maker
Currently, BSRM has the highest rod production capacity of 16 lakh tonnes per year. The company is also waiting for a new factory with a production capacity of 5 lakh tonnes. BSRM holds about 23%-24% of the local rod market.
After BSRM, Abul Khair Group's AKS Steel has the second highest production capacity of 14 lakh tonnes.
Anwar Group is expected to take over AKS Steel as the second largest rod-maker once its new factory opens late-2023.
Anwar Group officials said they currently have a production capacity of 2.70 lakh tonnes and the new plant will alone manufacture 16 lakh tonnes of rods by the end of 2023.
Manwar Hossain said several ongoing government megaprojects across the country and the changing rural economic landscape prompted Anwar Group to expand the businesses.
Industry insiders point to the fact that the leading steel manufacturers in Bangladesh have moved to expand their businesses in recent times as steel consumption per capita has increased in line with economic development.
Bangladesh's combined annual installed capacity of producing steel in 2018 was 8.5 million tonnes, while the total consumption was 7 million tonnes. Per capita steel consumption in the country almost doubled over the past eight years, standing at over 45kg in 2018.
Industry people expect that the implementation of government projects would add 217kg to this figure in the next few years.
The current size of the domestic steel market is around Tk45,000 crore, industry insiders say, adding that around 400 companies in this sector employ roughly 300,000.
Besides, Chinese steel giant Kunming Iron and Steel Holdings Company has announced to invest $2.3 billion in a steel manufacturing project along with a power plant at Mirsarai in Chattogram.
A consortium of 17 private players named Star Infrastructure Development Consortium Ltd is acting as the local partner of Kunming.
The company aims to produce 2 million tonnes of integrated iron and steel products annually. The operation of this consortium is expected to start by 2022.
Modern denim replaces old jute machines
Anwar's denim investment puts high hopes in modern technology. The group is transforming its jute mill in Munshiganj's Gazaria to accommodate the denim manufacturing units.
After setting up the factory at Tk1,400 crore, denim export will begin in 2025, according to the group Chairman Manwar Hossain.
He said they used to export jute yarn to Europe once. But man-made fiber has occupied the market subsequently. Now denim shows huge export potential. The Munshiganj factory will generate some 1,200 jobs.
According to sector people, there are currently 40 denim fabrics and 500 denim garment manufacturing factories in the country.
Bangladesh exported denim worth approximately $3.5 billion in the 2021-22 fiscal year, as the growth was over 15%.
Manwar believes Bangladesh's denim has huge potential to perform better in the export outlook.
Anwar Group of Industries, one of the oldest companies in the country, started the journey in 1834 as a hides and skins business. It was founded by Anwar Hossain's grandfather Lakku Mia.
The 188-year-old group is engaged in 36 types of business ranging from automobiles to banking and financial sectors. It has more than 20 companies, with an annual growth of more than 15%. The group employs more than 14,000 people.
Manwar said his late father Anwar Hossain basically developed the business with innovation and courage.
"With only Tk360 in hand, my father took over the family business. But he raised the company balance to several lakhs of taka just after four years," Manwar recalled.