KR Group’s brief business journey rakes in Tk1,500cr
The group’s current businesses include shipping lines, steel re-rolling mills, industrial oxygen manufacturing, poly packaging and flexi packaging. The group also owns cargo vessels and tugboats
After graduating in 2004, Mohammad Sekander Hossain Tinku took charge of his family's ship breaking business. Besides, the family also had a contracting business at the time. They used to supply old ships' steam boilers, generators, compressors and other parts to different industries of the country.
But Sekander Hossain did not confine himself to trading only as he joined the steel business in 2009 and established King Steels Ltd. He set up the KR Ship Recycling Yard the following year.
Prior to 2006, ship breaking business was not open to all due to numerous issues, including limited membership of the Ship Breaking Association.
The limited import had been pushing up scrap rates in the domestic market. The ship breaking business was opened up to all in 2006, when Sekander got involved in the sector.
From 2009 to 2014, many entrepreneurs left the shipbreaking sector after losses. But Sekander Hossain, owner of KR Shipbreaking, did well during the period. In an expansion mode, he set up KR Food Industries Ltd in 2014 on 144 acres of land in Sitakunda. In 2015, he set up the packaging factory KR FlexiPack Limited. He set up KR Oxygen Limited and SNT Ship Recycling Limited in 2016.
Then he set up ABS Shipping Lines in 2017 and, finally, KR Steel Re-Rolling Mills Limited in 2018. There are also KR Steel Structures Limited and KR Builders Limited.
The mother concern of the group is KR Steel, while the highest investment is in KR FlexiPack Limited. At present, the production capacity of the packaging factory is 500 tonnes per month. Its monthly sales are about Tk18-20 crore. The company is trying to double its production capacity in the next one to two months.
The group's current businesses include shipping lines, steel re-rolling mills, industrial oxygen manufacturing, poly packaging and flexi packaging. The group also owns cargo vessels and tugboats.
When Sekander Hossain started his ship breaking business in 2009, he had only 25 people. At present, his three shipyards employ 1,700 people, while KR Group altogether employs 4,300 individuals.
The group is doing well in almost every sector as it did not lay off any worker during the pandemic. Instead, it hired more than 200 workers. In the last two years, all its employees got full Eid bonuses plus a more than 10% salary increment.
The annual turnover of KR Group is now Tk1,500 crore, while its total bank loan is less than Tk500 crore. The group's asset value amounts to Tk2,000 crore.
Sekander said the pandemic and the Russia-Ukraine war have compounded the international raw material crunch. Besides, spiked freight charges and a strong US dollar are making imports costlier. But since product prices cannot be increased substantially, the profit margins have shrunk.
The young entrepreneur said he plans to expand his agro based business soon. Sekander Hossain has plans to set up broiler, layer and sonali chicken breeding plants and construct feed processing units. Besides, he plans to cultivate paddy by using the latest technology. There are also plans to invest in the pharma packaging sector.
Sultan Alauddin, vice president and manager of Bank Asia, Chattogram's Bhatiari Branch, said, "We have been doing business with KR Group for a long time. So far, no venture of the group has defaulted on bank loans. No debt had to be rescheduled too."
Sekander Hossain, chairman and CEO of KR Group, told The Business Standard that starting a business was quite challenging.
"The main challenge was to raise funds. Since I was a student, I didn't have much money. Every time I reached out to relatives and friends for money, I realised how complicated life is."
He said he incurred huge losses at the beginning of his business career. Later he collected money again and bought two magnetic excavators.
"At that time, magnetic excavators were rare and the market demand was very high. In one to one and a half years, I made a profit that was double the investment. After repaying the loans, I still had Tk1.5 crore," he recalled.
"Since then, I did not have to look back," said the entrepreneur. He plans to employ at least 10,000 people in the next two years through further business expansion.
