Ifad Autos Ltd has secured a 30-acre industrial plot at an economic zone in Chattogram to go ahead with its Tk430 crore automotive project there.
The listed automobile firm informed its shareholders on Thursday that Bangladesh Economic Zones Authority (Beza) has allotted the land in favour of the company to develop and operate industries, run commercial activities and construct onsite infrastructures at Bangabandhu Sheikh Mujib Shilpa Nagar.
The land is being allotted on lease for 50 years on a rental basis, Ifad Autos said, adding it would disclose the details immediately after making a deed with Beza.
In the last quarter of 2020, Ifad submitted its plan to invest Tk430 crore there to set up a lubricant blending plant for its Gulf brand, a two-wheeler manufacturing unit, and facilities to manufacture crucial automobile components.
Taskeen Ahmed, managing director of Ifad Autos, told The Business Standard, "We are planning to build the lubricant blending plant at first as the products are already popular in the market."
In 2017, Ifad partnered with Gulf Oil International UK to jointly run the business of the lubricant brand in Bangladesh.
Ifad has been in talks with India's Royal Enfield to assemble the iconic two-wheelers in Bangladesh and the company was advocating for a policy to come out of the rare restriction on higher than 165cc motorcycle engines.
The plan had a hiccup earlier this year when the government decided not to withdraw the restriction before 2024.
"We are still in talks with principal brands with a hope that the government might rethink its decision for the sake of investments and technology transfer in Bangladesh," said the managing director of Ifad Autos.
Hailing the latest policy developments, Taskeen said the recently adopted Automobile Industry Development Policy and the budget proposals for Vat-tax waivers for automobile manufacturers and component manufacturing light engineering sector together have prepared ground for a good beginning of localisation of the automobile sector.
His company would set up component manufacturing facilities at the newly allotted plot. The initial target includes commonly replaced vehicle parts such as filters, brakes, clutch, leaf springs, seats and batteries.
"We are developing our own research and development wing alongside continuing talks with internationally reputed component brands," said the Ifad managing director.
"Whatever happens ultimately, our plan includes both the local and export markets as both offer remarkable growth for us."
He believes each of the planned facilities would see success as the local market is growing at a higher than the average global rate.
The project would create over one thousand quality jobs, according to the project proposal.
The company itself would provide more than one-fourth of the estimated project cost and the remaining amount would come from lenders.
In the next three years, the entire plot would be utilised according to the plan, hoped Taskeen.