Singer, BAT to dig more in markets 

Infographic: TBS

Two leading multinational companies – Singer Bangladesh Ltd and British American Tobacco Company Bangladesh (BATB) – have announced to invest Tk680 crore and Tk574 crore respectively in their new factories. 

Singer's investment is aiming to re energise the century-old brand in the burgeoning local market, while BATB's new facilities will enable it to excel in its widening cigarette export window alongside creating contingency capacity. 

Singer Bangladesh, the oldest and a top player in the country's fast growing home appliances market, will pour Tk680 crore into setting up a new facility. 

The investment will be financed from internal sources and through borrowing from both foreign and local banks. The proposed manufacturing facilities will meet the increasing local demand with a competitive price and will also contribute to the company's growth, the publicly-listed company said in its disclosure. 

Kazi Ashiqur Rahman, Singer Bangladesh's company secretary, declined to comment beyond the disclosure. 

However, requesting anonymity, a high official of the company told The Business Standard that the company is planning big and going to build its third facility and the large new one might be the ultimate one for manufacturing and assembling electronics and home appliance products. 

The new plant will be inspired by the technology of Singer's new holding company Istanbul-based Arçelik, one of the global leaders in white goods and cooling products. 

Arçelik, which acquired 57% of Singer Bangladesh shares for $75 million in March 2019, is introducing all its global values, expertise, and advanced technologies to exploit the best out of the brand Singer, present in this land for 117 years. 

Since the acquisition three years back, Singer has already made around Tk80 crore technology investments and launched new-technology refrigerators. 

Can Dincer, chief commercial officer at Arçelik Global and also a director of Singer Bangladesh, told TBS in an interview earlier in March, "We are already investing in Singer and we have further investment plans in facilities, production, product range, marketing and communication."

"You will see how we are adding value to the quality and R&D [research and development] aspects of products, very modern technology, and production process in Bangladesh. This is our promise to consumers of Bangladesh: we are ready to bring our best resources…."

Singer that began with sewing machines and eventually turned into the largest household name for home appliances and televisions in the country lost the momentum in the race in the 2010s, while the great localisation wave made Walton the largest player in the refrigerator and television market. 

According to a UCB Asset Management report last year, Singer is competing with Walton as the second largest brand with a 12% market share in refrigerator, 11% in television sets, against Walton's gigantic 72% and 27% market shares in the two categories respectively. 

With a 13% market share, Singer is lagging only behind General and Gree in air conditioners and with 18% market share, it is trying to catch up with Samsung in the washing machine market. 

Having secured an annualised growth of 14% over the second half of the last decade, Bangladesh's TV, refrigerator, air conditioner, washing machine and kitchen appliances market has grown to around $2.5 billion, according to the UCB AMC report. 

With 100% of the population under electricity coverage, a rising per capita income and changing lifestyle helped analysts expect the market to grow at a 17% annualised rate to $10 billion by 2030. 

Widely winning the local market, Walton has emerged as an exporter to dozens of countries, including the western markets, and the company now is chasing its dream to be a top global brand. 

Arçelik's Can Dincer in his interview said his company is considering Bangladesh as a strategic hub in the region for exports.  

With the Tk1089 crore new plant, BATB aims to thrive on exports   

On its part, Tobacco giant BAT Bangladesh is going to invest further Tk574.2 crore in its new facilities in Savar, where it already has invested Tk515 crore in 2021 to build the factory's civil infrastructure. 

The new tranche of investment will basically finance the installation of machinery there alongside the land development in the extended area of the new factory. 

Contacted, BATB Head of External Affairs Sheikh Shabab Ahmed told TBS, "Looking at the future export potential in the longer term, our board has approved the fresh investment to build capability in the Savar factory. We believe with the improved capability we will be able to equip the company for any future demand." 

"The manufacturing facilities in Savar are to explore export opportunities of cigarettes in the world market," BATB Chairman Golam Mainuddin told shareholders in the last annual report.

The factory will also help meet the local demand as it includes contingency purposes, according to the chairman. 

BATB, a long exporter of tobacco leaf, entered cigarette exporting in 2019 and it has been enjoying a growing response from China and Maldives, the two markets it already serves. 

Australia, the United States, Malaysia and many European countries are also emerging as the large potential markets of BATB, said one of its senior officials. He said the superior quality and competitive price BATB offers is being considered as the major strengths of the company in cigarette exports. 

Export is a small contributor to BATB's annual revenue, while cigarette export is still a trivial part of that, but the potential is increasing fast as many countries are finding it better to opt out of tobacco and tobacco products production and discourage smoking through making cigarettes less available and costlier. 

Anti-tobacco groups have long been criticising the Bangladesh government for not discouraging smoking enough while they also have concerns regarding BATB's contract farming of tobacco. 

However, the BATB official, who requested anonymity, defended his company's position, saying beefed up exports would not hurt anyone as the company is able to get more tobacco grown on the same acres of land, thanks to the modern cultivation.