Charmed by the potential of the jute, and jute products in both the local and foreign markets, GPH Ispat and Fortune Shoes are now planning to invest in the industry.
The publicly-listed firms have submitted their expression of interest (EOI) to get the lease of state-owned jute mills in the Chattogram and Khulna zones.
GPH Ispat and Fortune Shoes took part in an international tender floated by the Bangladesh Jute Mills Association (BJMC) – a body which supervises state-run jute mills.
GPH Ispat is a country's one of the leading steel manufacturers and Fortune Shoes is a 100% export-oriented footwear maker.
If they are awarded the lease, this will be their first footstep in the jute industry, say sources.
At the beginning of this year, the BJMC floated an international tender to lease out 13 state-owned jute mills to the private sector.
In response to the tender, a total of 18 local and foreign firms, including the two listed firms, primarily submitted proposals in the jute sector.
According to BJMC, GPH Ispat applied and submitted an expression of interest to get the lease for three jute mills in the Chattogram zone, and the Fortune Shoes for two in the Khulna zone.
Now, the BJMC asked the interested firms to submit their final proposals by 25 May.
After getting the final proposals, the evaluation committee of the BJMC will finalise the winning firms for leasing out the government-owned jute mills.
The officials of the two companies said, participating in the tender does not mean that it is being finalised. If it is final, then they will invest in the jute industry.
Established in 2012, Fortune Shoes Limited – a local footwear manufacturer for exports – has been manufacturing and exporting a wide variety of shoes for men, women and kids.
According to BJMC, the Barishal-based company has expressed its interest to get a lease of two jute mills in the Khulna zone.
It is eager to get the lease of Platinum Jubilee Jute Mills and Doulatpur Jute Mills.
Two Indian jute mills – Pacific Jute, and Mohon Jute – have also submitted proposals for getting leases of the mills.
After getting the final proposals from the interested firms, the BJMC will decide on the lease.
Riaz Uddin Bhuiya, company secretary of Fortune Shoes, told The Business Standard, "In the name of Fortune Shoes, we are taking part in the tender, but if we are awarded the lease, the investment will come under the Fortune Group."
"The group management has decided to invest in the jute sector through a new company. It is not possible to open a new company in a short time. For this reason, the tender has been submitted in the name of Fortune Shoes," he added.
Fortune Shoes owns Premier Footwear, and MJ Industries as sister concerns.
It has nine production lines, and its current capacity is 35,500 pairs of shoes per day.
In the fiscal 2020-21, its revenue increased by 18% to Tk1440.40 crore, and net profit after tax by 109% to Tk24.55 crore.
GPH Ispat – one of the leading integrated steel manufacturers in Bangladesh engaged in manufacturing and trading of MS Billet and MS Rod – was incorporated in 2006.
BJMC sources said GPH Ispat has submitted an expression of interest to get a lease of three jute mills – Gul Ahmed Carpeting Jute Mills, MM Jute Mills, and RR Jute Mills – in the Chattogram zone.
An official of the company, seeking anonymity, said, "The company has primarily shown interest in getting a lease of the government owned jute mills. If it gets the final approval of BJMC, then an investment decision will be made."
In the fiscal 2020-21, GPH Ispat's revenue almost tripled over the previous fiscal year to Tk2816.64 crore, and profit rose to Tk166.09 crore, up from Tk29.94 crore in the fiscal 2019-20.
GPH Ispat's commercial production commenced in 2008 with an annual production capacity of MS Billet 84,000 tonnes and MS Rod 120,000 tonnes of different diameter ranges from 8mm to 40mm.
GPH Ispat has embarked on a new journey with cutting-edge innovation in the history of steel manufacturing and has proudly introduced Asia's first Quantum Electric Arc Furnace and Winlink Technology, whose annual capacity has reached 1 million plus steelmaking.
In June 2021, the company declared the commercial production of the new expansion plant and marketed the new products.
GPH can manufacture long steel products from 300 MPA to 900 MPA which ensures up to class-4 grade steel in its production facility.