Energypac has been working for the development of the country's power engineering sector since its inception in 1982. After three decades of success, it is now considered the sector's top company in the country. In this time, it has transformed itself as a group of nine companies with more than 5,000 employees.
The company was recently listed on the share market.
Humayun Rashid, the managing director of Energypac Power Generation and president of the International Business Forum of Bangladesh (IBFB), has talked to The Business Standard's Abbas Uddin Noyon about the business of Energypac and the country's economy.
Humayun Rashid started with a remark on the sustainability of Energypac's current business, "Energypac is producing products that will be needed till the end of civilisation. As long as there are people, our business will have a strong foundation."
"The demand for electricity and electrical appliances is constantly increasing. The demand for generators is also increasing. They will be needed till the end of the world. For these reasons, we have made long-term investments. All our investments are of the same nature," he added.
Asked why an ordinary investor would choose Energypac, Humayun answered, "Our investment is very sustainable. We are thinking of something permanent instead of short term. When an investor invests, he should believe that the electrical business in Bangladesh will be sustainable. They are investing in a company that is in growth."
"We want to move the company forward through solidarity with investors. Shareholders are our partners. They have to trust us. We have to have confidence in them too," he added.
At the end of 2019, the company raised Tk150 crore from the capital market through IPO. It will expand its business by investing this money.
In the 2019-20 financial year, the company's turnover was around Tk813 crore, which was more than Tk900 crore in the previous fiscal year. Sales dropped slightly over the past year due to the Covid-19 pandemic.
"We have brought the power generation company to the stock market. The company has four revenue departments. One of them is Energypac Power Ventures Limited. However, it is 100% owned by our Power Generation Limited," said Humayun.
"We recently invested in LPG. It is a little challenging. Many companies are coming here. Many people have to invest more to do business. We have already invested more than Tk600 crore. We want to invest more," he added.
"We have our own terminal in Chunkhali in Dakop, Khulna. It has 5,000 tonnes of storage facilities. We have a wide distribution network across the country. There is a high demand for G Gas among customers. As an electrical and mechanical company, we are more capable than others."
Humayun said, "Our main focus is on the energy sector. We are setting up a filling station in Rupganj for G Gas. Also, we will invest in logistical equipment. This will reduce our distribution costs. Several stations have to be set up across the country. This will further increase our capacity to supply LPG at the customers' doorstep. However, more investment is needed for this."
Investors think that the company's debt is higher than the turnover. Although this is seen as a negative trend in the market, Humayun thinks it is normal.
"Our loans are in investment form. We are now at the investment stage. Everything we borrowed has been invested. More investment will make more profits in the future," he added.
"We have invested for the last three to four years. These are long-term investments. After a certain period, they will yield big benefits. Already, our returns have started to come. They will increase day by day," said the managing director of Energypac.
Describing the company's compliance, Humayun said, "None of our relatives is posted as a director in any of our companies. Employees and sponsors are the shareholders here. Those who have invested in the stock market are also shareholders now."
"Four of our board members have no experience in the stock market. We just believed in production and did not think anything about shares. Now we have to think about it because of the company's listing. This is the first time I have a beneficiary owners account," he added.
What about Energypac's journey from the beginning to the present day? Humayun said, "First we started trading electrical products. Our business started expanding in 1995 with the trading of diesel generators in the name of Energypac Power Generation. We have worked as an EPC contractor for various industries. During that time, we also invested in power plant construction, operation, and maintenance."
"We started producing Glad Generators in the country using our long experience. We used to import Jack brand trucks. Later, we started assembling them here. From 2021, we have started assembling double cabin pickups and trucks," he said.
There is a subsidiary of Energypac Power Generation called Steelpac, which is in the business of pre-fabricated steel structures.
"We are working to ensure affordable housing. You will see it later next year. Our biggest investment is in G Gas which is bottling and marketing LPG in remote areas of the country. We have already invested about Tk600 crore. We will need more investment in the future."
The experienced entrepreneur said, "People are turning to using LPG in the areas where there is no natural gas as their purchasing power is increasing. So, the LPG market will grow in the future."
He thinks a trade-friendly environment is essential to survive in the global competitive market. "Bangladesh was ranked 168th among 190 countries in terms of doing business in the latest World Bank report. So, it is necessary to take initiatives with utmost importance given to business facilitation."
According to him, operational and non-operational costs are very high in Bangladesh. Production cost is also increasing for manufacturers due to transportation difficulties.
"When buying a truck, the buyer has to take a high-interest loan. As a result, more truck rent has to be paid. Traffic congestion increases time and fuel consumption. So, the cost of transporting goods by truck is high. Our competitors transport goods by rail and waterways. Their costs are much lower," he said.