A growing demand for automotive battery, fuelled mostly by widespread use of battery-run three-wheelers in rural and semi-urban areas, has led to booming business of local firms now exporting to around 70 countries.
Besides, appearance of hybrid and electric cars in local market, and scooters using battery in conjugation with fuels have further propelled the business the market of which has grown three to four times over the past ten years.
With improved road communication and gravelled roads penetrating deep into the rural areas, old modes of non-motorized transports have made way for motorized vehicles, which can be seen scurrying along the roads.
These transports, mostly three-wheelers, also known as easy bike, are what have played an important role in increasing manifold the demand for automotive battery, Nawaz A Rahim, head of business development of Rahimafrooz Batteries Ltd, a concern of Rahimafrooz Group, has said.
To cater to the demand, currently around 25 local companies are manufacturing batteries for three-wheelers, hybrid and electric cars, scooters, commercial vehicles, cars, instant power supply (IPS), solar panels and batteries for use in various appliances, according to the industry people.
Major companies in the sector
Rahimafrooz Batteries Ltd and Rahimafrooz Accumulators Ltd, both concerns of Rahimafrooz Group, Hamko Corporation, Navana Batteries Ltd of Navana Group, General Battery Company Ltd, Rimso Battery & Co Private Ltd, Abdullah Battery & Co (Pvt) Ltd, Panna Battery Ltd, Eco Batteries Ltd, White Products & Electronics Ltd of Rangs Group, Saif Powertec Ltd, Confidence Electric Ltd, Electro Battery Co Ltd, J Co Battery Engineering Works, Suntec Energy Ltd, A&P Battery Industries Ltd, Dong Jin Longevity Industry Ltd, Geli Industrial Co Ltd and Silicon Power Ltd are now the key players in the market.
Besides, Chinese-made but locally assembled batteries and those locally manufactured by Chinese companies operating here have also entered the market, accounting for around 50% of the demand, according to industry insiders.
An expanding market
The battery market the size of which is around Tk 8,000 crore is growing year on year. The market ballooned three to four times in the last ten years, registering a 10% to 12% growth in the last one year, according to the Bangladesh Accumulator and Battery Manufacturers’ Association (BABMA).
Around 100,000 people are directly or indirectly involved in the battery industries across the country.
The local firms usually manufacture two types of lead acid batteries — automotive and industrial dip bicycles. In addition, there is a huge market for valve regulated lead acid (VRLA) batteries used in the towers of mobile phone companies.
Although some local companies are capable of manufacturing this battery, imported batteries are dominating the segment as mobile phone operators are opting for the foreign batteries.
Currently, there are 25% import duty, 20% supplementary duty and 3% regulatory duty on imported batteries, according to National Board of Revenue.
Who leads the market
Rahimafrooz Batteries Ltd is the largest lead-acid battery manufacturer in the country. The company is also one of the leading regional players, now exporting to around 70 countries.
It manufactures about 200 different varieties of batteries for automobiles, IPS and other appliances in its factories located at Ishwardi in Pabna, and Birulia and Zirani Bazar of Savar in Dhaka. Its major brands are Globatt, Lucas and Spark.
In 2017-18 fiscal, the country earned $40 million exporting batteries. Of the amount, only Rahimafrooz’s share was $38 million.
But this was not the case seven or eight years ago. In 2009-10, the company had managed to only $5 million exporting batteries, according to a high official of the company.
Talking to Dhaka Tribune, Rahimafrooz Batteries Ltd head of business Nawaz A Rahim said: “Rahimafrooz has been in the battery business for 65 years. However, the company started its export in 1992. Currently, we are exporting to 70 countries including Singapore, Australia, Russia, India, Chile and Middle East.”
Rahimafrooz manufactures 15 lakh batteries in a year, said Nawaz A Rahim.
Of the local battery market, 60% to 65% demand is generated by battery-run rickshaws and easy bikes, and hybrid and electric cars, while of the rest, 15% demand is generated by commercial vehicles and 20% by solar panels, instant power supply (IPS) and industries, according to the market players.
“The use of battery-run rickshaws and easy bikes has increased 2 to 3 times in remote areas of the country, which inflated the market to a great extent,” said Nawaz.
An easy bike requires five batteries as it needs a battery every six months, he added.
The country has roughly six lakh battery-run three-wheelers, according to a rough estimate.
About 50% of the raw materials for producing lead-acid batteries are imported from Korea, Singapore, Malaysia, Thailand, India and China. However, the rest comes from recycling in the country, according to the industry insiders.
Who are the other key players
Rahimafrooz held sway in the country’s battery market up to 2000. After 2000, large-scale businesses associated with the industry such as Hamco, Navana, Ranges and Panna Group grabbed their respective shares.
By 1980, Panna Battery Ltd had started producing batteries on a small scale at Kamrangirchar in Dhaka. The company started marketing fully-formed batteries branded as ‘VOLVO’ in 2006.
The company is now exporting batteries to countries including Nepal, Bhutan and Singapore.
Talking to Dhaka Tribune, Panna Group Managing Director Md Lokman Hossain said: “We have started exporting and set up a separate unit for export.”
Many local companies were coming forward to export batteries as the government was now giving 15% cash incentive for export, he mentioned.
He, however, complained that 30 Chinese companies operating here were illegally occupying the market. “We are falling behind in competition with them. We want government interference,” he added.
Saif Powertec Ltd started producing batteries in 2017 and the company is now exporting batteries on a small scale.
The company’s General Manager (accounts and finance) Helal Uddin Sikder said: “Saif Powertec enjoys 10% of the local market. We are manufacturing 50,000 batteries every year for automobiles, IPS and solar panels.”
The global automotive battery market was valued at USD 41.17 billion in 2017 and is projected to reach USD 63.06 Billion by 2025, growing at a 5.5% from 2018 to 2025, according to a verified market research.
According to “Global Automotive Battery Market Forecast & Opportunities, 2019”, the global automotive battery market is forecast to surpass USD 42.6 billion by 2019.
At the retail level, the price of GLOBATT ACE N50Z Battery is Tk9,800, LUCAS Classic N50z Tk6,855, LUCAS classic Nx120-7 battery Tk9,720, and LUCAS ultima din100 battery Tk24,700.
Of the Hamko IPS battery, HPD 80-12 volt is priced at Tk7,424, HPD165-12volt at Tk13,875 while the Volvo IPS battery-IPS50s-12volt is priced at Tk6,642 and IPS200s-12 Volt at Tk19,481.