Published at: Dhaka Tribune, Jul 18, 2019
Imported home appliances are not rare sights in comparatively well-off households these days, but when it comes to entertaining guests or having snacks, local biscuits come to mind of everybody, prince or pauper, as they can be had on demand at affordable prices and with best quality.
Over the years, fed by growing demand, the market of biscuits grew in size at such a pace that after meeting the domestic demand the country has started exporting high quality biscuits.
According to the industry insiders, over the last decade the industry witnessed a 15% growth riding on growing demand for bakery products, especially in urban areas, leaving hardly any space for the rival imported cookies.
Once the market was dominated by small bakeries but now about 40 to 50% of the total market shares are held by the large and well-known local brands. At present, the annual market of biscuits of different brands is nearly of Tk 3,000 crore.
According to Bangladesh Auto Biscuits and Bread Manufacturers’ Association (BABBMA), the total annual production of biscuits currently stands at an excess of 65,000 ton.
The current market size of biscuit, bakery and confectionery items is Tk 6,000 crore which was only Tk 200 crore in 2004. The local manufacturers now meet 90% to 95% of the domestic demand and the rest is imported.
Talking to Dhaka Tribune, BABBMA President Shafiqur Rahman Bhuiyan has attributed the market growth to the shift to automation, which ensured quality foods at low prices.
Buyers’ preference for hygienically prepared foods is another reason for the growth, he mentions.
“At present, nearly 5,000 bread and baked food makers, including 100 automatic and semi-automatic bakeries, are operating in this segment. Some large firms like Olympic and Pran manufacture biscuits using fully automated machines. Around 15 to 17 lakh people are currently working in this sector,” he says.
“To protect our local brands, the government is helping in many ways. High import tax on biscuits has helped the local manufacturers tremendously. Five years ago, the imports accounted for 15 to 20% of the market but now it is only 5%,” he adds.
“Therefore, the opportunity is immense for local biscuit manufacturers,” he thinks.
Shafiqur says the government in 2000 took up a project in some parts of the country to provide primary schoolchildren with biscuits, which boosted the local biscuit industry.
The government has decided to bring the entire country under the project which, he thinks, will further expand this sector.
“For example, we used to import Lexus biscuit from Malaysia but now Danish Foods makes the same product with the same quality,” he says.
“After meeting local demand, local producers are exporting biscuits to 114 countries, including India, Saudi Arabia, Australia, Malaysia and some African and European countries,’ he informs.
Local ventures
Local manufacturers such Olympic Industries, Haque Food Industries, Danish Foods, Bangas, Nabisco Bread and Biscuits and other small and local producers are dominating the market.
Many more companies such Basundhara Group, Meghna Group and Akiz Group are just stepping into the market.
Kamruzzaman Kamal, marketing director of Pran-RFL Group, talking to Dhaka Tribune, recalls that in 2012 they officially started their journey in the biscuit industry.
Their brands are Pran, Pran-RFL, Bisk Club and All-Time. Keeping in mind customers’ purchasing capacity, they produce biscuits of different varieties, with the prices ranging from Tk5 to Tk150.
According to Kamal, the business of the company is growing at a rate of 10-15 percent annually.
Reduan Islam, brand manager of Well Food, says right now they have 30 items of biscuits in the market, with the prices ranging from Tk220 to Tk280 per packet.
“The import of biscuits has also been in decline and local market is growing mainly because of high demand for ready-to-eat foods,” he mentions.
Challenges
About challenges facing the sector, the BABBMA president points out that primary ingredient of biscuits is wheat and almost 80 percent of wheat is imported.
“The quality of biscuits depends on the quality of the imported wheat,” he says, adding that the government has imposed import tax on raw materials of biscuits.
He, however, considers many government initiatives positive for expansion of the sector and calls for formulation of a polity to sustain the growth.
He regrets that though at present locally produced biscuits are exported to many countries, this sector is yet not mentioned directly in the Export Promotion Bureau (EPB) as it is still counted under the agro products.
“We have discussed it with the Commerce Ministry,” he says.
According to the data of Export Promotion Bureau of Bangladesh, the export earning of sweet biscuits was $35.38 million in the 2018-19 fiscal year.
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