Singer, BAT to dig deeper into the markets

Two multinationals announce Tk 1,254 crore expansion plan

March 31, 2022, 10:50 p.m.

Last modification: March 31, 2022, 11:00 p.m.

Infographic: TBS

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Infographic: TBS

Two leading multinationals – Singer Bangladesh Ltd and British American Tobacco Company Bangladesh (BATB) – have announced investments of Tk 680 crore and Tk 574 crore respectively in their new factories.

Singer’s investment is aimed at reinvigorating the century-old brand in the booming local market, while BATB’s new facilities will allow it to excel in expanding its cigarette export window while building capacity for emergency.

Singer Bangladesh, the oldest and one of the major players in the country’s fast-growing home appliances market, will pour Tk 680 crore into setting up a new facility.

The investment will be financed from internal sources and by borrowing from foreign and local banks. The proposed manufacturing facilities will meet the growing local demand with a competitive price and also contribute to the growth of the business, the listed company said in its statement.

Kazi Ashiqur Rahman, general secretary of Singer Bangladesh, declined to comment beyond disclosure.

However, requesting anonymity, a senior company official told The Business Standard that the company is planning to build its third facility and the big news could be the ultimate solution for electronics and appliance manufacturing and assembly. .

The new plant will draw on technology from Singer’s new holding company, Istanbul-based Arçelik, a world leader in white goods and cooling products.

Arçelik, which acquired 57% of Singer Bangladesh shares for $75 million in March 2019, showcases all of its global values, expertise and cutting-edge technologies to harness the best of the Singer brand, which has been on this earth for 117 years. .

Since the acquisition three years ago, Singer has already made technology investments of about Tk 80 crore and launched new technology refrigerators.

Can Dincer, commercial director of Arçelik Global and also director of Singer Bangladesh, told TBS in an interview in early March: “We are already investing in Singer and we have other plans for investment in facilities, production, product range, marketing and communication.

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

Singer who started with sewing machines and eventually became the biggest household name for appliances and televisions in the country lost momentum in the race in the 2010s, while the big wave of localization made Walton the largest player in the refrigerator and television market.

According to a report by UCB Asset Management last year, Singer competes with Walton as the second-largest brand with a market share of 12% in refrigerators, 11% in televisions, against the gigantic market shares of 72 % and 27% of Walton in the two categories respectively. .

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

After achieving an annualized growth of 14% in the second half of the last decade, Bangladesh’s market for televisions, refrigerators, air conditioners, washing machines and kitchen appliances has reached around $2.5 billion, according to the report. UCB AMC.

With 100% of the population under electric coverage, rising per capita income and changing lifestyles have helped analysts expect the market to grow at an annualized rate of 17% to reach 10 billion. dollars by 2030.

Largely winning the local market, Walton has become an exporter to dozens of countries, including Western markets, and the company is now pursuing its dream of being a leading global brand.

In his interview, Can Dincer of Arçelik said his company sees Bangladesh as a strategic hub in the region for exports.

With new factory Tk1089 crore, BATB aims to thrive through exports

For its part, tobacco giant BAT Bangladesh will invest another Tk 574.2 crore in its new facilities in Savar, where it has already invested Tk 515 crore in 2021 to build the factory’s civil infrastructure.

The new investment tranche will mainly finance the installation of the machines at this location as well as the development of the land in the extended area of ​​the new factory.

When contacted, BATB’s Head of External Affairs, Sheikh Shabab Ahmed, told TBS: “In terms of future longer-term export potential, our Board of Directors has approved the new investment to build the capacity of the Savar plant. We believe that with the improved capabilities, we will be able to equip the business for any future demands.”

“Savar’s manufacturing facilities should explore opportunities for exporting cigarettes to the global market,” BATB Chairman Golam Mainuddin told shareholders in the latest annual report.

The plant will also help meet local demand as it includes emergency needs, according to the president.

BATB, a long-time tobacco leaf exporter, entered the cigarette export business in 2019 and it is enjoying a growing response from China and the Maldives, the two markets it already serves.

Australia, the United States, Malaysia and many European countries are also emerging as potential big markets for BATB, one of its senior officials said. He said the superior quality and competitive prices offered by BATB are seen as the company’s main strengths in the field of cigarette exports.

Export is a small contributor to BATB’s annual revenue, while cigarette export is still an insignificant part of it, but the potential is growing rapidly as many countries find it better to withdraw from tobacco production and of tobacco products and discourage smoking by making cigarettes less available and more expensive.

Anti-tobacco groups have long criticized the government of Bangladesh for not sufficiently discouraging smoking, while they also have concerns about contract farming of tobacco by BATB.

However, the BATB official, who requested anonymity, defended his company’s position, saying that boosting exports would not hurt anyone because the company is able to grow more tobacco on the same acres of land, thanks to modern cultivation.

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