One of the largest Bashundhara Group conglomerates is setting up the country’s largest seed milling plant to produce edible oil in Narayanganj Sonargaon with an investment of Tk 1,023 crore.

Bashundhara is putting 35% of the money on its own, while state-owned Agrani Bank, together with Janata Bank, has arranged a syndicated loan to provide the remaining 65%.

The plant is expected to produce 14.8 lakh tons of crude soybean oil and 0.6 lakh tons of crude sunflower oil per year, which can produce about 2.77 lakh tons of finished (refined) oil, or 12% of the country’s total consumption.

Currently, Bangladesh needs more than 23 lakh tons of edible oil per year, of which some 20 lakh tons come from imports and 3 lakh tons from local manufacturers.

“The country is still heavily dependent on edible oil imports. Our new project is good news for the local market as well as the global economy,” said Redwanur Rahman, Managing Director of Bashundhara Multi-Food Products, the subsidiary of the conglomerate that develops the facility.

It would be the largest seed mill in the country, he added. “Currently, we are only refining raw edible oil, which is imported from different countries. The new seed crushing facility would help people get edible oil at an affordable price,” Redwanur Rahman said.

Located in the village of Pirojpur, the plant is expected to come into operation soon and generate 2,000 jobs.

According to the project document, Bashundhara acquired 14.8 acres of land with Tk 118.4 crore. Also, it spends Tk206.6 crore to prepare the required infrastructure.

Meanwhile, the company opened letters of credit worth Tk 408 crore with Agrani Bank and Tk 176 crore with Islami Bank to import machinery. In addition, some machines worth Tk 24 crore would be procured from local vendors.

The site which has grown by 90% has so far received machines worth Tk 230 crore, it reads.

Bashundhara Group VP SafiatSobhan holds the lion’s share of the factory, 74.89% to be exact, followed by Sadat Sobhan’s 9%, Sonia FerdousSobhan 8%, Ibrahim Sobhan 8% and Moynal Hossain Chowdhury 0 .11%.

The 665cr syndicated loan

Agrani Bank acted as lead arranger and banking agent for the Tk665.27 crore syndicate loan and provided Tk350 crore on its own, while the other syndicate member, Janata Bank, lent Tk315.27 crore Tk.

In a recent scheme in the capital’s residential area of ​​Bashundhara, the two public banks signed the loan agreement with Bashundhara Multi-Food Products Limited.

“Bashundhara Group has no delinquent loans. Even, they have no record of loan rescheduling or interest relief,” said Shams-Ul Islam, Managing Director of Agrani Bank.

“We [Agrani and Janata] have been funding different Bashundhara Group projects since 1993. They are compliant,” he added.

Shams-Ul Islam said syndicated loans are very beneficial for the country’s megaprojects because one lender cannot fund big. He hopes the seed crushing plant will go a long way in meeting the demand for edible oil in the country.

Bashundhara Group Chairman Ahmed Akbar Sobhan was present at the event.

“We are committed to working for the people by establishing new manufacturing facilities as the government provides us [manufacturers] huge political support,” he said.

Sobhan believes that Bangladesh has set a unique example in development, among others around the world.

Meanwhile, Agrani Bank is also arranging another syndicated loan of Tk 4,300 crore for Bashundhara Group’s under construction gold refining facility. More than five lenders would join the syndicate.

The edible oil market

Due to its heavy reliance on imports, Bangladesh’s edible oil market often experiences ups and downs depending on world prices. Over the past year, the market has been on an upward trend, and prices hit an all-time high last month with the start of the Russian-Ukrainian war.

Market data showed that soybean, the most widely consumed edible oil, took over the market in the 1990s. Imported from different countries, it was once refined in the country.

In 2007, City Group first established a soybean processing plant, followed by Meghna Group and Bashundhara Group. Meanwhile, Globe Pharma diversified its activities in the sector in 2018.

All currently produce only 3 lakh tonnes of edible oil.