IFAD Group to create Tk 433cr industrial complex at Bangabandhu Shilpa Nagar
IFAD Group is keen to get Tk 433.5 crore to create an industrial complicated at the Bangabandhu Sheikh Mujib Shilpa Nagar (BSMSN) as it looks to make a foray into the developing motorbike and automotive component segments.
The group positioned its investment to intend to the Bangladesh Economic Zones Authority (Beza) on Monday, seeking 30 acres terrain at the sprawling professional city in Mirsarai, Chattogram.
IFAD intends to create three factories found in the proposed commercial complex: a making and assembly plant for motorcycles, a good factory for automotive ingredients, and a blending plant for equipment lubricants.
"There exists a huge home-based business in Bangladesh for automotive parts as there are a lot more than 10 lakh commercial autos and 16 lakh passenger cars plus they need extra parts," said Taskeen Ahmed, managing director of Ifad Autos.
"The demand for auto elements is growing. Now, the demand is fulfilled through imports."
Thirty % of the project cost, or Tk 130 crore, would result from the business's retained earnings and the rest of the 70 %, or Tk 303.5 crore, would be borrowed from banks.
Nowadays IFAD Group's concern Ifad Motors Ltd distributes professional vehicles of India's Ashok Leyland, including bus, vehicle, lorry, and dump vehicle, and represents Atul Autos of India serving the three-wheeler cargo and passenger car market in Bangladesh.
The upcoming automobile policy will be helpful to give a boost to the business as it would emphasise automotive component developing for native value-addition, he said.
The marketplace size of automotive parts in Bangladesh was about Tk 1,400 crore to Tk 1,500 crore last year with an total annual growth level of 10 to 12 % over the prior one decade, regarding to an estimate by motor vehicle part importers.
The global automotive component industry size is more than $2 trillion, given by the mild engineering industry.
Ahmed said global automakers such as Toyota and Honda fulfil their requirement of components through outsourcing.
According to Ahmed, 80 to 90 per cent of finished items from the commercial complex would focus on the domestic industry of Bangladesh, and the others might be exported abroad.
The company would start setting up the factory after obtaining the land as it looks to choose commercial procedure within a year.
Ifad Autos features sold a lot more than 60,000 commercial vehicles in the last two decades for a good combined sales benefit of $750 million. Currently, it employs a lot more than 1,000 people, according to the company's website.
Listed about the Dhaka Stock Exchange, Ifad Autos reported revenue per reveal (EPS) of Tk 0.92, the net asset value per show of Tk 39.73, and the net operating cash flow per show of Tk 7.68 for the year ended on June 30, 2020, against Tk 4.59, Tk 39.18 and Tk 10.51 respectively, year-on-year.
The EPS was Tk 0.70 found in the July-September one fourth against Tk 0.51 found in the same period this past year. The NAV per talk about was Tk 40.43 in the quarter.
Its share closed 2.24 % lower at Tk 39.2 on the DSE yesterday.
The government has recently declared the light-engineering sector as the Product of the entire year, and the auto policy will be formulated. Therefore, the industry will increase in the foreseeable future, and the automakers and assemblers will need components, Ahmed said.
"We are in debate with auto component makers in Japan, India, Korea, China and Taiwan to function jointly or forge technical collaboration," he said.
The industrial complex would focus on making filter and seat of automobiles before going to other components.
"We will give attention to research within the next three years to build up components and improve the volume of finished items," Ahmed noted.
The planned investment is expecting to create 1,000 jobs.
The motorcycle manufacturing facility will be create in partnership with a European manufacturer to churn out high-end two-wheelers.
Ahmed sees an excellent market for the high-end motorcycles in Bangladesh in the approaching days and nights. The demand for motorbike is just about 5 lakh each year, and it would double next five years.
Gulf Oil Bangladesh that could produce lubricants will be a joint venture between Gulf Essential oil International UK Ltd and Ifad Group.
Paban Chowdhury, executive chairman of the Beza, said the purchase proposal of Ifad Group is different and shows long-term perspective.
"The group should be able to focus on the component motor vehicle sector in Bangladesh."
The Beza in addition has received investment proposals from Uttara Motors, Superstar Allied, and Bangladesh Auto Industries Ltd, he said.
