N Mohammad Group defers expansion plan till 2025
Mohammad Plastic Industry Limited, a concern of Chattogram-based N Mohammad Group, has deferred its Tk 500 crore expansion plans by around two and a half years citing construction materials and the US dollar turning costlier.
As per an August 2021 land lease agreement with Bangladesh Economic Zones Authority, three factories were to be set up inside Bangabandhu Sheikh Mujib Shilpa Nagar to initiate commercial production of plastic products from June 2022.
The company has already developed the site on 10 acres of land at Chattogram's Mirsarai alongside factory designs spending over Tk 60 crore.
"…but suddenly the price of construction materials increased (since October 2022) when we started to construct the factory," said Managing Director Mohammad Nazrul Hoque.
"Against this backdrop, we were compelled to postpone construction work and investment will go up, which is an impact of the Russia-Ukraine war," he said.
Now the plan is to start the construction work from next February as the price of the dollar is gradually becoming stable, he said.
The investment will definitely need to be increased by at least 25 percent to 30 percent as per primary estimates, he said.
"…we are committed to going into commercial production by January or February 2025," added Hoque.
Currently the company manufactures around 1,500 types of household items such as wood plastic composite doors, boards, pipes and fittings alongside furniture.
The new units will produce flexible or plasticised polyvinyl chloride (PVC) furniture and doors, high-density polyethylene pipes and fittings, wood plastic composites, flexible packaging and moulds for the domestic market.
According to Hoque, they will be able to provide import substitutes of packing raw materials and moulds for local footwear industries and ensure exports as well.
The value of their annual exports to India, Japan and the Middle East has gone down to around $22 million last fiscal year from an average of $24 million, he said.
Their average annual turnover from local sales is around Tk 600 crore but business is slow at the moment due to inflationary pressure and economic uncertainties, he added.
Around Tk 40,000 crore worth plastic items are annually sold in Bangladesh, undergoing a growth of about 20 per cent every year, according to the Bangladesh Plastic Goods Manufacturers and Exporters Association.
Products manufactured in the country can be broadly listed under 142 categories, of which intermediate products like film plastic, household items and garment accessories are mainly exported.
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