Tuesday, 29 November, 2022

Industry That Shines

After hurdles, SA Group well on track

Says its Chairman Sahabuddin Alam, asserting that the group is now ready to grow further

  • Sun Online Desk
  • 6th October, 2022 09:47:35 AM
  • Print news
After hurdles, SA Group well on track

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SA Group of Industries is one of the leading business conglomerates in Bangladesh. Its chairman Md Sahabuddin Alam, his father and grandfather are businessmen by profession. Since the independence of the country, their main business had been importing clothing, yarn and commodities from abroad.

The group experienced different ups and downs in the business by this time. Overcoming the major setback it faced over the last few years, it’s now struggling to get on the right track.

In an interview with the Daily Sun, Sahabuddin Alam shared the story talking about hurdles, way-outs and potentials. Daily Sun’s Special Correspondent Nur Uddin Alamgir conducted the interview.

Graduating in Management from the University of Chittagong in 1981, Alam set up a small electric bulb factory with machinery imported from India in 1985. The factory produced some 5,000 to 10,000 pieces of bulb per day.

With a mindset of doing business since childhood, Alam started the business after his graduation.

They, however, started diversifying their business through investing in the edible oil refinery sector in 1987 and launched “Shah Amanat Edible Oil Refinery” having a capacity of producing 30 tonnes of oil per day in the city’s Kalurghat area.

They set up another refinery in 1991 and made good profits due to lack of major competitors in the market then.

The group acquired the Agro Daily of Messers Elias Brothers in 1999 and started producing “Samannaz Condensed Milk” with modern machinery imported from abroad. The condensed milk is now being marketed with the popular brand “Goalini.”

The business conglomerate came up with two more oil factories “SA Oil” and “Samannaj Super Oil” in Chattogram in 2000.

Later, they focused on flour, semolina, paper, beverage and salt industries with an investment of a good amount of money in between 2005 and 2010, said Alam.

“In 2001, we purchased the Kamal Vegetable Oil Factory in Dhaka. It was a good-size industry having production capacity of 200 tonnes per day. Two other oil refineries - Sarija Oil Refinery and South-Eastern Oil Refinery having a refining capacity of 3,500 tonnes of oil daily - were also set up in 2011 and 2012,” said the SA Group chairman.

He said they also have investments in tea, full cream milk, ghee (Vanashpati Ghee) and storage tank renting.

The group now owns SA Pulp and Paper Products Limited, South Eastern Paper Mills Limited, Samannaz Condensed Milk Limited, SA Salt Industries Limited, South Eastern Food Products Limited (Oil), South Eastern Food Products Limited (FCMP), South Eastern Food Products Limited (Tea), SA Beverage Limited, Laila Food Products Limited, SA Oil Refinery, Samannaz Super Oil Limited, Laila Vanashpati Products Limited, Kamal Vegetable Oil Limited, Sarija Oil Refinery, South Eastern Oil Refinery Limited, South Eastern Tank Terminal and SA Tank Terminal.

However, the business group started experiencing a tough time in 2012, after the concerned authorities suspended providing gas connection to the industrial units in Chattogram.

Terming it as bleeding time for the SA Group, the chairman said they invested hundreds of crores of taka for construction and  land and machinery purchase by the time.

“It was a great debacle for my business as we had to pay the bank interest with installments, minimum charge for gas connection and staff salaries for the shut industries,” he said.

“Gas lines were also cut off for minimum charges around four years back while we had to pay up to 15 to 18 percent bank interest in between 2009 to 2016 amid the acute crises,” said Alam.

In addition to the high rate of bank interest and high cost of production, drastic fall in the price of refined oil in the international market in 2016,put the group in great trouble further, claimed the chairman.

“Getting stuck with investment of Tk 700 crore, high bank interest rate and devaluation of pricing worked behind the bad situation of the group,” observed Alam.

“It caused a gap in working capital. Banks also adjusted the money of working capital into the capital machineries to get back their loans. It caused me to be defaulter. The amount of debt started being doubled gradually,” he narrated.

In this circumstance, the industrialist faced a good number of cases filed by different banks and financial organisations for loan defaulting and other charges.

“During the crisis moment, we contacted the regulatory body which advised us to apply for rescheduling the loans through down-payments,” said Alam.

Most of the loans were rescheduled by most of the banks and the rest two or three would be done soon, said the chairman.

“Now we are paying installments to the banks. The banks are satisfied with the payments,” he said.

“We got gas connections restored in 2018. We again started importing machinery from Europe and re-commissioned them,” said Alam.

Among the total 17 industries, seven industries are running and the rest 10 including six refineries will resume production soon, he hoped.

“Now, six of the industries of paper, wheat, flour, water, condensed milk and salt are running partially due to lack of working capital.”

“The affected industries where crores of money was invested are facing the problem of working capital. If the industries are not refinanced, they will not survive,” said Alam.

Lauding different initiatives taken by the government for facilitating small and medium entrepreneurs and others, he also laid emphasis on financing to the industries which became defaulter but now on the right track and continuing payment of loans.

“The industries which are capable of producing goods should be financed through providing allocation for working capital from special funds under the supervision of Bangladesh Bank,” he said.

According to him, those who have already invested and installed machineries and are tested entrepreneurs should also be prioritised.

If the refinancing is possible, some 200 industries of the country will resume production within three months, observed the businessman.

“We became regular and banks are giving us support now. Process for opening up L/C should be made easier and the bank should give money to the defaulter through Bangladesh Bank for helping the sick industries run properly,” he said.

“There are some 4,000 employees at our industries now and another 10,000 employment will be created if all the factories run,” he hoped.

“If we get necessary support, it will take six to seven months to run all the industries,” Alam said, stressing the uninterrupted supply of gas and power to the export-oriented industries.

“Keeping the interest rate within nine percent and easing VAT and tax payment systems avoiding dual taxation and VAT will help the industrial growth in the country,” he added.

“After overcoming the hurdles, we are now on the right track to proceed further,” the SA Group chairman asserted.