Bengal Meat shines after Envoy joins hands

Fresh, halal, hygienic – a quest Bengal Meat started off with to take safe and quality meat to the global market. But it was not a safe bet. With many hurdles, from no collateral free loan to no country recognition, coming in the way, they eventually shifted to serving local consumers. 

In 2011, Sheltech Group joined hands with Bengal Meat, and fortune eventually started smiling upon it after 12 years of its inception, thanks to prioritising the local market and introducing new meat items with value addition. 

The meat producer and processor now eyes maintaining the consistency to build on a good "balance sheet" and to get listed with the bourse – so that the company ensures a sustainable growth.

"We logged profit for the first time before the Covid outbreak. Though the profit graph dropped slightly during the pandemic, we are still in gains," Bengal Meat Chairman Kutubuddin Ahmed told The Business Standard.  

Aiming at safe meat export to the Gulf Muslim majority nations, Bangladeshi expatriate Mazharul Islam and his friends established the company in 2006. But the dream soon fizzled out thanks to lack of business knowledge, local business policy barriers, high rates of local meats, scant access to bank loans and international meat export compliances.           

Bengal then used to produce wholesome meat meant for foreign buyers.   

The company repeatedly issued ownership shares to stay afloat, but the policy did not yield much of success until realtor Sheltech Group roped in the meat business.

Envoy Group represents 40 businesses ranging from garments, textiles, real estate, hospitality service and consumer products with annual turnover of $400 million and a workforce of approximately 21,000.

Lanka Bangla Finance Ltd's Chairman Mohammad A Moyeen is the managing director of Bengal Meat, Envoy Group's Managing Director Abdus Salam Murshedy and Bangladesh Cricket Board's Vice President Mahbubul Anam are directors, and Anwer Khan Modern Hospital Ltd Chairman Anwer Hossain Khan is one of the 12 investors.   

The ownership overhaul in that year brought in a couple of major policy changes such as switching to the local market from solely focusing on export and developing steak meat-like high-end products.  

The changes seemed working perfectly as Bengal started registering profit subsequently. Currently, Bengal's 80% products go to the local market through 40 district-level outlets as 20% items are meant for export in Dubai, the Maldives and Kuwait.  

Now the company's outputs include beef, mutton, poultry and other bird meats. Primary products are typical meats used for curry, while specially butchered meats are for steaks, processed dishes, ready to cook-marinated meat, frozen snacks, ready to eat, and heat and eat meals.

Its current annual production is around 4000 tonnes of safe meat – an international meat-selling standard involving fresh and hygienic cattle rearing to safe meat display at superstores.     

In an expansion bid, Bengal is now adding fish products to the menu by outsourcing from fish farmers working with WorldFish. The company says it is also working on poultry production and processing capacity too.

Bengal officials say maintaining the "safe" compliance drives the production and processing costs by 10%-15% than the regular. But with a production for home focus, the prices, they say, need to be within the reach of people in retails.       

Uncompromising quality navigated Bengal thru the tough time   

After the inception in 2006, Bengal spent most of its capital on technological upgradation. The company was also denied bank loan owing to collateral issues, plus it faced export barriers stemming from international compliances and a lack of Bangladesh's government-to-government (G2G) deals with the Gulf nations.

Mazharul brought in potential buyers from Malaysia, Dubai and some other countries on his own to show them how the meats were being processed. He hired foreign technicians and experts for attaining meat processing standards even when the company had been incurring losses.

Subsequently, the company signed some business-to-business deals for market access to Dubai, which also makes easy access to the Gulf nations.

But that was not enough for staying afloat and posting in profit. In 2014, some of the co-founders started leaving Mazhar, intensifying the business pressure he had been facing.

But Bengal's founder Mazharul Islam did not give up on quality. He rather started looking for new investors to fill in the empty chairs.

Newcomers joined the business, put money in meat processing, obtained the halal certification from Indonesia and now are looking after Bengal.

 'Carry the meat, not animal': Safe meat is sophisticated

Bengal meat staff said their cattle are reared in stress-free grazing environments to ensure the final product – safe meat. The cattle must be raised and processed where they are born. The meat can only be carried, not the livestock since any journey will cause stress to the cattle and result in lactic acid in livestock ruining the meat quality eventually.        

"Bengal Meat's journey began with an export-only target and the processing units were developed accordingly. We still maintain strict quality from picking up the cow to displaying the meat at outlets," Bengal Meat CEO AFM Asif told TBS.           

He said the cattle primarily will go through a physical check-up, and the meat must qualify the clearance test by veterinary doctors after slaughtering. Cattle suppliers will be provided with the prices only if their animals pass the quality test.    

In the strictly maintained chilling and sterilised industrial settings, the slaughtered animal will be kept below 5-degree Celsius.    

Then the butchers will start their work where the temperature must not exceed 12-degree Celsius.

Bengal staff say they constantly check the temperature of the butchery, supply chain and outlets so that the nutrition ingredients remain intact.          

Asif said most of the farmers are now quite aware of quality and hygiene. "They believe us as many young entrepreneurs are rearing livestock exclusively for Bengal," he noted.   

Meat might  

Bengal founders chose Pabna – one of the country's renowned cattle rearing hubs – for setting up the meat processing factory. Apart from meat processing, the company now has a fodder cultivation and research field on 30 acres of land.

Earlier, the company used to collect cattle from the traders. But now the grassroots-level farmers contact the company on their own, and sell the livestock to the company.    

The company's supply chain has more than 1,000 farmers, while Bengal's own cattle sheds always have 500-1,000 livestock as a stock.   

"They [farmers] know that we at least guarantee their minimum profit. So, they do not have to worry about the price," said the company CEO Asif.

The company trains the cattle growers and teaches them what the livestock should be provided with at what age. With the guidelines, they supply the exact livestock to Bengal.   

Besides, the farmers, non-bank financial institution IPDC and Bengal have a tripartite deal under which the cattle growers can avail loans with Bengal Meat as the guarantor.   

Asif said a number of cattle farms have been established centering the Bengal processing unit. "It is all about building up trust. They know business with Bengal is hassle-free."       

He said the meat producer' research and development wing is conducting research on six air-borne cattle diseases.      

Though Bengal's paid-up capital is around Tk105 crore, its current equity investment amounts to Tk250 crore. Besides, as many as 600 people are now working at the company.   

Only for the elite?

When Bengal shifted its focus to the local market, it targeted five-star hotels that used to import red meat. The meat processor established the brand as an alternative to that import. Many hotels now take meat from the company.   

But expanding the customer base to general people still remains challenging owing to retail rates, said Asif.

"Safe meat is costlier by Tk60-70 per kg than the ordinary one, and many people are not ready to pay for it," he commented, adding maintaining the cold-chain requires a "huge cost".         

To overcome it, Bengal has signed a technology development deal with Bangladesh University of Engineering and Technology (Buet).     

The company says it also faces numerous policy barriers. Banks treat Bengal as a processor and charge interest accordingly, while the company claims it is just "an extended version of grassroots-level cattle farming".   

The company's another concern is importing frozen buffalo meat from India. This imported item is cheaper than regular beef and restaurants are its main buyer.   

"Bengal is still up and alive as the shareholders and financiers are emotionally involved in it. Otherwise, they were supposed to walk away a long time ago owing to whopping food safety costs," said Asif.