Leading global MNC Azelis set to invest big in food, pharma raw materials in Bangladesh

Infographic: TBS

Azelis – one of the world's leading multinational companies supplying raw materials for the pharmaceutical, food, and agriculture sectors, and chemicals for textiles, personal care, and life science products – is going to begin its operations in Bangladesh with a huge investment, sources said.

The Belgium-based company has already completed all kinds of approvals from the government authorities concerned to do business in Bangladesh. It has set up an office in the capital's Uttara. And the leading pharma, food, soil improver and textile companies of the country will be Azelis' buyers.

Aparna Khurana, managing director of Azelis-India, told The Business Standard that the company plans to lead in the Bangladesh market. She has not disclosed the size of the planned investment but has hinted that the figure will be higher than that of other companies in the sector in Bangladesh.

Stakeholders said that the prospective investment will have a major impact on Bangladesh's pharma, food, textile, and personal care markets.

According to a study, Bangladesh has a raw material market to the tune of approximately Tk20,000 crore for pharmaceutical, food, agricultural, and personal care products. Most of the ingredients are imported.

Sources at the company said it has business supplying these raw materials in 57 countries, including the US, the UK, Japan, Germany, Australia, the Netherlands, and India. 

The market size of the company is about $5 billion. It is at the top of the list in supplying these raw materials to about 10 Asian countries, including India, Pakistan, and Sri Lanka.

Azelis mainly sources these ingredients from 2,300 leading raw material manufacturing companies around the world.

Aparna Khurana said Azelis is a leading global innovation service provider in the specialty chemicals and food ingredients industry. Azelis' Bangladesh office serves the pharma, food, agricultural, and personal care markets, complementing its more than 30 offices across the Asia Pacific region.

"This new expansion brings Azelis closer to its customers in Bangladesh, deepening customer intimacy and providing innovative solutions to address their formulation needs through our comprehensive portfolio of products," she added.

The managing director said that as one of the fastest growing economies in the world, Bangladesh is an important hub that offers many new business opportunities in key markets across the life sciences and industrial chemicals industries. Opening its first office in Dhaka, Bangladesh, is an integral part of the group's organic growth strategy to strengthen its footprint across the South Asian continent and provide additional solutions and expertise to customers. 

She said, "While we typically do not disclose investment numbers, Azelis is proud to continue investing in our innovation capabilities, deepen the technical expertise of our team, and focus on growing together with our principals and customers, to ensure we continue to provide a first-class experience and innovative solutions in Bangladesh."  

"Expanding into Bangladesh is a strong reflection of Azelis' commitment to business growth and remaining a leader in our industry through providing innovative solutions. Azelis' Bangladesh office will contribute to the pharma, food, agribusiness, industrial, plastics and rubber, lubricants, and personal care markets by focusing on improving supply chain security, providing digital platforms and solutions to drive customer intimacy, delivering sustainable solutions, and developing our talent pool, all to support the economic growth of Bangladesh," Aparna Khurana added.

What do business leaders and policymakers say? 

Md Jashim Uddin, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), told TBS that the investment by such a world-leading company will make the Bangladesh market more competitive. 

As a result, it will be easy to get quality raw materials, he said, adding that also, since they will import these raw materials from abroad to Bangladesh through their supply chain, the government will get huge revenue as a result.

"It will eventually benefit all including manufacturers, consumers, and the government," he maintained.

Commerce Minister Tipu Munshi said the government is working to attract such multinational and foreign companies to invest in Bangladesh.

"Almost all these raw materials are import dependent. If any company wants to come to Bangladesh to produce these raw materials, the government will give them all kinds of facilities. The country has many economic zones in which they can invest," he added.

The raw material market

According to sources at the Dhaka Chamber of Commerce and Industry, the market for raw materials in the pharma sector is now around Tk6,000 crore, the food sector around Tk8,500 crore, chemicals for textiles around Tk3,000 crore, personal care (cosmetics) around Tk1,200 crore, and life science-based other products around Tk2,000 crore.

About 1,200 Bangladeshi small and large businesses import all these raw materials.

Two more multinational companies

Two multinational companies – Brenntag and IMCD – are doing business supplying these raw materials in Bangladesh. Brenntag established its operations in Bangladesh in August 2010, while IMCD started its operations in Dhaka in July last year.

Vivek Pandey, country manager of Azelis-Bangladesh, said that already the country's leading food, pharma, textile, personal care, and life science-based product manufacturing companies have come forward to enter into contracts with the company.

Why are multinationals interested? 

The people concerned said that more than a hundred multinational companies are currently doing business in Bangladesh. After the Covid outbreak, two multinational companies—Brenntag and IMCD—started their operations.

No other multinational company has invested in Bangladesh in the last three years.

Aparna Khurana said markets have been impacted by raw material shortages, supply chain disruptions, inflation, and raw material price increases. This has led to more instances of shortages of certain ingredients, increasing demand across the industry. Many other elements are also influencing these shortages, including geopolitical situations, which are affecting access to raw materials.

For Azelis, this presents an opportunity to focus even more on providing innovative and sustainable solutions to support customers with their challenges in this area. By combining our extensive portfolio of products and deep technical expertise, we are able to offer complementary products for formulations or sustainable alternatives to ensure customer requirements for certain products are met, assisting with business continuity, she added.  

Azelis at a glance 

The company has a presence in 57 countries around the world, with over 60 application laboratories and 100+ offices globally. 

Azelis is a market leader in EMEA (which accounted for 46.5% of the group's revenue for the year ended on 31 December 2020), where it is the second largest pure-play specialty chemicals and food ingredients distributor, and the Americas (which accounted for 42.9% of the group's revenue in 2020), where it is the largest pure-play specialty chemicals and food ingredients distributor and has a growing presence in Asia-Pacific (which accounted for 10.7% of the group's revenue in 2020).

Azelis' global leadership position stretches across a number of diversified and attractive end markets with favourable growth dynamics. 

The company's portfolio is divided between life sciences and industrial chemicals, with life sciences end markets representing approximately 60% of revenue in 2020.