‘Scarcity of high-quality raw material biggest challenge for food processing sector’

The largest exhibition of processed food has started at the International Convention City Bashundhara in Dhaka on Thursday (November 21). The demand for processed food is on the rise as people's lives are getting busier. Against such a backdrop, many people are investing in the food processing business. Apart from meeting the local demand, food items processed by local manufacturers are now being exported to various countries.

The Business Standard's Shawkat Ali recently spoke to Ahsan Khan Chowdhury, the chairman of the country's leading food processing company, Pran-RFL Group.

In the interview, Ahsan Khan talked about various aspects of the industry, including local and international markets for processed food, the competitor countries of Bangladesh and its competitiveness in the market, and challenges regarding raw material.

The Business Standard (TBS): What is the current market size of processed food in Bangladesh?

Ahsan Khan Chowdhury: The market for processed food is very big in Bangladesh. There are two types of processed food manufacturers in the country. First, there is a group of entrepreneurs who are producing food items at the industrial level and have been able to come under a well-shaped structure. Secondly, there is another group that is producing food items such as pickles, cakes, biscuits on a small scale at home or in a small space. This group does not have any formal recognition because it is yet take an institutional shape.

That every individual consumes processed food of some sort or the other every day indicates how vast the sector is. People are getting more and more inclined to consuming processed food in proportion to the rise in their earnings. The current market of the food processing sector, if calculated in monetary terms, cannot be smaller than Tk50,000 crore.

The sector is growing at an annual rate of 10 percent. The growth is expected to increase further in coming days as the entrepreneurs are putting more emphasis on manufacturing new and quality food items. At present, the food processing sector is contributing one percent to the country's Gross Domestic Product (GDP).
 
TBS: How is Bangladesh performing in the export business of processed food?

Ahsan Khan Chowdhury: Export earnings from the sector have been rising consistently. The volume of exports was $372 million in the 2018-19 fiscal year, up from merely $19 million in 2005-06. Spices top the chart of foodstuff that are being exported from the country. Besides, snacks, juice drinks, biscuit, chanachur, mustard oil, aromatic rice and puffed rice are among the top exported food items. We prioritise our food manufacturing by keeping in mind the demands of Bangalees living in different corners of the world. Our products are now being exported in large volume to countries like Saudi Arabia, the United Arab Emirates, Malaysia, India, Australia, Singapore, the United Kingdom and Nepal. At present we are exporting food items to as many as 144 countries. Exports to developed countries is also increasing gradually.

Among the agricultural products, another sector – frozen food – is getting bigger. Various food items such as samocha, singara, nan ruti, pitha, bhorta and different types of sweets are among the largely exported frozen food.

TBS: What is the current scenario of exploring new export markets?

Ahsan Khan Chowdhury:  We sell our products at local markets in various countries. The Philippines has recently been added to the list of new markets for Bangladeshi processed food. A good amount of our products is being exported to that country. Once Vietnam was one of our biggest competitors, but a big market has been created for us in that country now. We have also entered the Chinese market. Biscuit export to China is increasing day by day.

TBS: There are often complaints in local and international markets about the quality of Bangladeshi food items. Have you done anything to tackle this?

Ahsan Khan Chowdhury: There will be questions about the quality of food as long as the world exists. This is because people who are satisfied with a product today will start thinking tomorrow that the particular item can be better. This is a continuous process. Different countries notify us about different things at different times. Discussions also take place in the country. Sometimes, some ingredient which is not good for health is found in a food item. Then we try to improve the quality of that item without using the harmful ingredient or by using an alternative. If we get feedback, we realise it might be based on some findings from new research. Then we start working on improving the quality of our products.

As we are exporting our products to the world market, we are gaining the capability of providing quality products in the local market. This is because we know the criteria we have to fulfil to provide quality products to the American market. Foreigners are testing our products and certifying them on a regular basis. A delegation from the United States Food and Drug Administration (USFDA) recently visited our factory to examine the products which we are exporting to the US.

Now we are so confident that we feel we can enter any country with our products without facing any difficulties.

TBS: What is the biggest challenge in the food processing business? How can you overcome that challenge?

Ahsan Khan Chowdhury: Businesses face various difficulties all over the world. However, the biggest challenge for the food processing industry in Bangladesh is scarcity of high-quality raw material. Apart from rice, we need many vegetable items, and good-quality mangoes and tomatoes. We want the quality of our tomatoes to be better than the Chinese ones. However, the colour of our tomatoes is not comparable with that of the Chinese ones.

Another big challenge is to stay competitive in different countries. For this we need good-quality raw material. The government agencies working on agriculture must develop improved varieties of agricultural products to meet the demand.

TBS: Which countries are the biggest competitors of Bangladesh in the international market?

Ahsan Khan Chowdhury: I want to mention three countries: India, Pakistan and Thailand.