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COMPANY PROFILE EREBUS GROUP (EG) Main Office- Printers Building (7th floor), 5, Rajuk Avenue, Motijheel, Dhaka-1000, Bangladesh Tel: (880)-2-9571920, (880)-2- 9569624 Fax: (880)-2-9565027, Email- [email protected]; [email protected]; Liason Office- House # 252. Road # 18, 3 rd Floor. New D.O.H.S. (Mohakhali), Dhaka Cantt. Bangladesh Tel: (880)-2-8753022 Mob: +8801713193375

EREBUS GROUP-PROFILE

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Page 1: EREBUS GROUP-PROFILE

COMPANY PROFILE

EREBUS GROUP (EG)

Main Office- Printers Building (7th floor), 5, Rajuk Avenue, Motijheel, Dhaka-1000, Bangladesh Tel: (880)-2-9571920, (880)-2-9569624

Fax: (880)-2-9565027, Email- [email protected]; [email protected];

Liason Office- House # 252. Road # 18, 3rd Floor. New D.O.H.S. (Mohakhali), Dhaka Cantt. Bangladesh Tel: (880)-2-8753022 Mob: +8801713193375

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EREBUS GROUP (EG)

ABOUT USWe at the EREBUS GROUP, Believe that nothing is impossible if you apply your mind to it. This line of thinking has made us what we are today. A solid conglomerate of dynamic companies all of which are Growing at an incredibly fast pace, with rapid expansion plans that will make the EREBUS GROUP a force to reckon with in Bangladesh’s Industrial Scenario.

The Spirit of adventure, overriding commitment to our goals in every area of activity. And, Above all, Our uncompromising allegiance to quality conscious customer base enables us to not only meet their exacting needs but also base our future plans on the rapidly growing market for our products and services.

EREBUS GROUP, Commitment to excellence. Down-to- Earth business philosophy. Linking technology and market needs. For the benefit of one and all, at Erebus Group. We are well on our way to carving out more opportunities, more monopolistic positions.

Diversification of this nature comes naturally to . A Erebus Group with the mettle to succeed, whatever the field, conglomerate that, in everything it does, always thinks big and thinks ahead.

But EREBUS GROUP’S success story does not end here. Having achieved much, the group is moving onto bigger things. For a better and brighter tomorrow for global economy. 

EG AT A GLANCEAs one generation passed over the management responsibility to the next, it provided the wisdom and experience achieved during its own era. This knowledge was rightly used by each new generation to make the Group to new heights. Overtime it succeeded in creating a national & international network that comprises of many subsidiaries and affiliates.

EREBUS GROUP is engaged and or involved in Commercial Banking, Merchant Banking, Leasing & Investment, Brokerage firms for Stock Market in Dhaka and Chittagong, Real Estate Development, Trading Houses, Telecommunication, Industry based on manufacturing Plastic Products for multinational purpose and has Associate Partners in Interior and Architecture firms, Print and Digital Media and TV channel.

Our Board of Directors and partner in our allied concern companies have a vast experienced in the above field for more than 10 years, and they have a strong educational background in Business Administration degree from the U.S.

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THE FOUNDER

STOCK EXCHANGE BROKERAGE -CHITTAGONG STOCK EXCHANGE

National Securities & Consultant Ltd (NSCL) which was licensee for membership of Chittagong Stock Exchange was incorporated January 1, 1996 the Securities Exchange Commission has issued stockbroker registration certificates as per Securities and Exchange Commission (Stock Dealer, Stock Broker & Authorized Representative) Rules, to National Securities & Consultants Ltd holding Stock Broker CSE Member No.121057.

It was founded by Late. Mr. Shahjahan Kabir who served then as Managing Director. The company is engaged in stock market dealings. NSCL offers full fledged international standard brokerage service for retail and institutional clients. The management of the company is vested in a 15-member management team headed by the Managing Director, Mrs. Tahera Kabir (wife of Mr.Zubayer Kabir).

NBFI (NON BANKING FINANCIAL INSTITUTION) - LEASING & MERCHANT BANKING

Bay Leasing & Investment Limited (BLIL), a second generation NBFI (Non Banking Financial Institution) was incorporated in 7 February 1996 founded by Late. Mr. Shahjahan Kabir, and was the Advisor. The company is sponsored by a group of prominent industrialists, businessmen and professionals. In 25 May 1996 the Company received license from the regulator to act as non-banking financial institution under Financial Institution Act 1993 & Financial Institution Regulation of 1994 with a paid up capital of BDT 22.50 million. Initially BLIL provided services related to lease financing, short term financing, corporate advisory services etc. In 25 June 1998, BLIL received license from Securities & Exchange Commission (SEC) to act as a Merchant Banker and Portfolio Manager in the capital market. As a merchant banker, the Company provides services related to issue management, underwriting, private placement, portfolio management etc.  

NAME- LATE MR. SHAHJAHAN KABIRNATIONALITY- BANGLADESH; BORN- NOV 1939; DIED- MAY 2000EDUCATION - MASTER OF HISTORY, DHAKA UNIVERSITYPURSUED CAREER AS A DYNAMIC AND DEDICATED IN BANKING SECTOR FOR 30 YEARS WITH UNITED BANK LTD (EAST PAKISTAN THEN) NOW JANATA BANK; NATIONAL BANK LTD (FIRST PRIVATE BANK PIONEERED IN BANGLADESH) STARTED HIS DESIGNATION AS SAVP UNTIL DMD. PURSUED HIS DREAM TO FOUNDING A FINANCIAL INSTITUTIONS IN COMMERCIAL BANKING, LEASING AND MERCHANT BANKING, STOCK EXCHANGE BROKERAGE FIRM, & REAL ESTATE DEVELOPMENT.

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BLIL started commercial operation in 1996 and its major business relates to lease/loan on textile, transport (including marine), garments & accessories, power & energy, engineering etc; deposit mobilization and merchant banking activities.

BANKING

EXIM Bank Limited (Export Import Bank Of Bangladesh Ltd) was established in 1999 under the leadership of Late Mr. Shahjahan Kabir, founder chairman who had a long dream of floating a commercial bank which would contribute to the socio-economic development of our country. He had a long experience as a good banker. A group of highly qualified and successful entrepreneurs joined their hands with the founder chairman to materialize his dream. In deed, all of them proved themselves in their respective business as most successful star with their endeavor, intelligence, hard working and talent entrepreneurship. Among them, Mr. Nazrul Islam Mazumder became the honorable chairman after the demise of the honorable founder chairman.

This bank starts functioning from 3rd August, 1999 with Mr. Alamgir Kabir, FCA as the Advisor and Mr. Mohammad Lakiotullah as the Managing Director. Both of them have long experience in the financial sector of our country. Mr. Alamgir Kabir is also the brother of our Honorable Founder Chairman, and he is currently the Chairman of Southeast Bank Ltd. By their pragmatic decision and management directives in the operational activities, this bank has earned a secured and distinctive position in the banking industry in terms of performance, growth, and excellent management.

REAL ESTATE

In 1999, Late. Mr Shahjahan Kabir has founded Erebus Properties Ltd as its Real Estate Development which is run by a team of experienced staff under the leadership of Mr. Zubayer Kabir. He joined as Managing Director of the company on Jan 2000.

Erebus Properties Ltd comprises of a very experienced team of architects, engineers, and management team in association with Journey-Riddhi Consortium. The mission of this professional team is to bring about a much-needed qualitative revolution in the real estate industry in Bangladesh using their experience, insight, and sharing Erebus total commitment to quality customer satisfaction.

Keeping unwavering standard with careful attention to maximum comfort and impeccable service, Erebus Properties Ltd has initiated and already handed over several projects in different locations of Dhaka City.

Every apartment is a statement of quality workmanship, built carefully with detailed attention and a finish that is second to none. Erebus Properties Ltd also enjoys the benefit of its associated companies, which enhances their capabilities in terms of technical, financial, and logistic support.

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THE MANAGEMENT

Zubayer Kabir turned an entrepreneur in the field of real estate, stock brokerage firm, plastic industry, telecommunication, and trading holds his time at a breath-less span. He is also the honorable board member in banking and leasing investment company. He obtained his education from abroad and studied Bachelor of Business Administration in Northeastern University, Boston, USA. Being the eldest son of Late Shahjahan Kabir he was able to carry our business into new dimension. Starting his career in the early 90s he gave full vigar in pursuit that has helped him earning great reputation in business entity.

Nationality – Bangladesh

Present Position Managing Director, Erebus Properties Ltd. (Real Estate Development)Director, Export Import Bank Of Bangladesh Ltd. (Shariah based Islamic Bank)Director, Bay Leasing & Investment Ltd. (Leasing Company & Merchant Bank)Director, National Securities & Consultants Ltd. (Stock Brokerage member-Chittagong Stock Exchange) Director, Bli Securities Ltd (Stock Brokerage member-Dhaka Stock Exchange)Director, Horizon Plastic Industries Ltd. Manufacturer of Plastics moulded products for BERGER, MARICO, & UNILEVERDirector, Cell Bangla Ltd. (Dealer of Citycell, SingTel & Service Agent of HUAWEI mobile handsets)

Shabbir Kabir

Nationality – Bangladesh

Present Position Managing Director, Bow Holdings Ltd, Commercial Import Trading HouseDirector, Erebus Properties Ltd. (Real Estate Development)Director, Erebus Plastic Industries Ltd. Manufacturer of Plastics moulded products for BERGER & MARICODirector, Bay Leasing & Investment Ltd. (Leasing Company & Merchant Bank)Director, National Securities & Consultants Ltd. (Stock Brokerage member-Chittagong Stock Exchange)Director, Bli Securities Ltd. (Stock Brokerage member-Dhaka Stock Exchange)

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Director, Communic Park Ltd (Dealer of Grameenphone, Telenor, Importer of Mobile Handset VK MOBILE KOREA, Mobile Distributor ZTE, ALCATEL)

Asha Paloma Karina Tamala

Nationality – Indonesian

Present Position Director, Bow Holdings Ltd, Commercial Import Trading HouseExecutive Director, Erebus Properties Ltd. (Real Estate Development)

Executive SummaryErebus Group is carving out an opportunities to enter into Food and Beverages, Herbal & Cosmetic, Consumer Household, Healthcare & Nutrition Products Retail sector which will be concentrated under our allied concern BOW HOLDINGS LTD. We are interested to explore Indonesian products and import to cater into retail market in Bangladesh in future. In this aspects you may get the idea about Bangladesh is rapidly increasing in changing of consumer behavior and taste. Below we have collected some data that is clearly explains how it is progressing in food and beverages industry.

Bangladesh's food retail sector is dominated by traditional shops. Nonetheless, it has shown growth and modernization, keeping pace with overall economic growth, the increase in middle-class consumers, and changes in consumption patterns. The organized retail sector, including supermarkets, remains relatively small, but consumes increasing volumes of imported food products and exhibits the fastest growth.

An Overview of Bangladesh Retail Food Industry

Section I: Market Review

Status of Retail Market

Retail trade is one of the traditional businesses of Bangladesh. Its expansion is keeping pace with population growth and changes in consumption patterns, which are consistent with the growth of the economy. This expansion has not been structurally organized, because, until recently, retailing had never been perceived as an industry, but rather as an individual or family business entity with a very limited scope of organized expansion. Little to no marketinformation is available on the retail sector, but secondary sources indicate that the size of the food retail sector in Bangladesh could be US$12-14 billion, and the number of retail grocery shops could be around 1 million. Retail is one of the biggest sources of employment (12 percent), and it contributed 13 percent (wholesale and retail trading) to Bangladesh’s GDP in 2001/02.

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Types of retail shop in Bangladesh

There is a wide variety of retail shops in Bangladesh, ranging from open-air temporary shops to well equipped modern supermarkets. The following classifications may be applied:

1. Roadside shops: These small grocery shops are visible throughout the country and constitute around 75 percent of the retail sector. The floor space ranges between 30 and 100 sq. feet. Most village markets are in this category. No imported food items are available in these shops except some low-quality products from India, especiallyin border-adjacent areas

2. Municipal Corporation Markets: Shops in the municipal corporation markets are arranged according to the kind of commodity they carry, such as, fish, meat, vegetables, fruits, and groceries. These shops appear in the semi-urban and urban areas. Imported foods and processed food items are available, but limited to those purchased by the middle class. This category represents about 20 percent of the food retail sector.

3. Convenience Stores: These are located mostly in well-to-do urban areas. The customers are upper-middle to upper-class locals and foreigners. These stores are major outlets for imported food items and high quality local products, and represent about 5 percent of the retail sector.

4. Supermarkets: These are the most recent additions to the retail sector in Bangladesh and began appearing less than 5 years ago. With the success of the pioneer supermarkets, this type of store has already attracted the interest of investors, and new outlets are coming into operation quickly. To date, there are about more than 30 stores of this kind operating in the country, of which about 22 or more are located in Dhaka. They make up less than one percent of the retail sector.

Food Market and Consumers’ behavior

Bangladesh is predominantly a traditional, poor society, where about 90 percent of the population is Muslim; other groups represented are Hindu, Christian, Buddhist, and other minorities. Per-capita income is about US$380. Dhaka, the capital, has 10 million out of the country’s 129 million people (2001 census), with 34 percent of the population living below the poverty line. Rural people generally do not consume processed foods. The size of the urban population is 29 million people. The Statistical Year Book 2000 indicates that about 22 percent of them, regarded as upper middle class and above, have average household incomes of US$3,254, or a per capita annual income of more than US$550. This category of people (6 million in 2001) is growing in size along with the economy.

Roughly 45 percent of household consumption expenditures in urban areas is on food and beverage items, mostly for basic food necessities like grains (90 percent of which is rice), pulses, vegetables, vegetable oils, salt, fish, meat, and sugar. Due to the very strong preference of buying fresh food (generally daily), and wholly cooking it at home, theproportion of processed food in the daily meal is still quite negligible. However, with urbanization, decreasing family sizes, and the spread of education and employment among women, a major change in food habits among the educated middle-to upper-class population has become evident. They are increasingly consuming processed food items like sauces/ketchup, jam, jelly, noodles/pasta/macaronis, soft drinks/fruit juice, etc. The local production of processed foods has rapidly increased during the 1990’s.Simultaneously, abundant availability of these food items imported from many countries including the United States, with no quantitative restrictions but at moderately high tariffs, also contributed to this change. The basis of a processed food market has been established. Supermarkets are gaining in popularity, as consumers attach more andmore importance to appearance, ambience, comfort, and the availability of a vast range of products.

Bangladeshis are not vegetarian and consume a lot of chicken, beef, mutton, and fish. Except for chicken, the local production capacities of other animal proteins are diminishing. Large quantities of fresh fish are being imported from India, Burma, and Thailand. This Muslim-

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dominated society is unlikely to consume imported meat unless it is guaranteed ‘Halal’. This limits large-scale imports of meat, except that targeted at the non-Muslim population, which are mostly foreigners.

Import Market

The Bangladeshi market has been relatively open for processed and semi-processed food products and fresh fruits; these are, however, classified as luxury items by the Government of Bangladesh (GOB). Requirements include compulsory labeling on each packet, with origin, date of production, and date of expiry (best-before date), phytosanitary clearance, and in some cases, a radiation-free declaration (example: potatoes). Import duties on processed food products and fresh fruits are generally not very high, but the GOB sometimes imposes supplementary duties. Other duties include the value-added tax (VAT), currently at 15 percent, the advance income tax, and the development surcharge. Combined, these amount to a duty of 35 to 65 percent on imported food items and fresh fruits. For alcoholic beverages, however, the duties reach about 300 percent. Reports of under-invoicing are common. An imported food item costs approximately 3.5 times its FOB cost once it reaches its final consumer (see Appendix I). Logistical constraints include the scarcity of refrigerated transportation and warehousing facilities, inefficient port facilities, and uncertainty due to political unrest. The economic advantages of large-scale importing are therefore difficult to realize for fear of significant spoilage. To minimize risks, most importers procure processed food items (including US products) from consolidators in Singapore or Dubai. Most importers are located in Dhaka and Chittagong (a major port city).

Despite these hurdles, the demand for imported food products is growing quickly. Statistics show that Bangladeshis spent US$162 million on imported processed food items in 2001/02 (US share US$13 million, 8 percent), down 20 percent from US$203 million in 2000/01 (US share US$8 million, 4 percent) (see Table 1).

Table 1: Bangladeshi Imports of Processed Food Products in Million Dollars

SOURCES 1999/00 2000/01 2001/02All Countries 139.58 202.78 162.28USA 5.29 8.04 13.02

Source: Bangladesh Bank, 2003 Data

Section II: Road Map for Market Entry

A: Organized Retail Market

Entry Strategies

Suppliers of Indonesian Food and Beverages Industry should consider the following strategies to enter Bangladesh’s organized retail market:

Appoint a local importer or distributor as agent or representative to introduceproducts and to develop market demand among potential consumers.

Contact KBRI, Dhaka for assistance (to the extent practicable) in selecting a legitimatelocal importer or distributor. Visiting the country to meet a few of them may help indeveloping a clear picture of the market, importers/distributors, and retailers.

Provide assistance to the designated representative in order to promote theproduct(s) through market surveys, participation in trade fairs, trade shows andother promotional events, and media advertisements.

Adopt an attractive pricing policy, taking competitors’ strategies and consumers’price sensitivity into account.

Send product samples and company /product catalogs to appointed importer in Dhaka for display in theEmbassy’s trade promotion events or trade related exhibition.

Market Structure

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Organized retail outlets are relatively few and remain concentrated in the major cities, but they do sell imported products. The off-take by consumers is limited (less than 5 percent of total food consumption comes from these outlets). They usually procure their products from importers or distributors for imported items, and from distributors or suppliers for the local products. Organized sector retailers normally maintain established supply lines (drawing from establishments with storage capacity) for imported products, and access both established and casual supply lines (“once-in a while” suppliers with no storage) for local products. Depending on the size of the outlets, they engage 200 to 400 distributors or sub-distributors (dealers) for consistent availability of their commodities. Most importers source their goods in mixed containers from the country of origins or from consolidators in Dubai or Singapore, except those that arrive in high volumes, like fresh fruits.

Figure: Market Structure (Organized Sector)

Included in this category of food retailer are three relatively large supermarkets, around 30 medium-sized super stores, and 200-250 other convenience stores located in the posh areas of Dhaka and other big cities. The share of imported food products currently handled by these outlets is very small, and items include fruit juice (both powdered or liquid); canned fruits, vegetables, and fish/meat; jam/jelly; sauce/ketchup; edible oil; dry milk powder; salad dressings; spaghetti/vermicelli; olive oil; coffee; fresh fruits; and chocolates, biscuits, and cookies. The biggest constraint facing this sector is the extreme scarcity of space in the appropriate areas: land is almost unavailable and is very costly.

See Appendix II for a list of supermarkets and superstores presently operating in Dhaka and Chittagong.

B: Unorganized Retail Market: Small Provisions Shops/Grocery Shops/Wet Markets

Entry StrategiesMany of the same importers and distributors that supply the organized market also supply processed food items and fresh fruits to the unorganized and traditional retail markets; subsequently, the strategy for entering the unorganized market remains the same as that for the organized market.

Market Structure

This market segment constitutes 95 percent of the retail sector in Bangladesh. Retailing of imported food items in this market is very limited, except those medium- or lowquality items that are brought in, sometime through illegal channels, from Bhutan, India, Myanmar, and Thailand. Fresh fruits from all sources are available in this sector.Limited selection, lack or refrigeration, bargaining, early-morning to late-night hours, and no ambience characterize this market. This is the preferred market for about 80 percent of the urban population and all of the rural population, as it is considered the best source for the freshest food, especially vegetables, fish, meat, and fruits.

Figure: Market Structure (Unorganized Sector)

Foreign Supplier

Importer / Distributor Local Manufacturer

Distributor

Super Stores

Consumers

Foreign Supplier

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Section III: Competition

A major portion of imports comes from Singapore and Dubai in mixed containers and is therefore not recorded by their original country of origin. It is nonetheless clear that many countries are present in the Bangladeshi food retail market, and that the United States is one of them. Success in selling imported products depends on relative prices,consistent availability, marketing strategies, and the familiarities of products to consumers. Countries like India, Bhutan, Nepal, Thailand, and Malaysia are supplying products well-suited to and demanded by middle- to upper-class consumers, such as jam/jelly, sauce/ketchup, pickles, edible oil, fresh fruits, etc. These countries’ market shares, in terms of volume, are relatively higher than those of Australia, the United States, China, Italy, and the United Kingdom, who supply mainly products such as fruit juice (concentrates or powders), energy drinks (powders), dry milk powders, salad dressings, fresh and dried fruits, spaghetti/vermicelli, olive oil, and coffee. Their maincustomer is the foreign population living in the country, tourists, and the middle-and upper-class population. This indicates that the products from the former countries do not compete directly with those from the latter group, but US products do have to be competitive with their European and Australian competition to improve market share.Australia, Thailand, and Malaysia have all conducted effective market promotion activities. Australia, New Zealand, Denmark, and the United Kingdom have established processed food production units (joint ventures) in Bangladesh for dairy products. China and Australia are active in the fresh fruit sector, and conduct trade delegation visits, shortduration in-store promotions, participation in trade fairs, trade servicing, and food showcasing. Australia opened a store (Value Plus), which sells exclusively Australian products. Korea also opened a store (KOMART), which sells exclusively Korean products.

A preliminary assessment of the retail food market, shown in Table 2, indicates that at the top end of the market 49.6 percent of the food products are locally produced. In quantity-terms, Australia, Malaysia, the United States, Thailand, and the United Arab Emirates are the top food item exporters to Bangladesh. Interestingly, Table 2 alsoindicates that in value terms, Bangladesh holds only 18 percent of the market, while the top five foreign shareholders are Australia, Netherlands, Denmark, Thailand, and Switzerland.

Table 2: Market Share in the Organized Retail Sector of Bangladesh

Share in Terms of Volume Share in Terms of Value

Country Percent Country PercentBangladesh 49.60 Bangladesh 18.05Australia 7.60 Australia 10.95Malaysia 4.81 Netherlands 10.79USA 4.33 Denmark 8.37Thailand 4.31 Thailand 8.13Dubai 3.78 Switzerland 7.19New Zealand 3.35 New Zealand 6.49Netherlands 3.29 Malaysia 4.53Denmark 3.20 USA 4.47Switzerland 2.46 Dubai 3.96Singapore 1.96 Singapore 2.03Saudi Arabia 1.52 Bhutan 1.88

Importer / Distributor Local Manufacturer

Distributor

Unorganized Retailers

Consumers

Sub-Distributor / Wholesaler

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Oman 1.28 Malta 1.76Pakistan 1.22 India 1.37Bhutan 1.14 Italy 1.25Italy 1.14 England 1.21India 0.54 Saudi Arabia 1.15South Africa 0.51 Unknown 1.02Others 3.99 Others 5.40All Countries 100.00 All Countries 100.00

Source: Post Market Survey, 2003 Data

Advantages and Challenges Facing US Products in Bangladesh

Advantages

1. Growing health awareness is making consumers more quality conscious, and imported food items are considered high quality.2. Australia, USA, Malaysia, Thailand products are renowned for their quality. As you can see on the chart Indonesian products is in the category of others. In this sector we can increased the import of quality food n bevarages in Bangladesh3. Fast growing urban retail sector is capable of marketing an increased volume of branded Indonesian products.4. Rapid urbanization and the growing number of women in the workforce spur the demand for processed food items, while the supply of good quality local products is limited.5. A growing middle class, around 15-18 million people, can increasingly afford to purchase imported food products.6. Bangladeshi import policies have exposed the Bangladesh retail market to the international suppliers.7. A large number of foreigners in Dhaka and other metropolitan areas are a willing audience for imported fresh and processed food items.8. The expanding fast food and restaurant sector requires high-quality imported food and ingredient products.

Challenges

1. As a Muslim-dominated country, most consumers want imported products free from haram (prohibited) ingredients (pork, alcohol, and non-halal beef, chicken, and mutton).2. US products are higher priced than those from competitors.3. Importers, retailers, and consumers lack brand awareness.4. Competition from Europe, Australia, and other Asian neighbors is very strong, due to their closer geographic proximity to Bangladesh.5. The vast majority of the population prefers fresh food items that are cooked at home.6. Imported products are costlier due to tariffs and corruption.7. The political and law-and-order situations are unstable and unpredictable. The GOB’s tariff policy lacks consistency due to politicians’ protecting their own business interests.8. Rapidly growing local capacity, including that of multinationals, to produce larger varieties of branded items that are of better quality and more competitively priced.

Section IV: Best Product Prospect

A: Products already present in the market, which have good sales potentialProducts Selection CriterionFruit Juice/Jams/Jellies Increasing popularity of imported products.Sauces, spreads, salad dressings, and vegetable oils

Shortage of local supply and increasing popularity of these items due to changes in food habits.

Chips, noodles, pasta, macaroni & vermicelli Increasing popularity of imported products and changes in food habits.

Fresh fruits (peach, strawbeery, avocadoes, apples and table grapes)

Shortage of local supply and popularity of exotic fruits.

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Dry milk, milk products, and energy drinks Shortage of local supply and increasing health awareness among potential consumers.

B: Products not yet present in significant quantitiesProducts Selection CriterionBiscuits/Cookies/Chocolates Increasing popularity of imported products.Breakfast cereal Shortage of local supply and increasing

popularity of these items due to changes in food habits.

Tinned/canned fruits, Shortage of local supply and increasing popularity of these items due to changes in food habits.

Health and diabetic foods Shortage of local supply and increasing health awareness among wealthier niche consumers.

C: Products not present because they face significant barriers

The GOB generally considers imported processed food products and fresh fruit as luxury items, and tries to discourage imports by imposing high supplementary duties. As a Muslim dominated country, imported beef, mutton, and chicken from western countries are generally not welcome, and consumption of pork by Muslims is strictly prohibited on account of religious considerations. There are, however, no legal restrictions to import these items. Imports of alcoholic beverages are severely constrained by high import tariffs, sales taxes, and a complex licensing system for both distribution and consumption.

Appendix I: Breakdown of Cost of Imported Processed Food Products for Retail Sale

Items Rate Dhaka Market

A. FOB Value $1.00 Freight (20' container - ICD Dhaka) Actual 0.10

B. C&F (Cost and Freight) 1 - $1.10Insurance 1% of B 0.01Landing Charge 1% of B 0.01

C. CDVAT Assessable Value $1.12Import duty (ID) 56% of C 0.63Supplementary Duty (SD) (subject to change) 40% of (C+ID) 0.70Value Added Tax (VAT) 15% of

(C+ID+SD)0.37

Advance Income Tax (AIT) 2.5% of C 0.03Infrastructural Devt. Surcharge (IDSC) 3% of C 0.03

Other Charges (Shipping agent and port) 2(OC)

US$860 / Container 0.03

D. Total Landing cost of the importer atDhaka (C+ID+SD+VAT+AIT+IDSC+OC)

$2.91

Importer’s Margin 3 10% of D 0.29

E. Invoice price of the Importer for theDistributor

$3.20

Sales Tax 5% of E 0.16

F. Distributor’s Cost Price $3.36 Distributor’s Margin 4 10% of F 0.33

G. Distributor’s Sales Price to Retailer $3.69 Retailer’s Margin 5 15% of G 0.55

H. Retail Price $4.24 Sources: National Agencies, Dhaka, Bangladesh (C&F agent) and importers/Distributors.

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Note: Calculation based on the assumption FOB value of $25,000 for a 20ft container1: Imports are made mostly on C & F basis not on CIF basis as per the import policy2 : Service Charge and Receptacle charges payable to shipping agent and port authority3 : margin can vary from 8- 12%.4 : margin can vary from 8- 12%.5 : margin can vary from 10-20%.

Appendix II: Some Major Superstores in Dhaka and Chittagong

Retailer Name Ownership No. ofOutlets

Location Supplying Agents

AGORA Rahimafrooz Superstores

Private Limited 4 Gulshan, Dhanmondi, Moghbazar and Mirpur , Dhaka

Importer/distributors /Local companies.

Nandan Food andBev. Ind. Ltd.

Joint-venture 3 Gulshan, Shantinagar, Dhanmondhi Dhaka

Dhali Super Store Private Limited 1 Gulshan, Dhaka “PQS. (Price Quality Service) Private Limited 4 Dhanmondhi, Gulshan,

Uttara & Shantinagar“

Meena Bazar Private Limited 1 Dhanmondi, Dhaka “Family Needs Private Limited 1 Uttara, Dhaka “Fortune City Private Limited 1 Uttara, Dhaka “Shop n’ Save Private Limited 1 Uttara, Dhaka “Stop N Shop Private Limited 1 Dhanmondi, Dhaka “Almas General Stores Private Limited 2 Gulshan, Dhanmondhi,

Dhaka“

Dedar Stores Private Limited 1 Gulshan, Dhaka Importer/distributors / Local companies.

Pick & Pay Superstore Private Limited 1 Banani, Dhaka “KOMART Superstores KOREAN 1 Banani, Dhaka ImporterVALUE PLUS AUSTRALIAN 2 Banani, Dhanmondhi,

DhakaImporter

Super Fresh Private Limited 1 Banani, Dhaka Importer/distributors / Local companies.

Ettadi General Store Private Limited 1 “C.S.D SUPER SHOP Private Limited 26 Dhaka Cantontment, other

major cities“

Tokyo Superstores Private Limited 2 Uttara, Dhaka “Tropicana Stores Private Limited 1 Gulshan, Dhaka “Fresh N Near (ACI Logistics) Private Limited 3 Dhaka “Gulshan General Store Private Limited 1 Gulshan, Dhaka “OHIBA General Store Private Limited 1 Dhanmodhi, Dhaka “Rajeshwarey Private Limited 1 Chittagong “Park N Shop Private Limited 1 Chittagong “Santha Monika Private Limited 1 Chittagong “Shomabesh Store Private Limited 1 Chittagong “Chandrika (Pvt) Ltd. Private Limited 1 Chittagong “