Largest-ever investment in Bangladesh’s pvt sector: Tk 4,000cr PVC plant starts production

Meghna Group of Industries (MGI) has started commercial production in its PVC manufacturing plant, a development that will save Bangladesh millions of dollars from imports.

MGI has invested $400 million, equivalent to Tk 4,000 crore, to set up the plant in its economic zone in Narayanganj. This is the single largest-ever investment in Bangladesh’s private sector after Japan Tobacco’s acquisition of Akij Group’s tobacco unit for $1.5 billion in 2018.

“We first produced 100 tonnes of PVC on September 15 and since then we have sold around 300 tonnes to local buyers,” said BM Islam, senior executive director of MGI.

He is confident that Meghna PVC will be able to meet 45percent of the country’s 3 lakh tonnes annual requirement.

PVC or polyvinyl chloride, a petroleum byproduct, is used to make wires, cables, film of all applications, floor paving materials, coating on fabrics, artificial leather, soft tubes, gloves, toys, plastic shoes, drainage pipes, doors and various automobile components.

But the journey was not smooth as it took over a decade to set up the factory and go for commercial production of a thing, which Bangladesh never produced, said Islam.

“We had to open 55 LCs for imports. Some 250 foreigners have worked to set up the plant,” he told Business Insider Bangladesh on Monday. “Now we are proud of the plant and we hope it will be a commercially viable project,” he noted.

But, running this plant is very challenging as raw materials must be kept at a certain temperature and it has to be carried to the plant from a vessel through a pipeline, which is 1.3-km-long for the Meghna PVC plant, he said.

He said Pran-RFL, which is the largest producer of plastic products, could be the biggest consumer of Meghna PVC.

Earlier in April, Mostafa Kamal, chairman and managing director of MGI, in an interview with Business Insider Bangladesh said this is the biggest-ever investment by a Bangladeshi company. He also said he has taken loans from the Netherlands to set up the plant.

The plants were supposed to be opened in 2021, but the onslaught of the coronavirus pandemic delayed the work, he said.

MGI’s chairman Kamal explained what has driven him to set up such plants, which no other businesses in Bangladesh have ever done.

He said Bangladesh’s economy has been growing steadily for over a decade and the country is on track to graduate from the LDC status in 2026.

“The next phase of progress will depend on diversification of products, such as petrochemicals. But there are no petrochemical products in Bangladesh and we rely fully on imports to meet the demand of a market of 17 crore consumers,” Kamal said.

“That’s why MGI has taken up this project to make import-substitute PVC products. We will be able to cater to 60 percent of the country’s needs,” he said.

Bangladesh imports over three lakh tonnes of PVC annually from China, Vietnam, Thailand and Taiwan to make different types of plastic products.

MGI has grown up as a conglomerate riding on fast-moving consumer goods — from edible oil to sugar, flour, bottled water and many more. Later, it expanded to building materials, chemicals, logistics, pulp and paper, power, feeds, shipping and financial institutions.

Meghna is the only business group in the country with three economic zones, which have also received over $100 million in foreign investments.