Food Processing in Bangladesh PDF

UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK
(COVER THIS AREA WITH PHOTO)
FOOD PROCESSING IN BANGLADESH
Opportunities within fishery, vegetables and fruits

AGENDA
The food sector overall
The fishing industry
The fruit and vegetable

industry
2
SUMMARY I: THE FOOD PROSECCING

SECTOR IS IMPORTANT IN BANGLADESH
Bangladesh has a well-established food
processing sector, which heavily relies
on agricultural production
The sector accounts for 22% of total

manufactured products, 20% of total
labor force and 5% of total GDP equal
to around 4.48 bill USD
Focus is on domestic demand.

Excluding scrimps export of processed
food products is limited and mainly
targeted ethnic products, not the
mainstream international markets
Besides scrimps main products are

agriculturally based as oils and
bakeries, but also fishery plays an
3
important role
SUMMARY II: A NUMBER OF OPPORTUNITIES

EXISTS WITHIN PROCESSED FOODS
Main challenge in the fishing industry is lack of raw
materials, due to high national and international demand.
This gives opportunities:
Investments in hatcheries and ponds etc. (grow supply

base, develop contract farming etc.)
Technology introduction to increase effectiveness in

trawl fishing and inland fishing
Technology introduction to increase utilization of fish

waste
Main business opportunities in the fruit and vegetable

industries are:
TBD (study not done until end of 2009)
xxxx
xxxx
4
EDIBLE OILS FOLLOWED BY FISHERIES ARE THE

MAJOR SUBSECTORS WITHIN PROCESSED FOODS
5
THE PRODUCTION OF PROCESSED FOOD

HAS SHOWN SIGNIFICANT GROWTH
There are nearly 700 processed

food manufacturing enterprises
in Bangladesh including brands
like Teer, Olympia, Milk Vita,
Fresh, 7Up, Bombay, Ahmed,
Bengal, Pran, Isphahani and
Igloo
The processed food sector has

grown 22% during the last 3
years and the growth is
expected to continue as the
industry is considered the most
potential growth industry in
Bangladesh
6
MAIN EKSPORTS ARE SCRIMPS FOLLOWED

BY FISH AND AGROBASED PRODUCTS
Bangladesh only has around
0.1% of the world share in
export of processed foods
In FY07-08 exports amounted to

515.48 mill USD
81% were shrimp products, 15%

fish products and only 4% agro
based products
The export products of agro

goods are mainly aromatic rice,
powdered spices, frozen snacks,
puffed rice, mustard oil
7
EKSPORT LEVELS ARE NOT HIGH, BUT

GROWTH HAS BEEN SUBSTANTIAL
Eksports grew 23% from 2005-2006 to 2007-2008 in terms of MT and about

12% in terms of USD-value
As processed shrimp production has stagnated the growth is fully contributed

to growth in processed fish products (36% measured in MT) and processed
agro-products (87% also measured in MT)
8
AND THE POTENTIAL TO GROW EVEN

FURTHER IS VERY SIZEABLE
The potentials for high volume export

in the processed food sector have not
been exploited to the fullest
Focus has mainly been on ethnical

products and export to a limited
numbers of countries. There is
limited export to the EU, Italy and
the UK are major importers
With only smaller changes in product

range and standards it is believed
that there is high potential for
entering the US and EU mainstream
markets with processed food
products
9
THE EXPECTATION OF CONTINOUS

GROWTH FINDS STRONG SUPORT
Investment climate in Bangladesh is very
attractive. One main goal of government is
to attract foreign investors and boost export
12.5% cash incentives to export of frozen

1
shrimp and fish and 20% cash incentives to
export of agro processed products is given
The sector has further been declared as a

Thrust Sector and therefore receives
preferential treatments including income tax
exemption, tax return, cheaper air
transport, low interest rates and export
assistance
2 3
Bangladesh is also part of EUs GSP and EBA
programmes, which opens for duty and
quota free access to the EU market
10
1. Government subsidy given on export price to the exporter. 2 Generalized System of Preference. 3. Everything But Arms.
OTHER FACTORS ARE ALSO SUPPORTING A

BELIEF IN FUTUR GROWTH
The industry is already well established and
optimism is strong as local demand is growing
as Bangladesh is experiences +5% yearly
growth in GDP
Only minor product adaptation and staff

training is needed in order to explore new
markets
Large amounts of seasonal fruits and

vegetables are not utilized today and are just
waiting for the processing industry to get
started
Demand in the fishing industry is outweighing

existing supply
Bangladesh has a very cost-efficient labor force

11
IT WILL REQUIRE AN EFFORT TO GAIN

MARKET SHARES IN THE EU AND THE US
Investment capital and new technology

needs to be transferred from abroad
Training of local workers need to be in

focus
Production quality most be increased
A broader product range targeted the

main EU and US market will have to be
developed
Marketing skills to penetrate the EU and

US markets will have to be learned
12
AGENDA
Food sector overall
Fishing industry
Vegetable industry
13
BANGLADESHI FISHERY SECTOR IS A LARGE

AND IMPORTANT SECTOR
With 166,000 km2 of sea area and more
than 200 rivers with a total length of 22,155
km Bangladesh is endowed with abundant
water resources
White fish and shrimps are available more or

less in every district of the country making
fishing one of the most important industrial
sectors in Bangladesh
The sector contributes with ~5% to GDP and

accounts for 4.3% of all foreign exchange
earnings
1.2 mill people are engaged in the sector on

full-time and ~10 mill on part-time basis.
8% of the total population is directly or
indirectly engaged in the industry
14
2.564 Mill MT FISH ARE PRODUCED YEARLY -

CLOSE TO 80% COMES FROM INLAND SOURCES
Marine Inland
fisheries fisheries
Trawl fishing Artisanal fishing Closed water Open water

34.159 MT 463.414 MT 1.060.000 MT 1.006.000 MT
15
MARINE FISHING ARE GROWING

AT 9% ANNUAL
Bangladeshi waters are rich in nutrient
creating favorable fishing conditions
Marine fishing includes industrial fishery

with large trawlers and artisanal fishery
with mechanized and non-mechanized
boats
In FY07-08 34,159 MT fish was produced

by trawl fishing and 463,414 by artisanal
fishing
Growth of marine fishing has been

moderate about 9% during the last five
years (trawl fishing 5% and artisanal
fishing 10%)
The main fish types caught in sea are

Illish, Bombay Duck, Pomfret, Jew fish and
Sea Cat fish
16
TRAWL FISHING IS DOMINATED BY

UNSUSTAINABLE BOTTOM-FISHING
Modern fishing trawlers were introduced in
the eighties and the fleet has grown rapidly
in the last 10 years
In 1997 there were only 14 white fish

trawlers in Bangladesh and 41 shrimp
trawlers. In 2009 the figures are 133 and 49
182 of the vessels have onboard fish

processing facilities
Out of the 182 trawlers and vessels, only 8 of

them are mid-water fishing vessels, the rest
are bottom-water fishing vessels being very
damaging to the environment
Government has not since 2005 given license

to new fishing vessels, but it is expected that
around 40 mid-water licenses will be given in
months to come
17
INLAND FISHERY IS ALSO GROWING AND

EVEN STRONGER THAN MARIN FISHERY
Inland fisheries has grown by

26% during the last five years
and in FY07-08 ~1.000 mill MT
fish was produced in both inland
open and closed-water
Out of the 2.066 mill MT produced

fish in FY07-08 only 0.135 mill MT
was shrimp and prawns
The main fish types caught in

inland water in FY07-08 were
carp, cat fish, snake head, live
fish and Illish
18
GROWTH IN WHITE FISH PRODUCTION

BUT ALSO OVERCAPACITY IN PROCESSING
Of the 2.563 mill MT produced fish in FY07-
08, 92% were white fish and 8% shrimps
and prawns
The production of white fish has increased

23% during the last five years
There are 145 fish processing plants with an

annual production capacity of 265,000 MT
Of the 145 plants 92 are in operation. 53

are out of operation, mainly due to lack of
raw materials and working capital. Of the 92
plants 54 process shrimps, while 10 of them
only white fish. The remaining do both.
68 of the plants have approval by the EU to

export to EU countries
19
THE FISHING INDUSTRY IS FACED WITH A

NUMBER OF CHALLENGES
Persistent shortage of fish supply is a
major issue as local and international
demand is increasing even more then
supply
Need for new machinery, technology and

development of products and marketing
for the EU-market is obvious
Quality standard has to be improved and

regularly monitored
Lack of electricity and gas supply and

weak infrastructure are constraining
production
Shortage of working capital and the risk

of natural disasters are other challenges
20
BUT THE CHALLENGES ALSO OFFERS

OPPORTUNITIES
Processed fish supply is not large enough to
satisfy demand. Supply can be increased:
Technology to increase effectiveness in
inland and marine fishing (adapted
fishing gear, drift of machineries etc.).
Increased investments in hatcheries

and closed water productions (ponds
etc. )
Products could be adapted to high paying

European markets
Utilization of waste materials in existing

processing could be further developed (new
technology)
21
SUPPORT TO DANISH COMPANIES WISHING TO

ENTER THE BANGLADESH MARKET IS POSSIBLE
The Business to Business
programme supports Bangladeshi
and Danish companies seeking to
engage in long term strategic
partnerships
Support can be applied for in

three phases:
1. A Contact phase
2. A Pilot phase
3. A Project phase
Up to 90% of all costs can be

covered with a maximum of DKK 5
mill.
For more information please see:

http://www.ambdhaka.um.dk/en/menu/Develo
pmentIssues/Businesstobusiness%28B2B
22 %29Programme/
If you would like to know more about the fishing industry in

Bangladesh and about your business opportunities please
contact the Royal Danish Embassy in Dhaka at morlyn@um.dk
(B2B-Coordinator, Morten Siem Lynge)
23
AGENDA
The food sector overall
The fishing industry
The fruit and vegetable

industry
24
Study to be done in late 2009
More information will follow
25

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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK

(COVER THIS AREA WITH PHOTO)

FOOD PROCESSING IN BANGLADESH

Opportunities within fishery, vegetables and fruits

The food sector overall

The fishing industry

The fruit and vegetable

SUMMARY I: THE FOOD PROSECCING

The sector accounts for 22% of total

Focus is on domestic demand.

Besides scrimps main products are

SUMMARY II: A NUMBER OF OPPORTUNITIES

Investments in hatcheries and ponds etc. (grow supply

Technology introduction to increase effectiveness in

Technology introduction to increase utilization of fish

Main business opportunities in the fruit and vegetable

TBD (study not done until end of 2009)

EDIBLE OILS FOLLOWED BY FISHERIES ARE THE

THE PRODUCTION OF PROCESSED FOOD

There are nearly 700 processed

The processed food sector has

MAIN EKSPORTS ARE SCRIMPS FOLLOWED

In FY07-08 exports amounted to

81% were shrimp products, 15%

The export products of agro

EKSPORT LEVELS ARE NOT HIGH, BUT

Eksports grew 23% from 2005-2006 to 2007-2008 in terms of MT and about

As processed shrimp production has stagnated the growth is fully contributed

AND THE POTENTIAL TO GROW EVEN

The potentials for high volume export

Focus has mainly been on ethnical

With only smaller changes in product

THE EXPECTATION OF CONTINOUS

12.5% cash incentives to export of frozen

The sector has further been declared as a

OTHER FACTORS ARE ALSO SUPPORTING A

Only minor product adaptation and staff

Large amounts of seasonal fruits and

Demand in the fishing industry is outweighing

Bangladesh has a very cost-efficient labor force

IT WILL REQUIRE AN EFFORT TO GAIN

Investment capital and new technology

Training of local workers need to be in

Production quality most be increased

A broader product range targeted the

Marketing skills to penetrate the EU and

Food sector overall

BANGLADESHI FISHERY SECTOR IS A LARGE

White fish and shrimps are available more or

The sector contributes with ~5% to GDP and

1.2 mill people are engaged in the sector on

2.564 Mill MT FISH ARE PRODUCED YEARLY -

Trawl fishing Artisanal fishing Closed water Open water

MARINE FISHING ARE GROWING

Marine fishing includes industrial fishery

In FY07-08 34,159 MT fish was produced

Growth of marine fishing has been

The main fish types caught in sea are

TRAWL FISHING IS DOMINATED BY

In 1997 there were only 14 white fish

182 of the vessels have onboard fish

Out of the 182 trawlers and vessels, only 8 of

Government has not since 2005 given license