Banks' lukewarm response to funding potato plant expansion
FE Report | Wednesday, 18 June 2008
When there is a national effort to promote potatoes as substitute for staple rice, a local French fry producer is getting negative response from local banks to financing expansion of its plant.
Quality French Fried Potato, which produces 10 tonnes of French fry per month in its Ashulia plant and supplies to local food shops and superstores, is readying to multiply its production ten-fold to meet a rising demand at home and abroad.
"I am shuttling from bank to bank without any success. They are rather giving me advice to go for textile or garments," said Eshtiaque Ahmed, managing director of Ejab Group, the owning company of Quality French Fried Potato. "The investment in expansion will be around Tk 160 million to Tk 200 million, where my share will hardly be 30 per cent," he added.
Eshtiaque said buy offers are coming from the Middle East and Australia. "But I am telling all of them about a delay in supply at the moment as I am not getting financial support to expand my production facilities," the Ejab Group MD said.
He said the bankers might have failed to fathom the export market. "An individual in the United Arab Emirates, who runs a super chain store there, alone sells French fry worth US$ 6.6 million a month," He said.
He said once the export of French fry begins the potato production will get a big push bringing farmers, sellers, processing units and exporters in a chain of system.
A 500-gram packet of French fry of the company is now sold at Tk 65 in retail shops, mainly in super stores where an imported 450-gram packet is sold at Tk 165.
As the banks are not ready to finance, he said, the government can support such initiatives by reviving the EEF (Entrepreneurs Equity Fund) for agro-based industries, Eshtiaque suggested.
Ejab is planning to start its potato chips production by the middle of next year. Explaining the local market situation Eshtiaque said the Lays Chips coming from India has a market of about Tk 150 million although it is still being consumed by upper segment of the population.
"The quality of our potatoes is very high and I am confident that we will be able to produce chips matching the qualities of Lays," he claimed.
Ejab Group, a company having annual turnover of Tk 500 million, has been involved in diversified business in jute-based products, edible oil refining, potato cold storage, dairy products, processed food, seeds and cattle insemination since 1959.
Quality French Fried Potato, which produces 10 tonnes of French fry per month in its Ashulia plant and supplies to local food shops and superstores, is readying to multiply its production ten-fold to meet a rising demand at home and abroad.
"I am shuttling from bank to bank without any success. They are rather giving me advice to go for textile or garments," said Eshtiaque Ahmed, managing director of Ejab Group, the owning company of Quality French Fried Potato. "The investment in expansion will be around Tk 160 million to Tk 200 million, where my share will hardly be 30 per cent," he added.
Eshtiaque said buy offers are coming from the Middle East and Australia. "But I am telling all of them about a delay in supply at the moment as I am not getting financial support to expand my production facilities," the Ejab Group MD said.
He said the bankers might have failed to fathom the export market. "An individual in the United Arab Emirates, who runs a super chain store there, alone sells French fry worth US$ 6.6 million a month," He said.
He said once the export of French fry begins the potato production will get a big push bringing farmers, sellers, processing units and exporters in a chain of system.
A 500-gram packet of French fry of the company is now sold at Tk 65 in retail shops, mainly in super stores where an imported 450-gram packet is sold at Tk 165.
As the banks are not ready to finance, he said, the government can support such initiatives by reviving the EEF (Entrepreneurs Equity Fund) for agro-based industries, Eshtiaque suggested.
Ejab is planning to start its potato chips production by the middle of next year. Explaining the local market situation Eshtiaque said the Lays Chips coming from India has a market of about Tk 150 million although it is still being consumed by upper segment of the population.
"The quality of our potatoes is very high and I am confident that we will be able to produce chips matching the qualities of Lays," he claimed.
Ejab Group, a company having annual turnover of Tk 500 million, has been involved in diversified business in jute-based products, edible oil refining, potato cold storage, dairy products, processed food, seeds and cattle insemination since 1959.