Dairy industries - a lucrative area for investment

M Jalal Hussain Bangladesh, with an area of 147,570 square km and a population of 160 million, is an emerging country in South Asia. With a growing number of better educated young people, skilled, semi-skilled and unskilled workforce, and a congenial business environment, the country offers considerable scope of diversified local and foreign investments. There are two sea ports and three international airports, capable of handling millions of tons of cargo per month. During the last 20 years, the country has developed many industries with large investments by the local and foreign investors and remarkable industrial growth has taken place mostly in the apparel and textile industries. With rapid industrialisation, skilled manpower, business professionals, technical personnel, engineers and managers have emerged and opened the doors to investors in many other areas. A large number of IT, electrical, electronic, telecom engineers, agriculturists, and veterinary doctors come out from the universities of the country to meet the needs and challenges of the 21st century. Investment in dairy farming and related industries is an excellent and lucrative area in Bangladesh, which remained ignored by the prospective investors. Bangladesh is a least developed country (LDC) with a large population and the government has spent large amount of foreign currency on import of food items like rice, wheat, dairy products, sugar, edible oil etc. But the country is naturally blessed with fertile land, plenty of water and rainfall, rivers, canals, moderate tropical climate and high potential for dairy farming. The climate of Bangladesh has much similarity with the climate of Australia, New Zealand, and India which are the world leaders in the field of dairy farming. Tropical Asia (mainly India) is the largest milk-producing region in the world. Bangladesh has the 4Ms (men, materials, money and market) which are the basic requirement for establishing an industry or business and the investors can exploit the opportunities and prudently invest in dairy farming and associated industries. A dairy farm produces milk which is then processed into various milk-based products like cream, butter, skimmed milk, cheese, milk powder, whey, yogurt and others. Bangladesh has been importing dairy products since its Independence. At present, it spends US $250 million for importing dairy products mainly milk powder mostly from New Zealand, Australia, India and some other countries. In addition, it also spends a large amount of foreign currency for importing cattle from India to meet the high local demand for beef. If the investors come forward and invest in dairy and cattle-raising farms, they can meet the large local demand and can also export abroad in future. In the context of Bangladesh, dairy farms and other related industries will create considerable employment opportunities along with other economic benefits. The supply of milk and milk products will increase and reach the general mass at affordable prices, thus, improving the nutritional condition of the general people. It is worth mentioning here that milk and dairy products play an important role in a healthy and balanced diet. They are rich source of calcium, protein, magnesium and phosphorus which build and maintain strong and healthy bones and protect human body from various diseases. Cow dung from dairy farms can also be an important source of organic fertiliser. Bangladesh spends a large amount of foreign currency on import of fertiliser every year and if dairy farms are established, animal waste can be used as fertiliser that will reduce import of fertilizer to some extent. In recent times, in the rural areas of Bangladesh, cow dung is being used in making bio-gas, which is used for cooking and other purposes. There are some large fertiliser industries, namely, Zia Fertiliser Company Ltd., Jamuna Fertiliser Company Ltd., Chittagong Urea Fertiliser Company Ltd., and Karnafuli Fertiliser Company Ltd, which use natural gas as a raw material and for generating energy. We know that the gas reserve of Bangladesh is reducing every year because of massive use and within five to 10 years the reserves might be exhausted fully. The policymakers and planners should start thinking now and look for alternative ways of meeting the needs. Modern dairy farms can help in that situation by providing animal waste as fertiliser and bio-gas source for power and energy. Dairy farms have more economic value, as more supporting industries will grow along with the dairy industries. The skins, hides and bones can be used commercially that increases more employment opportunities. Considering the enormous potential for dairy farming, the government should attract more investments in this sector by providing policy support and other incentives. It should offer special incentive packages for setting up dairy farms and associated industries, such as tax holiday for 10 years; duty-free import of high-yielding dairy cattle and other plant, machinery and equipment. Dairy farms and related industries should provide good financial returns because of the large local demand and the investors could be ensured of sustainable long-term dividends. The modern know-how and the latest technologies have reached every country including Bangladesh and high-yielding breeds of cattle can be inducted in Bangladesh to substantially increasing milk production. The writer is the group financial controller of a private group of industries. He can be reached by at email: jalal.hussain@gmail.com