Business Person of the Year

Fast mover in poultry

Stories of professionals creating successful enterprises are still rare in this country. That of a trained architect entering an unrelated sector like poultry has got to be absolutely unprecedented. But that is exactly the saga of Kazi Zahedul Hasan.

Born in 1941 in Dhaka, Hasan graduated from BUET in 1962 and joined the same institution as a lecturer. In 1963, he availed of an USAID scholarship and left for an architecture degree at Harvard University. He returned to the country after four years and started teaching again at BUET while working part-time at an architectural firm. In the next ten years of his life, Hasan went through a series of major life-changing events. Starting with marriage in 1968 and the birth of his twin sons, he went back to Massachusetts for his wife's PhD and then moved to Saudi Arabia to teach at King Abdul Aziz University.

Hasan returned to the country for good in 1983 and made a sequence of decisions that eventually led to where he is today. At the beginning, he did what was probably most expected of him -- he opened up his own architectural outfit. But soon, intrigued by the booming sector of export-oriented RMGs, he launched Kazi Fashion Ltd. In 1995, he bought a large piece of land in Sreepur to construct a textile factory that would feed into his garment-making unit. Constructed on 2 bighas of land, the textile factory still left another 30 bighas idle. Toying with ideas of how this land can be utilised, Hasan at first tested fish cultivation. The quality of the soil, however, was not conducive for water retention. At this time, destiny played a major role. On a trip to Delhi, he met, through friends, a man who was a pioneer in the Indian poultry business. From then on, Hasan's life shifted onto an entirely different track.

Enchanted by the peace and quiet of poultry farms, which proved especially refreshing after the perennial problems of RMG production, Hasan eagerly studied the Bangladeshi poultry market. The sector was completely new to him but he discovered immense potential in the fact that the commercial poultry breeding industry was fragmented at that time - a few breeding farms existed but were not profitable and had not implemented much of modern technology. Aggregate market demand was definitely not being met locally; on the other hand, imports were expensive and there were not enough flights available to carry live cargo. Overall, it seemed like a perfect scenario that demanded intervention -- and the Ivy League architect was more than willing to chip in. Hasan traveled to numerous countries that are currently the top names in the poultry sector, i.e. Thailand, Malaysia, Taiwan, US, Philippines, etc., chose the latest technologies and promptly launched the first company of Kazi Farms Group, Kazi Farms Ltd, in 1996.

Today, the group is engaged in a whole range of integrated poultry activities, starting from parent stock chicks and day-old broiler and layer chicks to broiler chicken, hatching eggs, and commercial feed, through numerous enterprises. Group turnover stands at Tk 1.2 billion, having grown at a phenomenal rate despite calamities like flood and rumors of bird flue, and now amounts to 35 percent of the total market. The company employs a large number of trained expatriates, local poultry veterinarians, and management specialists. It also has a well-equipped poultry laboratory.

Till date, Kazi Farms has played a pioneering role in numerous aspects of the poultry sector. The group launched the first grandparent stock farm in the country meaning that local breeders no longer have to pay high prices, in foreign currency, to source the parent flock from abroad. From February this year, the company has also started exporting hatching eggs, i.e. eggs that are used for commercial poultry meat production, for the first time in Bangladesh. With the support of international partners and affiliations, Hasan has made sure the best practices are implemented in these highly scientific processes for optimum productivity.

The group also places enormous importance on ensuring quality. Its international standard production and performance levels have gained much popularity among customers. It has also gained genuine goodwill because of its discipline in loan repayments. Also noteworthy is its role in environmental stewardship -- Hasan truly believes in building, operating, and maintaining its facilities in a manner that is consistent with the long-term sustainability of the eco-system.

So what key challenges did this professional-turned-entrepreneur face at the onset? Hasan, retrospectively, admits that doing business in Bangladesh is difficult, especially after living abroad. Still, what works are the support system of friends and relatives and the individual determination to persevere. Besides, he adds, "Bangladesh has a lot of opportunities to offer. For instance, you cannot even think of entering poultry in mature markets like the U.S. Work and patience do pay off here."

In terms of future plans, Hasan has a lot in the pipeline. Kazi Farms is considering further processing of its products and offering more value-addition in terms of dressed, ready-to-eat, and organic poultry products. In the imminent years, local production can easily capture the regional export market. Food product export from Bangladesh is generally not perceived to be an easy task, for example, Europe requires stringent compliance as a prerequisite but overall it is very much achievable. Currently, there are 150,000 poultry farms and 130 poultry breeders in this country. This recognition will hopefully, not only encourage Hasan in his future endeavors but will also raise the expectation level and benchmarking standards in this high-potential sector.


Enterprise of the Year

Turning innovation into practice

After RMG, if the "Made in Bangladesh" seal promises to make a serious dent into another global industry, that industry has got to be pharmaceuticals. And who else deserves to be recognised more in the budding arena of Bangladeshi pharma, than one low-profile company that has grown in leaps and bounds to develop 53 new molecules within a span of 5 years! The company we are talking about is none other than Incepta Pharmaceuticals.

Incepta began production in 1999 with a handful of generic products which were then sold over-the-counter. The USP of these products at that time had been sheer price competitiveness. But management had always aspired to provide innovative import-substituting drugs. In that spirit, the first local AT1 receptor blocking antihypertension drug was produced and launched at Tk 6 vis-à-vis comparable imports which were sold at Tk 80. The medical community appreciated this move greatly and endorsed the product. Over time, a series of other new products were developed and successfully launched. Incepta's product range to this date is comprised of various types of dosage forms including tablets, capsules, oral liquids, ampoules, dry powder vials, powder for suspension, nasal sprays, etc. The company specializes in value-added high technology dosage forms like sustained release tablets, quick mouth-dissolving tablets, barrier-coated delayed release tablets, etc. Today, Incepta's turnover stands at Tk 1.2 billion with a product portfolio of 125 brands and almost 1,500 employees. The company is, at the moment, in the process of exporting to thirty different countries of the world.

Such stellar success for a new entrant would obviously not have been possible without the support of a few critical processes: a world-class manufacturing capability, an excellent marketing and distribution system, and a dynamic corporate culture. In a short period of time, Incepta has been able to build up a state-of-the-art production factory on a 160,000 sq ft area in Savar. Once the current upgradations have been completed, this factory is expected to be one of the best in the country. Secondly, an efficient and competent marketing and distribution system has been the priority of top management since the very beginning. With the help of 13 depots geographically spread around the country, the company now covers a large number of rural as well as urban areas in Bangladesh. Last but not the least, the innovation-focused mindset has truly permeated all levels of the organisation: whether it be in terms of developing more and more new products or recruiting of new graduates for fast-track development and higher responsibilities. At Incepta's helm, remain three talented individuals who had been part of the initial set-up team persons who are outstandingly capable in their areas of expertise. Abdul Muktadir, Hasneen Muktadir and Mahbubul Karim, each bring years of experience in other organisations to their current roles of supervising a distinct area of the Incepta business.

Along its five-year journey, Incepta has maintained an interesting financial strategy. It has not used bank finance except for a meager amount during the first two years. The start-up team gathered the initial capital from family and friends and has reinvested annual earnings ever since to fund its expansions. Has this stunted the company's growth trajectory? Muktadir, managing director, thinks not; in fact he believes it has helped the company remain away from the vicious cycle of interest burdens. Management has coordinated its expansion in phases so that enough capital would be accumulated internally by the time a new product is ready for mass production. This is quite an achievement considering that most of its competitors have access to large-scale financing from the capital market.

In terms of future prospects, Incepta has much to look ahead to. The ability of Bangladesh to provide effective health care to its people depends, to a large extent, on the availability of medicines at affordable prices. Furthermore, after 2005, the global pharmaceutical market will be more accessible to Bangladesh than ever before as India and China will have to start conforming to the WTO rules on intellectual property. To capitalise on this narrow window of opportunity, the entire Bangladeshi pharma industry has to seriously gear up. Muktadir explains, "Currently, 95 percent of the formulations sold in Bangladesh are locally made; but only 30 percent of the chemical compounds required are made here with the major chunk being imported from abroad. If we can capture more value in our primary supply chain, Bangladesh will gain tremendous advantage in discovering new drugs. The implication of developing just one new compound is billions of dollars for a country. We have such a huge population base and so many universities from where intelligent people can be obtained, all we need is the appropriate skill in chemistry." As has been witnessed in India and China, strengths in basic chemistry allow local pharmaceutical companies to produce medicine molecules which are only slightly different from the original but are far less in prices.

Despite its humble start, Incepta is dreaming big, with plans to become a global research-based company in the long run. And along with its own growth, management is also optimistic about the future of the country. Success in the global pharmaceutical arena is not an impossible task, Bangladesh has only to replicate the performance of others. Incepta management is ready to collaborate with universities to groom up the right kind of scientists who can take the nation forward. An educated population can surely make us an economic powerhouse that will break down some of the other barriers that we are now facing.

 

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