The private sector in the country is currently experiencing a kind of investment stagnation. In the recently concluded FY 2024-25, credit growth in the private sector was only 6.40 percent. Such a decline in private sector credit growth has not been seen in the recent past. This investment drought is also visible among companies listed on the stock market. Over the past year, only 12 companies in the manufacturing sector have announced investments of nearly BDT 21.14 billion for business expansion. Market sources say that new investment announcements from so few companies in a single year have never happened before.
There are currently 360 companies listed on the stock market, of which 200 are in the manufacturing sector. These companies include both large local and multinational corporate firms. Bonik Barta analyzed investment announcements from manufacturing companies listed on the Dhaka Stock Exchange (DSE) over the past year, from August 2024 until yesterday. It shows that during this period, only 12 companies announced investments for business expansion. The total announced investment amounted to BDT 21,138.7 million.
Among the manufacturing companies, the highest investment announcement—nearly BDT 5.53 billion ($45.3 million)—came from MJL Bangladesh PLC. In December last year, the company’s board decided to purchase a 12-year-old used ship, MT Nissos Delos, replacing their 20-year-old MT Omera Legacy. The price was set at $45.3 million. Two months after this announcement, at the beginning of March this year, the company announced the sale of the MT Omera Legacy tanker for $22.7 million. However, no updated information on the delivery of the MT Nissos Delos tanker has been received so far.
MJL Bangladesh Chairman Azam J Chowdhury told Bonik Barta, “Overseas oil and gas carriers are an investment in our business. We made such a large investment because of the government’s previously supportive policies in this sector. Until 2030, VAT and tax exemption facilities were provided in this area. But recently, these benefits have been canceled. This has harmed the foreign currency-earning potential of this sector.” He further said that investments are being hindered due to the lack of supportive government policies and reforms in business in certain cases.
Two listed companies of the Square Group, Square Pharmaceuticals PLC and Square Textiles PLC, announced investments of BDT 5.35 billion. Among them, in October last year, the board of Square Pharmaceuticals announced an investment of BDT 5 billion for BMR&E, capital machinery, and land. At the same time, Square Textiles’ board announced an investment of BDT 350 million for BMR&E. For several years, the boards of both companies have been continuously announcing investments for business expansion.
When asked, Md Kabir Reza, Head of Accounts & Finance of Square Pharmaceuticals and Square Textiles, told Bonik Barta, “Over the past few years, we have been making continuous investments for business expansion. In this process, the board decides on investments by estimating the potential costs for expansion, and the business implements the investment as needed. So far, most of the announced investment has been spent. Without compromising existing capacity, we are investing strategically to enhance business capabilities, the benefits of which will be seen in the future.”
The listed multinational British American Tobacco Bangladesh Company (BATBC) announced an investment of BDT 2.97 billion in June. This investment decision was mainly made to relocate the company’s factory from Mohakhali to Savar. The move is expected to increase the capacity of the Savar factory. The company said it will fund this investment from its own resources and bank loans. In addition, in February, the company decided to buy a laser jet printer for BDT 249 million and in December last year, it announced an investment of BDT 283.8 million to increase production capacity. In total, over the past year, BATBC announced nearly BDT 3.5 billion in investments for business expansion.
The listed multinational company in the cement sector, LafargeHolcim Bangladesh, announced an investment of BDT 1.8 billion in May this year for business expansion. This investment is planned to establish a mill at the company’s Surma Plant located in Chhatak, Sunamganj.
Taufiqa Foods and Lavello Ice Cream PLC announced an investment of nearly BDT 1.5 billion for business expansion in September last year. The company’s board decided to use this fund to establish a second unit at the ice cream factory. For this, land adjacent to the company’s factory in Bhaluka, Mymensingh, was purchased. At that time, it was stated that contracts would be made with companies in Singapore, China, and Italy to purchase capital machinery for the new unit. After setting up the new unit, the company’s ice cream production capacity will increase to 250,000 liters per day. It was also mentioned that the project would be financed through bank loans and the company’s own funds, and products from the new unit would enter the market from June this year. However, so far, no updated information regarding this has been found on the stock exchange.
Envoy Textiles Limited decided in November 2024 to invest BDT 973 million to set up a spinning project expansion unit to increase yarn production. In this case, 30 percent of the investment was to come from the company’s own funds and 70 percent from bank financing. Once implemented, the project will raise the company’s annual production capacity to 4,550 tons. The unit will produce cotton-polyester-spandex core-spun yarn. The company had stated that the project would be completed by December this year. Additionally, in September 2024, Envoy Textiles’ board announced an investment of BDT 237 million to establish a factory for reprocessing waste fabric. The unit will reprocess 12 tons of fabric daily. Altogether, the company announced BDT 1.21 billion in investments for business expansion in 2024.
M Saiful Islam Chowdhury, Company Secretary of Envoy Textiles, told Bonik Barta, “The work on the waste fabric reprocessing factory has progressed a lot. We hope to start commercial production there soon. On the other hand, the initial plan for the spinning factory was to take bank financing. But later, due to the increase in interest rates on bank loans, we moved away from that plan. We are supposed to receive a $30 million loan from the Asian Development Bank (ADB). A major part of this will be spent as working capital, and a portion is planned to be invested in the spinning factory.”
Walton Hi-Tech Industries PLC’s board decided in April this year to start lithium-ion battery production to reduce import dependence. The total cost of the project is estimated at over BDT 1.13 billion. Commercial production is scheduled to begin by mid-2026. Once production starts, the company expects to sell batteries worth approximately BDT 1.44 billion annually.
Olympic Industries announced BDT 495.7 million in investments over the past year for business expansion. Of this, in August 2024, the company allocated BDT 227.2 million for capital machinery for a snack food making plant, in February this year BDT 136.6 million for capital machinery for a multi-functional chocolate plant, and in May BDT 131.9 million to set up a multi-color cookie production line.
ACI PLC’s board in February this year decided to invest BDT 85 million in its subsidiary ACI Herbal and Nutraceuticals Limited, and last month, BDT 225 million in another subsidiary, ACI Biosciences Limited. Altogether, the company announced BDT 310 million in investments over the past year.
Textile company Rahim Textile decided on November 2024 to invest BDT 247.6 million to expand its knit dyeing and washing unit. After installing new machinery, the company’s annual knit dyeing capacity will increase to 3,302,400 kg, and the washing unit’s annual capacity will rise by 11,250,000 pieces. The company stated that the investment will be funded through bank loans, its own funds, and other sources.
The board of the multinational paint producer Berger Paints Bangladesh Limited decided in February this year to invest BDT 51 million in its new subsidiary, Jenson & Nicholson Packaging Limited (JNPL). This subsidiary will produce various types of packaging materials in the National Special Economic Zone (NSEZ). Berger Paints will hold 51 percent ownership, while another subsidiary, Jenson & Nicholson (Bangladesh) Limited, will invest BDT 49 million for the remaining 49 percent ownership. The board also decided to amend the existing lease agreement for 39.41 acres of land with the Bangladesh Economic Zones Authority (BEZA) to finalize the land allocation for JNPL. After the amendment, 38.25 acres will remain under Berger Paints, and 1.16 acres will be allocated to JNPL. In addition, since 2022, the company has invested in setting up a third factory in the Mirsharai Economic Zone.
For several years, credit growth in the country’s private sector has been sluggish. Over the past year, it has slowed even further. As part of contractionary monetary policy, the 2024-25 budget had set a credit growth target for the private sector at 9.8 percent. However, due to the investment slowdown, even this single-digit target was not achieved. By the end of the fiscal year, growth stood at just 6.40 percent. In this situation, the target for credit growth in this sector has been revised down to 7.2 percent by December next and set at 8 percent by June 2026.
With new industrial facilities not established, imports of capital machinery have also declined significantly. Over the past year, the trend of opening LCs for three fundamental industrial inputs—capital machinery, intermediate goods, and raw materials—linked to GDP growth, employment, and export earnings has been downward. In FY 2024-25, LC openings for capital machinery imports fell by 25.41 percent, for intermediate goods by 6.26 percent, and for raw materials by 0.15 percent. Sector insiders say the drop in imports is due to the investment drought, economic stagnation, and reduced consumption expenditure. Currently, credit growth in the country’s private sector has reached the lowest level in history.
Rupali Haque Chowdhury, president of the Bangladesh Association of Publicly Listed Companies (BAPLC) and Managing Director of Berger Paints Bangladesh, told Bonik Barta, “Over the past two to three years, we have invested BDT 8.12 billion in setting up new factories. We have decided to establish a plastic factory. We are moving forward with it. The current period is quite challenging. The economy is in a contractionary phase, consumption has fallen, and interest rates are rising. In this situation, thinking about new investments is difficult. With sales declining, cash flow naturally drops. If profits from business decrease or losses occur, there is no opportunity for new investment. Everyone expects the country’s economy to recover after next year’s election. There are some positive aspects as well, such as the foreign exchange rate currently being stable and no severe dollar shortage. Everyone is waiting for the right time to invest.”