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Sales drop 30pc in one year

Local biscuit makers feel pinch of price hike of essentials

Sohel Parvez
Local biscuit industry passes through a crisis as sales dropped by about 30 percent in the last fiscal year following a decline in purchasing capacity of consumers in the wake of price hike of essential commodities, industry insiders said.
Moreover, the surging prices of basic raw materials such as flour and edible oil have also forced many biscuit makers, including some leading companies, to cut their production.
While many small biscuit makers are now facing the risk of closure, according to the industry people, who also said the government's drive against food adulteration also affected the sector.
"It's a tough time. Overall the industry's sales dropped by
about 30 percent in the fiscal year 2007-08,” said Md Safiqur Rahman Bhuiyan, president of Bangladesh Auto Biscuits & Bread Manufacturers Association (B/YBBMA).
According to Shafiqur, the sector recorded a turnover of aboutTk 500 crore in fiscal year 2007-08 from about Tk 700 crore a year ago.
"It's (biscuit) not a necessary item. So, people are cutting down consumption,” he said adding that he has to shut his factory at Gaibandha because of increasing cost of fuel.
The biscuit makers said the prices of raw materials have almost doubled over the last one and a half years.
Now each kg of unpacked flour sellsatTk37-42againstTk 25-29 a year ago, according to Trading Corporation of Bangladesh. The price of edible oil has soared from Tk 72-73 to Tk 119-122 a litre.
“But we have been able to increase the prices of biscuits by only 25 percent. Even after that our sales have become static," said a senior official of Al-Amin Group, a leading biscuit maker.
"It has become difficult for many of us to sustain with the rising costs of production. Many of us are cutting down production due to fall in sales,”
said Nurul Amin, deputy manager (sales and marketing) of Bangas Ltd.
Moqbul Ahmed, general manager (marketing) of the country's one of the oldest biscuit makers Nabisco, said the company is cutting its production to reduce costs.
"What we now need to do is to produce for those groups of
people having purchasing capacity,” he said.
A senior official of Partex that manufactures Danish brand biscuits said the company's sales were good earlier. But the situation is quite reverse now, he said adding that the company has also cut productions.
“The overall industry is
going through a crisis,” said Humayun Kabir, director of Romania Food and Beverage, a concern of Bengal Group of Industries that entered biscuit market about two years ago.
He said the company now focuses on urban areas to boost sales.
sohel@thedailystar.net