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Pran to enter flour, frozen food markets

Sohel Parvez
Processed-food giant Pran plans a Tk 293-crore ($35.8 million) expansion to fortify its position in the growing domestic food market by diversifying its productbasket.
As part of the plan, the company will set up plants to process flour, frozen food items and liquid glucose.
The company said it will produce vitamins- and minerals-fortified flour, and will supply the flour as a raw material to its frozen food processing plant for making frozen snacks such as chapati, paratha, singara and samucha.
The liquid glucose plant will reduce Pran's import dependence for the glucose it uses to make chocolates and candies.
"The investment for these plants is part of our strategy of vertical integration and product diversification," said Pran's Chief Executive Officer Amjad Khan Chowdhury.
Sylvan Agriculture Ltd, a concern of Pran, will set up these plants with a $25.1 million finance from the Asian Development Bank.
Pran will invest the rest $ 10.7 million.
"So far I know, we are going to be the first company in Bangladesh to get the ADB loan," said Chowdhury.
Pran's investment drive comes as the demand for processed food grows due to changes in lifestyle, urbanisation and rising incomes from a steady growth of the economy over the past two decades.
According to the ADB, Bangladesh's
food and beverage sector has an estimated annual value of $13 billion, of which the processed food market is worth around $1 billion.
"There is a huge growth potential for processed food due to the rising middleclass, higher women employment, and changes in lifestyle," said the ADB in its sector overview for the Pran project.
The export demand for processed food items is also rising, not only in the advanced economies but in the developing countries as well.
The share of processed food in the global food exports increased from 44 percent in 1980 to 63 percent in 2006, according to the ADB.
Processed food exports from developing countries have significantly contributed to this trend. Processed food items from Bangladesh mostly go to the Middle East, where many expatriate Bangladeshis live.
Pran said it mainly wants to cater to the growing local market for processed foods, including "ready to cook" and "ready to eat" snacks such as paratha, samucha and singara.
"The demand for such frozen snacks will increase, keeping pace with industrialisation, " said Chowdhury of Pran.
The plant for liquid glucose will cut the country's import dependence as more than 90 percent of the local demand is met with Indian and Chinese imports.
Pran said it will use a portion of the liquid glucose to make candies and sell the rest in the local market.