New

INTERNSHIP REPORT

ONAgribusiness of Saudi Bangladesh Industrial and Agricultural Investment Company Limited

ByMd. Bablur RahmanID No. # 103-537-071Semester # Summer- 2011

An Internship Report Presented in Partial Fulfillmentof the Requirements for the DegreeMaster of Business Administration

ATISH DIPANKER UNIVERSITY OF SCIENCE & TECHNOLOGYHOUSE # 83. ROAD # 4, BLOCK # B, BANANI, C/ADHAKA-1230, BANGLADESH

January, 2012

Internship ReportMBA ProgramADUST

Submitted byA.H.M. ZAHID KARIMID. 103-510-071

External SupervisorDr. Md. Ashraf HossainManaging DirectorSaudi Bangladesh Industrial and Agricultural Investment Company LimitedLimited

Internal SupervisorDr. Md. Serajul IslamAssociate ProfessorSchool of AgribusinessAtish Dipankar University of Science & Technology

Start Date for Internship : September 1, 2011End Date for Internship : January 15, 2011

Submission DateFebruary 15, 2011

Contents

Order Description Remarks1.0 Letter of transmittal2.0 Acknowledge3.0 Introduction3.1 Background of the Study:3.2 Rationale of the Study:3.3 Objective of the Study3.4 Scope of the Study3.5 Methodology of the Study3.6 Timeline of the Study3.7 Limitations of the Study4.0 Company profile4.1 About Radon-Bd4.2 Mission, Vision & values 4.3 Companies Approach , Partnership, Advice &Fund5.0 Core Competence of The Company6.0 Organogram of Radcon-Bd7.0 Main Part of The Study8.0 My Internship Duty9.0 Output of my work 9.1 World market research9.2 Turnover by client type9.3 Data collection method9.4 World market research9.5 Top ten research companies 9.6 Market in Europe10.0 Problems of agribusiness11.0 Magnitude of current investment 12.0 Demand of Consultancy in Agribusiness13.0 Competitor Organiization13.1 HB Consultants Limited13.2 SRG Bangladesh Limited13.3 BETS13.4 Young Consultants14.0 My Concept

Sl. No. Description Page No.15.0 My Internship Learning15.1 Scope and Potential of Management Consultancy in

Agribusiness Sectors15.1.1 Size of Agribusiness15.1.2 Process of different Products 15.1.3 Status of Value Addition15.1.4 Potential value added products- Grain15.1.5 Potential Value Added Products -Fruits15.1.6 Potential Value Added Products -Vegetables15.1.7 Potential Value Added Products -Spices15.1.8 Potential Value Added Products - Oilseeds16.0 SWOT Analysis17.0 Recommendation of Agriculture Service18.0 Conclusion 19.0 References

February 15, 2011

Dr. Md. Sirajul IslamAssociate ProfessorDepartment of AgribusinessADUST Business Faculty

LETTER OF TRANSMITTAL

Sir,

With the reference to your authorization, this is the report of “ Internship Report on Saudi Bangladesh Industrial and Agricultural Investment Company LimitedLimited Service”. Hope the report will help you to assume the service of Radcon-Bd.

I am always prepared to assist you by going through the report.

Sincerely Yours,

AHM Zahid KarimID. 103-510-071MBA Program (Agribusiness)ADUST

Acknowledgement

The author first praises his creator, almighty God, for giving ability to complete the Internship Report after successfully completion of other courses of AEMBA.

Then I would like to thank my internal Supervisor Dr. Md. Ashraf Hussain, Managing Director, Saudi Bangladesh Industrial and Agricultural Investment Company LimitedLimited for teaching me all the things that I needed to perform my work.

The author feels much pleasure to acknowledge with his deep sense of gratitude, sincere appreciation and heartfelt indebtedness to his reverend teacher Dr. Md. Serajul Islam, Associate Professor, School of Agribusiness, Atish Dipankar University of Science & Technology (ADUST), Dhaka for his keen interest, scholastic guidance, precious suggestions, generous help, affectionate feelings, constant encouragement and constructive criticism from the beginning to the end of the research work. He has also edited the report and offered valuable suggestions for this report improvement.

The author sincerely expresses his gratitude to all other teachers of the ADUST whose are directly involved in AEMBA for their valuable advice and affectionate loving.

The author is pleased to extend his gratefulness to all the staffs of the department of Agribusiness for their cooperation during the study.

It is the time the opportunity to express his heartiest gratitude and indebtedness to his wife Mrs Nazia Akther, relatives, friends and well wishers who directly or indirectly helped him in completing the EMBA successfully.

At last, I would like to thank all the executive of Saudi Bangladesh Industrial and Agricultural Investment Company LimitedLimited who give me support all the during my internship

period.

The Author

INTRODUCTION

3.1 Background of the Study:

As a student of Master of Business Administration at Atish Dipankar University of Science & Technology (ADUST) Agribusiness School it is essential that we apply our technical knowledge in the practical work field. For this reason we have to done an internship in a particular organization and submit a report to implement our knowledge in the work of our particular organization. After successfully submitting report, we complete our MBA course. I have done my internship in Saudi Bangladesh Industrial and Agricultural Investment Company LimitedLimited at Saudi Bangladesh Industrial and Agricultural Investment Company LimitedAgriculture Division.

3.2 Rationale of the Study:

For the better agro based entrepreneurship development, need better business plan. Bangladesh is an agriculture based country. For the better improvement of the economic condition of our farmers is to need modern agricultural technology and practices for their good livelihood. Agribusiness is an important part of agriculture practice. To start an ideal agribusiness need right guideline and plan. If you ask me, is consultation need in agribusiness? Then I will ask you why most of agribusiness, agriculture projects & industries are failed? In this report, I presented the probable solutions of this type of problems. So, this study is justifiable in this line.

3.3 Objective of the Study:

Main objective of my internship report of Saudi Bangladesh Industrial and Agricultural Investment Company Limited Agriculture Division is to successfully complete my MBA degree as well as inform others about agricultural services and benefits of consultation in agribusiness.

3.4 Scope of the Study:

In my internship report I give more focus on the benefits of agro based firms. Scope of my report was limited to these services of Saudi Bangladesh Industrial and Agricultural Investment Company Limited. Apart form these I provide some information about seed business in Bangladesh.

3.5 Methodology of the Study:

Very simple methodology is used to prepare this report. I collect primary data and information from my field visit and talking directly with my supervisor, clients, donor agencies, farmers, agriculture, entrepreneurs, agents of the company and different GO/NGOs office during this study. I collect secondary data and information form websites, service profile, marketing plan of Saudi Bangladesh Industrial and Agricultural Investment Company Limitedand my working experiences. After analyzing all data, this final report is prepared.

3.6 Timeline of the Study:

September 2011 to January 2012 in the time of ADUST semester “Fall- 2011”

3.7 Limitations of the Study:

There has a little chance of limitations in this study, because I am working in this company at agriculture service Division for two years. As a result, I have enough information about the services of Saudi Bangladesh Industrial and Agricultural Investment Company Limited which are

describe in this report. But here may have code of conduct as well as NDA (non-disclose agreement) which do not permit me to provide all sorts of information.

4.0 Executive Summery

4.1 About SABINCO

SABINCO (Saudi-Bangladesh Industrial and Agricultural Investment Company Ltd)  a private limited company established at Dhaka under the Companies Act 1913. It was formed in June 1984 at the joint initiative of the Ministers for Finance of Bangladesh and the Kingdom of Saudi Arabia in an effort towards strengthening economic co-operation between the two countries. The company started operations with an authorised capital of $60 million and a paid up capital of $48 million paid by the two governments in equal amounts. Later, the paid up capital was enhanced to $60 million on 31 December 2000. The company obtained license from the BANGLADESH BANK on 7 February 1995 to operate as a Non-bank Financial Institution under the Financial Institutions Act 1993.

The management of the company is vested in a 6-member board of directors. The government of the Kingdom of Saudi Arabia nominates 3 members in the board, including the chairman, and the government of Bangladesh nominates the other 3 members including the deputy chairman.

Main objective of SABINCO is to assist the pace of economic development of Bangladesh through investment in trade-oriented and agri-based industrial enterprises. It also discharges activities related to marketing of the produces of those industries. The company provides industrial credit for BMRE of existing industrial units and for their mechanisation to enable them to compete with modern production process at lower operating and overhead costs.

Investment policies of SABINCO are framed in line with those of the government of Bangladesh formulated and promulgated from time to time under changed circumstances. The company prefers to finance import substitution and local raw material-based export-oriented industries. It provides medium and long-term loans both in local and foreign currencies to prospective industries and makes direct capital investments in companies through equity participation. It manages and underwrites public issue of shares and debentures of companies. It also arranges private placement of primary issue of shares and debentures of companies/corporate bodies. Other functions of the company include regular participation in stock market transactions, loan syndication and constitution of investment funds.

During the period between the inception of its operations in Bangladesh in 1984 and 31 March 2001, SABINCO provided financing support of Tk 3,473 million both in local and foreign

currencies to 46 new industrial projects. 50% of the financial support went to industries of three sectors viz, textile (22%), chemical, medicine and other health related industries (17%), and fish and shrimp culture (11%). The remaining 50% was received by other types of industries the list of which includes glass and ceramic, cement, hides and skins, and products therefrom, engineering, food and beverage, toys, paper and other linkage industries. Credit financing by the company recorded a gradual growth over time. In 1994-95, the disbursement was Tk 1,336 million and the amount increased to Tk 2,424 million in 1999-2000. On 30 June 2000, total assets of SABINCO stood at Tk 4,039.07 million, which comprised term finance Tk 1,883.85 million, fixed assets Tk 38.28 million, current assets Tk 1,569.61 million, and other investments Tk 836.22 million. The liabilities were: share capital Tk 2,106.08 million, reserves Tk 1,790.12 million, and term loans Tk 142.85 million. Net profit of the company in 2000 was Tk 115.60 million.

Saudi Bangladesh Industrial and Agricultural Investment Company Limited, popularly known by its acronym SABINCO, is a joint venture Industrial Finance and Investment Company owned by the Governments of Saudi Arabia and Bangladesh.

It was incorporated under the Bangladesh Companies Act 1913 on 24th June 1984 with it’s headquarter in Dhaka. The company commenced operation in 1986. In 1993 Bangladesh Bank granted license to operate it as a Non-Banking Financial Institution.

The objective of the company is to make investment in manufacturing, agro-processing , infrastructure and utility service projects/industries in Bangladesh on commercial basis through loans, finances and equity participation.

The company has a paid up capital of USD 60 million with following shareholding.  Government of the Kingdom of Saudi Arabia - 50%Government of the People's Republic of Bangladesh - 50%

The company has a six-member Board of Directors to which the Government of Saudi Arabia nominates the Chairman and two members, while the Deputy Chairman and two other members are nominated by the Government of Bangladesh.

SABINCO has both loan and equity based products and it also acts as financial intermediary and advisor. SABINCO promoted large number of medium and large scale industrial projects in manufacturing, agro based and infrastructure sectors some of which were first of its kind in Bangladesh and created more than 10,000 new jobs. SABINCO played a pioneering role in Bangladesh economy by creating new industrial subsectors like industrial scale fish farming, fishery and poultry supporting industries, private sector cement factory, export oriented fruit and vegetable processing unit etc. Currently SABINCO is also funding in telecom, pharma, power and expanding its financing depth.

Origin:

The Saudi-Bangladesh Industrial and Agricultural Investment Company Limited, popularly

known as SABINCO, is a Development Financial Institution (DFI) and Investment Company. It

was promoted under dual initiatives of the Government of the Kingdom of Saudi Arabia and

the Government of the People's Republic of Bangladesh out of deep-rooted ties and close

economic relationship of the two brotherly Muslim nations. The company was established

under joint collaboration by a protocol signed between the two governments in 1984 with a

view to making investments in the industrial and agro-industrial fields in Bangladesh. SABINCO

was floated as a private limited company with the governments of Saudi Arabia and

Bangladesh as the two Shareholders. It was incorporated under the Bangladesh Companies

Act 1913 on 24th June 1984 with its headquarter at Dhaka. The company commenced

operation in 1986. Subsequently, Bangladesh Bank granted license to SABINCO in 1993 under

the Financial Institutions Act 1993 to operate as a Non-Banking Financial Institution.

Vision:  To operate as the country’s leading Development Financial Institution (DFI) and a

major contributor to the national efforts for sustained economic development of our country

and improvement in the quality of life of our people.

Mission:  Creation of national wealth, entrepreneurship development and employment generation through promotion

of productive enterprises.

Objectives : To make investment in manufacturing industries, agro-processing industries, infrastructure projects and

utility service industries in Bangladesh on commercial basis through loans, finances and equity participation.

Shareholding:

Total paid up capital:  US$ 60 million  

Government of the Kingdom of Saudi Arabia - 50%

Government of the People's Republic of Bangladesh - 50%

                                                                           Total -100%

Oard of Directors :

The company has a six-member Board of Directors to which the Government of Saudi Arabia nominates the Chairman and two members, while the Deputy Chairman and two other members are nominated by the Government of Bangladesh. Current Board Members of the company are:  

Management

MANAGING DIRECTOR

Mr. Quazi Shairul Hassan has been appointed as Managing Director of Saudi – Bangladesh Industrial and Agricultural Investment Company Limited (SABINCO). He

Dr. Abdulaziz M. Al-Turki   Chairman

Dr. Mohammad Tareque   Deputy Chairman

Mr. Abdul-Majid A. Al - Wohabe   Director

Mr. Mohammed Iqbal   Director

Mr. Ahmed M. Al-Ghannam   Director

Mr. A.B.M. Ahsanul Haque Ahsan   Director

Mr. Quazi Shairul Hassan   Managing Director

assumed his duties as Managing Director from 26 October 2009.

He is a management professional with more than three decades of multi industry experience, having worked both at home and abroad for American Express Bank, Eastern Bank, One Bank and SABINCO among others.

Mr. Shairul, an MBA from IBA, Dhaka University.  

MILESTONE ACHIEVEMENTS

SABINCO facilitated mobilization of capital expenditure / investment of about Taka

one thousand crore (ten billion) in local private sector.

Above 10,000 new jobs were created in large numbers of big and medium scale

industrial enterprises promoted by SABINCO.

Introduced Industrial Scale Fish Farming (Grow Out) concept in the country.

Promoted first Balanced Fish & Poultry Feed mill within country.

Promoted first commercial Shrimp Hatchery (Black Tiger) unit in private sector.

First successful local fruit and juice processing unit was promoted by SABINCO.

Facilitated accelerated growth of local private sector cement industry by promoting

four pioneer cement industries.

Successful in raising fund as mandated syndicate financing arranger.

As a profitable company it has been plowing back its profits for investment in new

industrial ventures within the national economy.

PRODUCT RANGE

Loan Product:

Term LoanSABINCO provides Term Loan to new project as also for BMRE. Tenure of the loan is 5 to 10 years. Interest rate is very competitive and can be both fixed and floating. 

Syndication Loan SABINCO acts as an arranger of Syndication Loan for big scale projects and also participates in Syndication arranged by other financial institutions. SABINCO being a specialized financial institution has an experience in promoting large scale green field industrial projects and arranging fund from both local and international financial institutions, which has put it in a competitive advantageous position with other financial institutions.

Working Capital Loan Working Capital Loans are usually provided to existing financed projects on selective basis.

Institutional Loan SABINCO can extend Credit Line to a financial institution for re-lending on mutually negotiated terms and conditions.

Equity and Transferable Security Products:

Participation in IPO, Secondary Market Operations

SABINCO participates in IPO, operates in the Secondary Market and also takes part in Private Placement of Shares.

Private Placement of Shares /Debenture

SABINCO makes placement of private equity to local/foreign Institutional Investors and helps entrepreneurs in arranging private equity for their industrial ventures.

Preferred Stock In case of Preferred Stock Dividend rates are fixed on case to case basis depending on the nature of the project; accompanied with Put Option, backed by Personal Guarantee of sponsors.

Investment in Debt and Securitized Instruments

Debt Instruments like Zero Coupon Bond or Asset Backed Securities are also used to finance a project.

Bridge Loan For this facility interest rate is similar to that of Term Loan.  Tenure of the loan is 1 to 3 years.

Fee Based ProductsSABINCO provides Professional Services like Advisory Service, Consultancy , Syndication service, Securitization Service to clients.

ELIGIBILITY FOR AVAILING FINANCE

Any productive industrial venture with good and clean track record of the promoters is eligible for seeking investment through submission of proper documentation as required by SABINCO. 

Loan Amount:

Loan amount can vary depending upon the specific requirement and repayment capacity. However SABINCO’s average loan/funding size to a single project is more than TK 50 million.

Securities for Loan:

Borrowers have to provide securities that are determined, based on nature of the project and risk perception.

Rates & Fees: SABINCO offers very competitive interest rate , which more often than not better

than the interest rate offered by other NBFIs and Private Commercial Banks.

The interest rates can be both fixed and floating to satisfy the needs of a project

and its sponsors.

Repayments:

In general repayment period is 5 to10 years that depends on estimated cash flow

of the project.

Usually payments are made on quarterly basis through Post Dated Cheques

(PDCs) Bank Transfer. However payment may be structured taking into

consideration seasonality business in certain industries.

The repayment schedule is provided at the time of disbursement of the funds.

FUNDING APPLICATION PROCESSING

Application stating the required financing amount and accompanied by the following documents need to be submitted by the promoters/ lead arranger.

Feasibility Report on the project;

Sponsor’s Profile and existing Business Profile if any;

Income Statement & Balance Sheet of the company and its sister concerns (if

any);

CIB Undertakings.

Other information and documents as require by SABINCO.

Updated Liability position of any outstanding liabilities with other financial

institutions.

SCHEDULE OF FEES & CHARGES

Large Industrial Loan:

Fees & ChargesTerm Loan Working Capital Loan

Sole Finance:    Processing Fee 0.10%-0.25% 0.10%-0.25%Legal/Documentation Fee At Actual At ActualPrepayment Fee/Early Settlement Fee

1%-2% 1%-2%

Penal Interest 1%-2% on the overdue amount

1%-2% on the overdue amount

Reschedulement charge NIL NIL     Fees & Charges Syndication Fund

RaisingSyndication Participation

Loan Syndication:    Arrangement Fee 0.20%-1.00% N/ALegal/Documentation Fee At Actual As decided by the

Lead ArrangerPartcipation Fee 0.10%-0.25% As decided by the

Lead ArrangerL/C Commission As per negotiation with the

ClientAs decided by the Lead Arranger

Penal Interest 1%-2% on the overdue amount

As decided by the Lead Arranger

Prepayment Fee/Early Settlement Fee

1%-2% 1%-2%

Reschedulement charge NIL NIL 

SME Finance:

Fees & ChargesTerm Loan Working Capital

LoanProcessing Fee 0.10%-0.25% 0.10%-0.25%Legal/Documentation Fee At Actual At ActualPrepayment Fee/Early Settlement Fee

1%-2% 1%-2%

Penal Interest 1%-2% on the overdue amount

1%-2% on the overdue amount

Reschedulement charge NIL NIL 

Interest Rates:

Particulars

Sole FinanceSyndication Participation

Large Loan/Term Loan

Working Capital Loan

SME

Agro Based Sector

10%-12% 10%-12% 10%-12% As decided by the Lead Arranger and subsequently by majority lenders

Service Sector 13%-16% 13%-16% 10%-13% As decided by the Lead Arranger and subsequently by majority lenders

Industrial Sector

13%-16% 13%-16% 10%-13% As decided by the Lead Arranger and subsequently by majority lender

 Note:  Interest rates are subject to change without notice depending on the prevailing money market conditions based on the agreements with the Borrowers/Clients.

7.0 MAIN PART OF THE STUDY

Saudi Bangladesh Industrial and Agricultural Investment Company Limited Agriculture Division :

Saudi Bangladesh Industrial and Agricultural Investment Company Limited Agriculture Division is a specialist division of Saudi Bangladesh Industrial and Agricultural Investment Company Limited and is dedicated to providing agribusiness service & consultancy, agriculture business planning and development, agro based project (GOs & NGOs), marketing and others field. The dedicated team, including trained agriculturists, works closely with clients in helping evolve strategic marketing solutions. Every project is handled with a perspective where we work along with clients in identifying the problems and providing research based, actionable solutions.

Specific Objectives of Agriculture Division

Brief ob Focus Area :

Integrated Agricultural DevelopmentAgriculture, rural development and farmers are among the top concerns and priorities of the Bangladesh Government. Bangladesh is facing dual challenges to ensure food security to its large and still growing population and to improve the living standards of the rural population. Sustainable stable growth in agriculture and ensuring food security are key areas of the Government's development plans. With increasing income levels in the urban areas and more

sophisticated consumer demand, there is also a shift in the focus from the quantity of food supply towards cost effectiveness, larger diversity and quality of agricultural products. So integration of agriculture is the demand of time.

Integrated Farm Design, Planning & Implementation Integrated Model Farm Design Home Based Integrated Farming (Modern Concept) Integrated Crop Management

Infrastructure Development

Those involved in agricultural production have long understood the importance of nurturing and sustaining the natural resources that make farming possible. The opportunity for enhancing sustainable practices that yield tangible benefits is growing. We understand these emerging opportunities and are capable of guiding clients in the development of sustainable programs and practices that can return measurable results.

These opportunities and benefits can come from additional revenues from marketing and differentiation efforts; in other cases, they will come from regulatory mandates or requirements from business partners in the food system and distribution channel.

Why a Sustainability Plan Now?

Recognizing the impact of changes in government policies, regulations, or business partner practices can be instrumental in attaining a sustainable competitive advantage. Benefits of developing a proactive sustainability strategy include:

Participating in defining sustainability, instead of having those decisions made by others Communicating corporate values to stakeholders Mitigating compliance costs

The move toward sustainability is moving quickly and having an understanding of the options will be important. A strategic focus on sustainability will allow you to shape your business environment and anticipate change.

Sustainability Planning developing sources of funding from the private and public sectors Impact analysis of private sector sustainability Inorganic and organic fertilizer plant Agro industrial plan, design & management Bio fertilizer Production Plant Agro based Farm & Industry Design Agro based home design & management

Agricultural Assessment & Project Planning

Food Production Improvement & Processing Food processing plant Crop Production, Seed production, Storage including Post harvest Fisheries Production & Processing Meat production & Processing Milk production & Processing Small & Large Scale Consumer Goods Production Contacts with Produce Packing & Market Distribution Equipment/Systems Procurement Shipment and Delivery Logistic First Hand Contacts with Agricultural Suppliers & Producers

Sector Strengthening We provide objective views and analyses of problems and opportunities in the production, distribution, and consumption of food, fiber, fuel, and environmental landscaping products. Our goal is to deliver timely and accurate information for agribusiness decision makers and policy makers to make sound choices. With many years of experience in agricultural economics, our team of consultants develops work products rooted in sound quantitative and qualitative methodologies which have proven to provide reliable assessments of often complex agricultural issues.

Feasibility studies & Market research Farm Planning, Design & Management Agri- Business Assessment and Planning Agricultural Sector Analysis Industry structure, conduct and performance Policy and regulatory analysis Benefit-cost analysis Financial modeling Benefit-cost analysis Econometric / statistical analysis Comparative economic studies Project Design & Management Growing Assistance & Growing and Livestock Assistance Growing & Fisheries assistance Expert Agronomic Support

Rural Development

We work with producer cooperatives, nonprofit organizations, and community economic development agencies on rural development programs that have an agricultural component. By enlisting our capabilities in business planning and infrastructure development, communities working on rural development projects can be help achieve their goals of increased self-sufficiency while preserving their rural quality of life.We provide assistance as facilitators and advisors for locally-driven projects, and our background in agricultural business development goes a long way in helping communities sustain the conditions for long-term growth.

Area of rural development ;

Rural Health & Education Rural water & Sanitation Rural Market & Economics Rural community agricultural economic development planning Audits, inventories and assessments of regional and community agricultural assets Micro-economic impact and analysis Long-term economic strategy development Transportation Infrastructure development projects Sustainability assessments and plans Attracting business investment Developing sources for funding Trade and export promotion programs

Forest Management Eco Park design Roadside Plantation Reforestation of degraded land Commercial Agro forestManagement

Agro Climate Management Disaster management Climate Change Adaptation Environmental Management Natural Resource Management

Farmers Health & Crop Insurance

Institutional Capacity BuildingCapacity lies in the quality of local policy cultures. Some are well integrated, well connected, and well informed, and can mobilize readily to act to capture opportunities and enhance local conditions. Others are fragmented, lack the connections to sources of power and knowledge, and the mobilization capacity, to organize to make a difference. Capacity building to improve public sector performance is thus an important focus of development initiatives.

Area of capacity building;

Civil Society and Social Movements; Democracy and Human Rights; Identities, Conflict and Cohesion; Social Policy and Development; Technology and Society. Agriculture policy & Developemnt Agricultural Training Programs & Seminars Professional Agricultural Tours Coaching on project implementation Farm & Industry Management Training Financial Management

Agribusiness DevelopmentIn today’s highly competitive and global agribusiness market place launching an agricultural venture successfully is a challenging undertaking. Assembling a team of qualified people, conducting market research, securing capital and financing, and developing a solid business plan to guide the entire effort are all major projects by themselves. We deliver usable results in these key areas of both the feasibility study and the start-up plan for the venture.

Our involvement in all segments of agriculture – from farm inputs, production, post-harvest processing to logistics, and end user marketing – keeps us in touch with current developments and long-term trends shaping the business. Harnessing this experience in the development of your plan will help you achieve the essential differential advantages you will need for your new business over the long term.

Projects Include:

Business Plan development Farm Management Farm finance Management Regulatory, technical, and financial feasibility studies Market potential research Potential competitor analysis Business plan development Marketing planning Personnel development and training Capitalization and financing strategy

8.0 My Internship Duty at Saudi Bangladesh Industrial and Agricultural Investment Company Limited

My internship period was 4 month and during that period I worked under direct supervision of the Managing Director of Saudi Bangladesh Industrial and Agricultural Investment Company Limited. Basically my duty was to analyze scope and potential of management consultancy in agribusiness sectors, the agriculture of different firms and potentiality of agriculture as well as world market. I worked both in office and outside Dhaka. In my internship period I have performed following duties:

Seed Business in Bangladesh at a Glance

Bangladesh Seed Grower, Dealer and Merchants Association (BSGDMA) Asian Seed Congress 2007, Manila, Philippines

Bangladesh is primarily an agriculture based country with agriculture accounting for 23% of the country’s GDP. About 75% of the country’s population is engaged in agricultural production.

The seed industry in Bangladesh comprises of both public and private sector initiatives. In the private sector, there are more than 100 companies involved, with over 5000 registered seed dealers operating across the country. The recent expansion of the private sector seed companies has resulted in the engagement of thousands of contract farmers into the formal seed production chain, leading to improved livelihoods amongst the rural community.

Government agencies involved in this sector include Bangladesh Agricultural Development Corporation (BADC), Bangladesh Agricultural Research Institute (BARI), Bangladesh Rice Research Institute (BRRI), Bangladesh Jute Research Institute (BJRI) and Department of Agriculture Extension (DAE). The government has recently given the seed sector a “priority” status.

Of the locally produced vegetable seeds, nearly 905% is accounted for by the private sector. The government agency most actively involved in vegetable seed production is BADC. Vegetable production is Bangladesh has traditionally been seasonal, with 70% of the vegetables being grown in the dry winter months between November and February, and only about 30% during the rest of the year.

Recent initiatives from the private sector have emphasized the development of vegetable varieties suitable for growing during the hot and wet summer months between March a-October-enabled by the production of off season vegetable seed varieties. The past decade has also been marked by a transition from Open Pollinated to Hybrid varieties-deriving maximum utilization from the existing land mass.

With regards to rice seed this year, an additional 1 million hectare of land has been brought under hybrid rice production. This required 11400 MT of seed, and of this 1800 MT was locally supplied while the rest was imported. The production, marketing and import of the entire volume of the hybrid rice seed was undertaken by the private sector. However, hybrid rice seed accounts for less than 5% of total rice seed requirement.

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Considering the land limitations in the country, recent trends indicate a shift towards the production of high yielding varieties of both vegetables and rice. Locally produced varieties including Red Amaranth, Stem Amaranth, Yard Long Bean, Bitter Gourd and Cabbage have found markets in Europe and some countries of South East Asia.

Market Opportunities

Varieties Total Total Supply Total Supply

Demand Government Private

Rice 313955 74314 3350 77664wheat 72000 19051 19051Maze 3300 233 3000 3233Jute 3570 456 1350 1806Pulses 21350 245 245Oil Seed 13500 398 398Vegetable 2700 63.2 728 791.2Spice Seed 101875 42 65 107Potato 400000 9231 5000 14231Total 932250 104033.2 13493 117526.2

Source: Seed Wing, Ministry of Agriculture, 2006

The gap between local production and demand for seed amounts to nearly 87 percent. Imported seeds thus play a major role in the seed sector of Bangladesh. Huge opportunity also exists for the expansion of local seed production.

Market Size of Seed in Bangladesh

Crop Name Quantity of Seed Used in

Agriculture (MT)

Market Price of Seed

Used in Agriculture (M Dollar)

Rice (HYV) 288956 124Rice (Hybrid) 25000 71Wheat 72000 26Maize 3300 5Jute 3570 3Pulse 21350 15Oil Seed 13500 10Vegetable 2700 12True Potato 400000 171Total 830376 436

Source: Seed Wing, Ministry of Agriculture, 2006

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Specific features and benefits of the product of SABINCO:

Products

1. Broiler parent chicks and broiler chicks

is the Bangladesh franchisee of Cobb-Vantress USA for the Cobb 500 broiler, acknowledged to be the best broiler in the world. The Cobb 500 parent and broiler chicks of SABINCO are considered to be the best performing chicks in the domestic market, and are sold at a premium over other broiler breeds. To give our customers a budget option, we also produce Ross broilers from our own GP.

2. Layer chicks

SABINCO is also the distributor for Hy-line brown and white layers in Bangladesh. Hy-line International of the United States of America is the oldest poultry breeding company of the world, and is the leading breeders of layers.

3. Feed

SABINCO expanded its operation into poultry feed manufacture in 2006. Within a very short period it has become recognized as the market leader in both quality and volume with a market share of 24%. In order to ensure consistency in feed quality, SABINCO received technical assistance from Cargill USA and Buhler Switzerland to set up its commercial feed mill operation. The feed mill uses state-of-the-art sanitizing pellet mills from Buhler of Switzerland, manufacturer of the world's best feed equipment. By eliminating any possible bacterial contamination from the feed, the Buhler sanitizing pellet mills ensure that poultry farmers experience fewer disease outbreaks and see better results.

In my participated fairs and demonstration program I have to tell the features and benefits of our products to the customers. Basically I told the followings this about our Rice seed, Maize seed and mustard seed:

Features Benefits it will give than the own saved seed.

1. Rice Seed:

Important Features... ...

This seed class is Foundation and it is produced from Breeder Seed (BS) which collected from Bangladesh Rice Research Institute (BRRI).

Seed rate is 6 kg acre-1

Moisture percentage (%) maintains maximum 12. Disease infection and Insect infestation rate is low. Healthy seedlings produced from this seed. High yield.

Benefits of Using This Rice Seed:

Maximum germination percentage (%), as a result seed rate becomes low. Cheppy grain percentage (%) is minimum or free. Bright color seed, as a result no seed borne fungus inside the seed. Thousand Grain Weight (TGW) is high, full matured seed.

2. Maize Seed:

Important Features... ...

Cultivate in both Rabi and Kharif season Cob size big Shank size and shape is thin. Thousand Gain Weight (TGW) is maximum. High shelling percentage (%). Lodging resistant. Erect leaves Uniform cob size

Benefits of Using This Maize Seed:

Some hybrid has low spacing, as a result maximum seed consume per unit of area. Increase seed, increase plant and ultimately increases number cobs and yield increases. Bright and shinny grain and that’s why this hybrid have got high market price. Low moisture content in grain and no insect damage during storage of this hybrid grain.

3. Mustard Seed:

Important Features... ...

Cultivate in Rabi season Seed rate is low. Sowing method in line. Heavy vegetative growth Only one hybrid mustard seed in Bangladesh.

Benefits of Using This Maize Seed:

Seed cost minimum per acre High yielding variety Oil content percentage (%) is high

Competitors of SABINCO:

At present in Bangladesh competition in the agricultural seed business is quite intense. As, SABINCO started its seed journey in 2008; for this reason they are facing very tough competition from some companies who are operating their business in this sector for many years. At present 20-25 large medium and small companies are actively operating their business in this sector. But the main competitors of SABINCO especially in the rice and maize seed sector are:

ACI seed Limited Energypac Agro Limited Syngenta (Bangladesh) Limited Krishi Banijyo Protisthan Alpha Agro limited Supreme Seed Company Limited

1. ACI seed Limited:

This company is considered one of the pioneer of modern varieties of rice cultivation in Bangladesh established 1997. This company first introduced Hybrid rice in our company. They also producing and marketed HYV rice seed in this country. Now they contribute 3 to 4 hybrid rice in the country.

2. Energypac Agro Limited:

Established in 2003 and this company is the distributor of 2 hybrid rice seed which are imported from china. This company also produced and supply foundation rice seed across the country.

3. Krishi Banijyo Protisthan:

This company established in 2004 (a sister concern of Auto Crop Care Limited) and they were only distributor of Monsanto India (Pvt.) Limited. From this company they import hybrid maze seed and distributed over the country. They also produced and marketed OP variety rice seed.

4. Supreme Seed Company Limited:

This company is a very old company in this sector and established in 1990. They are the market leader of hybrid rice seed. They also produced hybrid rice seed in our country. Supreme seed go to the vegetable and maize seed business.

5. Syngenta (Bangladesh) Limited:

This is a Switzerland based prestigious multinational company. They marketed both inbred and hybrid rice seed, hybrid maize seed and other vegetable seed. But hybrid maize seed is the maize competitor product to our company.

Competitor of fish feed:

Since last decade, fish feed manufacturing companies have been increasing like the bacterial multiplication!! One common question can be arisen behind's back. What are the actual reasons of it? or what is the prospect of fish feed industry? There are some good reasons like-day by day more and more people are involving in fish culture, increasing demands of fish in the local market as population is increasing simultaneously here in Bangladesh, inadequate good quality fish feeds in the market, optimum production cost, high elasticity of the market, better annual turnover of fish feed manufacturing companies and greater prospect of fresh water fish processing and exportation in near future. 

There are some national and multinational fish feed manufacturing companies currently operating their business in Bangladesh. Most of the fish feed manufacturing companies are trying to deliver their best product in the market with a good conversion rate. Among the multinational feed manufacturing

companies ACI Godrej Agrovet Pvt Ltd   has taken a significant market share within a very short time. Among the Both national and multinational fish feed manufacturing companies Quality Feeds Limited is still now at the top position with a big market share. 

Here's a brief list of fish feed manufacturing companies currently in operation in Bangladesh:

01. Quality Feeds Ltd.

02. ACI Godrej Agrovet Pvt. Ltd.

03. Paragon Poultry Ltd.

04. Aftab Bohumukhi Farms Ltd.

05. Spectra Hexa Feeds Limited.

06. C. P Bangladesh Company Ltd.

07. Fresh Feed.

08. Teer Poultry and Fish Feeds.

09. Agro industrial Trust (AIT).

10. Biswas Agro and Fish Feed Ltd.

11. New Hope Feed Mill Bangladesh Ltd.

12. Aman Feed Limited.

13. Lion Feeds Ltd.

14. Rupshi Feeds Limited.

15. Usha Feeds Limited.

16. Provita Feed Ltd.

17. Nourish Feed and Hatchery Ltd.

18. Jayson Agrovet Ltd.

19. Uttara Foods and Feeds Pvt. Ltd.

20. Amrit Nitol Feed Ltd.

21. Aleya Feeds Ltd.

22. Sunny Feed Ltd.

23. BRAC Feed Mills

24. Euro Feeds Ltd.

25. National Feed Mill Ltd.

26. Index Agro Feeds.

27. Saudi Bangla Fish Feed Ltd.

28. ACME Feeds Ltd.

29. Modern Feeds Ltd.

30. Niribili Feeds and Hatchery Ltd.

31. SGS Feeds Ltd.

32. S.B Feeds Ltd.

33. Bay Agro Ltd.

34. Aga Feed Mill Ltd.

35. Pocha Feeds.

36. VNS Feeds.

37. SMS Feeds.

38. Asia Feed.

39. Super Feeds Ltd.

40. FNF Feeds Ltd.

41. Care Feeds Ltd.

42. Mono Feed Ltd.

Present Situation :

SABINCO is a new company in this seed industry in Bangladesh. But as a new company the achievement of Petrochem seed is excellent especially in rice and maize seed sector. At present hybrid maize seed of Petrochem (Pioneer)holding the 3rd position in the country with % market share and giving very tough competition to Monsanto maize seed. Up to now Petrochem has taken initiative for selling of 500 MT maize (Pioneer) seed.

SABINCO also achieved their goal on rice seed quality.

14.0 My concept in Short

To summarize I want to say that for better consultancy service in agribusiness the organization should be highly professional considering agriculture, technology and business knowledge. These are the combination of effective for agribusiness, agriculture projects & entrepreneurship development. Introducing effective training & courses for agribusiness management, project management, farm development a firm can spread their area. “A Person to A Farmer “ concept can bring a revolution in modern agriculture sector. It is highly recommended for a agriculture firm to have their own research & development section which can ensure the clients to better output.

15.0 My Internship Learning

Overall when my during Internship period I have developed a fair idea on following things:

World management market Role & activities of agriculture division of Radcon_bd Limited Competitors of Saudi Bangladesh Industrial and Agricultural Investment Company LimitedLimited Present situation of Saudi Bangladesh Industrial and Agricultural Investment Company

LimitedLimited. SWOT of Saudi Bangladesh Industrial and Agricultural Investment Company LimitedLimited Future prospect in agriculture of Saudi Bangladesh Industrial and Agricultural Investment

Company LimitedLimited

The main achievement is to find out the scope and potential of management consultancy in agribusiness which has described from the next page.

16.0 SWOT Analysis

Strengths A group of enlisted consultant cover

the all area of field. Pro growth team. Loyal workforces. Strong linkage with donor organization.

Weaknesses Lack of advance technologies. Lack of professionalism. Time frame breaking. Few or no training program. Weaker office management. Lack of marketing strategy. Lack of local funding for entrepreneurs.

Opportunities Strong linkage with partner

organization. Quick government & donor org

response through innovative work. Expend training & courses opportunity. Strong linkage of education programs

and economic development. Partnership with international

organization. Internal marketing More private / public alliances

Threats Frequent political unrest. Market leading competitor. Boring legislative process. Uncertain environmental disaster. Sustainable financial backing may

cause of company stagnant. Illegal bidding process.

17.0 Recommendations of Agriculture Service

Agribusiness is the integral part of our economy. service for the agriculture sector can be categorize into three. These are ;

1. Agricultural operation2. Agribusiness 3. Integrated agribusiness

For these three category I have different recommendation for each.

Recommended area for agricultural operation :-

Initial agricultural assessment of a particular site location Suitable crop recommendations Agricultural financial viability assessment Project Planning Quotations Assessment Site Construction Supervision Local Farmer Training Programs Growing Assistance & Management, scientific, and technical area

Recommended area for agribusiness :-

Management, Scientific, and Technical Services

Management firms advise on almost every aspect of corporate operations: marketing; finance; corporate strategy and organization; manufacturing processes; information systems and data processing; electronic commerce (e-commerce) or business; human resources, including benefits and compensation; and many others. Scientific and technical firms provide technical advice relating to almost all non management organizational activities, including compliance with environmental and workplace safety and health regulations, the application of technology, and the application of sciences such as biology, chemistry, and physics.

And the integrated agribusiness is the combination of agricultural operation & agribusiness.

18.0 Conclusion :

To conclude I want to say that as a new company the performance of Saudi Bangladesh Industrial and Agricultural Investment Company Limited up to now is to quite impressive. Although it will be very tough for Saudi Bangladesh Industrial and Agricultural Investment Company Limited to get the market leadership of management and agricultural management from other management organization.