In a time of low confidence, Abul Khair Group chairman expands business
In recent months, according to industry insiders, Kashem has acquired Abdul Monem Sugar Refinery Limited and the edible oil division of Globe Pharmaceuticals, in deals worth approximately Tk4,000 crore
Summary:
- Abul Kashem expands into food sector via Smile Food Products Limited
- Acquired Abdul Monem Sugar Refinery and Globe Edible Oil for Tk4,000 crore
- Abdul Monem Group sold refinery due to mounting losses and loan pressures
- Smile Food Products now sells edible oil, flour, and bottled water
Abul Kashem, chairman of Bangladesh's largest industrial conglomerate Abul Khair Group, has expanded business in the food and commodities sector under his company Smile Food Products Limited – at a time when confidence is low for new investments.
In recent months, according to industry insiders, Kashem has acquired Abdul Monem Sugar Refinery Limited and the edible oil division of Globe Pharmaceuticals, in deals worth approximately Tk4,000 crore.
As part of the acquisitions, Kashem paid at least Tk1,700 crore for Abdul Monem Sugar Refinery, widely known as Igloo Sugar, and more than Tk2,000 crore for Globe Edible Oil Limited, which includes several acres of land in Dhaka's Tejgaon industrial area.
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A senior executive at Abdul Monem Group said the decision to sell the sugar refinery was driven by mounting losses. "Our losses from the sugar mill were increasing, making it difficult to sustain operations," he said. The group has reportedly used Tk600 crore from the sale proceeds to settle outstanding bank loans and pay arrears to the National Board of Revenue (NBR).
Despite owning Igloo, the country's largest ice cream producer and a major consumer of sugar, Abdul Monem Group was struggling to compete in a market where sugar prices are regulated by the government. The executive noted that businesses with integrated operations – such as bakeries and beverage production – had a better chance of surviving, an advantage Abdul Monem lacked.
Abdul Monem Sugar Refinery has an annual refining capacity of 300,000 tonnes, representing one-eighth of Bangladesh's total sugar demand. The refinery is now under the management of Kashem's team.
Kashem's expansion has also included the acquisition of GEOL, a concern of Globe Pharma Group of Companies, which has operations in carbonated beverages, biscuits, and dairy products. Among its well-known brands are Uro Cola and Tiger soft drinks.
A senior official at Smile Food Products confirmed the company's growing portfolio. "We are already selling edible oil, palm oil, drinking water, atta, flour, and suji under various brands," he said, citing Starship Soybean Oil, Butterfly Palm Oil, Sotej (drinking water), and AMA (flour products).
The Globe Edible Oil's acquisition comes amid political shifts following the fall of Sheikh Hasina's government on 5 August last year. The group's chairman, Harunur Rashid, and his brother, Mohammad Mamunur Rashid Kiron, a former Awami League MP from Noakhali-3, were closely associated with the ruling party. Kiron also served as a director at the company.
"They are no longer in a position to run the business, especially after the change in government. We haven't seen them since," said a company official, requesting anonymity.
Attempts by The Business Standard to contact Harunur Rashid and Mamunur Rashid were unsuccessful as their phone numbers remained unreachable. Calls and messages to Samir Al Rashid, another director, also went unanswered.
TBS tried to speak to the Abul Khair Group, but no one was willing to comment on record.
"This [Smile Food Products Limited] is not a venture of Abul Khair Group, so I cannot assist you in this matter," said an official of the group's communications department.
Industry insiders say Abul Kashem is in discussions to acquire additional companies, particularly in the food, beverages, and biscuits sectors as he seeks to solidify his presence in an industry dominated by major players such as Meghna Group of Industries, City Group, and TK Group.
Kashem, the eldest son of Abul Khair Group's late founder, took the helm following his father's sudden death in 1978. Under his leadership, the group has grown into Bangladesh's largest industrial conglomerate, with market dominance in cement (Shah), steel (AKS), dairy (Marks full cream milk powder), tea (Seylon), and condensed milk (Starship). The group's annual turnover stands at around Tk50,000 crore, according to company insiders.
Abul Hashem, the second son of the group founder, is the managing director of the Group; third son Abu Syed Chowdhury is the group deputy managing director, while fourth son Shah Shafiqul Islam is a director of the group.
