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TUESDAY, JULY 22, 2025
Navana adopts 10-year plan to overcome a crippling setback

Corporates

Morshed Noman & Ahsan Habib Tuhin
16 May, 2022, 12:00 pm
Last modified: 16 May, 2022, 05:17 pm

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Navana adopts 10-year plan to overcome a crippling setback

Business expansion without a plan, inept management, mishandling of bank loans and less skilled workforce led Navana in serious troubles

Morshed Noman & Ahsan Habib Tuhin
16 May, 2022, 12:00 pm
Last modified: 16 May, 2022, 05:17 pm

Navana had already been on thin ice since 2018, but the situation turned nasty during the pandemic as the business conglomerate became unable to pay its employees.

Earlier in 2019, the group with a Tk5,233crore bank loan turned to the government, seeking for a Tk1,200 crore bailout. But the appeal did not work out.

For the sake of survival, the business group then had to opt for a massive overhauling – remodelling its corporate vision, changing the top brass, reconfiguring priorities, and setting up a long-term sustainable business plan.

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"The group was facing drowning even in 2021. I can tell you one thing for sure that we are now at least able to stay afloat," Khandaker Istiaque Mahmud, a seasoned corporate figure who was hired to oversee Navana's human resources in 2021, told The Business Standard.

The chief human resources officer believes Navana had been lacking an effective staffing plan – one of the key factors that pushed the conglomerate on the verge of collapse.

"Business landscape had changed drastically in the last two decades, but we failed to get adjusted with it," Istiaque noted.

Established in 1996 with only two companies, the group would expand to as many as 17 ventures in the next two decades.

"The expansion spree was flawed as Navana top brass had a serious ego issue over opening the new ventures by going beyond the actual management capacity," said WahedAzizur Rahman, another official the group hired as its chief executive officer (CEO) during the 2021-overhauling.

"Due to the unplanned expansion, new ventures put pressure on firms that had been performing well," he said.

Istiaque, Azizur and other top new crews now sound optimistic about the future of the group, as they said Navana chairman and directors have understood their strategic shortcomings and are now eager to correct the course.

The plan

Although late, Navana Group Chairman Shafiul Islam Kamal in 2021 realised that it was still possible to turn around if the group could use available business opportunities. The first step was bringing changes to the top management as part of the corporate restructuring.

Nearly half a dozen new professionals who have rich corporate resumes were tasked with salvaging the group.

Soon after assuming office, the new team formulated a 10-year master-plan. Meanwhile, Navana signed a contract with financial advisory firm Riverstone Capital Limited for debt-equity restructuring and mapping a corporate financial strategy.

Wahed Azizur Rahman said corporate professionals like him joined the beleaguered group since it still has the opportunity to turn around.

"Our target is to take the group to an international level," he added.

Chief Human Resources Officer Khandaker Istiaque Mahmud said they are now working on four projects, including setting up the group's mission and vision, values and principles.

"We want to reengineer the business process and build a skilled workforce who will be able to turn all ventures under Navana profitable in the next five years," Istiaque noted.

An expansion without focusing management

Before establishing Navana, the group Chairman Shafiul Islam Kamal used to oversee the automobile segment of Islam Group – a business conglomerate established by Shafiul Islam's brother Jahrul Islam.

Shafiul joined Islam Group in 1968. He shepherded Navana Limited, a Toyota vehicle distributor, and Aftab Auto, a Hino commercial vehicle distributor and assembler, under Islam Group.

Shafiul left the group in 1995 after his brother Jahurul died that year. He founded Navana Group with Navana Limited and Aftab Auto next year.

Shafiul Islam is currently the chairman of Navana Group, while his son Saiful Islam is the senior vice-chairman and another son Sajedul Islam is the vice-chairman of the group. Shafiul's wife Khaleda Islam and daughter Farhana Islam are the directors.

In 1996, Shafiul Islam established Navana Real Estate Limited and Navana Construction Limited. Subsequently, Navana Electronics Limited, Navana Furniture and Navana Battery Limited were founded.

He also invested in compressed natural gas (CNG) business, motor oil, logistics services, food, welding electrodes, plastics, renewable energy equipment and most recently liquefied petroleum gas (LPG).

Of his 17 companies, Aftab Auto and Navana CNG are listed with the bourse.

Shafiul Islam also put money in textile and taxi-cab business, but gave those up after incurring losses.

For the business expansion, Shafiul had to face a huge bank loan that eventually put a squeeze on the fragile group.

Seventeen companies of Navana Group borrowed a total of Tk5,233crore from 31 banks and 19 non-banking financial institutions till 2019.

Navana Group's financial condition started to deteriorate after the chairman fell ill in 2018 and his sons took charge of the companies. Then came the pandemic delivering a massive shock as the poor business management failed to tackle it.

Let some of the ventures drift away

Navana Group new CEO Wahed Azizur Rahman said the management has to move away from the idea that the group has to perform better in all businesses. "We have to give up some of the businesses where we do not have the capacity. We will only focus on business where we have large investments and market potentials."

Real-estate and automobiles are at Navana's core businesses, according to officials.

They said they want to emphasise backward and forward linkages in the real-estate and automobile sector. As a distributor for Toyota and Hino vehicles, they also plan to set up assembly plants in Bangladesh.

The Navana CEO said there is a huge potential in the two sectors. Navana has a good demand for vehicles thanks to the brand value of Toyota and Hino.

He said the vehicle assembling plants will help boost Navana's business competitiveness.

With the CNG refuelling business declining gradually, several gas stations of Navana are struggling to stay afloat. The CEO said there are various supporting businesses such as rest houses and super shops at gas stations in foreign countries.

"But we are not allowed to run any supporting shops at the stations. Even then, we will talk to the government and try to introduce the shops."

Regarding the LPG segment, he said, "Bangladesh has more companies than the market size. As a result, none of them are doing well. But since there is a future potential, we may continue it."

About the current financial condition of the group, Wahed Azizur Rahman said they have already rescheduled the big loans. There are also plans to take some more companies to the stock market and issue bonds for long-term financing.

Meanwhile, Khandaker Istiaque Mahmud said they are developing a sustainable corporate system that can absorb and stand out against severe business shocks in the future.

Economy / Infograph / Top News

Navana / Navana group / Navana's Companies

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