Opportunities within fishery, vegetables and fruits

1
FOOD PROCESSING IN BANGLADESH
(COVER THIS AREA WITH PHOTO)

• Opportunities within fishery, vegetables and
  fruits

2
AGENDA

• The food sector overall
• The fishing industry
• The fruit and vegetable industry

3
SUMMARY I THE FOOD PROSECCING SECTOR IS
IMPORTANT IN BANGLADESH

• Bangladesh has a well-established food processing
  sector, which heavily relies on agricultural
  production
• The sector accounts for 22 of total manufactured
  products, 20 of total labor force and 5 of
  total GDP equal to around 4.48 bill USD
• Focus is on domestic demand. Excluding scrimps
  export of processed food products is limited and
  mainly targeted ethnic products, not the
  mainstream international markets
• Besides scrimps main products are agriculturally
  based as oils and bakeries, but also fishery
  plays an important role

4
SUMMARY II A NUMBER OF OPPORTUNITIES EXISTS
WITHIN PROCESSED FOODS

• Main challenge in the fishing industry is lack of
  raw materials, due to high national and
  international demand. This gives opportunities
• Investments in hatcheries and ponds etc. (grow
  supply base, develop contract farming etc.)
• Technology introduction to increase effectiveness
  in trawl fishing and inland fishing
• Technology introduction to increase utilization
  of fish waste
• Main business opportunities in the fruit and
  vegetable industries are
• TBD (study not done until end of 2009)
• xxxx
• xxxx

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EDIBLE OILS FOLLOWED BY FISHERIES ARE THE MAJOR
SUBSECTORS WITHIN PROCESSED FOODS
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THE PRODUCTION OF PROCESSED FOOD HAS SHOWN
SIGNIFICANT GROWTH
There are nearly 700 processed food manufacturing
enterprises in Bangladesh including brands like
Teer, Olympia, Milk Vita, Fresh, 7Up, Bombay,
Ahmed, Bengal, Pran, Isphahani and Igloo The
processed food sector has grown 22 during the
last 3 years and the growth is expected to
continue as the industry is considered the most
potential growth industry in Bangladesh

7
MAIN EKSPORTS ARE SCRIMPS FOLLOWED BY FISH AND
AGROBASED PRODUCTS
Bangladesh only has around 0.1 of the world
share in export of processed foods In FY07-08
exports amounted to 515.48 mill USD 81 were
shrimp products, 15 fish products and only 4
agro based products The export products of agro
goods are mainly aromatic rice, powdered spices,
frozen snacks, puffed rice, mustard oil
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EKSPORT LEVELS ARE NOT HIGH, BUT GROWTH HAS BEEN
SUBSTANTIAL
Eksports grew 23 from 2005-2006 to 2007-2008 in
terms of MT and about 12 in terms of
USD-value As processed shrimp production has
stagnated the growth is fully contributed to
growth in processed fish products (36 measured
in MT) and processed agro-products (87 also
measured in MT)
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AND THE POTENTIAL TO GROW EVEN FURTHER IS VERY
SIZEABLE
The potentials for high volume export in the
processed food sector have not been exploited to
the fullest Focus has mainly been on ethnical
products and export to a limited numbers of
countries. There is limited export to the EU,
Italy and the UK are major importers With only
smaller changes in product range and standards it
is believed that there is high potential for
entering the US and EU mainstream markets with
processed food products
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THE EXPECTATION OF CONTINOUS GROWTH FINDS STRONG
SUPORT
Investment climate in Bangladesh is very
attractive. One main goal of government is to
attract foreign investors and boost export 12.5
cash incentives to export of frozen shrimp and
fish and 20 cash incentives to export of agro
processed products is given The sector has
further been declared as a Thrust Sector and
therefore receives preferential treatments
including income tax exemption, tax return,
cheaper air transport, low interest rates and
export assistance Bangladesh is also part of
EUs GSP and EBA programmes, which opens for duty
and quota free access to the EU market
1
2
3
1. Government subsidy given on export price to
the exporter. 2 Generalized System of Preference.
3. Everything But Arms.
11
OTHER FACTORS ARE ALSO SUPPORTING A BELIEF IN
FUTUR GROWTH

• The industry is already well established and
  optimism is strong as local demand is growing as
  Bangladesh is experiences 5 yearly growth in
  GDP
• Only minor product adaptation and staff training
  is needed in order to explore new markets
• Large amounts of seasonal fruits and vegetables
  are not utilized today and are just waiting for
  the processing industry to get started
• Demand in the fishing industry is outweighing
  existing supply
• Bangladesh has a very cost-efficient labor force

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IT WILL REQUIRE AN EFFORT TO GAIN MARKET SHARES
IN THE EU AND THE US

• Investment capital and new technology needs to be
  transferred from abroad
• Training of local workers need to be in focus
• Production quality most be increased
• A broader product range targeted the main EU and
  US market will have to be developed
• Marketing skills to penetrate the EU and US
  markets will have to be learned

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AGENDA

• Food sector overall
• Fishing industry
• Vegetable industry

14
BANGLADESHI FISHERY SECTOR IS A LARGE AND
IMPORTANT SECTOR
With 166,000 km2 of sea area and more than 200
rivers with a total length of 22,155 km
Bangladesh is endowed with abundant water
resources White fish and shrimps are available
more or less in every district of the country
making fishing one of the most important
industrial sectors in Bangladesh The sector
contributes with 5 to GDP and accounts for 4.3
of all foreign exchange earnings 1.2 mill people
are engaged in the sector on full-time and 10
mill on part-time basis. 8 of the total
population is directly or indirectly engaged in
the industry
15
2.564 Mill MT FISH ARE PRODUCED YEARLY - CLOSE
TO 80 COMES FROM INLAND SOURCES
16
MARINE FISHING ARE GROWING AT 9 ANNUAL
Bangladeshi waters are rich in nutrient creating
favorable fishing conditions Marine fishing
includes industrial fishery with large trawlers
and artisanal fishery with mechanized and
non-mechanized boats In FY07-08 34,159 MT fish
was produced by trawl fishing and 463,414 by
artisanal fishing Growth of marine fishing has
been moderate about 9 during the last five years
(trawl fishing x and artisanal fishing x) The
main fish types caught in sea are Illish, Bombay
Duck, Pomfret, Jew fish and Sea Cat fish
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TRAWL FISHING IS DOMINATED BY UNSUSTAINABLE
BOTTOM-FISHING
Modern fishing trawlers were introduced in the
eighties and the fleet has grown rapidly in the
last 10 years In 1997 there were only 14 white
fish trawlers in Bangladesh and 41 shrimp
trawlers. In 2009 the figures are 133 and 49
182 of the vessels have onboard fish processing
facilities Out of the 182 trawlers and vessels,
only 8 of them are mid-water fishing vessels, the
rest are bottom-water fishing vessels being very
damaging to the environment Government has not
since 2005 given license to new fishing vessels,
but it is expected that around 40 mid-water
licenses will be given in months to come
18
INLAND FISHERY IS ALSO GROWING AND EVEN
STRONGER THAN MARIN FISHERY
Inland fisheries has grown by 26 during the last
five years and in FY07-08 1.000 mill MT fish was
produced in both inland open and
closed-water Out of the 2.066 mill MT produced
fish in FY07-08 only 0.135 mill MT was shrimp and
prawns The main fish types caught in inland
water in FY07-08 were carp, cat fish, snake head,
live fish and Illish
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GROWTH IN WHITE FISH PRODUCTION BUT ALSO
OVERCAPACITY IN PROCESSING
Of the 2.563 mill MT produced fish in FY07-08,
92 were white fish and 8 shrimps and
prawns The production of white fish has
increased 23 during the last five years There
are 145 fish processing plants with an annual
production capacity of 265,000 MT Of the 145
plants 92 are in operation. 53 are out of
operation, mainly due to lack of raw materials
and working capital. Of the 92 plants 54 process
shrimps, while 10 of them only white fish. The
remaining do both. 68 of the plants have
approval by the EU to export to EU countries
20
THE FISHING INDUSTRY IS FACED WITH A NUMBER OF
CHALLENGES

• Persistent shortage of fish supply is a major
  issue as local and international demand is
  increasing even more then supply
• Need for new machinery, technology and
  development of products and marketing for the
  EU-market is obvious
• Quality standard has to be improved and regularly
  monitored
• Lack of electricity and gas supply and weak
  infrastructure are constraining production
• Shortage of working capital and the risk of
  natural disasters are other challenges

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BUT THE CHALLENGES ALSO OFFERS OPPORTUNITIES

• Processed fish supply is not large enough to
  satisfy demand. Supply can be increased
• Technology to increase effectiveness in inland
  and marine fishing (adapted fishing gear, drift
  of machineries etc.).
• Increased investments in hatcheries and closed
  water productions (ponds etc. )
• Products could be adapted to high paying European
  markets
• Utilization of waste materials in existing
  processing could be further developed (new
  technology)

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SUPPORT TO DANISH COMPANIES WISHING TO ENTER THE
BANGLADESH MARKET IS POSSIBLE

• The Business to Business programme supports
  Bangladeshi and Danish companies seeking to
  engage in long term strategic partnerships
• Support can be applied for in three phases
• A Contact phase
• A Pilot phase
• A Project phase
• Up to 90 of all costs can be covered with a
  maximum of DKK 5 mill.
• For more information please see
• http//www.ambdhaka.um.dk/en/menu/DevelopmentIssue
  s/Businesstobusiness28B2B29Programme/

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If you would like to know more about the
fishing industry in Bangladesh and about your
business opportunities please contact the Royal
Danish Embassy in Dhaka at morlyn_at_um.dk
(B2B-Coordinator, Morten Siem Lynge)
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AGENDA

• The food sector overall
• The fishing industry
• The fruit and vegetable industry

25
Study to be done in late 2009 More information
will follow