Xinyi Glass Holdings Limited – one of the world's leading integrated glass manufacturers and also the sixth largest industrial group in China – has shown interest in investing $200 million in Bangladesh, according to the Bangladesh envoy in China.
Xinyi's Head of International Business Development Cheng Gang came up with the investment proposal at a recent meeting with Bangladesh Ambassador to China Mahbub Uz Zaman. The glass manufacturer has sought 65 acres of land close to a port or seashore for its proposed plant with an annual capacity of 38,000 tonnes of floating glass.
The investment would generate $95 million annual revenue, and create 400 jobs for the locals, according to a letter the ambassador sent to Foreign Minister AK Abdul Momen.
Ambassador Mahbub Uz Zaman wrote that the glass-maker's land and other requirements match facilities that the Bangabandhu Sheikh Mujib Shilpa Nagar offers.
He noted that Xinyi is the largest supplier of float glass in the global industry with a total market capital of $10 billion and over $1.8 billion annual revenue.
The foreign ministry forwarded the investment queries to the commerce ministry, the Bangladesh Investment Development Authority (Bida) and the Bangladesh Export Processing Zone Authority (Bepza).
Md Sirazul Islam, executive chairman of Bida, told The Business Standard that he received Xinyi's investment proposal and queries and discussed the matter with the executive chairmen of Bepza and Bangladesh Economic Zones Authority (Beza).
He said, "Regarding Xinyi's demand, the Bepza chairman said the plots in the EPZ in Mirsharai are small, so they will work on combining several plots to allocate land for the company.
"Beza has a large area of land in Bangabandhu Sheikh Mujib Shilpa Nagar in Mirsharai. Besides, there is a vast area of land in Matarbari. It is possible to allocate land there according to the company's demand," said the Bida chief executive.
The Chinese firm submitted a written questionnaire to the Bangladesh embassy, inquiring about the investment facilities. Xinyi also inquired about the preferential policies Bangladesh offers to foreign direct investment.
Established in 1988, Xinyi Group has been running 12 large manufacturing bases in different domestic economic zones in China, according to the Bangladesh Embassy in China. The group has invested $500 million in Malaysia so far.
On infrastructural requirements to set up a factory in Bangladesh, the company said it will require 150 million cubic metres of natural gas per year. It will also require 20-25 MW dual power circles – one regular, one redundant for back-up – and 1.2 million tonnes of water per year.
Referring to silica sand as the main raw material for glass-making, the company said it will require around 0.5 million tonnes of silica sand per year and asked whether Bangladesh has such a quarry.
"The general manager of the group told me that their products are serving customers and partners in over 150 countries and regions in the world," the ambassador wrote to the foreign ministry.
Local glass-makers faring well
Being totally import-dependent once, Bangladesh is now exporting glass. Local glass-makers are supplying float glasses to local constructions.
According to the Export Promotion Bureau, $3.5 million worth of glass and glassware were exported in FY20 against the target of $2 million, which is 144.76% up compared to the year before.
The glass industry in the country is growing by 8-10% every year, mainly due to the increase in commercial building projects, with local companies meeting 90% of the domestic demand, industry players say.
The annual demand for glass is 25 crore square feet, and the annual production capacity of private and public glass manufacturers is 32 crore square feet.
The current size of the glass industry is around Tk1,500-2,000 crore.
PHP Family and Nasir Group invested in float glass used in commercial buildings in 2005 and 2006 respectively. They dominate the glass market, meeting about 70% of the total demand, while other companies hold the remaining 30% share combined.
Vice-Chairman of PHP Family Mohammed Mohsin told The Business Standard the demand for glass was increasing gradually due to the rise in infrastructure development.
He said demand had grown significantly in the past few years and that is why they were bringing new products to the market.
"This sector has potential, but there has been no development for a long time. It will continue to grow in the future," added Mohsin.
The top companies in the glass industry are PHP Float Glass Industries, Nasir Glass Industries, MEB Sheet Glass Industries, AB Glass Industries and state-owned Usmania Glass Sheet Factory. Among them, Usmania and MEB are relatively old.