With work experience at different organisations in Sydney, London and New York, Riad Mahmud joined National Polymer Industries Limited as its managing director in 2009. Under his leadership, the company is at the forefront of the polymer pipe, fittings and door business. Riad Mahmud, who completed BSc and MBA in America and Australia, recently sat down with Salah Uddin Mahmud, staff reporter of The Business Standard, to talk about the company's business and future plans.
How is the polymer business going now?
The polymer business has developed mainly in the housing and agriculture sectors of the country. Our economy is dependent on agriculture. The sector has developed over the last few decades with the development of irrigation systems and crop components.
Again, with the development in people's living standards, the housing sector is growing. Concrete buildings have also spread to villages. At present, it is difficult to find a thatched house in a marginal area. Non-government organisations cannot show such houses to donor agencies.
In line with these developments, National Polymer has grown at around 22% over the last 10 years, where the polymer sector has grown at a rate of 8-9%.
What do you have to share about National Polymer?
We decided to expand the business during the coronavirus pandemic. We bought land in Bhaluka, Mymensingh, with the money we had raised by issuing the right shares. Now construction is going on there. We will manufacture new products at the facility.
We are focusing on the stock market as the main driving force for business expansion. We have already issued the right shares. Again, we are in the process of raising money with bonds. Our main target is increasing exports.
We are trying to maintain the continuity of the growth of the company. That is our main goal. The company's growth is now around 20%. Once the decisions taken to expand the business are implemented, it will be possible to sustain the ongoing growth.
How is your business doing in the epidemic? Have you been able to overcome its effects?
Our business activity was suspended for one month because of general holidays during the Covid-19 pandemic. Since then we have been doing business by maintaining hygiene rules. We have paid 100% of the salaries and allowances of the employees on time. We have also given regular increments to the employees amid the coronavirus.
Why should we deprive employees since the company has maintained growth in the coronavirus?
What do you want to share with us about exports of polymer products?
There are a lot of export opportunities in this sector. It can move forward like the garment industry. But it requires sincerity and patronage on the part of the government.
Currently, China is the giant in polymer exports. It has come a long way by utilising the facilities provided by the government. China provides companies with subsidies for participating in international trade fairs.
The main issue for exports is that there must be exposure at trade fairs. You need to know where fairs are taking place. It will not be possible to introduce products in the world market if you are sitting at home.
The plastic sector requires attention to emerge like the garment industry. At major fairs around the world, the Bangladesh Investment Development Authority can provide top domestic companies with space so that they can take stalls at subsidised rates.
We can take part in fairs with stalls there. When the market develops, it will become a big export sector like readymade garments.
What challenges do you foresee in taking the polymer sector forward?
We have an obstacle, which is that plastics is an energy-hungry sector. It is not done with little electricity. It needs continuous high power. In our country, high power means gas generated power. Now we have a limitation of gas. Although there is enough electricity in the country, there are problems with distribution. We need uninterrupted power as we operate on a high volume and low margin.
If that can be done, in certain sectors which have a capacity of more than a thousand tonnes, there must be uninterrupted power supply. This is because two seconds or five seconds of load shedding severely disrupts production. In this case, we want support.
We want bond licence simplification although there are irregularities in its use. Officials at the National Board of Revenue know real exporters as well as shell companies. These export players should be given support.
When companies come with work orders, the bond issue should be done in a short time. This is because there is an obligation to deliver goods as per export deadlines. So there has to be support.
Which plastic products are in higher demand?
Demand for plastic tanks is increasing with PVC pipes and doors. Unlike metallic products, plastic is gaining more and more interest. Demand for household products has grown significantly in particular. This is because the prices of the products are as affordable as they are sustainable.
In the Seven Sisters region of neighbouring India, demand for plastic products has grown significantly because it costs more to bring goods from Delhi. We have captured that market.
We have a shortage of international marketing. The stronger we make this concept, the more external market share we will get. As we see growth in the country, so do we see the opportunities outside.