Ifad Autos gets land to build industrial complex

Ifad Autos has been allotted 30 acres of land at the Bangabandhu Sheikh Mujib Shilpa Nagar by the Bangladesh Economic Zones Authority (Beza) to set up an industrial complex.

The company has a plan to establish a manufacturing and assembly plant for motorcycles, a factory for automotive components, and a blending plant for machine lubricants in the complex.

"We have a target to utilise the full land within three to four years and the construction will start just after the current rainy season," said Managing Director Taskeen Ahmed.

"We may establish two other projects here because we are seeing potential of the automotive sector in Bangladesh," he said. There are more than 10 lakh commercial and 16 lakh passenger vehicles in the country which need spare parts, according to Ahmed.

The listed automotive company informed the Dhaka Stock Exchange (DSE) yesterday that Beza has allotted the land to develop and operate industries, run commercial activities and construct infrastructures.

"Furthermore, the land is being allotted on lease for 50 years on a rental basis," it said.

The company will disclose all the information immediately after formulating the deed with Beza, the disclosure added.

The motorcycle manufacturing unit will be set up in partnership with a European brand to churn out high-end two-wheelers.

Ahmed sees a good market for high-end motorcycles in Bangladesh in the coming days. There is a demand for around 5 lakh motorcycles in the country per year and it would double within the next five years, he said.

Ifad Group and Gulf Oil International UK will engage in a joint venture, Gulf Oil Bangladesh, which would be blending the lubricants.

Ifad is keen on investing over Tk 430 crore to set up the complex, according to its plan that was placed before Beza last year.

The project would be financed by the company's retained earnings and from loans availed from banks.

The market size of automotive components in Bangladesh was about Tk 1,400 crore to Tk 1,500 crore last year while the annual growth rate was around 10 per cent to 12 per cent over the previous decade, according to an estimate by automotive part importers.

Ifad Autos has sold more than 60,000 commercial vehicles in the last two decades with a combined sales value of $750 million.

When news of the land allotment became public, stocks of the company dropped 2.23 per cent to Tk 52.60 yesterday.