Meghna Group to start production of $400mn PVC project next month

Meghna Group of Industries (MGI) has finished the construction work of PVC and PET manufacturing plants, which will be inaugurated next month, a development that can save Bangladesh millions of dollars from imports.

MGI has invested $400 million, equivalent to Tk 3,500 crore, to set up these two plants in its economic zone in Narayanganj. This is the largest-ever investment in Bangladesh’s private sector after Japan Tobacco’s acquisition of Akij Group’s tobacco business for $1.5 billion in 2018.

“This is the biggest-ever investment by a Bangladeshi company. We have taken loans from the Netherlands to set up the plants,” Mostafa Kamal, chairman of MGI, told the Business Insider Bangladesh on Thursday.

The plants were supposed to be opened in 2021, but the onslaught of the coronavirus pandemic delayed the work, he said.

PVC or polyvinyl chloride, a petroleum byproduct, is used to make wires, cables, film of all applications, floor paving materials, coating on fabrics, artificial leather, soft tubes, gloves, toys, plastic shoes, drainage pipes, doors and various automobile components.

On the other hand, PET, which stands for polyethylene terephthalate, is a clear, strong and lightweight plastic belonging to the polyester family. It is typically called “polyester” when used for fibres or fabrics, and “PET” or “PET Resin” when used for bottles, jars, containers and packaging applications.

According to Meghna’s website, it will make PET Resin that will be used in the packaging applications for water bottles and carbonated soft drinks.

MGI’s chairman Kamal explained what has driven him to set up such plants, which no other businesses in Bangladesh have done.

He said Bangladesh’s economy has been growing steadily for many years and the country is on track to graduate from the LDC status in 2026.

“The next phase of progress will depend on diversification of products, such as petrochemicals. But there are no petrochemical products in Bangladesh and we depend fully on imports to meet the demand of a market of 17 crore consumers,” Kamal said.

“That’s why MGI has taken up this project to make import-substitute PVC and PET products. We will be able to cater to 60 percent of the country’s needs,” he said.

He said Bangladesh imports over two lakh tonnes of PVC annually from China, Vietnam, Thailand and Taiwan to make different types of plastic products.

MGI has grown up as a conglomerate riding on fast-moving consumer goods — from edible oil to sugar, flour, bottled water and many more. Later, it expanded to building materials, chemicals, logistics, pulp and paper, power, feeds, shipping and financial institutions.

Meghna is the only business group in the country with three economic zones, which have also received over $100 million in foreign investments.