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18 June 2024

Business Insider Bangladesh

ADB, City Group sign $10mn loan to build energy-efficient oilseed crushing plant in Bangladesh

BI Desk || BusinessInsider

Published: 01:34, 18 May 2024  
ADB, City Group sign $10mn loan to build energy-efficient oilseed crushing plant in Bangladesh

Photo: Collected

The Asian Development Bank (ADB) and Rupshi Seed Crushing Limited, a member of the City Group, have signed a $10 million loan to construct a greenfield energy-efficient, multi-oilseed crushing plant within the City Economic Zone in the Narayanganj District, Bangladesh.

The new plant will replace an older, less efficient facility, ADB said in a statement on Friday.

It is expected to save 1.3 million cubic meters of water and 1,000 tons of fuel, decrease energy costs by 9 kilowatt-hours per ton, and reduce greenhouse gasses by 1,723 tons annually, while production capacity will remain at 3,000 metric tons of soybean seed crushing per day.

Workers from the original plant will be absorbed into the new one. HSBC is also providing an export credit agency-guaranteed parallel loan.

“The production of edible oils plays a vital role in Bangladesh’s food security. The refined oils are a consistent component in the daily diet of people, while the resulting oilseed cakes are a critical ingredient in the production of animal feed,” said ADB Director General for Private Sector Operations Suzanne Gaboury.

“Projects like these that promote the agribusiness value chain play a crucial role in meeting the Sustainable Development Goals, specifically in achieving zero hunger and developing responsible consumption and production.”

The new plant will have the flexibility to process different types of oilseeds, such as soybean, canola, and sunflower, which will improve resilience against crop failure or price fluctuations.

The products of the crushing process, namely oilseed cakes, are used as animal feed due to their high protein content.

The new technology will also improve the quality of the oilseed and cakes.

“City Group has been an integral part of Bangladesh's economic landscape for over 52 years and understands the importance of sustainable growth and food security. Our collaboration with the Asian Development Bank and HSBC demonstrates our dedication to leveraging innovative solutions in the agribusiness sector. By investing in state-of-the-art facilities and environmentally friendly energy-efficient technologies, we aim to improve operating efficiency while contributing to the nation's food security and environmental sustainability,” stated City Group Managing Director Md Hasan.

Established in 1972, City Group is one of the largest conglomerates in the country and is a leader in the edible oil industry with a quarter share of the market.

City Group’s main interests currently lie in the production of refined edible oil, flour, sugar, tea, lentils, pulses, rice, and drinking water.

Additional areas of the Group’s investment are hospitals, banking, insurance, media, stock brokerage, asset management, advertising, printing and packaging, shipbuilding, logistics, and animal feed.

It owns and operates a 78-megawatt power plant for captive consumption and marine vessels and trucks for logistics.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.

Established in 1966, it is owned by 68 members—49 from the region.