Diversified conglomerate aims to take Bangladesh to the world

Founded in the 1970s by two brothers, Ahmed Sohail Fasiur Rahman and Salman Fazlur Rahman, Beximco Group is the largest employer in the private sector in Bangladesh. Employing over 48,000 people worldwide, it has evolved from a modest commodities trading company to a heavily diversified conglomerate with operations in sectors as diverse as textiles, real estate development, media, ceramics, pharmaceuticals, and energy. The company operates both domestically and internationally, and combined, the industries it works in account for nearly 75% of Bangladesh’s GDP.

The country produces 99% of its domestic health requirements, in addition to now stepping up its exports. Reflecting the growth of the sector and indeed the nation, the expansion of the Beximco Group has also been rapid and unprecedented. It is now the largest exporter of pharmaceuticals in the nation, and has a global presence in more than 45 countries.

In addition to manufacturing and selling generic pharmaceutical formulation products, active pharmaceutical ingredients (API), and intravenous fluids, it began exporting to the EU market in 2013, where its ophthalmic products are especially notable. Latanoprost and Timol are two drugs used to reduce the pressure inside the eye for people with open-angle glaucoma or intraocular hypertension, and are already available in Germany, Austria, and other parts of the EU. The Beximco Group’s budget-friendly generic alternatives have been a welcome addition to governments seeking to reduce healthcare costs without compromising on quality.

FDA approval
Beximco Pharmaceuticals and its facilities are already also accredited for export by the regulatory authorities of Australia, Canada, Taiwan, and Brazil, and as of June 2015, the company can boast of having tapped into another major international market. Following the successful inspection of its oral solid dosage facility in its production center at Tongi, the Beximco Group became the first Bangladeshi company to be approved by the U.S. Food and Drug Administration.

This achievement will pave the way for the export of medicines to the U.S. market, which is famous for its exacting standards and regulations.

Among the drugs Beximco Pharma will export are its generic version of the wonder drug, Sofosbuvir, which is made by Gilead Sciences Inc. and known for its effectiveness at treating hepatitis C (it has a 90% cure rate), as well as its hefty price tag. The Beximco Pharma version – which is prescription only – costs nearly half the price per tablet, making it the cheapest treatment for hepatitis C in the world. For an idea of the market potential of this drug, it is worth noting that an estimated 170-185 million people around the globe are chronically infected with the hepatitis C virus.

According to Salman F. Rahman, the Vice Chairman of the Beximco Group and one of its co-founders, the company’s decision to move into the pharmaceutical manufacturing business was its first major milestone, although in retrospect, this move aligns perfectly with the company’s mantra of ‘Taking Bangladesh to the World.’ He explains that previously, the company’s motto was ‘Diversity is Our Strength’. While this is certainly an idea that continues to ring true through the highly diversified portfolio of industries that the Beximco Group is present in, it is clear that the company is developing an increasingly global agenda.

Bangladesh’s ambassador abroad
“My brother and I started the Beximco Group, but now we have a family of 65,000 people,” says Mr. Rahman. Although he asserts that the company’s success is the product of everyone’s contributions and reports that he feels proud and satisfied by what the company has achieved, he admits that one large challenge remains: “Before we can sell our company, we have to sell Bangladesh,” he says.

Salman F. Rahman’s son and Director of the Beximco Group, Shayan F. Rahman, echoes his sentiments. “We feel that when you look at Bangladesh from abroad, there are a lot of negatives that surface,” he says. “Our tagline means that the Beximco Group really wants to be the company that takes Bangladesh to the outside world and brings out all the positives that the country has to offer. There are positive stories to be told.”

The Beximco Group’s success at taking its brand abroad is certainly one positive story that bodes well for other Bangladeshi brands eyeing mature international markets, which would be well-served to consider, as Shayan F. Rahman suggests, many of the “positives” that Bangladesh has to offer.

Geographically, Bangladesh’s enviable location at the midpoint between India and China favorably positions it to become the heart of future trade in the region.

Energy developments
Well aware that developing power infrastructure will be a key component in supporting Bangladesh’s future growth potential, the Beximco Group has also ventured into the energy sector through the formation of two companies – Beximco Group Petroleum Limited and Beximco Group Power Company Limited.

Established in 2009, the former is committed to ensuring Bangladesh’s energy security by locally processing fuels. It is currently exploring opportunities to play a crucial role in liquid fuel supply, and has acquired the land and equipment necessary to bring the petroleum business in Bangladesh to a new level.

In parallel, with demand for electricity rising rapidly, the Beximco Group Power Company is on the path to establishing a 540MW coal-fired power plant that will be the first commercial power plant in the country. Built with state-of-the-art technology and environmentally friendly design, it will pave the way for using imported coal for power generation in Bangladesh.

The right time for investors is now
More broadly speaking, in terms of balance sheets, Bangladesh has not been a disappointment. The country’s economy has grown by an average of 6% over the past decade, and government institutions remain very open to receiving and facilitating investments from abroad. “This is really the right time for people to come into Bangladesh and look at it as a country where you have a very positive approach to international investment,” says Shayan F. Rahman. “Most multinational companies that have come into Bangladesh have done tremendously well.”

Added value in garments
As for the Beximco Group itself, it is clear that its nimble response to market changes and its enterprising can-do spirit are the catalysts of its continued success. As explained by Salman F. Rahman, when the company‘s management first moved into the garment manufacturing industry, they quickly realized that the value in garments was extremely low because the entire manufacturing process relied on imports – everything from fabric to buttons, thread, and even packaging had to be imported.

It was a very popular space that many companies decided to move into, but essentially, the only contributions they could make involved cutting material and sewing or assembling it, which represented a very low value addition, since it was basically only labor cost. It was then that the Beximco Group decided to make a start on a backward linkage. They set up a modern yarn spinning unit, and then branched out into weaving and fabric manufacturing before setting up an entire vertically integrated textile operation that freed them from an otherwise debilitating reliance on imports.

Other companies in the sector began to follow suit, and today, the value addition has increased to between 50%-60%, since everything can be produced in Bangladesh, including fabrics, buttons, and all the accessory bells and whistles. The country still relies on the occasional import of material, but Shayan F. Rahman says they are more or less self-sufficient when it comes to denim and yarn – two staples of the industry.

Taking Bangladesh to the world
In addition to using these materials to make clothing, the Beximco Group also supplies yarn to the world’s premier carpet and rug manufacturers in Europe and the United States.

It also produces twine, which it exports to manufacturers of tatami mats and other floor coverings used in gardening and for household purposes.

To date, the Beximco Group has also partnered with some of the world’s most prestigious design institutes to develop the in-house design capabilities of its textiles division. Collaborating with the Fashion Institute of Technology, Parsons, and the London School of Fashion, it has tapped a pool of talented designers and has served the likes of fashion giants such as American Eagle, Calvin Klein, H&M, Macy’s, and Zara.

Operating under its own label, Yellow, the Beximco Group also sells clothes through its proprietary outlets. Aimed at younger audiences, Yellow is a design-driven brand that aims to “celebrate creative and original thinking to highlight a lighthearted and optimistic view of life through a superior quality product,” according its website. It captures a modern interpretation of relaxed, comfortable fashion that stems from the Beximco Group’s pioneering legacy and openness to discovery.

Pioneering corporate culture
Another factor that has contributed to the success of the Beximco Group is its unique corporate culture. While it is especially common in Bangladesh to reserve important positions of family-run businesses for relatives, Salman F. Rahman explains that he and his brother relied heavily on professionals when expanding their business, and were among the first companies to delegate positions of authority to non-family members. “You cannot control everything within the family, because after time this will limit your growth,” he explains. “If you want to really grow, you have to depend on professionals, and that is what we did.”

The Vice Chairman is particularly proud of the results of a recent survey, which revealed that more than 50% of the hardware and software companies currently operating in Bangladesh are run by chief executives and other ex-employees of the Beximco Group. Likewise, approximately 40% of the managing directors of all the banks in Bangladesh also passed through the Beximco Group pipeline. “We have created entrepreneurs that have left us and then succeeded on their own,” he says proudly, hinting at another key characteristic that differentiates the Beximco Group from its business peers: not fearing the competition.

The pillar behind the Beximco Group’s relentless innovation and proliferation into radically different industries is the unwavering belief that the more competition there is, the more productive the Beximco Group must be as a company. It is this philosophy that drives the company forward and keeps the management optimistic. Instead of viewing former employees who venture out on their own as turncoats or traitors, Salman F. Rahman sees this as a sign that the country is moving ahead, and that people want to take risks and bring greatness to the country for which they have fought so hard. Ultimately, he also sees it as proof that even beyond Bangladeshi borders, local companies will begin to have an impact.

Once again ahead of the curve, the Beximco Group already has plans to move some of its manufacturing units outside of Bangladesh and more aggressively market its products in the foreign countries where it begins to manufacture.

Nonetheless, true to their ethos, the brothers hope they are not the only Bangladeshi company exploring new frontiers.

“In Bangladesh we were told that we would never succeed and that our entire country was a basket case,” says Salman F. Rahman. “Although there still remain many challenges to our success, we know that you cannot succeed only on your own – you have to have others succeeding with you.”

He emphasizes that success also needs to be collective success – it cannot be individual, because when only individuals succeed, a country has not succeeded. In order for the latter to happen, you need hundreds of companies like the Beximco Group to constitute success for Bangladesh – a reality which Salman F. Rahman hints is closer than one might expect.

“My biggest satisfaction is that we have set an example and now we have so many companies following us,” he says. “Today, I firmly believe that the private sector in Bangladesh is vibrant and confident, and that we have a lot to give.”