shan final

International Business Plan

Shan Foods (Pvt) Ltd is a rapidly growing food company with presence in over 50 countries. As custodians of our customer's trust in quality. We are strengthening our departments with candidates having extra ordinary positive energy, able to energize the team, obtain and edge in technology, and determined in execution, with a passion for excellence.

History:

Shan Foods initially started its operations in a single room, in the house of its present owner and CEO Sikandar Sultan. The initial concept of Shan masala was to provide the people of Pakistan with a quality Brand in masala industry. Its initial customers were family members, friends , close relatives and other known people. As time passed new and complete strangers started come for the Shan masala. This was the time when real production started at Shan. It was established in 1981 in the servant quarter of Mr. Sikandar Sultan’s house and an industrial grinder and mixer in his garage. The route from a one room company to a multinational firm is slow but successful.

It took Shan Foods 25 years to be, what it is today. A Shan food was initially marketed in 1983, two years after it was founded, and that was the official launch of Shan Foods in Pakistan. Shan stated its exports in 1984 in which they had tremendous success. They initially exported 15 different types of Masalas in 4 different countries. 1995 was the time when Shan Foods constructed a factory and the whole operations were shifted to it for mass production to meet the local and international demand. This was the turning point for Shan Foods and gave an edge in its business operations. Since then company has never looked back and always increased its sales through differentiation, local and international sales. Today it has presence in almost 60 countries of the world which includes 4 continents. Shan can be found in any big store of the world. It’s quality standards have met the international standards and has been allowed in countries like America and in continents like Europe.

About Shan Foods:

Shan Foods through all this time has been known for its wide range of daily products it offers. Not only by that; is Shan Foods known for its quality. Shan Foods is considered free from all sorts of mixings in spices, people through the time has praised its quality products. Mr. Sikandar (CEO and founder) has emphasized on quality from the day one.

Shan Foods ought to replenish and acquire the best quality supplies available in the market. Because of the nature of the business Shan Foods have to acquire the best and delivers the same with fresh, aromatized, healthy and safe spice packets for daily households.


GajarHalwa | LaukiHalwa | Rasmalai Mix | GulabJaman | Sheer Khurma Mix | Special PistaKheer Mix.

Break Fast

Hunter Beef Spice Mix | Egg Spice Mix |Paya Spice Mix | Nihari Spice Mix | Haleem Spice Mix.

Amongst all the products that Shan food offers the complete range will be accepted and sold in

the host market due to the fact that the host market shares the common taste and preference. Shan

foods have a vast range of non-vegetarian spices where as its competitors Radhuni and MDH and

Badshah masala do not cater to non-vegetarian spices.

The same goes for the Bangladeshi market as we know that the traits and customs of both

Pakistan and Bangladesh are some what similar to each other the Bangladeshi market is now

ready for such products.

The best part of Shan Foods product is that Shan offers premium quality of spices with V lock

technology that no other powder spices company offers. The true aroma of taste and exact

amount required in the recipe is the reason why Shan is leading in spice industry.

As we all know that spices in Bangladesh are not new. Bangladesh is one of the biggest exporters of vegetarian recipe spices in the world. The thing which is unique and new is the spice Mix which will enable them to make perfect Pakistani recipes without even knowing anything about it. Bangladesh was once a part of Pakistan and they are exposed to Pakistani dishes and have a liking towards it. It is just they don’t know the recipes and is hard for them to bring upon all the spices needed in these Pakistani foods such as Biryani, Tikka or Chaplikabab etc. Shan Foods gives them an opportunity and ease of cooking by introducing already mixed spices which is convenient, affordable, rich in taste and high on quality.

The brand speaks for its self. Shan Foods is known for its taste and quality, it is present in the US and European markets which is a proof that it has always kept the quality of its products very high. People will have a trust on Shan Foods and this trust will enable people to buy spices from Shan Foods. Apart from it Shan Foods will be offering a wide range of Pakistani recipe mixes which is entirely a new market there. This will encourage the Bangladeshi Market to buy, cook and taste those Pakistani products which they have never tried before. This will further be elaborated in the Marketing section of the report.


The inventory required for the exports in Bangladesh would be 500,000 to 600,000 packets. This is because we will be sending a specific amount each spice mix to the host country. This is Shan Foods policy to export all the brands, tastes and products it offers at once. This creates a good perception in the customers of the host country and keeps them involved in buying and utilizing Shan’s products for a longer period of time.

We are the iTQi (International Taste and Quality Institute) award winner of 2010. This proves our superior taste and excellent quality products to offer to our consumers internationally. We have entered the European and US market which is also our biggest proof of excellence. Therefore, every product which Shan food offers is high in quality and taste and thus every product has export potential.

Industry Analysis:

The Spice industry is a growing industry in Pakistan and in the world. We witness enormous

increase in terms of sales and production if we compare the stats from last years’. The key

players in the Pakistani branded spices are Shan Foods on top with National foods, Chef’s Pride,

Mehran Foods, Ahmed Foods, Habib Foods, Zaiqa Foods, Kitchen Secrets and Ronaq Masala.

To analyze the industry in a better way we should see the Pakistani spice industry in two parts.

Branded Spices

Unbranded Spices

About 7000 spices and salt grinding units are operating in the country with 60 percent of these units based in the rural areas. However the market share of these rural based units is gradually decreasing, as a number of modern industrial units with larger production capacity have entered the market, with quality branded products. The Spice industry is mostly un-documented, which makes it difficult to determine the exact market share. However on a macro scale there are a number of major players like National Foods, Shan Foods, Chef Pride and Mehran which hold major part of the market share o the curry spice business (about 25%), however, major share (about 70%) still lies with unbranded market. There are also small players in curry spices business and are restricted to very selective local market of rural areas. Apart from the major brands there are a large number of self-owned independent spice business set ups that are not as such affiliated with any of the brands. Such set ups are largely undocumented and unorganized hence making it difficult to estimate the approximate market size. It is estimated that there are over a thousand spice business set ups spread across Pakistan. Informal trade of raw Spices between Pakistan and India from the routes of Dubai-Bunder Abbas-Bara and Sindh Cross Border is around USD 6,250 million and 1,300 million respectively.Whereas, Delhi-Lahore informal trade of spices is USD 800 million. During the year 2006 our import bill for spices has been USD 3,850 million, Pakistan generally imports spices from Indonesia, India, China, Srilanka, Singapore, Iran, Bangladesh, Burma etc. Vietnam’s the major raw spices sourcing country for Pakistan. Exports of processed and semi processed spices during 2006 has been USD 1,955 million, mainly to Dubai, USA, United Kingdom, Saudi Arabia, Yemen, Spain, Germany,


Australia and Jordan etc. Shan Foods, National and Mehran Masala are the biggest exporters of spices as expressed by the existing operators.

It sometimes becomes difficult for firms to compete and this is one of the main reasons due to which many firms leave the industry. A noteworthy player Galaxy Masala was there in the market in the last decade but has closed down its operations now. The vital reasons due to which a firm might leave the industry are low consumer response to the company’s offerings due to dissatisfaction, high brand loyalty already towards other brand/player, not shifting to other brands, and monetary and trade concerns. Despite these possible reasons, there are number of players who have survived the stiff competition and come out successful.

The following table will give an idea about the current spice market share of Pakistan; it includes

both branded and unbranded spices.

Brand Business Volume Estd Market Share

Branded – Packed Spices 6-7 billion 30% market Share

Loose spices 20-25 billion 70% market share

(SMEDA)

Market share of branded packs, according to SMEDA are:

Brand Market Share In %

National Foods 35%

Shan Foods 45%

Chef’s Pride 15%

Others 5%

(SMEDA)


The below figure shows a region-wise breakup of the total Curry based spice market of Pakistan, the

REGION SHARE

Punjab 45%

Sindh 45%

NWFP & Baluchistan 10%

(SMEDA)

As evident from the above geographical distribution, Punjab & Sindh accounts for approximately90% of the packaged spices market due to a large number of towns and developed cities/areas. The remaining 10% caters to the NWFP and Baluchistan region.

International Industry Analysis:

During the period from 2004 to 2009, the value of international spice imports increased, on average, by 1.9% per year, whereas the volume increased by 5.9%. In 2004, world trade in spices consisted of 1.547 million tons valued at USD2.97 billion. There was a growing trend towards the trade of processed spices during the period, which fetch higher prices. The increasing demand for value-added processing of spices such as capsicum and ginger offer business opportunities for the food and spice industries in international markets The major markets in the global spice trade are the United States, the European Union, Japan, Singapore, Saudi Arabia and Malaysia. The principal supplying countries are China, India, Madagascar, Indonesia, Vietnam, Brazil, Spain, Guatemala and Sri Lanka. Among the major spices exporters, Pakistan does not exist and enormous potential of the export market attracts the investors in this sector.

International Trade Centre (UNCTD/WTO)-Report on World Spice Market 2004-2009

The demand for branded spices business has experienced a gradual change over the past years. As mentioned earlier the advent of technology has opened a new option of export for many potential investors. However this does not imply that the demand for spices business has been affected by technology because considering the associated costs and the subsequent pricing the affordability for spices by a large population of Pakistan becomes questionable.

Branded spices are facing competition from loose spices in terms of their prices. Branded spices are at least 30

percent more expensive than loose spices, because of the 15 percent GST. The packaged spices industry has an


estimated growth rate of 22%annually.The sales of loose spices have fallen “substantially” according to chairman,

Pakistan Grocers Association. And this market share seems to be going to branded or packaged spices, which

have seen 25 percent growth annually over the past five years, according to, national sales manager at National

Foods (Pvt) Ltd. Consumers are not only aware of the health hazards of adulterated and unclean spices, sold out in

the open, but there is a big difference in the medical bills of those who use branded spices and those who used

loose spices, according to a manager at Shan Foods Ltd. “The use of loose spices is prohibited in most countries of

the world and consumers in developed countries only use packed and branded spices”.

Bangladesh:

Population size:

158,570,535 est. July 2011

Bangladesh ranks on seventh most popular country in the world after Pakistan.

Growth: 1.566%

Density: Bangladesh has the highest population density of (1,101 persons/sq km) in the world, excluding a handful of city-states and small countries such as Malta.

Age structure comparison:

Bangladesh:

0-14 years: 34.3% (male 27,551,594/female 26,776,647)15-64 years: 61.1% (male 45,956,431/female 50,891,519 )65 years and over: 4.7% (male 3,616,225/female 3,778,119) (2011 est.)

Pakistan:

Age structure: 0-14 years: 35.4% (male 34,093,853/female 32,278,462) 15-64 years: 60.4% (male 58,401,016/female 54,671,873 ) 65 years and over: 4.2% (male 3,739,647/female 4,157,870) (2011 EST.)

http://en.wikipedia.org/wiki/Malta

http://en.wikipedia.org/wiki/City-states

http://en.wikipedia.org/wiki/List_of_countries_and_dependencies_by_population_density


Urban and Rural Population

Urban population: 28% of total population (2010)Rate of urbanization: 3.1% annual rate of change (2010-15 EST.)

The total Urban Population projected on the growth rate of urbanization for 2011 is 45,766,836 where as the calculated projection of rural population for 2011 is 114,147,576.

Climate of Bangladesh:

Tropical; Mild winter (October to March); hot, humid summer (March to June); humid, warm rainy monsoon (June to October)

Product-significant demographics:

15-64 years: 61.1% (male 45,956,431/female 50,891,519)

Natural resources :

Natural gas, arable land, timber, coal

Economic Environment:

Economy - overview: The economy of Bangladesh has grown 5-6% per year since 1996 despite political instability, poor infrastructure, corruption, insufficient power supplies, and slow implementation of economic reforms. Bangladesh remains a poor, overpopulated, and inefficiently-governed nation. Although more than half of GDP is generated through the service sector, 45% of Bangladeshis are employed in the agriculture sector, with rice as the single-most-important product. Bangladesh's growth was resilient during the 2008-09 global financial crisis and recession. Garment exports, totaling $12.3 billion in FY09 and remittances from overseas Bangladeshis totaling $11 billion in FY10 accounted for almost 25% of GDP.

Source: www.Index mundi.com

GDP - composition by sector :

Agriculture: 18.4%Industry: 28.7%Services: 52.9% (2010 est.)

Foreign Direct Investment:

https://www.cia.gov/library/publications/the-world-factbook/fields/2111.html?countryName=Bangladesh&countryCode=bg&regionCode=sas&#bg


United Arab Emirates, Kingdom of Saudi Arabia, United Kingdom are the top investor in Bangladesh from 1977 to 2010, according to FDI statistics of Board of Investment (BOI) of Bangladesh. Foreign Direct Investment (FDI) is an investment involving a long-term relationship and reflecting a lasting interest and control by a resident entity in one economy in an enterprise resident in another economy. FDI Components are the equity capital as direct investor's purchase of shares of an enterprise in another country, intra company loans as debt transactions between parent enterprises and affiliates and reinvested earnings as direct investor's share of profits not distributed as dividend or remitted to it which is reinvested.

The top 10 investing countries in terms of investment amount from 1977 to 2010 are as follows:

Country No of UnitsInvestment in (USD

millions)

Employment opportunities (in

person)

United Arab Emirates 6 2229.898 6,513

Kingdom of Saudi Arabia (KSA)

4 1850.406 2,154

United Kingdom 45 952.035 26,194

United States 23 735.376 3,881

The Netherlands 7 351.197 595

Egypt 2 177.149 243

Malaysia 7 162.006 833

South Korea 88 123.708 46,089

India 43 93.803 7,982

China 54 55.622 7,071

The total FDI from 1977 to 2010 in Bangladesh reached to about $6,731.20 million and created employment opportunities for almost 101,555 Bangladeshi citizens.

Board of Investment (BOI) of Bangladesh is the principal investment promotion agency engaged mainly in investment promotion, facilitation, and policy advocacy support for the policy makers. BOI has endeavored in to portray a brief on Foreign Investment registered from 1977 to 2010 for Joint venture investment and from 1990-2010 for the 100% foreign investment projects. FDI in Bangladesh mainly comprise 100% foreign owned investment and Joint venture between a Bangladeshi investor and a foreign investor. The investment comes in the form of equity, borrowings and reinvested earnings of the existing projects.


http://economy-bd.blogspot.com/2011/03/top-ten-investing-countries-as-fdi-in.html

Inflation:

The inflation rate in Bangladesh is increased by 50% based on previous year’s estimates and reaches to 8.10% in the 2011 from 5.41% in year 2010.

Exchange rates:

Bangladesh Pakistan

USD USD Years

70.590 85.270 201069.039 81.713 200968.554 70.640 200869.893 60.630 200769.031 60.350 2006

The five year exchange rates for Bangladeshi Taka have been seen quite more stable with only 1 to 1.5 Taka difference against US Dollar in last consecutive five years.

While on the other hand Pakistani Rupee has been seen more unstable against Us dollars and depreciated by twenty to twenty five rupees in last consecutive five years.

Balance of payment:

The estimated balance of payment at the end of FY10-11 is $10,790,000,000 and ranks on the 54th largest economy in the world with an increase by 4.35% compared to the 2010 estimates.

Per Capita income comparison on GDP-PPP:

BANGLA $1,700 (2010 est.)

PAK $2,400 (2010 est.)

Literacy rate comparison:

(Defines the age of 15 and above can read and write)

The Literacy rate in Bangladesh is 47.9% of which 54% are male and 41.4% are Female. Bangladesh is rank 186 th Nation on chart of 201 Nations.(est2001)

https://www.cia.gov/library/publications/the-world-factbook/docs/notesanddefs.html?countryName=Bangladesh&countryCode=bg&regionCode=sas#2103

http://economy-bd.blogspot.com/2011/03/top-ten-investing-countries-as-fdi-in.html


In Pakistan Literacy rate is 50% of which 63% constitutes male and 36% constitutes Female population. Pakistan ranks 182 on chart of 201 Nations. (Est 2009)

Existence of Middle Class:

Bangladesh’s middle class accounts for about 10 percent of the country’s population, still low compared to Pakistan’s 18 percent and India’s 30 percent, but growing steadily. According to one report, the percentage of poor people in Bangladesh has dropped from over 60 percent in the 1980s to about 47 percent in 2000s. Data on the actual size of the Bangladeshi middle class is sparse, but there is plenty of evidence suggesting its growth.

Ethnic Groups and Languages:

98% of population in Bangladesh is Bengalis who speaks Bangla and the official language is English

Cultural Landscape of Bangladesh Society

Although religiously, ethnically and linguistically homogenous, the dominant cultural pattern inBangladesh appears to be hierarchical (Kochanek 1993; Bertocci 1996; Hussain and Khan 1998). That implies that the society is characterized by high group values and high grid values. Individuals identify strongly with groups in society and these groups aid to organize a great deal of day-to-day life in the country. The following is an attempt to figure out the dominant culture of Bangladesh in the light of the theories discussed above and then look at its consequences on Bangladesh society and body politic. The social dimension (grid) of Bangladesh society is heavily influenced and molded by the Hindu religious culture with its caste system and other ceremonials as well as colonial heritage based principally on Master-slave (unequal relations) rapport. Social stratification and its manifestations on the organizations based on elaborate rules and hierarchy distance the elites from the common masses. On the other hand, Islam, the major religion of the country advocates of egalitarian values, brotherhood, fraternity (group values), which has succeeded to arouse its wider appeal and acceptance among the masses irrespective of their religious affiliation. Hence high grid and high group- two contrasting values is lively present simultaneously in Bangladesh society. This is one of the instances of numerous manifestations of social dualism in Bangladesh.

The earlier discussion on group-grid dimension of Thompson and its relevance in BangladeshSociety gives credence to the view that Bangladesh is a collective society. From the family to theEducational institutions and from educational institutions to work places, the traits of collective society are glowing. However collective norms are confined within groups. Furthermore,


Bangladesh is predominantly a masculine society where the dominance and presence of males is widespread. Uncertainty avoidance is also high in organizations and society in Bangladesh. Low trust across society is an illustration of this feature. Interpersonal trust outside immediate family is virtually on wane. Rather, group trust is largely confined to service based on mutual interest achievement. But this personal sense of trust is shaky. Low levels of interpersonal trusts also promote factionalism and consolidate hierarchy and formal rules in organizations including political parties (Kochanek 1993; Jamil 1998).In Bangladeshi organizations like the family, there is a high degree of power distance.Subordinates feel comfortable to work under superiors rather than with equals. Superior-subordinate relationships are characterized by protection, patronage and favor on the part of the superiors and respect, loyalty and compliance on the part of the subordinates. Deviant behavior and ideas are less encouraged. Opposing a superior’s decisions or raising a question is often considered beyadobi (ill mannered). Proper manners comprising obedience and deference are very important in gaining access to patronage and favor. The essence of loyalty is order (Jamil, 1998:148).According to Hofstede’s cross-cultural study (2001), Bangladesh predominantly belongs to theHierarchical society, which is shown in the following table.

The higher the score, the stronger the dimension

Source: Compiled by the Author from Hofstede (2001:502).In short, according to Hofstede’s features of national culture, Bangladesh tends to be a collective,Somewhat masculine society with high power distance and uncertainty avoidance, which resembles tohierarchic one as posited by Thompson (1990).

CURRENT POLITICAL ENVIRONMENT :

INTRODUCTION:

Currently, the political environment is not so good in Bangladesh. As a democratic country, the political environment of Bangladesh should be dressed of democratic form. But, in most of the cases political environment of Bangladesh would become so pollute that we cannot imagine that what type of political system has been following by our political parties. Without political unity, amity, true exercise of democracy; the political environment of Bangladesh can never be healthy.

SYSTEM OF GOVERNMENT:

The president, while chief of state, holds a largely ceremonial post; the real power is held by the prime minister, who is head of government. The president is elected by the legislature


(Parliament) every 5 years. The president's circumscribed powers are substantially expanded during the tenure of a caretaker government. Under the 13th Amendment, which Parliament passed in March 1996, a caretaker government assumes power temporarily to oversee general elections after dissolution of the Parliament. In the caretaker government, the president has control over the Ministry of Defense, the authority to declare a state of emergency, and the power to dismiss the Chief Adviser and other members of the caretaker government. Once elections have been held and a new government and Parliament are in place, the president's powers and position revert to their largely ceremonial role. The Chief Adviser and other advisers to the caretaker government must be appointed within 15 days after the current Parliament expires.

The prime minister is appointed by the president. The prime minister must be a Member of Parliament (MP) who the president feels commands the confidence of the majority of other MPs. The cabinet is composed of ministers selected by the prime minister and appointed by the president. At least 90% of the ministers must be MPs. The other 10% may be non-MP experts or "technocrats" who are not otherwise disqualified from being elected MPs. According to the constitution, the president can dissolve Parliament upon the written request of the prime minister.

The legislature is a unicameral, 300-seat body. All of its members are elected by universal suffrage at least every five years. Parliament amended the constitution in May 2004, making a provision for 45 seats reserved for women to be distributed among political parties in proportion to their numerical strength in Parliament. The AL did not take its share of the reserved seats, arguing that it did not support the indirect election or nomination of women to fill these seats. Several women's groups also demanded direct election to fill the reserved seats for women.

Bangladesh's judiciary is a civil court system based on the British model; the highest court of appeal is the appellate court of the Supreme Court. At the local government level, the country is divided into divisions, districts, sub districts, unions, and villages. Local officials are elected at the union level and selected at the village level. All larger administrative units are run by members of the civil service.

POLITICAL STABILITY AND CONTINUITY:

Despite serious problems related to a dysfunctional political system, weak governance, and pervasive corruption, Bangladesh remains one of the few democracies in the Muslim world. Bangladeshis regard democracy as an important legacy of their bloody war for independence, and they vote in large numbers. However, democratic institutions and practices remain weak. Under the state of emergency, political activities were restricted. Bangladesh is generally a force


for moderation in international forums, and it is also a long-time leader in international peacekeeping operations. Its activities in international organizations, with other governments, and its regional partners to promote human rights, democracy, and free markets are coordinated and high profile. In May 2005, Bangladesh became a member of the United Nations Human Rights Council.

Bangladesh lies at the strategic crossroads of South and Southeast Asia. Potential terrorist movements and activities in or through Bangladesh pose a potentially serious threat to India, Nepal, Bhutan, and Burma, as well as Bangladesh itself. The Bangladesh Government routinely denies Indian allegations that Indian insurgents in northeast India operate out of Bangladesh and that extremist Islamist forces are overwhelming Bangladesh's traditionally moderate character. It also denies there is any international terrorist presence in Bangladesh.

GOVERNMENT INVOLVEMENT IN BUSINESS AND ATTITUDE TOWARDS FOREIGN BUSINESS:

In order to encourage the inflows of FDI the government of Bangladesh offers one of the most liberal investment policies and attractive packages of fiscal, financial and other incentives to foreign entrepreneurs in South Asia. Major incentives to stimulate private sector direct investment are listed below.

Tax exemptions

Generally five to seven years' tax exemptions are available for many business investments. However, for electric power generation tax exemptions are provided for up to 15 years.

Duty

No import duty is applicable for export oriented industry. For other industries it is 5% ad valorem.

Income tax

Double taxation can be avoided in most cases as the country (Bangladesh) benefits from many bilateral investment agreements. Exemptions of income tax up to three years for the expatriate employees in industries are specified in the relevant schedules of the income tax ordinance.

Remittances

Facilities for full repatriation of invested capital, profits and dividends are the norm in most situations

Exit

An investor can wind up an investment either through a decision of an annual or extraordinary general meeting. Once a foreign investor completes the formalities to exit the country, he or she


can repatriate the net proceeds after securing proper authorization from the central bank (Bangladesh Bank).

Ownership

Foreign investors can set up ventures, either wholly owned or in joint collaboration, with local partners.

Investing in the stock market

Foreign investors are allowed to participate in initial primary offerings (IPOs) and right issues without any regulatory restrictions. Also, incomes from dividends are tax-exempt for investors.

Incentives and facilities for the investors

Industries are eligible for tax holidays for the following periods according to the location of the establishment.

The period of tax holiday is calculated from the month of commencement of commercial production or operation of the industrial undertaking. The eligibility of a tax holiday is to be determined by the National Board of Revenue (NBR).

The tax holiday facility is applicable to industries set up in Bangladesh before June 30, 2012.

Accelerated depreciation in lieu of a tax holiday is allowed at the rate of 80% of actual cost of machinery or plant for the year in which the unit starts commercial production and 20% for the following years. The rate of depreciation is 100% for years specified by the NBR.

DOCUMENTATION AND IMPORT REGULATIONS:

Import of goods in Bangladesh under this Order shall be regulated as follows:

3.1 List of restricted items- Unless otherwise specified the items banned for import in this list shall not be importable. But those items which are importable on fulfillment of certain conditions specified in the list shall be importable on fulfillment of those conditions.

The list of items controlled for import has been attached at Annexure-1

3.2 Foot note- Items mentioned in the foot note given after the restricted list shall be treated as banned items.

3.3 Freely Importable Items : Unless otherwise specified, any item, which does not appear either


in the restricted list or which has been mentioned as importable subject to certain condition shall be freely importable;

3.4 In addition to the conditions mentioned in the 'Control list' the conditions, restrictions and procedures for import of various items mentioned elsewhere in the text portion of this Order, shall as usual apply in case of import of those items;

3.5 If, while determining the import status of an item mentioned in the 'Control List', the description of goods does not conform to the H. S. Code mentioned against the item or any discrepancy arises between the H.S. Code and the description of goods, in that case the description of goods shall prevail;

3.6 Conditions of Prohibition and Restrictions- If the import of an item was restricted before coming into effect of this Order or if such restriction has been made effective due to the inclusion of the item in the Control List annexed to this Order or for imposition of any other condition such restriction shall be subject to the following conditions:

3.6.1 In case any restriction is imposed on import of a particular commodity with a view to protecting the interest of a local industry the concerned sponsoring authority/Tariff Commission shall strictly monitor production of that industrial unit regularly. The restriction may be revoked on the recommendation of the concerned sponsoring authority/Tariff Commission if the quality of products deteriorates and the price of the product is not maintained at satisfactory level or production level falls short of capacity. Such protected units which are specially engaged in "assembling type" activities shall have to move towards progressive manufacture actively and expeditiously.

3.6.2 The Tariff Commission and the sponsoring authority concerned shall continuously monitor the prices of the items covered by such ban to guard against undue increase of price. If the price of any item is increased except for factors like rise in the price of raw materials or decline in the rate of exchange or if the increase in the price of the item is disproportionately higher compared to the rise in the price of the raw materials in the international market the ban may be revoked on the recommendation of Tariff Commission/sponsoring authority.

3.6.3 However, if any one feel aggrieved by any decision regarding ban or restriction on import of any item he can refer his representation to the Tariff Commission. The Tariff Commission will duly examine such a representation and furnish its recommendation(s)to the Ministry of Commerce for consideration.

TRADE TARIFFS AND BARRIERS

Tariff barriers for poor countries


The quotas were complimented by high tariffs and other non-tariff barriers. These restrictions severely affected exports from developing countries of Food and clothing. For many of these countries, the garment sector offered key development opportunities-providing a high percentage of income, employment, foreign exchange and competitive strength on the world market.

As countries could choose which products to restrict from which countries, the MFA resulted in preferential treatment for certain countries; in the case of the UK, these included ‘least developed countries’ such as Bangladesh and Sri Lanka.

PATENTS AND TRADEMARK PROTECTION

In Bangladesh, protection of industrial property comes under the umbrella of Ministry of Industries. On behalf of Industries Department of Patents, Designs and Trademarks (DPDT) administers all the activities relating to industrial property. DPDT started its work as a department from 20.3.2004. Registrar is the head of this department. He is a joint secretary of the govt. DPDT has 4 wings; each is headed by a Deputy Registrar. The wings are: a. Patents & Designs Wing, b. Trademarks Wing, c. WTO and International Affairs Wing, d. Administration & Finance Wing.It has 9 sections, each headed by one Assistant Registrar.

BANGLADESH ECONOMIC RELATIONS WITH PAKISTAN:

The religious affinity could not keep Pakistan united for a long period and thus Bangladesh emerged as an independent country in 1971. However, Pakistan established full diplomatic relations with Bangladesh on January 18, 1976 and their relations improved considerably in the 1980s and 1990s.

During the 8th meeting of Joint Economic Committee (JEC) held in Dhaka on 12-13 September 2005, both countries decided to increase the bilateral trade to US $1 billion by 2007. It has already increased from about US $147 million in 2001-2002 to US $267 million in 2004-2005 to US $217 million during the eight months (July-Feb) of financial year 2005-2006.

Major imports from Bangladesh to Pakistan include tea, jute, medical and pharmaceutical products. There is a duty-free import of Bangladeshi tea by Pakistan. There are also prospects for the development and establishment of direct shipping service between the two countries in order to promote commercial and trade links.


Efforts to expand technical cooperation in various fields were identified by Joint Working Group. In 2006, four MoUs on cooperation in areas of agriculture, tourism, promotion of trade, and product standardization and quality assurance were signed during the visit of Begum Khaleda Zia, Prime Minister of Bangladesh to Pakistan.

There are MoUs signed between Pakistan Agriculture Research Council, Ministry of Food, Agriculture & Livestock and Bangladesh Agricultural Research Council. They have also signed MoUs on tourism.

INVESTMENT OPPOR TUNITIES IN BANGLADESH:

Investment opportunities in Bangladesh can be seen as falling into two broad categories:

Resource Advantages

Areas in which Bangladesh offers substantial resource advantages Example: Natural gas, fisheries and low-cost labor.

Development Opportunities

Areas in which Bangladesh needs to develop. Example: Upgrading of infrastructure (power, telecommunications, ports, roads and railways) Note: For this category, financing available through multilateral and bilateral sources.

Investment Guarantee

Foreign Private Investment (promotion and Protection) Act, 1980secures all foreign investment in Bangladesh. OPIC’s (Overseas Private Investment Corporation, USA) insurance and finance programs operable. Security and safeguards available under Multilateral Investment Guarantee Agency (MIGA) of which Bangladesh is a member. Arbitration facility of the International Center for the Settlement of investment Dispute (ICSID) available.

FACILITIES AND INCENTIVES

Facilities

Land and factory buildings are available on rental basis.

Electricity, telecommunications, gas and water are provided by the zones.


Recreational facilities are available.

Availability of food stuff and beverages on payment of nominal tax for foreigners working in EPZs.

Potential investors are required to deal only with BEPZA for investment and all other operational purposes.

Permanent resident ship to a foreign citizen investing a minimum of US$ 75,000 or equivalent amount (non-repatriable) similarly citizenship to any foreign citizen investing US$ 500,000 or transferring US$ 1,000,000 to any recognized Bangladeshi financing institution (non-repatriable).

INCENTIVES FISCAL

I. Tax Exemption

Tax holiday for 10 years.

Exemption of income tax on interest on borrowed capital.

Relief from double taxation subject to bilateral agreement.

Complete exemption from dividend tax for tax holiday period for foreign nationals.

Exemption of income tax on salaries of foreign technicians for 3 years subject to certain conditions.

II. Duty Free Import

Duty free import of machineries, equipment and raw materials.

Duty free import of materials for construction of factory buildings in the zones.

NON- FISCAL

I. Investment

All foreign investments secured by law.

No ceiling on extent of foreign investment.


Full repatriation of profit and capital permissible.

Repatriation of investment including capital gains, if any, permissible.

Remittances allowed in following cases :

All post tax profit and dividend on foreign capital.

Savings from earnings, retirement benefits, personal assets of individual on retirement/ termination of services.

Approved royalties and technical fees.

II. Project Financing and Banking

Off-shore banking facilities available.

Local and international banking facilities also wide-open.

III. Import

Freedom from national import policy restrictions.

Import of raw materials also allowed on Documentary Acceptance (DA) basis.

Advantage of opening back to back LC for certain types of industries for import of raw materials.

Import of goods from the Domestic Tariff Area (DTA) permissible.

Enterprises can sell their 10% of the product to the DTA on payment of duties and taxes under certain conditions

PRODUCT POTENTIAL:

Customer needs and desires

In Bangladesh rice and fish are the foundation of the diet; a day without a meal with rice is nearly inconceivable. Fish, meats, poultry, and vegetables are cooked in spicy curry ( torkari) sauces that incorporate cumin, coriander, cloves, cinnamon, garlic, and other spices. At weddings and on important holidays, food plays an important role. At holiday or formal functions, guests are encouraged to eat to their capacity. At weddings, a common food is biryani, a rice dish with lamb or beef and a blend of spices, particularly saffron. On special occasions, the rice used is one


of the finer, thinner-grained types. If biryani is not eaten, a complete multicourse meal is served: foods are brought out sequentially and added to one's rice bowl after the previous course is finished. A complete dinner may include chicken, fish, vegetable, goat, or beef curries and dal. The final bit of rice is finished with yogurt.

On other important occasions, such as the Eid holidays, a goat or cow is slaughtered on the premises and curries are prepared from the fresh meat. Some of the meat is given to relatives and to the poor.

By analyzing the host country’s customer needs and desires we can see that there needs are the same as home country (Pakistan).

Exposure to and acceptance of product

The culture and tradition of Bangladesh is quite familiar with Pakistan. Especially in terms of food preference and taste. Bengalis love spicy food with lots of spices and the dishes they prepare are almost the same with minor difference in recipe.

Shan masala exposure to Bangladeshi market will not be a big hurdle as people know about the range of product and its usage as the name Shan is a very powerful brand in readymade spice industry in the entire subcontinent.

If we talk about acceptance so sharing the same traditions the people of Bangladesh don’t have to change theirtaste to accept this product. If we question about will people accept the product or not in Bangladesh so Shan food is very much positive for that!

Availability of linking products

There are several brands Powder Spices are available in the Bangladeshi market such as Radhuni, ACI Pure, Arku, BD Food, Fresh, Tiger etc. But if we compare to Shan masala these brands have very little range of products and they are not exactly the same of what Shan offers to its consumer. Shan have a wide range of products and it’s not only powder spice but also offer readymade spice for your daily and special dishes. So the exact linking products are not available in Bangladesh’s market.

Attitudes of Bengalis toward Pakistani products

As we mentioned earlier that the way of living and our day to day living standards are the same like Bengalis. So being sharing the same standards and same needs and wants, Pakistani products are being appreciated and used by the people of Bangladesh. The best examples are Unique and Super star motorcycles which are been manufactured in Pakistan and exported to Bangladesh. As labeled as Pakistani brand still its been sold and appreciated by the Bengalis. This shows that there is a very good attitude towards Pakistani products.


Competitive offerings

After doing a complete market survey of powder spice in Bangladesh we can see that our prices are very much competitive in the market. A 50g meat curry masala or a fish curry masala of a branded company’s price is 55.00 taka and a 100g is of 95 to 100 taka and our pricing is way more competitive and the best thing about Shan is that we are launching a wide range of products in market which no other local brand in Bangladesh has ever launched.

LOCAL DISTRIBUTION AND PRODUCTION:

Distribution Channel

The distribution channel will be in the following manner.

- Direct (on-site)

- Direct Mail

- Area Distributor

- Agents

- Wholesalers

- Distribution Channels-Retailers

shan final

Documents