There are several agro processors such as Pran, Akij, Square, Ahmed, ACI, BD Foods and Bombay Sweets in Bangladesh with Pran being the largest. According to Bangladesh Agro Processors Association (BAPA), there are around 479 processors however the list in not exhaustive as there are other processors who are not members of the association. These processors produce a range of items and sell their products both nationally and internationally. Export destinations are primarily countries with large Bengali diaspora; penetration in new markets has been low. The processors are mostly engaged in processing of food products for which there is a proven market; import trends and the significance of the local informal processing are used as indicators to test the market potential. This is observable in the growth in local manufacturing of real potato chips (Following growth in import of Lays chips from India) and growth in snack food items (muri, chira etc.) for which there has been a strong local informal processing market. These processors mainly procure from the Northern districts of Bangladesh and the factories are mostly situated in this region. Although the production of crops have been increasing in other parts of the country (for instance, Mung is being cultivated on a large scale in Patuakhali), the processors are not interested to set up procurement centers in these regions as it involves significant resource mobilization and limited infrastructure (primarily road network). The region can experience growth in agro processing after the completion of the Padma Bridge and the power plants (Rampal). The processors mainly procure through agents/suppliers who procure these products from all over Bangladesh. The processors are very loosely connected to the farmers and previous attempts of introducing contract farming (in case of potato) have not been very successful as the farmers do not trust the processors. Thus, the procurement channel is characterized by seasonal and opportunistic procurement (processors procure only when there is surplus production and the price of the crops is at lowest) made through agents and traders. The agro processors receive support service from Bangladeshi manufacturers who produce various ingredients, machinery and packaging material. Some of the ingredients used in agro processing such as certain food colors, flavors and preservatives like sodium benzoate are imported as these are not produced locally. High end sophisticated machineries such as vacuum fryer are also imported as only light machinery are produced in Bangladesh.
Agriculture is the most important sector of Bangladesh economy as this country is blessed with the favorable climate, rich and fertile soil. Almost 80% of population lives in rural areas and approximately two-thirds of the labour force is employed in agriculture. Moreover, there are vast untapped human resources who can learn and adopt new skills to make it more progressive. Bangladesh’s agricultural sector has benefited from a sound and consistent policy framework backed up by substantial public investments in technology, rural infrastructure and human capital.
Bangladesh has enormous opportunities in agro-based industries because of several factors. The shifting of domestic demand — away from food grains and towards high-value agricultural products, including fruit, vegetables, fish, meat, and dairy products is one of the most important sources of agricultural diversification, value addition, and agri-business. Using demand projections based on reasonable growth rates in incomes and population, it is estimated that Bangladesh would need an extra $8 billion of these high-value products by 2020, according to World Bank 2008.