Given the ever-increasing population in Bangladesh, the need for creative and import-substituting business has become a necessity, especially when the business tends to be eco-friendly. Businesses in the field of agro-ecology have been gaining currency in today’s world simply because environment, health, and climate change have forced humanity to review its own sustainability paradigms.
Scientists have claimed that current approaches to farming with population growth, receding water levels and forestry, aggressive use of chemicals, urbanisation, and pull of labour from rural communities to cities have contributed to this precipitous decline in agro-ecological sustainability. Additionally, the onslaught of Mother Nature is creating a world of environmental nightmares, starting from tsunamis to flash floods.
Given the perilous context, it is all the more apt to be an entrepreneur supporting humanity and still profit from running businesses in the agro-ecology field, the bio-fertiliser industry in particular.
Truth is, a bee travels where the nectar is available. Similarly, an entrepreneur happily engages in a business where he/she has a reasonable opportunity to grow, earn a profit, and enjoy the “feel-good factor” of remaining in the trade. In other words, an entrepreneur is normally excited to be in a business when there is some glamour involved.
This common thread is true for any business. In the bio-fertiliser business, the glamour factor perhaps may not be accentuated as other businesses. However, if a presentable packaged product is introduced, the glamour factor is also captured.
In short, the concept of marketing with colourful presentations of any product removes the consumer from the immediate idea of the product at hand. With a business plan that delivers profit, an entrepreneur will desire to partake in it. Hence, enticing new entrepreneurs as well into this business is a great possibility.
Therefore, the major thrust of reaching out to entrepreneurs lies in promoting the business, its benefits, and then inviting entrepreneurs in this field to grow greater interest and involvement.
Integrated market communication will need to be properly addressed in bringing the societal mind-set change for furthering the growth of this business cluster. The same logic will also apply to bringing entrepreneurs from other fields to join this industry.
There are several reasons that entering the bio-fertiliser business is justified endeavour:
Climate change
Climate change is bringing more peril to the world, and if one only sees that a business has to be done for profit, then society loses the larger picture of “doing well by doing good.” The bio-fertiliser business can be promoted as a business that does society good. So the entrepreneur engages in a corporate social responsibility act by simply carrying on with it.
International impact funds are continually focusing on finding businesses that generate socially responsible outcomes, and what better way to promote a business than by staying involved in this business segment?
Competitive rivalry
The rivalry condition remains low in this industry due to low numbers of competitors. Given the nature of this business, and the relatively low scientific inquiry in the field, the demand for raw material is low, while nature creates huge quantities of raw material daily that can easily be found in cities, farms, etc.
It is noted that no more than 4-5% of Bangladesh’s entire supply of organic waste is used while many more millions of tons of processed organic fertiliser potential lies unattended.
The large landfills are piling up, creating environmental hazards across Bangladesh. With ingenious planning, policy support, and entrepreneurial zeal we can actually reclaim the landfills into other productive endeavors.
Food security risks
Food security has always been a risk in Bangladesh. The government and the private sector have to import huge quantities of chemical fertiliser to ensure that crop yields do not fall in the country.
Billions of dollars of imports are done while the raw materials of bio-fertiliser go to waste periodically. This is not a good public policy initiative and awaits correction.
If this system continues, the top soil fertility in Bangladesh may approach near zero level, igniting a very serious future environmental migration hazard from this part of the world.
Keeping the societal view in mind, our country needs to bring more entrepreneurs to reap the natural advantage that Bangladesh offers and earn revenue at the same time. Approximately $2bn worth chemical fertilisers are imported each year, causing other environmental harms.
Government policy and support
The government has reiterated its priority in converting our disposed waste into resource, therefore, with technical support, entrepreneurs are in a favourable position to conduct business in a policy-friendly climate. The government is also considering revising the licensing period and procedure to accommodate more entrepreneurs to enter this market.
With greater interest and participation, the government will extend greater policy support.
The bio-fertiliser trade association in Bangladesh currently has an emaciated existence as a wing under the chemical fertiliser industry, and hence, there is little policy effort in bringing out its true potential.
Municipality
The municipalities are increasing their awareness and sensitivity to waste-disposal planning and hence, entrepreneurs can be supported by the favourable and business-friendly environment. This is great incentive for an entrepreneur.
Supply chain
Supply chain constraints have been a major impediment to this business. Many companies have an interest, but managing the entire waste-collection process is tedious, needing dedicated human resource support. If investment support at reduced interest rates is received, then entrepreneurs may actively engage in this business. This will also create more interest in the labour supply industry, which continues to grow due to rising population.
Environmental awareness
The people of Bangladesh are increasingly becoming aware of their environment and people are forced to live in confined spaces. Households are trying to incorporate the touch of green living within their immediate environments. Given this interest, we see more greens and flowering plants in our compounds.
This has increased the demand for organic fertilisers manifold. Similarly, large nurseries have come up to support the demand of farmers and even small plantations. Additionally, crop density and yield necessitate more consumption of fertilisers. These are natural consequences of urbanisation resulting in more reasons for an entrepreneur to jump into the business.
Profitability
Prior analysis/market study of the bio-fertiliser sector of Practical Action -- a UK based development organisation -- has shown that the bio-fertiliser industry offers a viable business model with annual net profits in the range of 15-20%, even with a small, mobilised resource base, hinting that, with greater capacity, the profitability potential increases.
Stakeholder engagement
The stakeholders in this business have to be brought closer to support each other for a profitable and sustainable future. Knowledge and learning of the various stakeholders -- farmers, wholesalers, retailers, financiers, and entrepreneurs -- are to be significantly improved upon, otherwise, even small technical issues may jeopardise the entire value chain. The finance companies cannot consider equating this business model with any other business model. This understanding must be embedded in their hearts, so financing companies/banks may design their finance products catering to the exacting needs of the market.
The bio-fertiliser business has unique opportunities in Bangladesh. Simply because of the nature of the business, the exorbitant cost of imported bio-fertiliser products will experience a tough market battle here at home.