Why Sustaining Bangladesh's Productive Industries Is A National Interest: Mostafa Kamal

Dhaka, September 23, 2026 — The latest report from the Food and Agriculture Organization (FAO) has painted a worrying picture of global food markets, creating new pressure on economies and household livelihoods around the world. The FAO Food Price Index rose to 133.3 points in August 2026, its highest level since late 2022. Extreme weather, geopolitical tensions and disruptions to global supply chains have driven sharp increases in the prices of sugar, edible oils and food grains.

📊 Writing in The Financial Express, Mostafa Kamal — founder of City Group, one of Bangladesh's largest producers and suppliers of essential consumer goods — argues that sustaining Bangladesh's productive industries has become a matter of national interest, not just corporate survival.

💲 The Khatunganj Sugar Price Spike

In Bangladesh, the FAO report's impact is already being felt. At Khatunganj, one of the country's major wholesale markets, the wholesale price of sugar has increased by almost Tk 200 per maund, rising from nearly Tk 3,600 to Tk 3,800. Based on a maund of 37.32 kg, this represents an increase of nearly Tk 5 per kg, taking the price to around Tk 102 per kg.

The rise itself is an indication of the pressures currently facing the market. While international price increases are a major factor, disruptions to domestic production and supply can further amplify their impact on consumers. Therefore, ensuring food market stability requires more than securing imports — it also requires keeping the country's production and processing capacity operational.

🏭 Why Productive Industries Are Strategic Assets

Bangladesh's manufacturing sector supports far more than factory workers. Farmers, raw material suppliers, transport workers, dealers, wholesalers and retailers are all part of the broader ecosystem that depends on industrial activity. When the operations of a major industrial enterprise are disrupted, the consequences do not remain confined to the company's balance sheet. They can reverberate throughout the supply chain, employment market, banking sector and consumer economy.

This is why, Mostafa Kamal argues, sustaining productive industries has become a question of national interest — one that should be addressed through structured policy rather than ad hoc interventions.

🏗 PEZAB's Tk 5,000-Crore Long-Term Financing Proposal

A recent proposal by the Private Economic Zones Association of Bangladesh (PEZAB) has highlighted another important dimension of the challenge facing industrial development: access to long-term financing. The organisation has proposed establishing a government-supported fund of Tk 5,000 crore initially, with the potential to increase it to Tk 10,000 crore, to support infrastructure development in private economic zones.

Under the proposal, entrepreneurs would receive loans at an interest rate of 4.5 per cent for 15 years, including a four-year grace period. Thirty per cent of project costs would be financed by the entrepreneurs themselves, while the remaining 70 per cent would come through loans.

The reality behind this proposal is significant. Economic zones and large industrial projects require substantial upfront investment. Developing land and building roads, water and drainage systems, sewerage, electricity and gas networks, waste management facilities, fire safety systems and other infrastructure require large amounts of capital to be committed long before a factory begins generating meaningful cash flow.

Dependence on high-interest, short-term commercial borrowing can therefore place considerable financial pressure on projects from the outset.

🏢 Bangladesh's Private Economic Zone Landscape

According to PEZAB, there are around 23 approved private economic zones in Bangladesh, of which eight have received final licences and are in commercial operation. The organisation has said that many domestic and foreign investors are interested in establishing factories in these zones, but delays in infrastructure development are holding back the implementation of those investments.

This means that attracting investment requires more than allocating land or announcing economic zones — ensuring suitable industrial infrastructure and access to long-term financing is equally important.

💼 The City Group Case Study

The experience of Bangladesh's major productive enterprises reflects many of these structural challenges. City Group, one of the country's largest producers and suppliers of essential consumer goods, operates around 40 affiliated companies producing and supplying edible oil, sugar, flour, atta, salt, rice, pulses and other necessities. More than 25,000 people are directly employed by the group, while a much larger economic network involving farmers, dealers, transport workers and retailers is linked to its operations.

Yet even this substantial production capacity faces significant structural constraints. City Group has invested around Tk 14,000 crore in multiple industrial units at its Hossendi Economic Zone. However, prolonged delays in securing gas and energy connections have prevented these facilities from reaching their intended production capacity. In other words, the investment has been made and the infrastructure has been developed, but without the necessary energy supply, the productive capacity cannot be fully utilised.

💰 The Financial Squeeze

The financial consequences of such a situation can be substantial. Even when a factory is unable to begin or maintain full-scale operations, the costs of bank interest, maintenance, staffing and other operational expenses continue. The expected cash flow from production may not materialise, while expenses continue to accumulate. If such a situation persists for an extended period, even a productive enterprise can face working-capital constraints.

In the case of City Group, loans of around Tk 25,000 crore from approximately 49 domestic and foreign banks and financial institutions are linked to various production and expansion projects. The group has serviced its financial obligations for more than five decades, and its history of not being classified as a loan defaulter has also been highlighted.

At present, under the supervision of Bangladesh Bank and with support from international consultancy firm Ernst & Young (EY), the lending banks are working on a coordinated restructuring plan. One of its key objectives is to recover lenders' funds while keeping production operational through asset realignment, capital strengthening and operational reforms.

🌏 International Precedents: GM, South Korea, Japan

There are precedents around the world for addressing the difficulties faced by major industrial enterprises from a broader economic perspective:

• 🇺🇸 United States (2009) — supported the restructuring of General Motors because the collapse of the company was expected to affect not only the automaker itself but also the wider automobile industry, its suppliers and a vast number of jobs.
• 🇰🇷 South Korea — has at various times chosen to restructure strategically important industrial enterprises to protect production and employment.
• 🇯🇵 Japan — has also taken a similar approach to strategically important industries.

Bangladesh, too, needs a balanced policy approach. Accountability must be ensured in cases involving irregularities, corruption or deliberate loan default. However, when the difficulties faced by a productive enterprise are primarily linked to financing, infrastructure, energy supply or cash-flow constraints, and when there is a realistic prospect of returning the business to productive operations, structured restructuring may be a legitimate policy option.

💬 City Group Spokesperson's Statement

💬 City Group's spokesperson and Executive Director Masihul Chowdhury said, “For 54 years, City Group has been working for the country and its people. Our commitment goes beyond ensuring food security; we are also working to create employment and ensure a steady contribution to government revenues, and we remain determined to strengthen these efforts in the future. At this challenging time, we are working closely with our stakeholders, and we firmly believe that we will overcome this situation and bounce back soon.”

🏛 The Broader National Economic Question

The issue ultimately raises a broader national economic question. If Bangladesh is to advance food security, employment, investment and industrialisation simultaneously, productive industries cannot be viewed merely as individual businesses. Keeping a major industrial enterprise operational can mean:

• 🌾 Securing markets for farmers.
• 👥 Preserving jobs for workers.
• 🚚 Keeping transportation and supply networks functioning.
• 🏦 Improving the prospects of banks recovering their loans.
• 🛍 Ensuring continued supplies of essential goods for consumers.

📜 Conclusion: A Balanced Policy Imperative

Sustaining productive industries, Mostafa Kamal argues, should not be viewed as providing special treatment to any individual enterprise. Rather, through transparent and accountable restructuring, it is about protecting the productive capacity of the national economy.

During a crisis, the objective should neither be to save businesses blindly nor to allow productive enterprises to collapse unnecessarily. The goal should be to:

• ✅ Keep production running
• ✅ Protect employment
• ✅ Safeguard the economic interests of banks and the state

For Bangladesh, the City Group case and the broader PEZAB proposal together highlight the urgency of developing a coherent industrial sustainability framework — one that balances accountability, financing access, energy supply and the strategic importance of preserving productive capacity in the national economy.