0.0 The challenges: For last one decade Palm oil is the leading consumed oil in the world. According to MBOP (February 3, 2010), that shown in appendix table 4, 5 and 6, Palm oil has 27% of world oil and fats production share with annual production growth rate of 5.8% per annum. At 1991/1992 palm oil covered 20.1% of world oil production whether its main competitor soybean had 28.7% of market share. Due to its easy and low production buy tawny brown uggs australia boot cost at 2008 it become world highest consumed oil having a market share of 33.6% whether soybean oil covered 28.8% and rape oil and sun oil had 15.5% and 8.4%. According to oil world (2008), cited from MBOP (2010), Malaysia is the second largest palm oil producer in the world after Indonesia having 41.3% of market share. As one of the leading palm oil exporter nation Malaysia, export palm oil to major consuming countries like China, US, India, Brazil, Pakistan etc. Bangladesh is a huge market with a 116 million consumer where researcher assume that from 2011 extra 100 thousand tons palm oil will be required to meet its domestic need. For those Malaysian exporters who are new in Bangladeshi market the key challenge is to take their first step in to Bangladesh which is traditionally economically and culturally a diverse market and take the opportunities of its huge market and gain and rapidly increase their market share.
1.0 Customer analysis: Bangladesh is a land constrains country where 116 million people living in an area of 147,570sq-km. As agricultural land is very limited in Bangladesh so lands are use to food crops like rice buy tawny brown uggs australia boot and pulses. Also as Bangladesh is a populated country with high rate of birth so day by day agricultural lands are shrinking because of habitat area and industrial plots. According to Hussain (2004) the cultivate land in Bangladesh shrank from 620000 hectares in 1994-95 to 525000 hectares in 2003-04. That is why Bangladesh only manages to generate 10% of its local oil demand. These are the cause Bangladesh more and more dependent on imported oil.
The main consumed oil in Bangladesh is palm, soybean and mustard. Although palm oil and soybean oil are exported crude form and refined locally but for some past few years a substantial amount of RBD palm oil has been exported for vegetable ghee production. According to Alam(2009) total import of oil and fats including palm, soybean and mustard from 2000-2009 are shown in appendix table 1. From the table we can see that at 2000 total palm oil import in Bangladesh was 170.1 thousand tones which become 816.0 thousand tones at 2008 increasing 40% in 8 years. On the other hand at 2000 soybean import in Bangladesh was 511.3 thousand tons which decrease 57.26% at the year 2008 and become 217.3 thousand tons. At September 2009 Bangladesh imported 770.5 thousand tones and many businessmen predict that at 2011 it will touch 1000 thousand tones.
2.0 Consumers buying decision process: Another cause of increase consuming palm oil in Bangladesh is its customers buying decision process.? As like many other Asian countries Bangladesh oil market is price sensitive. Before depending on certain product Bangladeshi people like to compare it with its substitutes. And if they find it cheaper and similar to the product they used before than they switch to that product. According to Hussain (2004) that shown in table 2, we can see that at 2000-2001 the price of soybean was $667 and palm oil was $ 601 per ton which increased $940 and $769 at 2003-04. The significant difference between soybean and palm oil price led Bangladeshi customers to switch from soybean to palm oil.
Although palm oil import in Bangladesh increase rapidly for past decade but it still cannot fulfill its consumer needs. According to Alam(2009), oil world report that shown in table 3, at 2000 total palm oil consumed by Bangladeshi customers were 193.7 thousand tons which increase to 956.0 thousand tons at the year 2008. The researcher predicts that if its increase at this booming rate than at 2011 it will reach 1100 thousand tons.
Another cause of this increasing palm oil demand is the growth of food industries and restaurants in Bangladesh. A large portion of palm oil is being used by these sectors. Also the growth of biscuits and bakery industry helps palm oil to develop its rule on Bangladesh.
3.0 Competitor analysis: From the above analysis we can see that with all maximum exporting, Bangladesh will still have a shortage of 100 thousand tons of palm oil at 2011. According to Alam (2009), Malaysia is the highest supplier of palm oil in Bangladesh having 56% market share at 2005 and the other 44% were covered by Indonesia. As Malaysia is one of Bangladesh old trusted friend and exporting from Malaysia is easier and cheaper compare to Indonesia so if Malaysian exporter can offer better product with a competitive price than the researcher believes Malaysia can increase their market share as well as fulfill the extra 100 thousand tons that Bangladesh will need at 2011.
4.0 Market entry strategy: if a Malaysian exporter plans to supply crude palm oil in Bangladesh so in order to survive in such a competitive market the researcher recommended to go for a joint venture with one of Bangladesh's leading oil Refineries Company. Traditionally Bangladesh consumed oil and fat distribution channel is controlled by some key players so before going for a joint venture the researcher recommend that Malaysian exporter conduct a further brief market researcher to choose their JV partner. According to Alam (2009), a brief structure of Bangladesh palm oil industry and its key players are presented in appendix table 8. From the table we can see that the main player in Bangladesh palm oil industry is City group with 3 refineries and 2 dry fractionation producing 2300 MT per day. In the year 2008 they hold 17.70% of Bangladesh imported palm oil market share whether another company called ‘Nurjahan Group' captured 18.75% of Bangladesh palm oil market share. In third position there is another group called ‘MEB group' who hold 15.75% of market share. They all import a large scale of CPOL and CPO every year. The researcher recommends to choose wisely when come to select joint venture partner and put first step on Bangladesh market.
5.0 PEST analysis:
5.1 Political and legal environment: Bangladesh is a democratic country. From 1971 when it gets independence from Pakistan, it's gone through 3 periods of army ruling. Finally at 1991 it gets back its democracy and after that two major political parties named BNP (Bangladesh National party) and Bangladesh Awami League form the government. Although political situation in Bangladesh is stable for last twenty years but whenever a new government comes they naturally introduce some new laws. So before entering Bangladesh market one should consider those factors that can effects by government law. According to Bangladesh Customs Act, 1969 (IV of 1969), First Schedule, Section 18 Every five years, an updated guide of import activities is issued by the Customs Authorities. The major factor related to our palm oil exportation is that the necessary commodities like rice, oil price is controlled by Bangladesh government. According to the daily independent (December, 14, 2010), the retail price of palm oil is 86 BDT which is approximately equivalent
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