TK Group expands into shipping, plans to carry own edible oil imports

TK Group, a major player in the country's consumer goods and industrial sectors, has initiated massive investments with the goal of transporting its own edible oil imports by using its own vessels.

As part of this initiative, Samuda Shipping Limited, a subsidiary of the Chattogram-based conglomerate, purchased a vessel earlier this year, according to the company.

Procured at a cost of Tk157 crore, the ship named MT Samuda has a capacity of 24,025 tonnes of oil and employs a total of 40 people, including 22 sailors.

According to TK Group data, it imports eight lakh tonnes of edible oil annually. Shipping charges are around $40 per tonne. As a result, TK Group spends $32 million annually on the transportation of edible oil.

The group needs three more oil and chemical tankers to transport 100% of its imported edible oil. It will be able to transport goods with its own ships if they have a capacity of about one lakh tonnes.

Mustafa Haider, managing director of Samuda Shipping and director of TK Group, told TBS, "We have begun a new journey in the shipping sector. Based on this experience, we plan to expand the fleet."

He said, "On two trips, 44,000 tonnes of palm oil have been imported from Indonesia with MT Samuda. At a rate of $40 per tonne, the ship has transported goods weighing a freight charge of $176,000.

"With MT Samuda, around 25% of the total import demand for edible oil can be transported. Our goal is to transport 100% of edible oil using our own vessels. Three more tankers of the same size are required to reach this target."  

Highlighting the group's plans in the shipping sector, Mustafa Haider said TK Group relies on charter vessels not only for edible oil but also for importing consumer goods, raw materials for cement, and other industries.

He noted that the Flag Protection Act has significantly boosted the shipping sector over the past four years, increasing the number of domestically owned ships and creating new employment opportunities. TK Group has long-term plans to expand investment in this sector.

Captain Sabbir Mahmud, principal officer of the Mercantile Marine Office responsible for registering Bangladeshi-flagged ships, told The Business Standard, "TK Group has made new investments in oceangoing vessels this year. The group informed us of plans to purchase three more oceangoing oil tankers."

He said at least 15 Bangladeshi-flagged ships are expected to be registered in 2024. Currently, the number of domestic flag ships is 98, and this number will be 100 in June. A few new companies are coming forward to invest in buying container ships.

According to the Mercantile Marine Office, three Bangladeshi-flagged oceangoing vessels have been registered in 2024, including the bulk carriers MV Abdullah and MV Jahan Brothers, owned by the Kabir Group.

The available ships include 73 open cargo bulk carriers, seven tankers, six oil and chemical tankers, three gas carriers, eight container ships, and one cargo cum container ship.

Reasons behind new investments in shipping 

The new Bangladesh Flag Vessels (Protection of Interest) Act was enacted in 2019. As a result, preference was given to Bangladeshi flag vessels at local ports, allowing 50% of goods to be carried by local vessels, up from 40% previously.

Additionally, confusion regarding ship registration has been resolved. The law exempts traders from VAT on the registration of vessels with more than 5,000 DWT capacity.

In 2018, the number of Bangladeshi flag ships was 36. In 2019, the number continued to increase, attracting new companies to invest in this sector.

There are a total of 100 Bangladeshi-flagged ships operating on international sea routes. These include seven from the state-owned Bangladesh Shipping Corporation, with the rest owned by private operators.

Kabir Group operates 24 ships, followed by 22 from Meghna Group, 10 from Akij Group, eight from HR Line, and six each from Bashundhara Group and Vanguard Shipping.

Additionally, MJL Bangladesh, Orion Oil and Shipping, BSA Shipping, MI Cement Factory, Doria Shipping, Hanif Maritime, Advance Shipping, PNN Shipping Lines, Sunshine Navigation, PH Navigation, and Doreen Shipping Lines also have oceangoing vessels.

TK Group

Soon after the emergence of Bangladesh, two brothers from Chattogram Mohammed Abu Tayab and Mohammad Abul Kalam founded the company in 1972. It was named after the first letters of Tayab and Kalam's names.

Today, Abul Kalam, his son Mustafa Haider, and the sons of the late Abu Tayab run the entire TK Group.

TK Group comprises over 30 companies across various sectors, including edible oils and fats; steel galvanising; particle board;  consumer products; tea plantations; chemical; food and beverage; cement; software;  petrochemical; packaging and containers; leather; paper; share and securities; shipbuilding; and textiles.

The group directly employs more than 50,000 people, with an annual turnover exceeding Tk18,000 crore.