A Brief Tale of Success

It was Mr. Fazlur Rahman who believed that he could change his lot through

his hardship and determination. Out of his willingness in the year of 1972 he

started to walk a path of fortune. In the post war period when the economy

and social structure of Bangladesh was fragile, “City Oil Mills” was formed by

Mr. Fazlur Rahman. It was just another day in the independent Bangladesh

for most of the people, but 6th February, 1972 was the beginning of one of

the largest group companies of Bangladesh “The City Group”. Initially the

mission of the company was to produce mustard oil for the local market

consumption. But the up roaring demand of the product soon brought the

company in the competitive market. “City Vegetable Oil Mills” was

established at Rupshi, on the outskirts of Dhaka. This effort evidenced an

accelerated growth of City Group and the company was soon found to open

two more sister concerns by the year 1994 named “Hasan Vegetable Oil Mills

Liimited” and “City Fibers Limited”.

Within this time period the company brought out their first brand named

“TEER”. The flagship product for this brand was “ Soyabean Oil”. The

later part is the success stories of the corporation. Under the brand name of

TEER, different products are produced in different sister concerns of the “City

Group”.

In the year of 2009 City Group founded the Shampa Flour Mills Ltd, the

largest flour mill in the history of our country. Our report is solely based on

Shampa Flour Mills Ltd. and the products produced here.

About Shampa Flour Mills Ltd.

1

The country’s biggest-ever flour mill was set to start production at the end of

April, 2009. Shampa Flour Mills Ltd. was a Tk 250-crore project of the City

Group to produce premium grade and packed flour and semolina (suji). The

factory was established at Rupshi under Rupganj upazila in Narayanganj.

Shampa Flour Mills Ltd. is located on the bank of the River Shitalakhya.

The main unit occupies more than two acres of land while the warehouse and

silos occupy few acres of the 70-acre City Industrial Estate at Rupshi. It has a

structural installation of seven-storey industrial unit.

City Group used to operate the country’s biggest flour unit — Hasan Flour

that produced 200 tons of flour and semolina per day. According to the group

chairman, Fazlur Rahman, they were not able to meet the market demand.

And this situation led them to set up another industry with a production

capacity of 550 tons per day.

Shampa Flour Mills Ltd. brought the plant from Switzerland’s

that delivers the world’s most sophisticated and expensive technologies. The

coordinators of the installations of Shampa Flour Mills Ltd. were eight

European engineers. The plant is designed to be automated that guides the

machine to clean wheat in four steps before producing flour and semolina

and filter unwanted particle in seven steps up to packing of the product.

Food-grade plastics for making plant’s bed and food-grade paint on the walls

have been used in the Shampa Flour Mills Ltd. as per the guideline of

to ensure quality. Buhler technology obliges City to invest double in

compare to Indian or Chinese plants but Fazlur Rahman was sure of keeping

the prices of his products competitive and he did it too.

2

A top view of the massive structure of City Industrial Estate including Shampa Flour Mills Ltd.

The Machineries bought from Swiss Company

3

The Key Milestones

City Group of Industries has 22 sister concerns right now. The starting of any of those was a milestone for the group.

S# Company Products Starting1 City Oil Mills Mustard Oil 1972

2 City Rerolling Mills MS Rod 1985

3 City Vegetable Oil Mills Ltd Refined Soyabean & Palm Olein June 1990

4 City Fibers Limited P.P. Oven Bag October 1992

5 Hasan Plastic Industries Ltd HDPE Containers September 1994

6 Hasan Flour Mills Ltd Atta, Flour & Semolina December 1995

7 Hasan Printing & Packaging

Industries Ltd

Paper Carton September 1999

8 Hasan Containers Ltd Tin Containers September 1999

9 City PET Industries Ltd PET Bottle & Mineral Water February 2001

10 Shampa Oil Mills Ltd Mustard Oil April 2001

11 Farzana Oil Refineries Ltd Refined Soyabean & Palm Olein April 2001

12 City Dal Mills Ltd Beans June 2001

13 Grainmark Indenting 2001

14 Rahman Synthetics Limeted P.P. Oven Bag August 2001

15 Deepa Food Products Ltd Refined Soyabean & Palm Olein October 2003

16 VOTT Oil Refineries Ltd Refined Soyabean & Palm Olein February 2004

17 City Hair Oil Ltd Refined Coconut Oil May 2004

18 City Feed Products Ltd Poultry & Fish Feed November 2004

19 City Seed Crushing Industries Ltd Soyameal & Rapeseed Cake February 2005

20 City Salt Industries Ltd Salt March 2005

21 City Sugar Industries Ltd Sugar March 2006

22 Shampa Flour Mills Ltd Atta, Flour & Semolina April 2009

City Group of Industries launched four brands named , , and

.

is one of the significant milestones of City Group. This brand has

captivated the hearts and minds of the people.

4

Management

It might sound that the management of Shampa Flour Mills Ltd. is

consisted of very few number of employees. Shampa Flour Mills Ltd. is an

automated factory. It has only one manager to watch out the whole

operation. Several employees are also there for the maintenance of the

massive structure. The machines are run by European professionals. The

overall framework is taken care of by the management of The City Group.

Market Share

Shampa Flour Mills Ltd. produces products only. So, in this section we

can prove this mill’s point by telling ’s market share. From the very

beginning of the birth of products, it has enthralled the hearts of millions

of consumers. It’s hard to find a person without having the knowledge about

the products. products are popular in the higher income group.

They serve the best products to their customers and consumers. In the

consumer market, has around 40% of the market share. In the customer

market, products are far ahead of its competitors. Some of the

competitors of the consumer products of are eventually customers of

City Group. From this point of view we can understand that products

have a larger share in its related product market.

Mission

The mission of Shampa Flour Mills Ltd. is same as that of the CITY Group.

The mission statement of the company is “To provide HYGIENE, HEALTH &

EXCELLENCE in food consumables for the consumers at an affordable price

and raise awareness in the Local & International market”

City Group cares a great deal about the health concern of their consumers.

This is what enables them to maintain the highest quality of hygiene and

5

health standards while marketing their products, in order to meet the

common goal - Excellence!

The Principal Objectives of the company can be further broken down into 5

parts:

Passion for Excellence Business Integrity Pioneering Commitment Development

Vision

For more than three decades City Group has been serving the mass and

premium market with their quality product. They always look forward into all

the aspects of providing quality food and health consumables for the

consumers. From the initial days till now they strive always to achieve

customer satisfaction by providing quality consumables at rational price.

Achieving a satisfying market share in the local market, they are presently

exporting in the Middle East and some other places. Their vision is to serve

the whole world as an International Brand.

The entire painstaking process has started to take its shape and within a few

years the corporation looks forward to become one of the best corporations

in the country.

Mr. Fazlur Rahman, the industrialist vows to uphold his promise on quality

flour at affordable prices as he feels, ‘A nation needs nutritious food at

affordable prices and without that the intellectual level and productivity

cannot be increased.’

Strength

According to the spokesperson of the City Group, the main strength of the

Shampa Flour Mills Ltd. is its huge establishment. Shampa Flour Mills

6

Ltd. is one of the 10 largest mills of its kind in the world. It is the only

corporation which can refine the raw materials on its own thoroughly. After

that, they can produce their brand products. Their competitors lack this

advantage because of their fewer resources.

Weakness

As every company has weakness, the City Group isn’t an exception either.

But regarding Shampa Flour Mills Ltd. they have no weakness. There has

been some lacking in the whole company, the City Group. It was

unsuccessful to continue some of their products under the brand .

Consumer pack of coconut oil was discontinued; because they were

unable to position their product in the mind of users. Even though they have

the bulk and institutional pack of coconut oil. The discontinuation of salt

can also be regarded as a weakness of this corporation.

Opportunities

Any change in the market like the unavailability of the goods of the

competitors brings out a way of opportunity to the products. The change

in pricing policy of the competitors also brings prospect to the products of

Shampa Flour Mills Ltd.

Threats

Only threats products face is the unusual problem raised in the countries

where from city group import their raw materials. Most of the raw materials

are brought from Brazil, Canada, Australia, Malaysia and India. So, any

economical crises in these countries hamper the business strategies of

Shampa Flour Mills Ltd.

Competitors

There a plentiful numbers of flour mills in our country. But none can be taken

as a competitor of Shampa Flour Mills Ltd. because no other flour mill

would show the courage to compete with the king of the dynasty. But there

7

are some competitors of products which are produced in Shampa Flour

Mills Ltd. Some of those are FRESH, IFAD, ACI, PUSTI and FAUJI.

The Marketing Mix

The most important thing to run a business farm is the proper marketing

mix. The marketing mix is referred to the product, price, place and

promotion. Without these 4Ps, in no way a company can survive. The

marketing mix of Shampa Flour Mills Ltd. is pretty simple to grasp. It

doesn’t follow any extra ordinary marketing policy. The marketing of the

products are broadly based on the after sales satisfaction of the consumers.

They serve the best product to their consumers. Once a consumer buys their

products; they don’t turn their back on the company. So, the City Group

doesn’t need to generate lavish promotional strategy or anything like that. In

the following sections the marketing mix for Shampa Flour Mills Ltd. will

be thoroughly discussed.

Product

Several products from wheat are produced here. As Shampa Flour Mills

Ltd. is the largest one, they can finish up all the refining, packaging in one

place.

The products produced here are Atta, Maida, Suji and Poultry Feed. All of the

products are sold under the brand name of . The daily production capacity

of the mill is 550 metric tons. They produce consumer pack, institutional

pack and bulk pack. Several food packaging industries are also their

industrial customers.

Only 10% of the wheat is collected from our own country. Most of the raw

materials are imported from different countries around the world. High

quality of products is ensured here. Canada is the largest seller of Shampa

Flour Mills Ltd. regarding wheat. The other countries where from Shampa

Flour Mills Ltd. imports wheat are Russia and Australia.

8

The Atta, Maida and Suji are produced in a gigantic factory. There are around

six stages to produce high quality atta, maida and suji.

The premier brand of City Group – Wheat (locally known as "Atta") speaks for

itself. The overwhelming demand of it is enough to satisfy the consumers

that “ ATTA” is a true symbol of quality. The local market has seen the

consumption of many branded wheat based products, but Atta makes its

mark itself. One can easily differentiate amongst the quality easily.

Manufactured from one of the best quality of wheat, Atta is produced in a

highly modernized environment meeting strict safety standard. The

extracted wheat and other ingredients are crushed using the popular

machine of Switzerland to ensure 100% purity and fineness.

Yet another derivative of wheat, Semolina, commonly known as Suji, is also a

key ingredient for the luscious sweets of Bangladesh. By importing wheat,

which is mainly responsible for producing Semolina, Shampa Flour Mills

Ltd. crushes it along with other ingredients, in order to produce Semolina.

The company ethics, beliefs and ideals are founded around the better health

of our nation through good nutrition and products, which are grown to

support the future of our planet.

Suji meets the highest quality available and the products are grown

originally. The products are packed and sealed with maximum freshness.

products represent value for money.

The company has already introduced Bar Codes to their entire range of

consumables as plan of their renewed quest to achieve excellence in all

aspects. According to them the bar codes will help them strengthening the

features of their entire range of products greatly.

All the labels/packs of the brands already contain the information regarding

manufacturing date, expiry date, batch number and MRP. The company is

9

going to include the ingredients, specification & nutritional facts on all the

labels very soon.

Now let’s talk about the products in detail. According to the Shampa Flour

Mills Ltd. they produce goods for all types of buyer. They have consumer

packs. They also have the institutional and the bulk packs.

Some products with different sizes are shown below.

ATTA

Specification

Moisture Percent by mass 10 MaxTotal ash (on dry basis), percent by mass 2 MaxGluten (on dry basis), percent by mass 7 Max

Consumer packs of Atta

2kg 1kg

Maida

SpecificationsMoisture, percent by mass 13.0 maxTotal ash (on dry basis), percent by mass 1.0 max

Gluten (on dry basis), percent by mass 10.0 min

Consumer Packs of Maida

10

2kg 1kg

Suji

SpecificationsMoisture, percent by mass 13.0 maxTotal ash (on dry basis), percent by mass 1.0 maxGluten (on dry basis), percent by mass 7.50 min

Consumer packs of Suji

500gm 250gm

Price

The prices of Atta, Maida and Suji are not very high. Consumer of a lower

income group can also afford the products of Shampa Flour Mills Ltd. The

prices are differentiated with the refining, production and competition.

According to the spokesperson of City Group, their products are value for

money. Their prices are relatively lower than their competitor in the aspect

of quality.

11

They keep themselves updated about the prices of the competitors. If they

get to know the change of prices of their competitor, they spontaneously

take action for this.

Some other reasons are also kept into mind before pricing. The economic

conditions of the countries from where Shampa Flour Mills Ltd. imports

the raw materials largely influence the pricing strategies.

In our country, it’s very hard to maintain a fixed price in the food related

industry. The fluctuating condition of our economy also plays a major role in

the pricing. The price of products may vary in different places. But, City

Group keeps trying on keeping the price in the range of their customers and

relatively lower than their competitors.

Place

The distribution channel of products is very strong. One can find

products everywhere in our country. They have around 2000+ distributors all

over our country. There are more than 60 distributing regions for the

products. For every regional office there is one Regional Manager, several

Zonal Officers and a good numbers of Sales Representatives.

Few years back they used to follow the DO system. DO system is the short

form of Delivery on Order. In this system the distributor could buy products

having the opportunity of taking delivery of the products upon their wish.

Most of the time they waited until the price would rise. In that case the

distributors could earn a lot profit investing the same amount a little time

earlier. They could use the firm as their warehouse. But City Group has

recently changed their distribution policy. They don’t follow the DO system

anymore. Now they follow the Purchase Order policy. Now the distributors

have to take the products on the time of purchase. They don’t get extra

benefit from the purchases what they used to execute.

12

The city group, owner of the Shampa Flour Mills Ltd. has a huge number

of transportation vehicles. They transport their raw materials and products

through their own transports. They own two large Vessels to carry the

imported raw materials. From the Chittagong port they bring their raw Wheat

through their Burges. The City Group owns around 100 heavy duty trucks

and 50 covered van, which are used for the Shampa Flour Mills Ltd. also.

Regarding the products of atta, maida and suji, the firm has an

advantage. They use the pull sale strategy. They don’t need to push their

distributor thoroughly. Even though, they have their marketing department

to train up their sells representatives. To motivate the distributors and retail

sellers, this farm provides several incentives. For instance, the common one

is the special price reduction for the distributors after purchasing bulk

amount.

Promotion

A vast promotion is not needed regarding products. Rarely do they show

their advertisements on television. Only during the Eid festival the City

Group promotes their products frequently on TV. They use print media for

rare occasions. Unlike the competitors of them they don’t even put large

billboards. They use massive promotional strategy only when a new product

is being launched.

They are generous when they are asked to sponsor any educational

initiatives. This also helps them to promote their product. The Deputy Brand

Manager (Marketing & sales) quoted that they sponsor the sports related

occasions of different educational institutions frequently.

To promote the company, City Group makes brochures of its prospective

SBU. These are mostly used for the corporate clients. Corporate videos made

by advertising farm are also used to promote the corporation regarding the

overseas clients. They take part in trade fairs as a promotional campaign.

13

Success Factors

The success factor for the Shampa Flour Mills Ltd. is the goodwill of the

city Group. City Group has always been loyal to its customers. Mr. Fazlur

Rahman, Chairman of the Group says, “The factory is a public welfare entity.

If someone serves the public and the consumers with good quality products,

the consumers will, in return, pay the due price.” And they have lived up to

their promise. This unique selling proposition has led them to the summit of

success.

End Note

A vision can take a person to his desired place. Shampa Flour Mills Ltd. is an

example of that. One proper idea with proper implementation can make one

really successful; the chairman of city group and industries makes a perfect

example for us. After visiting the organization we’ve noticed that how to

manage and organize a huge company. Although when they started, it was

not so massive, but now it is. The manpower of city group is the heart of this

company, their hard labor and determination towards their work makes it

such a triumphant company. In our point of view we’ve learned that effective

manpower and proper maintenance are the key things to achieve

accomplishment. Though motivation is also needed for the employees and

city group is providing that also. Moreover we have learned so much about

the lifecycle of a company while doing this project. Special thanks goes to

14

Mr. Rubaiet Ahmed who cooperated with us thoroughly. We deliberately

thank our instructor for making us doing the report, which will help our

practical life in near future.

Acknowldgement

http://www.citygroup.com.bd

http://www.zimbio.com/Bangladesh/articles/606/

Largest+flour+mill+set+start+operation

http://www.highbeam.com/doc/1P3-1746519481.html

Corporate Brochures of City Group

Corporate video

15