Evolution of Square

1925: Samson H. Chowdhury, founder of Square Group and pioneer of

pharmaceutical industry in Bangladesh was born to a physician father and
housewife mother in Pabna.

1952: Mr. Chowdhury joined his father's pharmacy and received idea to
manufacturing medicines in Bangladesh, instead of importing.

1956: Mr. Chowdhury started his first business venture by opening small
pharmaceuticals company called Esons in Pabna.

1958: Mr. Chowdhury found Square Pharmaceuticals Limited, flagship company

of Square Group along with three partners with capital of Rs. 17,000.

1964: Square Pharmaceuticals Limited was converted to a limited company.

1974: Square Pharmaceuticals Limited participated in technological

collaboration with Belgian subsidiary of Johnson and Johnson (USA).

1982: Square Pharmaceuticals Limited signed licensing agreement with LaRoche (Switzerland).

1985: Square became leader in market share among all domestic and
multinational pharmaceutical companies of Bangladesh.

1987: Square Pharmaceuticals Limited became first Bangladeshi pharmaceutical

company to export.

1988: Square Group ventured into a new business by setting up Square

Toiletries Limited, a manufacturer of cosmetics and toiletries products.

1994: Square Pharmaceuticals Limited became a public limited company

through IPO process.

1994: Square Toiletries Limited became a private limited company, ultimately

going on to become largest domestic manufacturer of cosmetics and toiletries
with 20 brands and 55 products.

1995: Square Pharmaceuticals became self-reliant with raw materials by setting

up Active Pharmaceuticals Ingredient (API) factory.

1997: Square Pharmaceuticals Limited won National Export Trophy.

1997: Targeting diversity in business, Mediacom Limited (an advertisement

agency) was founded.
1997: Square entered the hugely lucrative textile/garment sector by setting up
Square Textiles Limited, a yarn manufacturer with capacity of producing 60,000
kg yarn per day.

1998: Targeting diversity in business, Square Securities Management Limited, a

capital market brokerage house was founded.

2000: Square Yarns Limited, Square Yarns Limited, another yarn manufacturing
plant was set up.

2001: Not satisfied with being only involved in backward linkage, Square Group
decided to export ready-made garments directly by setting up Square Fashions
Limited, a readymade knitwear manufacturer and exporter. This factory currently
employs 3,200 workers.

2002: Sensing huge opportunity in IT software sector, Square Informatix Limited

was set up.

2005: Sabazpur Tea Company, an organic tea manufacturing company was set
up.

2005: Square Pharmaceuticals Limited started manufacturing plant complying

with US FDA and UK MHRA requirements.

2006: Square Group set up a state-of-the-art hospital in Dhaka called Square

Hopitals Limited to provide world class service to patients of the country.

2011: Square Group made another huge achievement went MaasrangaTV; the
first HD TV channel in Bangladesh went on air.

Evolution of Beximco
1976: Founded by Ahmed Salman F. Rahman and Ahmed Sohail F. Rahman, but
operations started much later on.

1976: IFIC Bank was setup between private and government sponsorship.

1980: Operations of Beximco Pharmaceuticals Ltd. started.

1993: Bextrade Limited was started as a corporate travel agency, operating as

a sister concern of the Group

1994: Beximco Textiles Ltd. was established as a public limited company

1994: Beximco Synthetics Ltd. was established to produce Polyester Filament

Yarns, namely, Partially Oriented Yarn (POY) and Draw Texturized Filament Yarn
(DTFY)

1995: Beximco Textiles Ltd. started commercial operations after issue of public
shares and debentures.

1997: Shinepukur Ceramics Ltd. was registered for business as part of Beximco
Group.

1998: Shinepukur Ceramics Ltd. commissioned its plants for production

1999: Shinepukur Ceramics Ltd. started producing Porcelain tableware and

Bone China.

1999: Shinepukur Ceramics Ltd. started producing Porcelain tableware and

Bone China.

2009: Started Beximco Petroleum Limited with land acquired in Gajaria,

Munshiganj with processing plants planned for production.

2010: Acquired a 5% stake in Unique Hotels and Resorts Limited, who operate
the The Westin Dhaka

Business/Product Diversity: Square

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Square Pharmaceuticals:
Below are their products according to Therapeutic class and their subclasses:

Alimentary Preparations

AnestheticsAnti-asthma

Anti-erectile dysfunction agent

Anti-obesity Preparation

Antiallergy Preparations

Antibiotic Preparation

Antibiotics

Antidiabetic Preparations

Antihaemorrhagic

Antiparasite Preparations

Antiseptic &Anticavity Mouthwash

Antiulcerants

Aromatase Inhibitor

Bone Calcium Regulator

Cardiovascular Preparations

CNS Preparations

Digestive enzymes

Drugs for Urinary Incontinence

Eye and Ear Preparations

Eye PreparationsHaematinics

Hair care product

LaxativeLipid Modifying Preparations

Musculo-Skeletal System

NSAIDs and Antigout Preparations

Oral & Injectable Preparations

Oral Antidiabetic

Oral Contraceptive

Other Antibacterials

Other Beta-lactam antibiotic except Penicillin and Cephalosporin

Penicillin

Penicillins and Cephalosporins

Prolactin Inhibitors

Quinolone Antibiotics

Respiratory Tract Preparations

Systemic Antifungal, Antiviral and Antiprotozoal Agents

Systemic Hormone

Systemic Sex Hormone

Thyroid Therapy

Topical Preparations

Vitamins and Minerals

Water Purification

Herbal &Nutraceuticals
The therapeutic classes that are covered are:

Anti-tussive& Expectorant
Hepato-protective
CNS & antidepressant
Adaptogen & Immunomodulator
Vitamin & mineral supplement
Hematinic
Gastrointestinal
Hormonal etc.
Ayurvedic: Energy tonic, Digestive health products, Liquid vitamins
etc.
AgroVet& Pesticide: AgroVet Division, Pesticide Unit.

Square Hospital
Square Hospitals Limited is a Square Group concern hospital. Below are
some of their Core Services:

OPD Services
Medical consultation & exam rooms
Foreign-trained medical & nursing specialists
IPD Services

Inpatient Facilities:
ICU, CCU, NICU, PICU, CSICU, SICU
Labor and Delivery Unit
Operating Theaters
Cardiac Catheterization Lab.
Critical Care :
Emergency Cardiac Care Specialists
Trauma Surgery Specialists
Ancillary Services :Pathology; Radiology and Imaging; Diagnostic
Facilities.

Service Support

Square Food & Beverages Ltd.

Square Food & Beverage Ltd. currently has three brands in the market:
Radhuni, Ruchi and Chashi.
RUCHI is the Ready to Eat snacks brand of Square Food & Beverage Limited
that comprises of:
Chanachur
Fried Dal
Banana Chips
Potato Cracker
Muri, Jhalmuri
Sauce
Ketchup
Jhuribhaja
Peanut
Chutney
Pickles
Honey
Radhuni is the flagship brand of the company with product ranges:
Basic spices
Mixed spices
Cereals & pulses based products
Edible oil

Chashi is a new brand which has become the landmark of the productsthat
are directly collected from the farmers.

Square Textiles Ltd.

Its venture comprises of:

Square Knits Fabric Ltd.( Manufacturing Business: Knit Fabric

Production)
Square Yarns Ltd.
Square Fashions Ltd.( Manufacturing Business:Readymade Knit
Apparel )

Square Textiles Ltd.(Manufacturing Business:100% Cotton Ring

Spun Yarn for Hosiery)

Square Toiletries Ltd.

Below are some of the products that are produced by SQUARE
Toiletries Ltd.
Jui
Meril Protective Care
Meril Baby
Meril Splash
Revive
Chaka
Chamak
Senora
Freshgel
White Plus
Magic
Kool
Xpel
Spring
Sepnil
Zerocal
Select Plus
Shakti
Saaf
Madina

Square Air Limited

Square Air Limited offers air services to meet all the traveling requirements
to cater all different needs of:

VIPs

CIPs
Corporate heads
Travel agents
Tour operators

Maasranga Television
Another member of Square Group is Maasranga Television, which is one of
the leading satellite television channel in Bangladesh. Maasranga Television
is broadcasts accurate, time-honored and credible news as well as
entertainment.
Some of the contents that are covered are:

Drama
Serials
Films
Musical programs
Educational
Entertaining programs for children
Programs on women issues
Comedy shows
Documentaries
Talk shows on current affairs
Business
Sports shows
Live events
World news

Square Informatrix Limited

The services provided are:

Broadband Internet Services

Corporate Data Communication Service
Software Development
Disaster Recovery Service
Network Design and Implementation
24/7 Help desk

Sabazpur Tea Company

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Mediacom Limited

Business/Product Diversity: Beximco

Beximco Textiles
Bextex Ltd.:

Yarn Products
Fabric Products
Knit Products
Denim Products
Special Yarn Products
Unique Wrinkle-Free product

Yellow: Its product line includes a wide range of formal and casual wears
for men, women, and kids.

Beximco Synthetics Limited:

Partially Oriented Yarn (POY)

Draw Texturized Filament Yarn (DTFY)

Jute Division:

Jute yarn and twine

Sized, coated, dyed, and polished yarn/twine

Beximco Pharmaceuticals
Below are provided medical conditions for which Beximco manufactures
pharmaceutical products:

Allergic Disorders
Analgesics and Antipyretic
10

Anti-infectives
Cardiovascular
Central Nervous System
Cough and Cold
Eye Care
Endocrine and Diabetes
Gastrointestinal
Intravenous Fluids
Muscloskeletal
Oncology
Respiratory
Skin Care
Vitamins and Minerals
Other products

Shinepukur Ceramics

Porcelain
- Plain Porcelain,
- Ivory China,
- Satin China and
- High Alumina Porcelain
Bone China

Real Estate, Construction, Marine Foods and Trading

Real Estate and Trading: Plot sales and property development in Dhaka
and Chittagong. Trading operations include

capitalization on industry knowledge

identification of market opportunities in actively traded commodities
Yarn trading for captive use in textiles division and sales to third
parties.

Beximco Engineering Ltd.:

Roads and railways

Bridge and offshore structure

Power/gas transmission line & sub-station

Commercial and industrial

Apartment

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Marine Foods:

Shrimps to other sweet water fishes

Deep sea fishing business
Value added production including ready to eat and ready to cook
products

ICT and MEDIA:

Bangladesh Online: Internet & Data Communication Services
Independent Television Ltd.: 24 hr TV news channel
The Independent Newspaper: The Independent is a leading English
language daily newspaper in Bangladesh.

Beximco Computers Ltd.: Software design and development specially

the banking application software, system integration and software exports.

HOSPITALITY:
Unique Hotel and Resorts Ltd.
Bextrade Ltd.: Airline services including air ticket of all airlines operating
to and from Bangladesh, worldwide tailor made packages and hotel
reservations, incentive tours and organizing convention & conference.

FINANCIAL SERVICES:
IFIC Bank Ltd.
Beximco Securities Ltd.

ENERGY:
Beximco Petroleum Ltd.
Beximco Power Company Ltd.
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Projection of involvement in international

business: Square
Mr. Md Aminul Islam, Senior Manager, International Marketing, Square
Pharmaceuticals Limited shared valuable information with us regarding the
current situation and future
international business through opening foreign manufacturing subsidiary or
through foreign direct investment.
According to Mr. Islam, Square is currently holding 19% market share in the
domestic pharmaceutical industry worth US $ 1.34 billion and enjoying 14%
growth in domestic demand annually. Only 4-5% of sales earnings of the
pharmaceutical company come from exporting.
Square Pharmaceuticals major motivation to start exporting was because of
competition in the domestic market and to enhance company image in the
foreign markets (as there was negative international attitude towards
medicines produced in Bangladesh in developed countries).
Square Pharmaceuticals chose a strategy of first approaching foreign
markets where rules and regulations and drug authorities are relatively more
flexible such as less developed African and Asian countries eg. Ethiopia,
Uzbekistan etc. At the second stage, Square started exporting to moderately
regulated but relatively more developed markets such as those in the ASEAN
countries. Finally they decided to enter strictly regulated but highly
developed markets such as USA and European Union (EU). Square recently
achieved US FDA and UK MHRA certification to export to those countries.
Square and Beximco are only two local pharmaceuticals to have US FDA
certification. However square has not yet started to export medicines to
these developed markets. Currently Myanmar is the biggest export market
for the company and total export revenue is US $ 15 million per year.
Currently Square Pharmaceuticals is using a local partner in each of the
foreign markets. The partner is an importer who undertakes the
responsibility of meeting local regulatory requirements and to carry out sales
and marketing activities in those markets. Square provides necessary
13

documents to the partners to meet their respective regulatory requirements.

They also provide training to the marketing personnel of the partners to
enable them to market Square products more effectively. These personnel
then try to convince local physicians to prescribe Square products to their
patients.
Advantages of having a partner/importer instead of direct marketing/selling
in foreign markets:

Main strength of Square is in manufacturing quality pharmaceutical

products. They can focus on their strength while the partner takes
care of international marketing.
Square does not have to deal with cultural differences in the foreign
markets.
Square does not have to monitor its international markets strictly.
Square makes a large amount of savings in terms of distribution and
infrastructure costs.

Disadvantages of not marketing directly in foreign markets:

Partner is making large amount of profit by charging almost twice

amount charged by Square to their local customers. Square could
have enjoyed this high profit if it operated directly in the market.
Square is not having control over promotion strategy of the partner. It
is also not able to verify if the partner is exploiting their domestic
market to full extent by charging competitive price.
Square is not getting direct foreign customer feedback to make
necessary corrections.

After doing cost benefit analysis of directly marketing in foreign market

through own office, Square decided it is not feasible. Rather they chose to
operate through the partner. However to mitigate some of the disadvantages
of working through partner, Square appointing Bangladeshi country manager
to each of these markets to increase control over the partners and to
enhance market intelligence.
Currently Square Pharmaceuticals is actively considering opening foreign
production facility. Some of the major benefits that they want to achieve by
starting foreign production are as follows:

Square can increase sales and profitability.

Square will face much less stringent regulatory regime if it decides to
produce in developed countries as developed countries impose much
stricter regulations for imports rather than on their local origin
products. For example, if Square sets up factory in USA, it will face

14

much easier regulations than exporting the same products from

Bangladesh to USA.
Square will also be able to market its products much easier in
developed countries as association with negative image of
Bangladesh will cease to be a factor.
Square can better serve its customers and foreign markets can be
better exploited through manufacturing presence.
Lead time of receiving order and providing medicines to customer will
be reduced.
Square can reduce transport and distribution cost of medicines by
manufacturing nearer to market.
Square can enter markets where protectionist regimes exist by
opening manufacturing subsidiaries in those countries.
Other factors to support this decision include improvement in
technology and management know-how, achievement of geographical
diversity and satisfaction of managements desires for expansion.

However this involves some risks as well which include:

There may be political instability in the country where factory is set

up.
Huge investment is required to set up factory, especially in developed
countries.
Square might have to face adverse profit repatriation policies.
Cost of raw materials can very high in certain countries eg. Operating
in landlocked countries involved high transportation costs for raw
materials.
There is heavy competition in pharmaceutical industry of developed
countries. Competitors are large and powerful.

Currently Square is actively pursuing cost-benefit analysis for possible

factory locations to determine which market could offer highest return and
lowest risks and make investment decision accordingly.
Another area where Square can seriously consider making foreign direct
investment is in the textile/ garments sector. Due to recent hike in garment
worker salaries, some of the cost advantage of Bangladesh in international
RMG market has been diminished and cheaper alternatives to Bangladesh
such as Myanmar and Ethiopia are emerging rather quickly. Vietnam is also
attracting much foreign investment in RMG industry due to disciplined
workforce and peaceful political and social climate. Therefore Square Group
can set up garments factory in such countries using experience and
expertise gained from domestic operations to take advantage of reduced
cost and more efficient workforce. However there is not much opportunity to

15

set up textile or spinning project in foreign market as this sector is

dominated globally by China and India.
The other products under Square portfolio do not represent good opportunity
to go for foreign manufacturing. From current situation and future
possibilities it can be understood that Square Group will need around
another ten years to go for foreign production in either garments or
pharmaceuticals industry.

Projection of involvement in international

business: Beximco
Interview with Mr. Ezaz Rasool, former Warehouse Manager at Beximco
Pharmaceuticals Ltd. gave us an insight regarding the international business
that Beximco does or could potentially be doing. The company dominates in
the Pharmaceuticals industry. Beximco Pharmaceuticuals Ltd. is the third
largest local pharmaceuticals company behind Square and Incepta (at 7.6%
market share with $13.49 million in revenue in 2013).Export sales revenue
was over $8.6 million in 2013. They are the largest exporters of
pharmaceutical products to foreign countries, around 55% of total revenue.
Currently Bangladesh exports pharmaceutical products to 86 countries,
Beximco exports to 45 of them. They dont have any overseas operations as
in FDI or manufacturing plant. However, there is potential for opening up a
foreign manufacturing factory in other countries mainly due to the following
reasons:

Around 70% of raw materials used in pharmaceutical products are

imported from foreign countries. If Beximco Pharmaceuticals were to
16

open up a factory in the vicinity of its suppliers it would reduce a

majority if their costs. Also delays in receiving raw materials are a
problem which will lead to delays in production.
Exporting to countries leads to potential losses in revenue whereby
countries buying from Beximco can easily sell those products at a
higher price in their home country.
TRIPS or Trade Related Intellectual Property Rights agreement made
with Beximco expires in 2016, which exempts Beximco from patenting
their product (which will increase their selling costs) as they are from
a least-developed country. After that Beximco will have to patent their
products in order to sell them which will increase costs.

Beximco Pharmaceuticals have clearly targeted the following regions for

global expansion of their manufacturing capacity: Middle East, European
Union, Latin America, USA, Australia and New Zealand. Having supplied
through exporting of medicine to various renowned hospitals like Raffles
Hospital, Heathway Medical Group and K K Womens & Childrens Hospital in
Singapore, MEDS and Kenyatta National Hospital, Kenya, CENABLAST in
Chile, and Asthma Drug Facility (ADF) of France, there is strong scope for
investment in those countries to open up their own manufacturing plant. The
company is the largest exporter of Active Pharmaceutical Ingredients (API)
and pharmaceutical products in Bangladesh with state-of-the-art
manufacturing facilities which are certified by global regulatory bodies of
Australia, European Union, Gulf nations, Brazil, among others. They have not
ventured out into the international markets because of the following reason
according to Mr. Rasool:

The company is used to exporting; they have managed to build a

reputation as quality producers of medicine and are determined to
continue in that fashion locally.
Trust issue is a big factor for Bangladeshi products in foreign
countries. Most customers do not value Bangladeshi products in the
same vein as they do with their own or other developed countries
products.
Legal formalities are high and maybe difficult to meet with in some
countries where quality standards are maintained to the highest and
proof of genuineness is required to operate.
Political issues are a big factor. Developing countries like Kenya where
potential is high but infrastructure is not that good do not have the
luxury of providing proper political stability for foreign countries to
operate.

Beximco Textiles Limited has a separate brand of clothing outlet named

Yellow which has garnered huge reputation all over Dhaka city with shops in
Bashundhara City, Gulshan, Bailey Road and Dhanmondi. As such, they have
17

decided to expand their business internationally to Pakistan by directly

opening up their Yellow brand of clothing shop in Karachi, Pakistan in
October 18, 2005. However, even though they have invested into a retail
outlet in another country it is not the same as opening up a factory in that
country so technically they still havent managed to do international
business in the proper sense that they are contributing to the output of the
foreign economy. They are exporting all their clothes and selling to the
Yellow store in Pakistan. There is scope for production in Pakistan because:

They have garments industries themselves and the environment is

developed enough to have opened up one over there.
Cultural similarities, both Muslim countries and mutually intelligible
languages-speaking, and both countries were part of the same history
throughout time.

Risks of operating in Pakistan include:

Huge political instability. Terrorist attacks by militant groups cause

business disruption and harm to physical well-being. Pakistan has
been on the receiving end of multiple terrorist attacks over the years
leading to either businesses moving overseas or closing down
altogether.
Competition in garments in Pakistan is also renowned as there are
local competitors which earn 54% of their revenue from exporting
garments to other countries.

For now the company is thinking of operating as an exporter while slowly

setting up outlets in Seoul, South Korea, and Dubai, UAE and other cities
around the world. From there on they plan on studying the market while
analyzing the potential costs and benefits of opening up a manufacturing
facility in those countries.

References:
1. "::: S Q U A R E ::: Textile - - - Square Textile." ::: S Q U A R E ::: Textile - - Square Textile. Accessed April 12, 2015.
http://textile.squaregroup.com/sqtextile.html.
2. "About Us." Square Pharmaceuticals Limited. Accessed April 21, 2015.
http://www.squarepharma.com.bd/about-us.php.

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3. "Annual Reports." Beximco Synthetics Ltd. Accessed April 8, 2015.

http://www.beximcosynthetics.com/.
4. "BEXIMCO | Textiles & Apparel Division." BEXIMCO | Textiles & Apparel
Division. Accessed April 10, 2015. http://www.bextex.net/.
5. "Bangladesh Export Import Co. Ltd." BEXIMCO. Accessed April 10,
2015. http://www.beximco.com/.
6. "Beximco Engineering Ltd." Beximco Engineering Ltd. Accessed April
10, 2015. http://www.beximcoengineering.com/.
7. "Beximco Pharmaceticals Ltd." Beximco Pharmaceticals Ltd. Accessed
April 10, 2015. http://www.beximco-pharma.com/.
8. "Home." Maasranga Television. Accessed April 12, 2015.
http://www.maasranga.tv/.
9. "International Office." Welcome to Shinepukur Ceramics Ltd. Accessed
April 10, 2015. http://www.shinepukur.com/.
10."New Dacca Industries Ltd (NDI), a Beximco Company, Is in Its 50
Year." Beximco Jute Division. Accessed April 10, 2015.
http://www.beximcojute.com/.
11."SQUARE TOILETRIES LTD." SQUARE TOILETRIES LTD. Accessed April
12, 2015. http://www.squaretoiletries.com/.
12."Square Air Limited - Corporate Charter, Air Ambulance, Travel Agents,
Tour Operators, Medical Evacuation, Aerial Shooting Bell 407,
Robinson R66 Helicopter Bangladesh." Square Air Limited - Corporate
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Bangladesh. Accessed April 12, 2015. http://squareair.com.bd/.
13."Square Food & Beverage Limited (SFBL) - Radhuni, Ruchi, Chashi
Brands in Bangladesh." Square Food & Beverage Limited (SFBL) Radhuni, Ruchi, Chashi Brands in Bangladesh. Accessed April 16,
2015. http://squarefoodandbeverage.com/.
14."Square InformatiX Ltd | ISP Bangladesh, Fiber Radio VSAT Wimax
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15."Welcome to SQUARE Hospital ..::: | AT SQUARE WE CARE :." Welcome
to SQUARE Hospital ..::: | AT SQUARE WE CARE :. Accessed April 16,
2015. http://www.squarehospital.com/

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