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Sheikh Akijuddin Success Story: History of Akij Group

Akij Group, which has been in business for almost 75 years, is now one of the largest industrial conglomerates in Bangladesh. For a long time, “Akij” has been a well-known name in various sectors including the jute industry, readymade garments, cement, food & beverages, and ceramics. Moreover, the country’s largest tobacco production and processing plant – Dhaka Tobacco Industry – was also under this diversified company. However, on July 7, 2018, the Dhaka Tobacco Industry was sold to Japan Tobacco International. At present, there are 21 different companies under Akij Group including Akij Shipping, Akij Agro-Processing, Akij Steel. Sheikh Akij Uddin, the founder of Akij Group, started his business activities in the 1940s. Following this, Sheikh Akij Uddin established Akij Industrial Group in the ‘70s. Although not well known to the present generation as a successful entrepreneur and industrialist, Sheikh Akij Uddin is a well-known name in the business world of Bangladesh.

Akij industrial group

Early Life

Sheikh Akij Uddin was born in 1929 in the village of Madhyadanga in Fultala Upazila of Khulna. He was the only child of Sheikh Mofiz Uddin and Matina Begum. Sheikh Mofiz Uddin was a regional businessman. Although Akij Uddin was admitted to the school when he was a little older, he did not continue his studies for a long time due to his restless nature. His father was dissatisfied with him about this and got him involved in business due to family difficulties. He started his business by selling chanachur, nuts, and lozenges at Bejerdanga railway station. In between, he also spent some time in his father’s business. However, if there were any mistakes in his father’s business, he would often scold Akij Uddin. As a result, Sheikh Akij Uddin left home in anger and left for Calcutta. At that time he was only 11 years old and had only 17tk. in his pocket.

But when he came to Calcutta, teenager Akij fell into the ocean. As there were no relatives in Calcutta, he took refuge at Sealdah railway station. In the midst of hundreds of adversities, Akij Uddin did not give up even after wandering for work all day in a completely unfamiliar environment. The frugal Akij spent the night lying on the platform over the newspaper at the railway station, while eating chatu as a meal, but the money was slowly running out. In the meantime, one day while crossing Ramlochan Street, he saw an orange auction and bought four baskets of oranges from there. Akij Uddin was able to earn 10 paisa by selling them. Upon learning of Akij Uddin’s hard work and dedication as a fruit seller and loving the frugal Akij’s hardships of life, the owner of Zakaria Hotel arranged for him to stay and eat at his hotel in exchange for 1 anna. 

Akij Uddin was able to save Rs 300 through his fruit business and as the capital increased gradually, he thought of changing his business.

At that time in Calcutta, the business of auctioning four-wheeled carts was very popular. Shopkeepers were attracting the buyers through rhymes in Hindi. Realizing that the business was profitable, Akij bought a new auctioneer’s wheelbarrow shop. But since Akij could not speak Hindi, he hired an assistant who could speak Hindi well, and in a very short time, he learned Hindi as well. For a whole year, Akij was running the business quite successfully and was doing better business than the other auctioneers, so the old businessmen conspired against him with police. As a result Akij Uddin was fined 5 Rs and jailed for 3 days.

Akij Uddin, lost his morale after his release from jail, sold everything in his business and had a capital of Rs 2,200. At that time, when he met a well-known Peshawari businessman, he offered Akij Uddin to go to Peshawar with him. Going to Peshawar, he resumed his fruit business as before and was able to double his capital of Rs 2,200 in just two years. On his way back home with two years of business experience in Peshawar, he tried to do business in Calcutta again for a while. However, due to the stagnation of trade and commerce in Calcutta during the Second World War, he returned to his village Madhyadanga in 1945 with a capital of Rs 8,000. Meanwhile, father Sheikh Mofiz Uddin and mother Momina Begum were devastated by the grief of their son’s escape. After a long separation, he returned to the country and persuaded his parents to come along with him to Calcutta as he was going there to resume business. Shortly afterward, he received the news that his father had died. After that he did not leave home and was trying to start a small business in the village. At this time he met his childhood friend Nitaichandra, whose father was a famous ‘Bidhu Bidi’ (Bidhu Tobacco) trader in Jessore region at that time. Akij went to Khulna several times with his friend Nitai to buy tobacco to learn about the business and learn how to make tobacco.

In the meanwhile his mother died quite suddenly and life changed very quickly for him. Within a few days he got married and started his family. His father-in-law was a well-to-do farmer and he wanted Akij to take care of his land. But then, in the mind of a hardworking and devoted Akij had a business addiction. At one point, he persuaded his father-in-law to set up a grocery store at Bejerdanga station in Khulna.

Business Strategy

Although he returned from Kolkata with a capital of Rs 8,000, he had only Rs 5,000 when he started a grocery store at Bejerdanga station. But Akij Uddin was everyone’s favorite because of his enthusiasm and good manners, which helped him a lot when he started the shop. He used to run his business with honesty and dedication as well as selling cheap products. He did very well in business and within a year of opening the shop, his capital stood at tk 30,000. One of the products sold in his shop at that time was ‘Pata Bidi’ (leaf tobacco). Due to his interest in tobacco, he started producing tobacco himself in 1952 and bought tobacco leaves from the surrounding areas to research different blends of tobacco and let his friends taste (smoke) them. In this way Akij Uddin was able to produce better tobacco in terms of taste and smell than the conventional tobacco brands in the market. Bringing tobacco from Benapole and Tendupata from Daulatpur, Akij Uddin started his tobacco factory with 3 employees. The factory was on the second floor of his grocery store at Bejerdanga station. He used to go to Daulatpur and sell the produced tobacco. But realizing that this completely new and unlabelled tobacco could not be sold without the cooperation of retailers, he resorted to special tactics. Traditional Wahab bidis were sold at Tk 9 per thousand and Jalil Surma bidis at Tk 8 per thousand. Akij used to supply his tobacco to retailers at tk 7 per thousand. On the other hand, the sellers, realizing the taste, smell and quality of Akij’s tobacco, used to sell the tobacco produced by Akij inside of other conventional tobacco in the hope of making more profit. Meanwhile, if the smokers wanted to know the reason for the difference between the taste and smell of this tobacco, they would inform them about the packaged tobacco of Akij. As a result, tobacco made by Akij became very popular in a very short time.

leaf tobacco

One of Akij’s business strategies was to sell quality products cheaper than others in the market. In addition to this, as a result of his good behavior, shoppers also used to shop from Akij’s shop. As a result, Akij was able to do well in the tobacco business as well as in grocery stores. As a result, the surrounding traders were jealous of Akij. In the meantime, one night when the fire broke out in the shop while the employee was sleeping, Akij tried tp get out through the front door and realized that the door of the shop was closed from outside. Brave Akij managed to come out with 4,000 taka in cash without being scared, but the whole shop including the goods was burnt in the fire. Akij was not disappointed even though his goods worth Tk 30,000 were burnt in the fire. He set up shop and factory again with the help of other business friends. However, in addition to Bejerdanga, this time he rented a tiny two-story house next to Daulatdia station and established a warehouse below and set up his office upstairs. From there he continued to distribute his tobacco.

In 1954, he applied for a government license for his tobacco and was granted a license later that year. Locally known as Akij Uddin’s tobacco, he took the license under the name “Akij Bidi (Akij Tobacco)” and started selling Tobacco with the label from 1955. He also used to buy paddy from different parts of Jessore district including Navaran at that time and supply it to business centers in Noapara and Daulatpur. Entrepreneurial and enterprising, Akij Uddin was always looking for new business opportunities. In this way he was expanding his business field through various seasonal trades like molasses, gram, wheat etc. Following this, in 1955, he met Mohammad Ali, the jute purchasing agent of Crescent Mill, the largest jute mill in the country at that time. Impressed by the honest, dedicated and efficient Akij Uddin, he arranged for Akij Uddin to supply jute with crescent jute. At that time jute played a major role in the export of Bangladesh. As a result, there was a lot of potential for profit in this business. While other traders used to run their business in various unscrupulous ways like giving less weight, mixing low quality jute with better quality jute and inserting bricks in the jute, in the hope of making more profit. Initially, Akij had to supply 1 truckload of jute per week, but within three months, he started supplying one truckload of jute daily. Mr. Akij was very successful in these businesses and by 1956 the number of workers in his Bejerdanga tobacco factory stood at about 150. The year 1956 and the following few years were very successful for 27-year-old Akij Uddin. Entrepreneurs at that time relied on middlemen or distribution centers to market their products. Retailers would come to these places to buy goods. But young Akij Uddin reduced his dependence on the middleman and bought baby taxis to deliver his own products to retailers in different regions. As a result, Akiz had complete control over the supply-chain of goods and he could push the product into the market according to his production.

In addition, he was able to deliver his products to retailers by reducing the cost to middlemen as the supply-chain came under his control. As a result, retailers were also getting good margins by selling Akiz products cheaply. So they were also more interested in selling Akij’s tobacco than other tobacco in the market. At that time such ideas were quite far-fetched. Apart from this, as Jessore is very close to Benapole Highway and Benapole border, Akij Uddin set up a factory with a production capacity of 1 million tobacco at Navaran. Despite the obstacles of local influential people in the beginning, he was able to build a strong position in Navaran with the help of local workers and business groups. As the demand for tobacco increased in the early 1960s, he bought twenty bighas of land next to Navaran Bazar and relocated his factory there. He also purchased five more baby taxis and continued to supply bidis to Khulna, Jessore and surrounding areas. He also shifted his jute warehouse to Navaran with success in the jute business. With the expansion of his business in Navaran, he and his family settled in Navaran in early 1962. In this way, the scope of Akij Uddin’s business gradually increased.

Although his scope in jute business increased along with bidi, he could not manage the bidi business in that way. At one point in 1964, due to a long business alliance, he started a jute purchasing center jointly with a man named Yakub Ali. But Yaqub Ali looted about 2 lakh taka at that time and fled. Since then, Akij Uddin has not been involved in joint ventures in many years. The import of tendu leaves from India was stopped in 1965 due to the Indo-Pak war. Although the ban did not last long, Akij reviewed the Dhaka market and realized that paper tobacco and cigarettes were slowly becoming more popular than leaf tobacco. But at that time, he did not have the money to transform Akij tobacco into paper tobacco as per the demand. As a result, in 1970, he took a loan of BDT 5 lakh from the Jhikargacha branch of Sonali Bank. But by then, as the situation was becoming dire with looming war he realised, it would not be right to invest that amount of money in any new venture. Meanwhile, when the war broke out, many residents of the Hindu-dominated Navaran moved to neighboring India and sold all their goods to Akij Uddin before leaving the country. He was able to take this risk easily as he had a huge amount of money in debt and had his own factory and warehouse in the area. In the war of independence, Akij Uddin almost died a few times. However with the help of the freedom fighters and his intelligence and natural instincts he survived the war.

After the war, instability increased in every sector of the country and the price of goods also increased several times. At that time Akij Uddin was able to earn about 15 lakh taka by selling the products in his warehouse during the war. This money helped Akij Uddin to become one of the top businessmen in Bangladesh. Although jute business continued after independence, tobacco production was stopped. From 1973, Akij Uddin turned his attention to tobacco production again and this time he tried to produce paper tobacco. He also bought an Isuzu truck with a capacity of three tons to facilitate the remote transport of tobacco. Earlier, Akij Uddin’s tobacco was spread in Khulna, Jessore and its adjoining areas but he did not supply it in Dhaka. As Akij Uddin realised that Dhaka’s market is very competitive and if he can’t supply this market regularly, he would not be able to survive in the competition. Moreover, it is important to bring differentiation in the taste and smell of tobacco. So Akij asked his assistant to collect samples of all the traditional tobacco in Dhaka and bring them. After researching those samples, Akij realized that his tobacco is of better quality than conventional tobacco brands. At that time Armanitola was the tobacco business center in Dhaka and Akij distributed his tobacco-free of cost among the traders there. During that period, Aziz tobacco was the most popular in Dhaka and as Akij tobacco is superior in taste and smell to Aziz tobacco, traders realize that it can be made popular very easily. In order to capture a substantial market share from Aziz tobacco, Akij Uddin decided to supply his Akij tobacco at a reduced price of 2 taka and sent twenty-five lakh tobacco from Navaran to Dhaka in a covered van, which took him a week to sell. He also hired regional traders to understand the demand for tobacco in different parts of the country and to facilitate Akij’s tobacco trade in those areas.

Although his scope in jute business increased along with bidi, he could not manage the bidi business in that way. At one point in 1964, due to a long business alliance, he started a jute purchasing center jointly with a man named Yakub Ali. But Yaqub Ali looted about 2 lakh taka at that time and fled. Since then, Akij Uddin has not been involved in joint ventures in many years. The import of tendu leaves from India was stopped in 1965 due to the Indo-Pak war. Although the ban did not last long, Akij reviewed the Dhaka market and realized that paper tobacco and cigarettes were slowly becoming more popular than leaf tobacco. But at that time, he did not have the money to transform Akij tobacco into paper tobacco as per the demand. As a result, in 1970, he took a loan of BDT 5 lakh from the Jhikargacha branch of Sonali Bank. But by then, as the situation was becoming dire with looming war he realised, it would not be right to invest that amount of money in any new venture. Meanwhile, when the war broke out, many residents of the Hindu-dominated Navaran moved to neighboring India and sold all their goods to Akij Uddin before leaving the country. He was able to take this risk easily as he had a huge amount of money in debt and had his own factory and warehouse in the area. In the war of independence, Akij Uddin almost died a few times. However with the help of the freedom fighters and his intelligence and natural instincts he survived the war.

After the war, instability increased in every sector of the country and the price of goods also increased several times. At that time Akij Uddin was able to earn about 15 lakh taka by selling the products in his warehouse during the war. This money helped Akij Uddin to become one of the top businessmen in Bangladesh. Although jute business continued after independence, tobacco production was stopped. From 1973, Akij Uddin turned his attention to tobacco production again and this time he tried to produce paper tobacco. He also bought an Isuzu truck with a capacity of three tons to facilitate the remote transport of tobacco. Earlier, Akij Uddin’s tobacco was spread in Khulna, Jessore and its adjoining areas but he did not supply it in Dhaka. As Akij Uddin realised that Dhaka’s market is very competitive and if he can’t supply this market regularly, he would not be able to survive in the competition. Moreover, it is important to bring differentiation in the taste and smell of tobacco. So Akij asked his assistant to collect samples of all the traditional tobacco in Dhaka and bring them. After researching those samples, Akij realized that his tobacco is of better quality than conventional tobacco brands. At that time Armanitola was the tobacco business center in Dhaka and Akij distributed his tobacco-free of cost among the traders there. During that period, Aziz tobacco was the most popular in Dhaka and as Akij tobacco is superior in taste and smell to Aziz tobacco, traders realize that it can be made popular very easily. In order to capture a substantial market share from Aziz tobacco, Akij Uddin decided to supply his Akij tobacco at a reduced price of 2 taka and sent twenty-five lakh tobacco from Navaran to Dhaka in a covered van, which took him a week to sell. He also hired regional traders to understand the demand for tobacco in different parts of the country and to facilitate Akij’s tobacco trade in those areas.

In addition to transporting tobacco, he also paid close attention to the campaign. He also figured an innovative approach to promote his product. He was advertising his tobacco on the body of his two covered vans for transportation. Also, when tobacco advertisements started appearing on the radio in 1976, Akij tobacco advertisements were first to be aired. By 1976, the daily production of Akij tobacco stood at around 70 lakhs. As the demand increased, complaints rose about the declining quality of Akij Uddin’s tobacco from the market. Then he hired agents to buy tobacco directly from Rangpur and Kushtia districts and at one stage in 1977 he decided to open a tobacco purchasing center and processing center in Rangpur. At that time, the demand for Akij tobacco was around 8 million daily. Although the jute and other consumer goods business went hand in hand, Akij Uddin then concentrated on the tobacco business and the gradual production of cigarettes. Following the continued loss of the state-owned Dhaka Tobacco Industries Limited, the government decided to auction off the factory. Akij Uddin submitted a tender of BDT 83,00,505 and became the second-highest auctioneer. But as the highest bidder in the auction failed to meet certain conditions, Akij Uddin got the ownership of Dhaka Tobacco. Akij Uddin participated in this auction with the funding of Janata Bank. When he became the owner of Dhaka Tobacco in 1978, only K-2 brand cigarettes were produced. Also in 1979, at the request of the then GM of Sonali Bank, Akij Uddin invested in SAF Industries leather business. However, due to a dispute with Mr. Cooper, a Scottish national who owned the SAF, Akiz Uddin bought the SAF industry. Although Akij Uddin did not have much knowledge in the leather business, he realized that there was a possibility of making a profit in this business in the future, so he sent his son Sheikh Momin Uddin to England to learn about leather technology.

Business Expansion:

In addition to establishing some related industries for the existing industries, Akij Uddin continued to expand his business empire by participating in one auction after another. These companies include Akij Printing and Packaging Limited, founded in 1974, Akij Transport Agencies Limited, established in 1980, and Navaran Printing and Packaging Limited. Realizing the huge demand for tobacco from tobacco and cigarette buyers in 1992, he took his son to establish Akij Match Factory Ltd. Akiz installed the country’s first automatic machine in their match factory and the dolphin brand produced on this machine was once at the top in match popularity.

Akij Group Business Expansion

Although he continued to trade in raw jute, Akij was unable to enter the jute mill business due to government policies. But when Akij Uddin was recognized as the second-largest exporter of raw jute in Bangladesh in 1992, he applied again and got permission. The Akij Jute Mill was finally established in 1994. Meanwhile, in 1993, the government-owned Khulna Hardboard Mill won the tender but the government did not hand over the ownership to Akij Uddin due to various technical reasons. As a result, Akij also decided to set up his own hardboard mill. But considering the demand in Bangladesh, Akij established Particle and Board Mills in 1997 on the advice of his son Bashir Uddin. Akij also planned to set up a textile mill in 1992, when the ready-made garments sector began to expand in the country after 1982. After several years of research and efforts, Akij Textile Mills was finally established in 1998. In 2001, Akij Food & Beverages Ltd. was established.

Akij Food & Beverages Ltd.

Also, when the golden age of real estate and real estate business started in the 90’s, Akij Uddin started Akij Cement Factory in 2002 with the first VRM or Vertical Roller Mill.

At that time, top cement manufacturers of the country were mixing fly ash in cement for the sake of higher profit, Akij Uddin was not in favor of mixing fly ash in Akij cement. Although the price of its cement has gone up a lot, Akij Cement is the first cement company in the country to market cement without fly ash. Another important product in the construction materials industry is tiles. Anticipating the future demand for tiles, Akij Uddin was looking for a field to work with in the cement factory as well as various other construction materials. Although he thought of setting up a tiles industry in Bangladesh in 2006, Akij Uddin, one of the proverbial industrialists of Bangladesh, died in October of that year. Although the matter was postponed for several years after his death, Akij Ceramics was launched in 2012 with the dedicated efforts of his children.

Conclusion

Sheikh Akij Uddin’s contribution to the development of the jute and tobacco industries in Bangladesh is immense. Whenever Akij Uddin has gone into business, he has done business with honesty and devotion. He has given more importance to the best quality products starting from raw material. In addition to product quality, he has taken a modern marketing strategy in product distribution and supply chain from the very beginning. In the society of that time, out of the idea that if the quality of the product is good, the buyer will find out for himself, he has taken the advertisement of his product seriously. Also, whenever Akij enters a new industry, he starts the business with a big investment from the beginning. His activities have helped in the development of the country’s industry. Along with the development of industry, he was a pioneer in social service. In 1980, she founded the Ad-Din Foundation, under which a 500-bed Ad-Din Women’s Medical College Hospital was established in Dhaka’s Maghbazar in 2008. There are also several other medical colleges, hospitals, nursing institutions, schools, and colleges in the country under this foundation. The contribution of Akij Group to the country’s economy is also undeniable. In the 2012-13 financial year, Akij Group paid a tax of Tk 3228.95 crore. In addition, Akij’s Tobacco Concern, which was sold to Japan Tobacco in 2018, is worth 1.48 billion US dollars or more than Tk 12,000 crore at the time, the largest foreign direct investment in the history of Bangladesh.

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