Soon, 'Nitol-Tata' shoes, cycles in Bangladesh

The Tata Group's agreement with one of the largest conglomerates in Bangladesh, the Nitol Niloy group, to make footwear and bicycles is likely to bear fruit soon.

Abdul Matlub Ahmed, chairman of the Bangladeshi company, said the brand name 'Nitol-Tata' was under consideration for both the products. The shoes would be the first to hit the markets, within six months.

Tata International, part of the Tata Group, and Nitol Niloy had signed a memorandum of understanding in April 2010 to manufacture shoes and bicycles in Bangladesh.

"For shoes, the investment will cross $15 million and the first phase of investment for cycles would be $10 million," Ahmed said. The 2010 deal was for Tata to export the shoes to Europe and possibly to India. Though the final share allocation and joint venture agreement is yet to be done, "Nitol Niloy is likely to hold the majority shares," said Matlub Ahmed. The Tata Group did not respond to queries from Business Standard.

The Tata Group's earlier investment plan for Bangladesh had included setting up of a 2.4-million-tonne steel mill, a 1-mt fertiliser factory, a 1,000 Mw gas-fired and a 500 Mw coal-fired power plant. This plan for $3 billion of investment was derailed in 2008.

As for the 2010 deal, the two groups had planned to produce 5,000 pairs of shoes a day in a manufacturing unit there.

Tata has a major presence in Africa's bicycle market and this was considered a strategy to expand presence in Asia. TIL is into the manufacture and export of leather products. It has also marked a presence in the retail footwear and leather market, through the Tashi brand.

Both companies already have a strong business bonding, as a major thrust of the Bangladeshi firm's business comes from the marketing of Tata vehicles in that country. It had begun assembling Tata Vehicles in Bangladesh as far back as 1991. And, for this year, it was targeting import of about 2,000 Nano cars.