Some local conglomerates plan to go for rice milling and marketing as the staple has a constant demand in the country of 16 crore people.

ACI and City Group are preparing to set up automatic rice mills, while Bashundhara Group is planning to go for processing and marketing of parboiled rice.

“Our rice will hit the market by the yearend,” said Syed Alamgir, executive director of consumer brands of ACI Ltd that has business in sectors such as retail, agribusiness, food items and pharmaceuticals.

The mill will be set up at an investment of Tk 39 crore, ACI said in a web posting on the stock exchanges.

Alamgir said they will bring "high quality" rice under the brand -- ACI Pure.

These large businesses, having good distribution networks, will debut in the market following some food processing giants such as Pran, Square and Deshbandhu Group to tap the growing demand for branded fine rice.

Currently, around 500 automatic and semi-automatic rice mills along with 17,000 husking mills are engaged in parboiling, drying and crushing paddy bought from farmers.

Of the mills, more than 350 operators market rice under their own brands mainly in the fine rice segment, said Md Layek Ali, general secretary of Bangladesh Auto, Major and Husking Mills Association, which has around 17,000 members.

These mills process and market at least 60 percent or three crore tonnes of the five crore tonnes of paddy produced a year in the country. Farmers keep the rest of the produce for their own consumption, according to analysts and millers. The market for milling and processing of rice stands at around Tk 50,000 crore a year.

Pran is engaged in retailing its branded rice in smaller packs but it is not present in the branded bulk segment catered mainly by automatic millers operating from the northwest region.

“We want to mill and market all types of rice -- from aromatic to coarse ones,” said Biswajit Saha, general manager of City Group.

“Presently we process and sell flour, cooking oil and sugar. That's why, we want to go for rice so that we can fulfil all the needs of a kitchen,” Saha said.

City plans to market in urban areas, mainly in Dhaka city, he said, adding: “There is no big rice mill in Dhaka. So there are prospects.”

He said City is now in talks with a European machinery company to set up the mill, which is going to be one of the biggest rice mills in Bangladesh.

“Discussion is going on regarding rice milling. This is now at the planning stage,” said Indrojit Kumar Mahalanabish, head of division, plants of Bashundhara Food and Beverage Ltd, a concern of Bashundhara Group.

“Bangladesh is a country of 16 crore people. As rice is a staple food, there are business prospects,” said Mahalanabish.

Layek Ali of the mills' association, however, expressed worries that the milling capacity might exceed the annual production of paddy.

“The market will be saturated and competition will intensify. As a result, many small and medium husking mills will not survive making workers jobless,” Ali said.