"Business should not be driven by profit alone, but by well-being of people”
One of the key figures behind the growth of Aftab, one of Bangladesh's leading poultry and agro-industry brands, is Mahabubur Rahman Sarkar.
He spent 25 years at multinational company LafargeHolcim Bangladesh Limited, holding leadership positions in finance, treasury, planning, and operations.
After a long corporate career, he transitioned to Bangladesh's agriculture-based industry and is currently serving as the Chief Executive Officer (CEO) of Aftab Feed Products and Aftab Hatchery, both concerns of Islam Group. His leadership is closely linked to the country's livestock sector, food security, and the future of agribusiness.
Recently, he appeared as a guest on Asia Post's business program "Beyond Business." In the interview, he discussed corporate leadership, his transition from a multinational company to a local industry, the challenges and opportunities in the agro-industry, and various aspects of his personal and professional journey. The program was hosted by Riazul Karim and edited by Zayed Al Mahbub.
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Asia Post: We'd like to begin by learning about your distinguished career. Where and how did your professional journey start?
Mahabubur Rahman Sarkar:
After completing my bachelor's and master's degrees, I began my career at Bangladesh's renowned Islam Group. During the 1990s, Bengal Development Corporation, a concern of Islam Group, was one of the country's leading business organizations. I joined its finance department, which marked the beginning of my professional career.
At that time, Bengal Development Corporation was a major enterprise with involvement in several large-scale projects, both in Bangladesh and abroad.
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Asia Post: You completed both your bachelor's and master's degrees in Statistics. Many graduates from that discipline pursue different career paths, yet you chose finance and later completed an MBA as well. What motivated you to combine these two different academic fields?
Mahabubur Rahman Sarkar:
When I was studying in higher secondary school, I had already started thinking about my future career. One thing was very clear to me—I did not want to study medicine. At the time, I had two options: continue with science or pursue engineering. Since I decided against medicine, I replaced Biology with Statistics.
After studying Statistics for two years, I realized it was an excellent subject. Although it was relatively new at the time and not many students chose it, I found it fascinating. I often describe Statistics as an advanced form of mathematics. I truly enjoyed the subject and believed it would provide a strong academic foundation.
Later, when I joined the finance department at Islam Group, I realized that Statistics had extensive applications in finance. Forecasting, data analysis, and probability are all integral parts of financial management.
When I later moved to Lafarge, I was assigned responsibilities in treasury and finance. While working there, I realized that if I wanted to advance into top management, I needed two essential competencies: a solid understanding of business and deep expertise in finance. That realization inspired me to pursue an MBA with a major in Finance.
To lead a business effectively at the management level, one must understand concepts such as capital investment, payback period, Internal Rate of Return (IRR), and break-even analysis.
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Asia Post: You mentioned treasury and said it particularly interested you. Most students find marketing more exciting, so what made treasury so appealing to you?
Mahabubur Rahman Sarkar:
That's a very relevant question.
In many local companies in Bangladesh, treasury functions are not managed as professionally as they should be. However, treasury management is both highly challenging and intellectually rewarding.
If you look at multinational companies operating in Bangladesh, almost all of them have strong treasury teams. The primary role of treasury is to determine how a business will finance its operations and investments.
For example, when a company needs capital, treasury decides whether the funds should come from equity contributed by the owners or through bank loans.
If borrowing is necessary, treasury determines whether the loan should be long-term or short-term, and whether it should be denominated in local currency or foreign currency.
Managing future cash flows, financial projections, and funding strategies is at the heart of treasury. It is essentially a combination of forecasting and data analysis.
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Asia Post: Since treasury relies heavily on projections and hypothetical data, how can businesses ensure the accuracy of those forecasts? After all, hypotheses do not always prove correct.
Mahabubur Rahman Sarkar:
First of all, you need reliable historical data. Before making any investment in a new sector, it is essential to conduct a proper feasibility study.
You need to understand the current state of the industry, the overall level of investment, and the balance between demand and supply. Unfortunately, obtaining reliable data in Bangladesh is often difficult.
In such cases, we conduct our own research and also seek assistance from professional experts. Organizations such as IDLC and BRAC EPL specialize in industry research and sectoral analysis.
When you commission a comprehensive report from a professional firm, it clearly identifies the opportunities, challenges, and risks associated with the investment. It also evaluates critical issues such as the availability of raw materials, electricity, and other essential resources.
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Asia Post: Sometimes, even after conducting detailed data analysis, businesses fail to secure foreign investment or loans. In your opinion, what are the main reasons behind this?
Mahabubur Rahman Sarkar:
One of the biggest risks in foreign financing is exposure to foreign exchange fluctuations, particularly the U.S. dollar.
Changes in the exchange rate can significantly affect future cash flows. If your revenue is generated in the local currency while your loan is denominated in U.S. dollars, the business faces substantial currency risk.
For example, suppose you take a loan when the exchange rate is Tk122 per U.S. dollar. Two years later, when you have to repay the loan, the exchange rate may have risen to Tk140 per dollar. In that case, you must purchase dollars at the higher rate to repay the debt, increasing your financial burden considerably.
However, if your business is export-oriented and earns revenue in U.S. dollars, this foreign exchange risk is naturally hedged because both your income and liabilities are in the same currency.
Therefore, maintaining a balanced ratio between equity financing and debt financing is essential for sustainable investment and financial stability.
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Asia Post: Many of Bangladesh's largest industrial groups are family-controlled. In such organizations, how well are the board and management aligned? Does management's opinion receive adequate importance?
Mahabubur Rahman Sarker: In an ideal business governance structure, there are three levels: the owners, the board, and the management. In many family-owned businesses, the board is entirely controlled by family members, with very limited representation from management.
I believe this is a risky structure. The board should include representatives from management and, where appropriate, independent directors. This is already mandatory for listed companies. However, I believe the time has come for private companies to adopt a similar governance structure. The stronger the board is, and the more industry experts it includes, the more informed and effective the company's decisions will be.
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Asia Post: Often, emotional attachment or personal preferences of business owners lead to poor investment decisions. In such situations, what should be the role of management?
Mahabubur Rahman Sarker: Business owners may sometimes want to invest in sectors outside their core business. You can call this emotional investment. In such cases, it is the management's responsibility to present the actual picture of that sector to the owners.
A proper feasibility study should be prepared, highlighting future cash flows and potential risks, and presented to the board. If the owners still choose to take the risk, that is ultimately their decision.
However, many poor investments also result from simply copying what other companies are doing. In such cases, I would recommend considering acquisitions instead of starting a new venture.
If a company is underperforming but has strong brand value or market share, acquiring it may be more profitable than building a new business from scratch. Of course, any acquisition must be preceded by thorough financial and legal due diligence.
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Asia Post: How important are fixed costs to the long-term sustainability of a business?
Mahabubur Rahman Sarker: It is an extremely important issue. A business should keep its fixed costs at an optimal level. Ideally, fixed costs should remain within 4 to 5 percent of total turnover. The higher the fixed costs, the greater the business risk. Whether business conditions are good or bad, fixed costs must still be paid. Over the past few years, we have experienced crises such as the COVID-19 pandemic and the Russia-Ukraine war. Companies with higher fixed costs suffered the most during those difficult periods. Therefore, maintaining fixed costs at an optimal level is essential for long-term stability.
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Asia Post: There is considerable discussion about whether small-scale poultry farmers can survive in the face of competition from large corporate players. What is your perspective?
Mahabubur Rahman Sarker: Our primary objective should be to ensure that farmers remain profitable. If farmers cannot make a profit, the entire value chain will collapse, and we will not be able to sustain our own business either. In the poultry market, the prices of day-old chicks and feed are largely determined by supply and demand.
Sometimes we have to sell chicks below production cost, while at other times prices may be slightly higher. It is a flexible market. However, if farmers adopt modern technology and practice proper farm management, there is no reason for them to incur losses. Our veterinary doctors provide technical support to farmers so they can operate their farms efficiently and profitably.
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Asia Post: What is the current state of technology adoption and research and development (R&D) in Bangladesh's agro sector? Are we lagging behind global standards?
Mahabubur Rahman Sarker:
In terms of technology, we are somewhat behind countries like China and Malaysia. Although Bangladesh has witnessed an agricultural revolution, the adoption of IoT devices and advanced technologies is still insufficient. Greater government support is needed in this area. At our laboratories, we continuously conduct R&D to ensure the best feed formulations.
Occasionally, reports emerge about substandard feed, but large companies never use ingredients that are harmful to health. Such problems usually arise from small-scale or informal feed manufacturers who try to reduce costs by using inappropriate materials. Businesses should not operate solely for profit; they should also prioritize the well-being of the people of the country.
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Asia Post: What are Aftab Agro's future plans? Are you considering listing the company on the stock market?
Mahabubur Rahman Sarker:
One of our major goals over the next five years is to become a publicly listed company. Our group's Eastern Housing has already been listed on the stock exchange for many years. Many business owners believe that going public means losing control, but that is a misconception. Being listed enhances corporate governance and accountability. It also strengthens the long-term sustainability of a business. I believe all major business groups in Bangladesh should enter the capital market. It will promote decentralization of ownership and encourage greater professionalism.
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Asia Post: What advice would you give to young graduates who are just beginning their careers? Should they become entrepreneurs immediately or gain experience through employment first?
Mahabubur Rahman Sarker:
I believe both paths are possible. However, anyone who wants to become an entrepreneur must be willing to take risks. It is also better to start a business with some of your own capital rather than relying entirely on loans. For those pursuing a career in employment, my advice is not to focus on securing a senior position or changing jobs too quickly. Instead, spend at least three to five years in one organization to learn and develop professionally. Career growth should not only be vertical but also horizontal. In other words, work in different roles to broaden your experience. Never fear challenges—embrace them as opportunities. To achieve great success, you must learn to think big.
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Asia Post:Thank you very much for your valuable time. We believe your insights will be highly beneficial to our readers.
Mahabubur Rahman Sarker:
Thank you, and my sincere thanks to the readers of Asia Post as well. I wish everyone good health and success. Assalamu Alaikum.