TruStory

NF Coir Limited in Bangladesh

The company

NF Coir Ltd is one of the largest SMEs in the coir industry in Bangladesh. The coconut coir (fiber) industry in Bangladesh is relatively nascent and has a lot of growth opportunities in both home and abroad. NF Coir Ltd. is one of the country’s leading coconut coir processing businesses with over 10 years of operational history.

Working with coconut husks, NF Coir produces mattresses for beds, coir scrubbers, coir felt rugs, and coco peat blocks. It has established itself as a corporate supplier of big brands like Otobi, Akhter, Swan, RFL etc, some of the largest household names in Bangladesh. It mainly supplies coconut fiber to corporate clients and also to local businesses.

Recently, the company moved into backward integration by setting up a fiber extraction plant to produce its own fibers from coconut husks. The company also acquired pith block machines to turn coir dust, a waste material of the process, into sellable coir pith blocks.

As an impact enterprise, it has established itself as a farmer and worker friendly company that works with its stakeholders to achieve commercial success and social/environmental impact.

The entrepreneur

The entrepreneur, Mr. Mostafiz Ahmed, had a family business of coconut oil. His father used to own a coconut oil factory. Here he realized that a lot of coconut husks are wasted in Bangladesh, where this waste has economic potential. He started a new, labor-intensive business, generating employment.

For a successful operation of the business, the entrepreneur started his homework before 2000. He traveled to India to understand more about the business. In 2000, he started to build new machines for making coir products and established his factory. First he imported machines and then made those in his own workshop.

To grab the market at first and understand the market, he used to import coir product and sell them to local customers. By 2005, he managed to start trial production and began to start supplying his own goods at a reduced price. By then, the business managed to capture the market.

The company has the ambition to establish itself as a top local and global coir product exporter of Bangladesh.

“Other products can be exported abroad as gardening items. In a lot of places, these are also used as pesticides for weed control. When anyone uses any synthetic product and throws it away, it stays on the earth and damages the environment. But if someone uses my product and throws it away, it mixes with the ground and improves the fertility of the soil. The dust that falls off, which we call coco peat, we make blocks out of it. The benefit of this product is that it can be used as an alternative to soil in places with no soil. After its neutralization, it is best for germination. All types of cultivation in greenhouses are done using this. It is also cheaper than soil.” – Mostafiz Ahmed

Impact

The investment contributes to job/livelihood creation, increased income for employees and smallholder farmers, and recycling waste into eco-friendly products.
It contributes to SDG 5, SDG 8, and SDG 12.

People

NF Coir’s primary target of impact are its employees and smallholder farmers. It sources the coconut husk or fibres directly from the smallholder farmers from different areas of Bangladesh, who are able to sell the waste of coconut processing to NF Coir and earn additional income for the households.NF Coir has boosted the local economy by creating jobs for people in the Bagherhat region of Bangladesh. The company has been able to employ 100 people directly (mostly women). More than 1000 people are indirectly related to this business in his area. The employees also benefit through training and livelihood opportunities where source of stable income is low in the rural areas.

Planet

NF Coir’s products are 100% eco-friendly as they are made almost entirely of coir. So, once a product reaches the end of its useful life, they can be thrown away and decompose into the soil easily. Moreover, the coco peat block in particular is beneficial to greenhouses where the blocks are used as a replacement for soil; coco peat block is more hygienic than actual soil and provides a better medium to germinate seeds for propagation relative to soil.

The uniqueness of this company

NF Coir’s current line of business came from the desire to use 100% of the coconut i.e. the husk which is mostly thrown away. They keep designing newer products such as plant pots, in-soles for hotel slippers, gardening items. Several of their machines are developed in house. The team learned the processes watching Youtube videos. The entrepreneurs visited different factories and machine dealerships to learn about how the machines work and they build them at their own facility. They are still innovating constantly to keep up with the market trends of coir based products and always on the look out for export oriented products i.e. products that have high demand in the international market.

“In the next 3-4 years, we aim to use the entire coconut to add value. High quality carbon, decoration piece, and other usable products can be made out of it. It can even be used in medicinal factories. If value is added, the price will increase, resulting in high price for coconuts, meaning farmers will get more money.” – Mostafiz Ahmed

Future plans

The company established itself as a market leader of coconut’s fiber-based felt mattress maker. NF Coir is constantly trying to develop new products lines with the versatile material they are sourcing such as tufted rugs, coco pole (for climber plants and vines), shoe in-sole, chew toy, etc. Their strength in the industry has given them the idea to also produce a very new kind of soil replacement products. Coco peat block is highly sought after as it is a sterile growing medium for plants. Scrubber is a relatively new product which are bought by fisheries to clean tanks, MNCs with dishwash product lines, and exporters as eco-friendly products. Mattress filling is their highest earner, as the highest volumes are supplied here to the largest mattress businesses.

They have successfully exported this product to South-Korea. NF Coir is now exploring new product lines such as dish scrubber, shoe in-sole, and pet chew toy from coconut coir. Truvalu’s aim is to support the company to become more formalized and structured so that they can also produce these products according to the standards of the Dutch market and export them.

Co-entrepreneurship

NF Coir needed better access to finance and business formalization. Through its co-entrepreneurship approach Truvalu:

Provided an equity investment to increase processing capacity, and professionalization of business to be in compliance with government rules and regulations.
Coaching by taking a board seat and being a member of the board of directors.
Supported with various BDS activities:
- Truvalu formalized the company before investment by providing legal support to convert NF Coir from proprietorship to private limited company.
- Truvalu helped them set up their full bookkeeping and financial reporting system.
- Truvalu assisted in formalizing their impact reporting structure.
- Truvalu has connected NF Coir to local and international buyers of their products