Mona Food & Biscuit Factory

Abstract
The case discusses on the biscuit industry of Bangladesh and focuses on Mona Food and biscuit factory, a
company producing fortified biscuits in Bangladeshi. The company’s sourcing, production process, success
and challenges are presented in this case and ask the readers to make a judgement on the tradeoff on
whether to expand a business or not.

Introduction
The global packaged biscuit market is a thriving one; with projections of reaching USD 135 million by 2023
(360 Market Updates, 2018). In Bangladesh, Bangladesh Agro Processors Association (BAPA) is the leading
agro industry membership organization for agro processors, while Bangladesh Auto Biscuit Bread
Manufacturers Association (BABBMA) advocating on issues such as employee skill development & welfare,
product development etc. (Katalyst, 2016).
Though sweet type biscuits are the most common variation produced, more emphasis are given on producing
biscuits with nutritional value. For example, the World Food Programme (WFP) of United Nations purchased
and/or distributes High Energy Biscuits (HEB); which are high in protein and are supplemented with premix
of vitamins and minerals (World food programme, 2020).
Mona Food & Biscuit Factory (MFBF from hereon) is a proprietor based company that produces HEB,
sanctioned by the United Nations WFP for their School Feeding Program (UN-WFP/GoB). The Managing
Director MD. Mahmudul Islam Mona has been in the biscuit industry for nearly two decades. Mr. Mona’s
family owns a significant amount of land in their hometown and were involved in business of producing food
(i.e., grain, rice, maize) since the early sixties (1960s). The company itself was first operationalized in 2003
by converting his family house in to a factory; which he later expanded for the purpose of the increasing
business functions. MFBF is a register supplier of HEB for daily feeding of 3.0 million primary school kids in
Bangladesh. Moreover, their HEB were also used to supply hurricane and tsunami affected areas of Sidr,
Aila and other natural hazards sites in Bangladesh, Indonesia, Sri Lanka; they also supplies to earthquake
affected areas in Haiti and Nepal. The company has produced 33,115.946 Metric Tons (MT) of HEBs; all
without any complaints or issues.

Standards, Renovations, and beyond

The company first renovated the factory in 1997, to increase the then current production capacity from 1 MT
per day to 25 MT per day to meet the enlistment requirement of the WFP’s Supplementary Feeding
Programmes (SFP) for supplying HEB. The second renovation was done in 1999 to increase production
capacity to 30 MT per day (as per WFP specification). To meet the demand for high quality and safety of
HEB, improved practices like Good Manufacturing Practice (GMP), Hazard Analysis and Critical Control
Point (HACCP) and other compliance standards were applied and followed by MFBF. Moreover, these
practices helped the company to meet national and international standards introduced in the industry in 1999.
MFBF continuously monitors and improves their quality control (QC) department by performing job rotation
and on the job training with their personnel; so all QC staff are up to speed. Their staff includes an array of
Quality Control Manager, Quality Control Officers, Microbiologists and QC Supervisors; who continuously
monitors the staff to ensure safe food for human consumption.
MFBF produce food for the children and others consumers, they follows three guidelines on worker safety,
food quality and manufacturing guidelines (provided in every package), which includes:
(a) Food Safety Manual -01 it comes with the picture of making process by the workers
(b) Food safety manual -02 in this manual there’s mentioned the food quality, the amount of the
ingredient.
(c) HACCP Guide line this is a structured guideline, the whole steps of manufacturing are described in
this guideline.
MFBF’s in-house laboratory has two sections including the Microbiological section and the nutritional section;
which ensures testing the parameters of the HEB including moisture, yeast and fat content, acid, iodine and
per-oxide value. Moreover, gluten, organoleptic and other tests are carried out in the lab, including checking
for possible (and prevention of) mold buildup.
Selecting raw material supplier are also scrutinized. Raw material suppliers must ensure fresh and safe
ingredients. MFBF’s food safety and QC team visit the supplier’s factory to check storage capacity, factory
environment (including pest control and fire safety procedures, machineries conditions), laboratory facilities;
along with updated certifications of environment safety, HACCP, GMP (if any).

MFBF’s ecosystem
As MFBF deals with food for human consumption, the Food safety guideline of WFP have to be strictly
maintained. Therefore, the sourcing, receiving and handling of raw materials (including sieving), mixing,
dough preparation, baking, cooling, storing (on both cool and dry warehouses), transporting (by covered
vans) etc. must be inspected by QC team meticulously. Moreover, a complete hygienic environment must be
maintained at all times, with special attention paid to the biscuits so it does not break (during transportation,
handling or storage). The products (biscuits) are stored by cleaning and sanitizing the space beforehand and
keeping a space of 1.5 feet from wall so it can be easily inspected. After a nominated QC officer checks for
deviations, the biscuits are delivered to designated Non-Government Organization (NGO) aka Not-for-Profit
(NFP) Organizations. Currently they have a storage capacity of 1000 MT. To reduce backlog, the company
uses the FIFO (first in first out) procedure and assign stock cards, which provides specific information such
total storage (used and available), weight and quantity of the products, delivered amount and client as well
as other necessary information.

Challenges and the way forward

Though the company follows the guidelines strictly, the production of HEB is challenging; more specifically
the challenges is the time. Understandably as per the nature and target market of the product, time is limited
from raw material procurement to delivery; however various lab tests, following protocols and maintain others
necessary formalities are usually causes of backlog. Moreover, raw materials maintenance (i.e., quality of
skimmed milk and flavor) as well as updating and maintaining (own and suppliers) of all certificates (i.e.,
GMP, HACCP, GLP, GHP) takes considerable amount of effort; this is especially true when collecting
certificate of analysis, origin certificate, and health certificate from suppliers.
However, the biggest challenge faced by the company was during an ongoing project in 2019 where the
inspection team of WFP (i.e., agent), informed MFBF that due to the use of traditional machinery the freshly
based biscuits were packed immediately. This immediate packaging of high temperature biscuits could lead
to complication for the end users; thus jeopardizing the hygiene and safety process. WFP then instructed
them to rectify this problem and improve the position or else they would lose their contract from WFP.
This investment in the packing machine (and other associated cost) would be significant and would increase
the cost of making (CM) by approximate 20%; which WFP will not pay for. On the other hand, their existing
machines could be used to produce biscuits for the local market and investing in the new packing machines
could potentially open door to export in other countries.

Conclusion
Though MFBF currently has orders from WFP, their position to being a sustainable supplier is at jeopardy,
unless they invest in new machines. Currently their capability to produce biscuits can meet the local market,
however they would then be forced to compete with established brand with little points of difference (POD)
among them. Investing in new machines would solidify their position of being a supplier for WFP and also
open the prospects of new markets; however the cost is significant. Moreover, to become a “A” grade factory
(of WFP), they would also need to construct additional building to accommodate other their product lines and
purchase high performance baking machines; which would also increase the CM.

Questions:
1. Aside from the packaging issue, identify other challenges faced by MFBF. Are these affecting the
overall efficiency of the company? Justify.
2. Using the Value Chain model, identify the primary and support activities of MFBF. How are these
activities affecting their business? their production? Explain with illustration.
3. Should the company invest and hold their position as WFP’s supplier or should they serve the local
market? How would this impact their profits? Discuss your argument.
References

360 Market Updates. (2018, May 05). Global Biscuits Market - Growth, Trends, and Forecast (2018-2023).
Retrieved October 01, 2020, from https://www.360marketupdates.com/global-biscuits-market-
12886723.
Katalyst. (2016, October 20). Study on the Roles and Opportunities for Private Sector in Agro-food
Processing Industry of Bangladesh. Retrieved October 01, 2020, from http://katalyst.com.bd/wp-
content/uploads/2017/01/Roles-and-Opportunities-for-Private-Sector-in-Agro-food-Processing-
Industry-of-Bangladesh.pdf.

World Food Programme. (2020). Specialized nutritious food. Retrieved October 01, 2020, from
https://www.wfp.org/specialized-nutritious-food