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BAKARKHANI BUSINESS IN PURAN DHAKA:

A Look into a Micro Enterprise Industry

PREPARED FOR

Mr. Sheikh Morshed Jahan

Associate Professor

PREPARED BY

Group 5, Section A, BBA 20th

ZR-05 MD. Mazharul Islam

ZR-08 Abashesh Biswas

RH-09 Tashfia Rawnak Anika

ZR-15 Fahmin Rahman

RH-19 Fableeha Bushra Chowdhury

RH-28 Syeda Shehtaz Hasib

ZR-31 Nishadul Haque Nihal

ZR-32 Rakib Khan

ZR-39 Sabbir Hossen

RH-48 Sadia Samira

ZR-60 Sajeed Alam

ZR-62 Ahnaf Ahmed

Institute of Business Administration

University of Dhaka

27 April 2014

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CONTENTS

Executive Summary .................................................................................................................................................................. 3

1.0 Introduction ....................................................................................................................................................................... 4

1.1 Bakarkhani Industry Profile............................................................................................................................................. 5

1.2 SWOT Analysis ............................................................................................................................................................... 6

2.0 Major Findings ................................................................................................................................................................... 7

2.1 Observations and Insights............................................................................................................................................... 7

2.1.1 Apprentice System .................................................................................................................................................. 7

2.1.2 Importance to Quality and Customers...................................................................................................................... 7

2.1.3 Strong Work Culture................................................................................................................................................ 8

2.1.4 Seasonal Demand .................................................................................................................................................... 8

2.1.5 Declining Profitability .............................................................................................................................................. 8

2.2 Sustainability Index and Maturity Timeline of Bakarkhani Industry .................................................................................. 9

2.2.1 Profit for owner ...................................................................................................................................................... 9

2.2.2 Customers..............................................................................................................................................................10

2.2.3 Employees .............................................................................................................................................................10

2.2.4 Value Chain Actors .................................................................................................................................................10

2.2.5 Society ...................................................................................................................................................................10

3.0 Triangular Framework ...................................................................................................................................................11

3.1 Organization Effectiveness ........................................................................................................................................11

3.2 Industry Effectiveness ...............................................................................................................................................12

3.4 Economy Effectiveness ..............................................................................................................................................12

4.0 Challenges and Prospects ..................................................................................................................................................13

5.0 Reflections and Take Aways ...............................................................................................................................................14

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EXECUTIVE SUMMARY

As the story goes, the name Bakarkhani was derived from the powerful General Aga Baker in the late

Nababi period. Bakarkhani whose origin goes back to as early as the Mughal era, is a unique bread with

a crispy texture. This age-old traditional food has survived the test of times, and still lingers in the

alleyways of Puran Dhaka, Bangladesh. This rare bread is usually eaten over a cup of tea, but variations

of the Bakarkhani may include adding cheese and khimar to enhance its flavors.

Bakarkhani shops in Puran Dhaka are micro enterprises that make up a small cluster or industry. In our

Bakarkhani field visit to Puran Dhaka’s Chankarpur, Lalbagh. Becharum Dewry, Doyagonj, Nazimudding

Rd and Narinda, around 30 Bakarkhani shops were surveyed and many of the shop owners were

interviewed. The field visit revealed many interesting facts about the Bakarkhani industry and allowed

us to draw some insights through our observations. Among other observations, it was seen that the

Bakarkhani industry works under an apprentice system whereby young children are trained on how to

make Bakarkhani from an early age. Our survey further revealed that the Bakarkhani makers give utmost

importance to customer satisfaction even though they do not get a fair price (one Bakarkhani costs only

3 Taka on average) for the breads they make with so much care. Furthermore, inside the Bakarkhani

shops where there are as few as 3 employees; there was an evident display of a strong work culture.

However, due to the declining demand of Bakarkhanis and its falling value, the industry is facing some

serious hurdles and many of the entrepreneurs are regretting coming to this industry. Hence, after

discussing some of the major findings of our field visit, the main challenges and the possible prospects of

this declining industry are highlighted, followed by some reflections and take aways from the research

on a micro enterprise, Bakarkhani.

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1.0 INTRODUCTION

The name 'Bakarkhani' is synonymous with Puran Dhaka. Every turn of a corner on the narrow streets of

Puran Dhaka are occupied with five to six small Bakarkhani shops.

Bakerkhani is a unique confectionary, a crispy spiced golden brown flat-bread that is enjoyed with the

morning tea or as a snack. Besides, it is quite compatible with beef, chicken or mutton curry. At times, it

may be also served with condensed milk or honey. Usually a salted treat, variations of Bakerkhani

include sweet ones and those with cheese added to enhance the flavor or the treat. It is a food that is

cheap cheap in price but rich in taste.

It's foundation dates back to the Mughal era, who had a very strong and influential food culture. The

origin of the name Bakarkhani is quite an interesting story, it goes as a legendary, sad love story

between Aga Bakar and Khani Begum around the middle of eighteenth century inspired the naming of

the bread. According to the book "Kingbadantir Dhaka" by Nazir Hossain, Aga Bakar a general in

Chittagong during Nabab Siraj-ud-daulah's reign (1800s), madly fell in love with a beautiful dancer, Khani

Begum. Another official, Jainul Khan, abducted Khani Begum as he had an eye for her at the same time.

As Aga Bakar rescued Khani, Jainul fled resulting a rumour that Aga Bakar assassinated Jainul and hidden

his dead body. Eventually, both Khani Begum and Aga Bakar were arrested. Aga Bakar was sentenced to

death and put in a cage with a tiger. Strong in his will and love, Aga Bakar killed the Tiger and

escaped. In the meantime, Jainul abducted Khani one more time and killed her. It is said that Aga Bakar

immortalized his love for Khani Begum and her memory through this specially prepared bread by

naming it 'Bakar-Khani' .

Bakarkhani stands as a symbol of love, a totem of our history and beacon of hope for those still clinging

onto the last relics of a culture in decline. The Bakarkhani is more than just multi-layered bread; it is in

fact a reminder of the affluence and magnificence of our ancient times.

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1.1 BAKARKHANI INDUSTRY PROFILE

Place Puran Dhaka - Shaatrouja, Nazimuddin Rd., Chankharpur, Lalbagh, Narinda

Number of shops Around 30 shops that make and sell Bakarkhani Rotis in the industry

Most shops can be found in small clusters spread throughout Puran Dhaka

Average number of employees The Bakarkhani industry is heavily depended on the employees. They are refered to as the “karigors”.

They are very highly skilled cooks who are adept at Bakarkhani preparation techniques as they receive on the job training and apprenticeship from a very young age

Each shop employes about 3-4 ‘karigors’ all of whom work simultaneously for the preparation of Bakarkhani .

Average capital Average start-up capital required is very low as most shops in the Bakarkhani industry locality which are specialized to be Bakarkhani shops are already fitted with the necessary fixtures, fittings and equipments required for the production process.

The average startup capital required for this business is about 35,000 Tk.,

Sales The selling price for Bakarkhani are fixed in the locality since the market for Bakarkhani represents a perfectly competitive market pattern.

The prices vary with the size of the Bakarkhani that is being sold. The larger ones are sold at 5 Tk each and the Smaller ones are sold at 3 Tk each.

They are also priced on their weight if bought in large quantities. For the large ones the price is around Tk 100 per kg.

There can be around 22-25 Bakarkhani in 1 kg.

Daily sales revenue on an average can range from 2000 to 3000 tk depending on the demand for the day.

On most days sales can range from 500 - 700 Bakarkhani .

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1.2 SWOT ANALYSIS

Strengths

Skilled, knowledgeable and experienced workers

Bakarkhani is rich in quality and taste and has unique flavor characteristics

Quite popular among residents of Puran Dhaka

It stands as a symbol of tradition and cultural heritage

Weaknesses

Demand is seasonal (more demand in winter)

Profit depends solely on sales volume

Industry highly dependent on skill of workers or 'karigors'

Changes in price of raw materials greatly affect the profit margin of individual

businesses

Perfectly competitive market

Opportunities

Scope for expansion as large scale production

Efficient management will lead to a more productive business hence progressive

industry

Threats

Industry may become obsolete if the need is satisfied with other baked goods

such as biscuits or dry cakes

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2.0 MAJOR FINDINGS

2.1 OBSERVATIONS AND INSIGHTS

In our Bakarkhani field visit to Puran Dhaka’s Chankarpur, Lalbagh. Becharum Dewry, Doyagonj and

Narinda, we came across some notable observations that were common to almost all the 30 shops we

surveyed.

2.1.1 APPRENTICE SYSTEM

Bakarkhani is hand-made bread that is made in a mud-oven heated with coal. Making this unique bread

takes years of practice to master. On every shop surveyed, it was observed that very near to the hot

stove, a boy not more than 14 years old, would be kneading dough for the bread to be rolled and later

baked. Under expert supervision, a young apprentice is given this moderately easy job initially to get him

used to the art of making a Bakarkhani . The apprentice, over the years, learns how to roll the bread in a

special way and add the thin layers of pastry which gives Bakarkhani its unique crisp texture.

When asked about why a particular young employee was kneading dough instead of being at school on a

weekday, his employer (who usually is a very close family member) would falter in reply, but say that

the boy does go to school. It was found that some of the children employed in the Bakarkhani shops, go

to evening classes in a public school nearby.

2.1.2 IMPORTANCE TO QUALITY AND CUSTOMERS

The bakers emphasized that they want to keep up the product quality. But consumers and customers

are not very willing to pay higher prices. However, they are ok with it. Their target is to reduce

profit/unit but to maximize the sale volume; therefore a higher total profit.

Almsost all the Bakarkhani shop owners emphasized the importance of making high quality Bakarkhani s

for their customers. Even though their profit margin is very little (price of a Bakarkhani is 3 Taka on

average), great importance was placed on making Bakarkhanis with the utmost care and expertise for

their customers. It was apparent that the owners’ target was not to increase the profit margin but sell

the maximum number of quality Bakarkhanis.

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2.1.3 STRONG WORK CULTURE

Typically, the work culture of the Bakarkhani shops is very strong. One of the reasons for this is because

there are not many employees (maximum 5 or 6). These few employees are usually close relatives

(father-son, brothers, etc) and enjoy each other’s company when making the Bakarkhani s.

One of the shop owners surveyed mentioned that on an usual day, he and his employees drink tea

almost 20 times. He said that tea and Bakarkhani are a sound combination, and drinking tea every now

and then is part of their culture as Bakarkhani makers.

2.1.4 SEASONAL DEMAND

Since Bakarkhani goes best with tea, the highest sales of Bakarkhani are experienced in the winter

season when people drink tea the most. Furthermore, during the wedding season, the bride’s side

makes a special sweet dish out of Bakarkhani s and milk. This sweet dish is sent to the groom’s house as

a tradition. Sales of Bakarkhani , thus increase during winter which is also the wedding season and

during other festive seasons like Eid.

In summer, the sale of Bakarkhani declines because the dry confectionary does not go well with the

heat. According to one of the business owners surveyed, people buy more fruits to refresh themselves

and hence sale of Bakarkhani declines because it's not a refreshing food to have during the heat.

2.1.5 DECLINING PROFITABILITY

Even though some of the Bakarkhani shop owners were satisfied with their business, most of the owners

mentioned that they were suffering from low customer demand of Bakarkhani s. Generally, the shops

do not make much every month and their income barely affords them a sound living.

One of the shop owners surveyed, who was an old man suffering from diabetes, mentioned that out of

desperation he left his low paying job at another place to build a Bakarkhani shop. But now, he feels that

he is not that better off and suffers to manage a living out of the very little profit he makes from the

small Bakarkhani shop in Becharam Dewry.

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Another shop owner surveyed told felt so frustrated with the declining demand of Bakarkhani said that

he feels like committing suicide by eating poison.

2.2 SUSTAINABILITY INDEX AND MATURITY TIMELINE OF BAKARKHANI INDUSTRY

Bakarkhani industry is a very small one that serves to a finite niche market. It was found that this micro enterprise

climbs up four of the ladders that lead to a sustainable business. The industry is only short of societal awareness.

2.2.1 PROFIT FOR OWNER

The Bakarkhani shop owners generally do not make much profit. When asked about why they came into

the business of making Bakarkhani , most replied, it was due to presumable profit which has later turned

out to be rather low.

The entrepreneurs come into this industry because they are driven by a desperate need to earn a living.

Making Bakarkhani is one of the few things that these entrepreneurs are skilled, knowledgeable and

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experienced at from their family heritage. Hence, it could be concluded that because of socio-economic

hardships and family traditions, most entrepreneurs opted for opening up a Bakarkhani shop despite its

low profitability.

2.2.2 CUSTOMERS

Customers are a very important part of the Bakarkhani industry in Puran Dhaka. All the shops surveyed,

reportedly emphasized their business’ importance of satisfying customers with their intricately made

Bakarkhanis. For instance, some of the shops surveyed said that their main objective is to satisfy the

customers with high quality Bakarkhani s even if it is at a low price and low profit margin.

2.2.3 EMPLOYEES

The Bakarkhani shops employ very few employees (as few as 3). Employees are usually the owner’s

relative or a friend or acquaintance. Due to the process of making a Bakarkhani , these few employees

are required to work as a team - one person makes the dough, another one kneads, another person rolls

out the dough while another person puts the flattened breads into the hot mud-oven fired by charcoals.

Due to the nature of the work, the few employees are given due respect by the their fellow workers.

However, children making Bakarkhani s are often forced to work at the shop by skipping school.

2.2.4 VALUE CHAIN ACTORS

The Bakarkhani owners did not emphasize any concern over their value chain actors. This is mainly

because making Bakarkhani requires only a few raw materials like oil, flour, dalda, cheese, etc. These

ingredients are acquired from local suppliers who have long-term business relationship with the

Bakarkhani owners. In some cases, the owners said that they buy from whoever it is most convenient

and that they don't have a long term relationship with any suppliers.

2.2.5 SOCIETY

The Bakarkhani shop owners are not aware of their shop’s effect to the society. However, the owners

did mention that they feel proud to be able to uphold an age old heritage of Puran Dhaka and

Bangladesh as a whole.

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3.0 TRIANGULAR FRAMEWORK

3.1 ORGANIZATION EFFECTIVENESS

1. Capital: Most Bakarkhani shops’ set up cost is not more than 30,000 Taka. The shops are a

compact, narrow room where the front side opens to the street outside. The mud-oven is made

inside the shop and this makes the temperature inside the Bakarkhani shop almost unbearably

hot.

2. Capability: The Bakarkhani shop workers are skilled at making this special bread. There is almost

always a young apprentice in the shop who learns the art of making Bakarkhani first-hand, from

a very early age.

3. Culture: Culture in the Bakarkhani shops is also very strong. Most times the employees are

related by family ties. The employees work as a team and have a friendly work environment.

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3.2 INDUSTRY EFFECTIVENESS

1. Customers: Customers are considered a very important part of the Bakarkhani industry. Most of

the shops surveyed reported that customers drive them to make high quality Bakarkhani s.

2. Competitors: Competition in the Bakarkhani industry is more or less fair and ethical. Almost all

the shops offer their Bakarkhani s at a price as low as 3 Taka. Because the competing shops are

clustered around Puran Dhaka, the individual shops experience the advantage of attracting

customers to the region.

3. Collaborators: Collaboration amongst the Bakarkhani shops exists as owners come from the

same hometowns (mostly Sylhet and Brahmanbaria).

3.4 ECONOMY EFFECTIVENESS

1. Technology and Information: Potential for technological improvement, does not exist in the

Bakarkhani industry as the age-old technique of baking the Bakarkhani in a mud-oven fired by

charcoals, brings a special type of burnt flavor on the this unique bread.

2. Collaboration and International Forces: This is not applicable for Bakarkhani industry as there is

no collaboration of impact of international forces.

3. State and Society: Government currently does not employ any benefits to the Bakarkhani

industry. However, society of Bangladesh knows Bakarkhani as a traditional bread.

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4.0 CHALLENGES AND PROSPECTS

The Bakarkhani industry in Puran Dhaka faces many dire problems. One of the major challenges it faces

is the problem of declining demand. People do not seem to be as much fond of Bakarkhani s as they

used to be in the earlier days. It is often seen that it is the older people of Bangladesh who treats

Bakarkhani like a delicacy that goes especially well with tea. However, the younger generation who

make up more than 50% of Bangladesh’s population are not quite aware of Puran Dhaka’s heritage food

called Bakarkhani .

Despite the challenge of a dying market, the Bakarkhani industry has many prospects in its future. Some

of the prospects of the Bakarkhani Industry are listed below.

1. Setting up a Brand: The Bakarkhani of Puran Dhaka is a rare delicacy that cannot be found in

any other place of the world. The culture of Puran Dhaka and Bakarkhani meld together. In fact,

it is because of Bakarkhani that Puran Dhaka is so famous. Hence, there is a lot of potential for

portraying Bakarkhani as a brand.

2. Variation in Flavors: One Bakarkhani shop was seen selling 100 variations of Bakarkhani under

customer orders. Among other variations, the shop sold chocolate, orange, horlicks and other

flavored Bakerkhanis.

3. Selling throughout Bangladesh: People from many places of Bangladesh come to Puran Dhaka

just to buy Bakarkhani . This huge market is under served in the sense that people have to come

a long way to buy Bakarkhani s. If a feasible supply chain were set up, then people throughout

Bangladesh could enjoy the crispness of Bakarkhani over a cup of tea. And at the same time, the

Bakarkhani makers can enjoy higher sales.

4. Selling outside Bangladesh: Expatriates who live in countries outside Bangladesh are often seen

buying bulk quantities of Bakarkhani from Puran Dhaka. A huge market lies for non-residential

Bangladeshis. Hence, if the Bakarkhani s could be exported, not only these customers would be

satisfied, but Bakarkhani workers can get a higher sales, and more profit.

5. Higher price: Making a Bakarkhani requires a lot of perseverance as the workers need to sit right

next to an extremely hot oven whose temperature can reach up to 400 degrees celsius.

Furthermore, a lot of care goes to making a Bakarkhani and yet the price of a Bakarkhani is

trivial, costing only 3 Taka. People must be convinced to pay a higher price for Bakarkhani ,

otherwise, the situation of the Bakarkhani industry will continue to look bleak.

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6. Owner’s association: Unless the owners manage to unite themselves and form an effective

association, it will not be long when Bakarkhani will be available not for consumption but for

exhibition.

5.0 REFLECTIONS AND TAKE AWAYS

Bakarkhani has been a traditional food of Puran Dhaka over the years and it has successfully established

itself as a brand. But recently the demand for Bakarkhani has been on the wane. The advent of fast food

has taken its toll from this old industry and it is now struggling to cope up with the change in trait. The

hardship of the owners to sustain the glorious past just does not seem to be helping it any more.

Intervention from higher authority also seems to be a bit too farfetched as the industry does not have

any materialistic value to the government.

The field visit to Puran Dhaka provided us with some valuable insights into the small business industry of

Bakerkhani. It helped us learn about the struggles and achievements of a small business cluster.

Following are some of the things we have learned in the long and the short run.

Short run

● Comprehension of work life at the base of the pyramid

● Insight into the distinguishing features of a large and micro industry

● Insight into the distinguishing traits of a micro enterprise

● Humbled view towards life after observing other people’s struggle

● Heightened interpersonal skills

● Sharpened skill of persevering through unfavorable weather and environment conditions

Long-run

● First-hand knowledge about micro enterprises

● Knowledge about Bangladesh’s businesses at the base

● Basis for further understanding business

● Acquirement of important tool to become an efficient manager