An Analysis of Herbal Industry

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Course: Business Communication

Term Paper
An Analysis of Herbal Medicines Industry of Bangladesh

Prepared for:
Mohammad Asif khan
Assistant Professor
Institute of Business Administration

Date of Submission: 21st December, 2010

December 20, 2010

Mohammad Asif khan
Assistant Professor
Institute of Business Administration
University of Dhaka

Dear Sir
Subject: Letter of Transmittal

We are submitting herewith our report entitled ‘An Analysis of the Herbal Medicines Industry in Bangladesh’ as a requirement of our Business Communication course.

This report is a summary of our findings about the growing industry and market of herbal products in the country. Our purpose was to have a clear understanding of how the local herbal industry works and to analyze their value chain management processes.

We would like to end by giving our sincere thanks to you for giving us this wonderful opportunity to gain some valuable learning experience. If you have any questions, please contact us.

Sincerely yours


The usage of herbs and other medicinal plants in the healthcare sector is not a new concept in the history of mankind. We have been utilizing plants for basic preventive and curative health care since ancient times. With the evolution of mankind, we can now get the benefits of plants in the form of herbal medicines.

Herbal medicine products are dietary supplements that people take to improve their health. Many herbs have been used for a long time for claimed health benefits. They are sold as tablets, capsules, powders, teas, extracts and fresh or dried plants. Recently, the ongoing global resurgence of traditional medicines has fueled the demand for medicinal plants and plant-derived drugs. The market of herbal medicines is growing at an accelerated pace and global market value is expected to exceed US$ 26 billion by 2011. Plant resources therefore, have become an attractive domain for public and private sector policy researchers, policy makers and development program implementers.

Bangladesh is home to hundreds of medicinal plants growing in wild areas, neighborhoods and backyards. This report is aimed at understanding the country’s medicinal plant industry structure in terms of- 1. Production, growth and trade

2. General market structure
3. Associated strengths and weaknesses
4. Value chain management, and
5. Future influences on the industry.

In our report, we have first talked about the different medicinal plants available in Bangladesh and the supply chain that brings the raw supplies to the end consumers in the form of drugs. The cultivation of medicinal plants is still in an elementary stage with few farmers cultivating on their own. However, the government, along with the Department of Forestry, has taken considerable steps like building providing research centers to attract commercial cultivation. 90% of the supply of raw materials is from wild harvests; although a huge number of raw materials are imported, mainly from India. Since majority of the population of Bangladesh live in rural areas it is not surprising that the most important market for herbal medicines are rural consumers. Another factor that fuels this consumption habit is the tendency of urban consumers to choose allopathic medicines over herbal ones.

We have also given an overview of the market size and growth. The total global herbal market is of size 62 billion US dollars and as of 2005, the size of herbal medicines market in Bangladesh was Tk. 3,600 Million (US $ 52.95) where the Unani enjoyed majority share amounting to Tk. 1800 m (US$ 26.48 m), Ayurvedic 1200 million (US$ 17.43 m), and Homeopath 600 m (US$ 8.76 m). The demand is and it is estimated that the rise in demand for Ayurvedic and Unani industries is at least 20% a year.

We have discussed the 4Ps of marketing mix strategies where different forms of products are portrayed at...
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