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Italian fashion brand United Colors of Benetton has expressed its willingness to increase its apparel sourcing from Bangladesh.

Monica Joshi, head of operations of Benetton Asia Pacific Limited, apprised Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), of Benetton's plans when she called on him at BGMEA's office in Gulshan today.

During their discussions, Hassan highlighted the RMG industry's increased focus on diversification of products, especially non-cotton and high-end segments.

He requested Benetton to support and collaborate with their suppliers in Bangladesh to build their capacities in manufacturing apparel products having higher market demand.

He assured Benetton of all-out support from BGMEA to expand its suppliers' base and sourcing volume in Bangladesh.

The BGMEA president also pointed out that the increase in prices of yarn, chemicals and other raw materials in the global supply chain has pushed up production costs in garment manufacturing.

In such context, he underscored the need for justified price and more empathy towards supply chain partners to make the supply chain sustainable, according to a statement from the BGMEA.

 

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To ensure international-standard facilities for domestic and foreign tourists, the government is going to implement a Tk3,140 crore project for the development of Cox's Bazar sea beach.

Under the project, a multifunctional road cum dyke, five feet high from the ground, will be constructed from Kalatali to Najirartek stretch of the beach.

Once the project is implemented, tourists can go up to the Najirartek beach – beyond Kalatali, Laboni Point and Sugandha beaches where they currently throng. Implementation of the project is also expected to bring in new private investment and create employment.

The project proposes implementation by 2024, starting from the current financial year. The proposal from the Ministry of Water Resources has already been sent to the Planning Commission for approval.

Under the project, walkways, bicycle bays and parking lots will be constructed, and solar-powered lights will be installed to enhance the beauty of the beach. Besides, various tourist-friendly infrastructure including a children's park, washrooms, information centre, locker rooms, seating area, exhibition space, and amphitheatre will be constructed.

Apart from Kalatali, Sugandha and Laboni, other points of the Cox's Bazar beach lack adequate facilities and security, forcing tourists to gather at those points only. Foreign tourists are also rare these days at Cox's Bazar due to the lack of international standard facilities at the beach.

The project proposal said the length of the enjoyable beach can be increased if the communication system is ensured. It will also be possible to improve the security system.

Under the project, 2km of the multifunctional road cum dyke will be constructed along the Najirartek beach, while 2.49km from Laboni Point to Kalatali, 2.11km from Najirartek beach to Laboni Point and 1.12km road cum dyke will be constructed from Kalatali to Bailey Hatchery. The road will be 30 feet wide with parking facilities.

A 1.3km connecting road from Cox's Bazar Airport to Diabetes Point will also be constructed under the project.

A 2km cycle bay will be constructed at Najirartek and a 2.6km cycle bay will be constructed from Laboni Point to Kalatali Beach. The cycle bay will be 10 feet wide adjacent to the multifunctional road with parking facilities.

A 2km walking bay at Najirartek Beach and a 2.28km walking bay from Laboni Point to Kalatali will be constructed. Besides, an aquarium building will also be constructed in Najirartek.

Prabir Kumar Goswami, executive engineer of Cox's Bazar Water Development Board, said implementation of the project will ensure a sustainable and effective system to prevent the erosion of the existing beach. The natural environment will remain intact as the proposed project will have a sand replacement system at the beach. As a result, public and private infrastructures along the beach will be protected from erosion.

He said no tourism facility has developed in the Najirartek area yet. If the project is implemented, the area will become attractive for tourists. According to our survey, this will also increase private investment. The project will protect the eroded coastal areas from Kalatali to Najirartek as well as create opportunities for economic activities.

Meanwhile, Cox's Bazar Shilpo O Banik Samity President Abu Morshed Chowdhury complained that locals were not consulted before taking up the project. For this reason, there are questions about how much the project will benefit the local people.

He, however, observed that the construction of the road cum dyke up to Najirartek would increase private investment.


Considering the high traffic on the Beribadh road along the bank of the Turag River in Dhaka, the government is going to widen the entire bypass route – upgrading the single-lane street to a four-lane expressway from Abdullahpur to Gabtoli.

The Roads and Highways Department (RHD) has proposed a project to construct the Dhour-Gabtoli portion of the four-lane road, while the Abdullahpur-Dhour portion will be covered by the Dhaka-Ashulia Elevated Expressway project under the Bangladesh Bridge Authority.

The RHD has already conducted a feasibility study on the 14km four-lane road from Dhour to Gabtoli and its proposal will soon be placed with the Executive Committee of the National Economic Council (Ecnec).

"We initially proposed a cost of Tk1,200 crore for the 14km road but it might decrease," said RHD Additional Chief Engineer Md Sobuj Uddin Khan.

He added that work in the project could start within a year pending on the final nod.

Meanwhile, the work of the Bridge Authority's Dhaka-Ashulia Elevated Expressway project is in progress. Starting from Hazrat Shahjahal International Airport, the 24Km expressway will reach the Export Processing Zone (EPZ) in Savar via Abdullahpur-Ashulia-Baipail, covering Abdullahpur to Dhour area of the Beribadh route.

"Currently we are completing all kinds of preliminary work and next month the physical work of the project will start," said Project Director Shahabuddin Khan.

"We are looking forward to completing it within four years, a year before the stipulated time," the project director said, hoping that the elevated expressway will be operational by 2026.

Shahabuddin Khan said, the total project cost is estimated at Tk16,901 crore, of which China will provide 65%. Chinese EXIM Bank has already approved a loan of $1.2 billion, he added.

Under the project, 10.83km of ramps, 1.95km long flyovers, 14.28km of four-lane roads, 2.72km long bridge and 18km of drains on both sides of the expressway will be built, as per the project documents.

It will allow around four crore people from 30 districts to enter and exit the capital quickly and easily. It also may boost the country's gross domestic product (GDP) by 0.21%, estimated the project papers.

Other than accommodating a high number of vehicles and people's movement, the four-lane road will help curb accidents. For the last few years, the Beribadh route has reportedly become an accident-prone area.

According to locals, over the last decade vehicle movement has increased in this route manyfold and the once isolated area has now become a busy route with all kinds of vehicles plying on it.

"In just the last 10 years, the vehicular movement rose a hundred times more. Over time, many factories, residential areas, parks and recreation centres have sprung up along the Beribadh road", said a local tea stall owner Aynal Mia adding that the number of accidents also rose over the years.

DMP Sergeant Md Ashaduzzaman at Dhour Police Box said, "Each month at least 10 accidents take place and of these, two or three are fatal. Other small accidents also occur but remain unreported."

The local traffic department has found narrow roads without dividers, frequent overtaking tendencies and reckless driving as the main causes for the high number of accidents.

"Due to the divider-less 25-30 feet single-lane road, head-on-collision rate is high in this area", added Ashaduzzaman.

He said that most accidents happen at night and in the morning and vehicles tend to break traffic rules.

Another Sergeant Akramul Rajib hoped that the four-lane road will help reduce the number and frequency of accidents


Bangladesh now has the highest number of green garment factories in the globe with the Leadership in Environmental and Energy in Design (LEED) certification given by the United States Green Building Council (USGBC).

Even a few months ago, the number of green buildings was 144, but this month the tally touched 150 with the last one's inclusion in the list on October 7, according to Bangladesh Garment Manufacturers and Exporters Association.

Of the 150, some 44 are platinum rated, 93 are gold, 9 are silver standard and four are just certified.

Some 500 more garment factories are waiting to be certified LEED by the USGBC.

Currently, nine of the top 10 green garment factories and 40 of the top 100 are located in Bangladesh, as the local garment suppliers have been strengthening workplace safety with the recommendations from the Accord and Alliance, two foreign building inspection and remediation agencies formed after the Rana Plaza building collapse in April 2013 when some 1,138 workers died.

 

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The Bepza Economic Zone in Mirsharai is at the centre of attraction for local and foreign investors due to its proximity to Chattogram port and other facilities.

The Bangladesh Export Processing Zones Authority (Bepza) plans to set up 539 industrial plots on 1,150 acres of land at Bangabandhu Sheikh Mujib Shilpa Nagar in Mirsharai, Chattogram.

It has already prepared 140 plots for factories to be set up there.

Meanwhile, 78 companies from home and abroad have applied for more than 250 plots. Of them, Japan alone has sought 50 plots.

The companies together have proposed to invest over $1.348 billion in the ninth economic zone set up by Bepza.

"We have already allotted 66 plots. They will start infrastructure development later this year. We are verifying the rest of the applications," Major General Md Nazrul Islam, Bepza Executive Chairman of Bepza, told The Business Standard.

"We are giving priority to companies from different sectors other than the readymade garment industry. We want to diversify our export products. We want to give allotments to competent companies after verifying their applications by next December."

Major General Md Nazrul Islam said Japanese businesses will invest in the production of field items, golf shafts and other products.

"We have formed a committee to review the Japanese proposal. But we will not be able to allot them 50 plots as there are a large number of investment proposals. We have a lot of demand for plots here," he added

$4.5bn foreign investment is expected

Bepza has received investment proposals from a number of countries, such as China, Japan, South Korea, the UK, the US, Canada and Hong Kong alongside those from local companies.

The companies are keen to invest in the manufacture of backward linkage products in the garment industry, such as zippers, buttons, high-quality leather goods, chemical industry, non-RMG products such as bags, trolleys and outdoor tents.

Bepza expects to complete the development of all 529 plots in the economic zone by 2023. It will generate employment for 5 lakh people.

The economic zone is expected to bring in $4.5bn in foreign investment and $3.23 billion in export earnings.

Master plan

Utilising the nearly 40 years of experience in EPZ construction and management, Bepza has prepared a modern, sustainable, and environmentally friendly master plan considering present and future needs

The plan includes the construction of five 10-storey residential buildings for investors, an investors' club with hotel facilities, and single individual accommodation for 2,000 foreign nationals.

It will have a central water reservoir on 45 acres of land for rainwater harvesting and water reuse after purification and a central automation system to facilitate a one-stop service and customs-related activities.

Investors can easily conduct business in the factory buildings that Bepza is constructing.

Major General Md Nazrul Islam said, "Just plug and play. Merchants will be able to make their products faster as soon as they arrive. They do not have to build new factory buildings on plots."

The installations of ancillary services such as electrical work and gas lines has been completed.

Major General Md Nazrul Islam said it will be a green industrial zone and added that Bepza welcomes investors from all over the world in order for them to take advantage of the exclusive investment opportunities offered at the Bepza Economic Zone.

Under Bepza, there are now eight EPZs --- Chattogram EPZ, Dhaka EPZ, Mongla EPZ, Ishwardi EPZ, Cumilla EPZ, Uttara EPZ, Adamjee EPZ, and Karnaphuli EPZ.

At present, Bepza contributes about 20% to the country's total annual exports.

There are no vacant industrial plots in the existing EPZs. In view of the growing demand for investment, Prime Minister Sheikh Hasina inaugurated the Bepza Economic Zone in January 2018.

The Bangabandhu Sheikh Mujib Shilpa Nagar is located on about 30,000 acres of land in Mirsharai and Sitakunda upazilas of Chattogram and Sonagazi upazila of Feni.

The government allotted 1,150 acres of land for setting up the Bepza Economic Zone at the Shilpa Nagar.

Bepza offers various incentives to investors in its EPZs. By investing in EPZs, investors can get tax holidays, duty-free imports of raw materials and equipment, tax exemption on dividends, GSP benefits, duty-free and quota-free access to the European Union and other countries.

Bepza allows 100% foreign ownership in EPZs. There are no restrictions on foreign investment and on a full withdrawal of their capital and dividends.


The government has finally begun allowing local manufacturing of up to 500cc mid-size motorcycles, up from the existing limit of 165cc engines.

The industries ministry on Sunday gave its seal of consent to Ifad Motors Ltd to locally produce the high engine capacity motorcycles, a source in the ministry told The Business Standard.

Ifad Motors is now setting up its motorcycle factory in the Bangabandhu Sheikh Mujib Shilpa Nagar at Mirsarai, Chattogram to manufacture the iconic Royal Enfield bikes with 350cc and bigger engines, the company's Director Taskeen Ahmed told TBS yesterday.

The industries ministry on Monday wrote to the commerce ministry to amend the draft Import Policy Order 2021-24 so that local plants can import essential raw materials and parts for manufacturing up to 500cc motorcycles, said ministry officials.

The existing policy does not allow imports of any motorcycles having over 165cc engines or their parts for the local market. Local manufacturers can, however, produce motorcycles with high engine capacity up to 500cc only for exports.

The manufacturing approval to Ifad Motors and the proposed amendment to the Import Policy Order will remove this bar, meaning that manufacturers can sell their higher engine capacity motorcycles both in local and export markets.

Ifad Director Taskeen Ahmed told The Business Standard that it will take 12-18 months to begin its Royal Enfield manufacturing.

"This is a constructive move towards attracting investments for manufacturing of high-end two wheelers in the country," he said.

The company will need to sell the bikes in the local market because without local sales they will miss the scale for competitiveness that is a must for exports, he added.

To see higher capacity bikes on local roads, a road permit will be needed from the Bangladesh Road Transport Authority (BRTA).

The inter-ministerial meeting

The industries ministry's move comes following a meeting – headed by industries ministry Secretary Zakia Sultana – held on 28 September between government offices concerned and motorcycle industry representatives.

In the meeting, the Bangladesh Motorcycle Assemblers and Manufacturers Association again opposed the idea of allowing higher engine capacity bikes on roads before September 2023.

They feared business losses if engine capacity restriction is now relaxed, according to the meeting minutes obtained by The Business Standard.

On the other hand, Motorcycle Manufacturers and Exporters Association of Bangladesh recommended withdrawal of the engine capacity restriction for the sake of attracting investments in the motorcycle industry.

A representative from the industries ministry in the meeting opined in favour of increasing the motorcycle CC limit, without which companies, such as Ifad, would not be able to set up their factories for advanced bikes.

The development of the motorcycle industry will not be possible with the engine capacity restriction in place as it will hinder local and foreign investments, the Tariff Commission representative opined.

A representative from the commerce ministry in the coordination meeting said the existing restriction in the Import Policy Order was based on previous decisions taken in the meetings between his ministry and the industries ministry.

If the meeting decides to raise the limit, the commerce ministry will amend the policy accordingly, he added.

The BRTA, which gives registration and road permits for vehicles, has no reservation with the motorcycle engine capacity, its representative told the meeting.

The BRTA has not been allowing the registration of higher capacity bikes since early 2000 as law enforcement agencies were concerned that unrestricted engine capacity bikes would make it impossible for cops to pursue lawbreakers.

However, the senior secretary of the Public Security Division of the home ministry also received a copy of the meeting minutes for their positive response towards allowing higher capacity bikes on roads.

In the meeting, a National Board of Revenue representative said since the industries ministry is the sponsoring ministry for the motorcycle industry, the NBR has no objection to the ministry's decisions.

The remaining barriers

Bangladesh, as one of the rare countries in the world with motorcycle engine capacity restrictions, has been trying to remove such an obstacle since the end of last year following some investment proposals to manufacture high capacity bikes locally, while the companies do not find their plan feasible without local market sales.

Based on the Tariff Commission's recommendation and applications from several new investors and the existing exporter Runner, the commerce ministry had initiated a move to allow up to 500CC bikes on local roads.

But the industries ministry opposed the idea to do it before the end of 2023 to ensure market protection for motorcycle assemblers and manufacturers.

Now, since the commerce ministry initiated change, investors are optimistic about getting rid of the restriction on highway-capable motorcycles, which are gaining in popularity with the development in road infrastructure across the country.

Experts across the world say higher capacity motorcycles are safer on roads as they have better control and safety features.

"We would internally discuss the request to amend the Import Policy Order," said Additional Secretary AHM Shafiquzzaman, head of the Import and Internal Trade Wing of the commerce ministry.

"In fact, we wanted the change [allowing big bikes] much earlier," he said.

His office is working on the new Import Policy Order expected to be finalised in a month.

If the needed change cannot be accommodated in the Import Policy Order before that, the industries ministry proposal may be actuated through statutory regulatory order.

Then, the only barrier might remain in place if the law enforcement agencies still hold on their argument regarding chasing criminals that might drag the moves towards building a stronger market and industry for motorcycles in the country, say industry people.

More investments to come

Runner Automobiles, the country's lone motorcycle exporter, on Monday applied to the industries ministry for its approval in manufacturing up to 500CC motorcycles for the local market.

The company is allowed to manufacture 165-500cc motorcycles only for exports and it has been exporting 200cc bikes to Nepal since 2018.

Without local road tests, it is tough to achieve technological excellence and compete in the international market, Runner Chairman Hafizur Rahman Khan previously told TBS.

Japanese Kawasaki also proposed investments to manufacture their high engine capacity bikes if the government allows them on local roads.

Sources at the industries ministry said Kawasaki's local partner Asian Motorbikes Ltd on Tuesday applied for the approval of their plan to manufacture high capacity motorcycles in Bangladesh only if they are allowed to sell both in local and export markets.

Rancon Motorbikes Ltd, the manufacturer of Japanese Motorcycle brand Suzuki, earlier proposed investments to manufacture higher CC bikes if they are allowed to sell both in local and regional markets.

But as the commerce ministry's move was hindered by the industries ministry's objection that cited the need for protection to the existing players in February this year, the Suzuki plan expired.

"Better late than never. We will communicate the recent developments with our Japanese principal and may apply for the same again," said Fahim A Khan, head of corporate affairs of Rancon.

Bangladesh motorcycle industry has progressed a lot after the Motorcycle Industry Development Policy 2018 had been formulated.

Honda, Bajaj, TVS, Yamaha, Hero, Suzuki, Lifan all have followed Runner's trail to manufacture motorcycles in Bangladesh and reduce unit prices.

On average, one-third drop in prices helped the annual market grow to over six lakh units, more than double the number five years ago.

Analysing the stage of economic development, industry people estimate that the annual market has full potential to jump to 20 lakh units in coming years if the government facilitates manufacturing, purchase and use of motorcycles as the vehicle for the commuters.

 

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The Bepza Economic Zone in Mirsharai is at the centre of attraction for local and foreign investors due to its proximity to Chattogram port and other facilities.

The Bangladesh Export Processing Zones Authority (Bepza) plans to set up 539 industrial plots on 1,150 acres of land at Bangabandhu Sheikh Mujib Shilpa Nagar in Mirsharai, Chattogram.

It has already prepared 140 plots for factories to be set up there.

Meanwhile, 78 companies from home and abroad have applied for more than 250 plots. Of them, Japan alone has sought 50 plots.

The companies together have proposed to invest over $1.348 billion in the ninth economic zone set up by Bepza.

"We have already allotted 66 plots. They will start infrastructure development later this year. We are verifying the rest of the applications," Major General Md Nazrul Islam, Bepza Executive Chairman of Bepza, told The Business Standard.

"We are giving priority to companies from different sectors other than the readymade garment industry. We want to diversify our export products. We want to give allotments to competent companies after verifying their applications by next December."

Major General Md Nazrul Islam said Japanese businesses will invest in the production of field items, golf shafts and other products.

"We have formed a committee to review the Japanese proposal. But we will not be able to allot them 50 plots as there are a large number of investment proposals. We have a lot of demand for plots here," he added

$4.5bn foreign investment is expected

Bepza has received investment proposals from a number of countries, such as China, Japan, South Korea, the UK, the US, Canada and Hong Kong alongside those from local companies.

The companies are keen to invest in the manufacture of backward linkage products in the garment industry, such as zippers, buttons, high-quality leather goods, chemical industry, non-RMG products such as bags, trolleys and outdoor tents.

Bepza expects to complete the development of all 529 plots in the economic zone by 2023. It will generate employment for 5 lakh people.

The economic zone is expected to bring in $4.5bn in foreign investment and $3.23 billion in export earnings.

Master plan

Utilising the nearly 40 years of experience in EPZ construction and management, Bepza has prepared a modern, sustainable, and environmentally friendly master plan considering present and future needs

The plan includes the construction of five 10-storey residential buildings for investors, an investors' club with hotel facilities, and single individual accommodation for 2,000 foreign nationals.

It will have a central water reservoir on 45 acres of land for rainwater harvesting and water reuse after purification and a central automation system to facilitate a one-stop service and customs-related activities.

Investors can easily conduct business in the factory buildings that Bepza is constructing.

Major General Md Nazrul Islam said, "Just plug and play. Merchants will be able to make their products faster as soon as they arrive. They do not have to build new factory buildings on plots."

The installations of ancillary services such as electrical work and gas lines has been completed.

Major General Md Nazrul Islam said it will be a green industrial zone and added that Bepza welcomes investors from all over the world in order for them to take advantage of the exclusive investment opportunities offered at the Bepza Economic Zone.

Under Bepza, there are now eight EPZs --- Chattogram EPZ, Dhaka EPZ, Mongla EPZ, Ishwardi EPZ, Cumilla EPZ, Uttara EPZ, Adamjee EPZ, and Karnaphuli EPZ.

At present, Bepza contributes about 20% to the country's total annual exports.

There are no vacant industrial plots in the existing EPZs. In view of the growing demand for investment, Prime Minister Sheikh Hasina inaugurated the Bepza Economic Zone in January 2018.

The Bangabandhu Sheikh Mujib Shilpa Nagar is located on about 30,000 acres of land in Mirsharai and Sitakunda upazilas of Chattogram and Sonagazi upazila of Feni.

The government allotted 1,150 acres of land for setting up the Bepza Economic Zone at the Shilpa Nagar.

Bepza offers various incentives to investors in its EPZs. By investing in EPZs, investors can get tax holidays, duty-free imports of raw materials and equipment, tax exemption on dividends, GSP benefits, duty-free and quota-free access to the European Union and other countries.

Bepza allows 100% foreign ownership in EPZs. There are no restrictions on foreign investment and on a full withdrawal of their capital and dividends.


The government has finally begun allowing local manufacturing of up to 500cc mid-size motorcycles, up from the existing limit of 165cc engines.

The industries ministry on Sunday gave its seal of consent to Ifad Motors Ltd to locally produce the high engine capacity motorcycles, a source in the ministry told The Business Standard.

Ifad Motors is now setting up its motorcycle factory in the Bangabandhu Sheikh Mujib Shilpa Nagar at Mirsarai, Chattogram to manufacture the iconic Royal Enfield bikes with 350cc and bigger engines, the company's Director Taskeen Ahmed told TBS yesterday.

The industries ministry on Monday wrote to the commerce ministry to amend the draft Import Policy Order 2021-24 so that local plants can import essential raw materials and parts for manufacturing up to 500cc motorcycles, said ministry officials.

The existing policy does not allow imports of any motorcycles having over 165cc engines or their parts for the local market. Local manufacturers can, however, produce motorcycles with high engine capacity up to 500cc only for exports.

The manufacturing approval to Ifad Motors and the proposed amendment to the Import Policy Order will remove this bar, meaning that manufacturers can sell their higher engine capacity motorcycles both in local and export markets.

Ifad Director Taskeen Ahmed told The Business Standard that it will take 12-18 months to begin its Royal Enfield manufacturing.

"This is a constructive move towards attracting investments for manufacturing of high-end two wheelers in the country," he said.

The company will need to sell the bikes in the local market because without local sales they will miss the scale for competitiveness that is a must for exports, he added.

To see higher capacity bikes on local roads, a road permit will be needed from the Bangladesh Road Transport Authority (BRTA).

The inter-ministerial meeting

The industries ministry's move comes following a meeting – headed by industries ministry Secretary Zakia Sultana – held on 28 September between government offices concerned and motorcycle industry representatives.

In the meeting, the Bangladesh Motorcycle Assemblers and Manufacturers Association again opposed the idea of allowing higher engine capacity bikes on roads before September 2023.

They feared business losses if engine capacity restriction is now relaxed, according to the meeting minutes obtained by The Business Standard.

On the other hand, Motorcycle Manufacturers and Exporters Association of Bangladesh recommended withdrawal of the engine capacity restriction for the sake of attracting investments in the motorcycle industry.

A representative from the industries ministry in the meeting opined in favour of increasing the motorcycle CC limit, without which companies, such as Ifad, would not be able to set up their factories for advanced bikes.

The development of the motorcycle industry will not be possible with the engine capacity restriction in place as it will hinder local and foreign investments, the Tariff Commission representative opined.

A representative from the commerce ministry in the coordination meeting said the existing restriction in the Import Policy Order was based on previous decisions taken in the meetings between his ministry and the industries ministry.

If the meeting decides to raise the limit, the commerce ministry will amend the policy accordingly, he added.

The BRTA, which gives registration and road permits for vehicles, has no reservation with the motorcycle engine capacity, its representative told the meeting.

The BRTA has not been allowing the registration of higher capacity bikes since early 2000 as law enforcement agencies were concerned that unrestricted engine capacity bikes would make it impossible for cops to pursue lawbreakers.

However, the senior secretary of the Public Security Division of the home ministry also received a copy of the meeting minutes for their positive response towards allowing higher capacity bikes on roads.

In the meeting, a National Board of Revenue representative said since the industries ministry is the sponsoring ministry for the motorcycle industry, the NBR has no objection to the ministry's decisions.

The remaining barriers

Bangladesh, as one of the rare countries in the world with motorcycle engine capacity restrictions, has been trying to remove such an obstacle since the end of last year following some investment proposals to manufacture high capacity bikes locally, while the companies do not find their plan feasible without local market sales.

Based on the Tariff Commission's recommendation and applications from several new investors and the existing exporter Runner, the commerce ministry had initiated a move to allow up to 500CC bikes on local roads.

But the industries ministry opposed the idea to do it before the end of 2023 to ensure market protection for motorcycle assemblers and manufacturers.

Now, since the commerce ministry initiated change, investors are optimistic about getting rid of the restriction on highway-capable motorcycles, which are gaining in popularity with the development in road infrastructure across the country.

Experts across the world say higher capacity motorcycles are safer on roads as they have better control and safety features.

"We would internally discuss the request to amend the Import Policy Order," said Additional Secretary AHM Shafiquzzaman, head of the Import and Internal Trade Wing of the commerce ministry.

"In fact, we wanted the change [allowing big bikes] much earlier," he said.

His office is working on the new Import Policy Order expected to be finalised in a month.

If the needed change cannot be accommodated in the Import Policy Order before that, the industries ministry proposal may be actuated through statutory regulatory order.

Then, the only barrier might remain in place if the law enforcement agencies still hold on their argument regarding chasing criminals that might drag the moves towards building a stronger market and industry for motorcycles in the country, say industry people.

More investments to come

Runner Automobiles, the country's lone motorcycle exporter, on Monday applied to the industries ministry for its approval in manufacturing up to 500CC motorcycles for the local market.

The company is allowed to manufacture 165-500cc motorcycles only for exports and it has been exporting 200cc bikes to Nepal since 2018.

Without local road tests, it is tough to achieve technological excellence and compete in the international market, Runner Chairman Hafizur Rahman Khan previously told TBS.

Japanese Kawasaki also proposed investments to manufacture their high engine capacity bikes if the government allows them on local roads.

Sources at the industries ministry said Kawasaki's local partner Asian Motorbikes Ltd on Tuesday applied for the approval of their plan to manufacture high capacity motorcycles in Bangladesh only if they are allowed to sell both in local and export markets.

Rancon Motorbikes Ltd, the manufacturer of Japanese Motorcycle brand Suzuki, earlier proposed investments to manufacture higher CC bikes if they are allowed to sell both in local and regional markets.

But as the commerce ministry's move was hindered by the industries ministry's objection that cited the need for protection to the existing players in February this year, the Suzuki plan expired.

"Better late than never. We will communicate the recent developments with our Japanese principal and may apply for the same again," said Fahim A Khan, head of corporate affairs of Rancon.

Bangladesh motorcycle industry has progressed a lot after the Motorcycle Industry Development Policy 2018 had been formulated.

Honda, Bajaj, TVS, Yamaha, Hero, Suzuki, Lifan all have followed Runner's trail to manufacture motorcycles in Bangladesh and reduce unit prices.

On average, one-third drop in prices helped the annual market grow to over six lakh units, more than double the number five years ago.

Analysing the stage of economic development, industry people estimate that the annual market has full potential to jump to 20 lakh units in coming years if the government facilitates manufacturing, purchase and use of motorcycles as the vehicle for the commuters.


"Bilal" sure has a lot to say about this :ROFLMAO:
 

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The government has planned to build another super specialised hospital – just across the first one – at Shahbagh in the capital.

With the construction of the first super specialised hospital under the auspices of Bangabandhu Sheikh Mujib Medical University almost to an end, the proposed 750-bed second medical facility along with the BSMMU and Birdem General Hospital will turn Shahbagh into a "hospital hub" in the next five years, say officials at the Economic Relations Division.

Funded by South Korea, the $200 million project will facilitate general surgery, gynaecology, surgical oncology, and ENT and eye treatment. The hospital will also have a 50-60 bed dialysis centre with 10 beds dedicated for children, said the officials.

Zulfiqur Rahman Khan, project director of the slated super specialised hospital, hopes the management of this medical facility "will rival" that of Square Hospitals or Evercare Hospital Dhaka [previously Apollo Hospitals] – two expensive private medical facilities in Bangladesh.

"Patients go abroad mostly for the hospital environment and medical services there. But we too have specialised doctors and are able to provide patients with better healthcare. If the medical skills and management could be put together in a hospital at home, the tendency of going abroad for treatment would certainly go down," he told The Business Standard.

Annually, about three lakh Bangladeshis go abroad for medical treatment. India tops the list of medical tourism destinations followed by other countries like Singapore, Thailand, Malaysia, and Dubai. With the Covid driven international flight suspensions in 2020 and 2021, the flow of outbound medical money saw an unprecedented drop.

Currently, Bangladesh does not have any such "super specialised" hospital. The BSMMU – a tertiary level medical facility – is considered to be the apex treatment facility.

The BSMMU Super Specialised Hospital One, a $122.25 million medical infrastructure also funded by South Korea, is slated for launching in February 2022; the construction of the 11-storey second hospital on three acres of land on the former Betar Bhaban premises will begin in 2023 and is expected to complete in three years.

Preferring not to be named, officials at the Economic Relations Division said South Korea showed interest in funding a second medical infrastructure as the first one's progress has been "admirable". South Korea will finance the entire spending for the second hospital while Bangladesh will only pay the customs duties on the foreign funding.

With more than 4,000 beds comprising the BSMMU, super specialised hospitals one and two, and the Birdem General Hospital, Shahbagh will turn into a "hospital hub" in the next five years, according to the officials.

All applied departments

The 11-storey hospital, the second super specialised hospital, will have five or six core departments and sub-departments. There will also be research centres, skill labs, lecture theatres, libraries, and a Bangabandhu museum.

Zulfiqur Rahman Khan said the second hospital will mainly have the applied departments not available at the first one.

BSMMU Super Specialised Hospital One will have a 100-bed accident emergency facility, a liver, gallbladder and pancreas centre, organ transplant centre, cancer centre, maternal and child health care centre, dental centre, cardiovascular centre, geriatric centre, spinal cord centre, burn injury centre, a health screening centre and an emergency medical centre.

At the second super specialised hospital, Zulfiqur Rahman Khan said, there will be various departments and sub-departments of general surgery, gynaecology, surgical oncology, and ENT and an eye department. The hospital will also have a 50-60 bed dialysis centre with 10 beds dedicated for children.

Officials say the second hospital was initially planned to be a 20-storey building. However, since high-rise buildings near the old airport in Tejgaon are prohibited, the number of floors was later brought down to 11 – reducing the hospital patient beds to 750 from previously planned 1,000.

The hospital will have a 400-car parking facility on four basement levels. The first super specialised hospital will have a parking capacity of 250 vehicles on two basement levels.

There will be overhead or underground connecting corridors between the two hospitals for ease of patient access. The administration of each hospital will be different though they will be under the BSMMU umbrella.

Funding and construction phases

According to BSMMU sources, the Korean government's one-year feasibility study for construction of the hospital is in the final stages.

Subsequently, the construction budget will be drafted and there will be a loan agreement between Dhaka and Seoul. After formulation of the development project proposal (DPP), the project will go for approval of the Executive Committee of the National Economic Council (Ecnec).

After the Ecnec go-ahead, a Korean contractor will be hired through a tender bid and construction will begin.

Zulfiqur Rahman Khan said it will take the whole of 2022 to complete all the initial processes and construction will likely begin in 2023 with a three-year deadline.

He said no existing medical facility in Bangladesh matches the standards of these two super specialised hospitals. However, Zulfiqur Rahman Khan did comment that maintaining standards would be challenging.


 

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Dhaka: The Civil Aviation Authority of Bangladesh signed an agreement with French aerospace company Thales on October 21 at InterContinental Hotel in the capital to establish a new radar at Dhaka Airport.

Under the agreement, Dhaka airport will get the new and modern radar with an air traffic control system in the next three years which is aimed at enhancing the safety and security of the country’s airspace.

The radar currently operational at Hazrat Shahjalal International Airport belongs to instrument landing system (ILS) category, while the new one falls under communication, navigation and surveillance/air traffic management (CNS/ATM) category.

The installation of the radar is expected to take roughly three years and will cost BDT 658.4 crore, according to CAAB. The project is expected to be completed by June 2023 with full government funding.

The agreement would cover the supply, installation and operation of navigation and surveillance systems, including radar and related air traffic management equipment.

According to the deal, the data collected through the radar must be kept secret by the French company to ensure that airspace security is not compromised.

Reports said, Bangladesh has a long maritime boundary and it is not possible to charge flights that use its airspace at present. The whole area cannot be covered with the existing radar. On top of that, take-off, landing and traffic management are very risky with the current radar.

The existing 37-year-old analogue radar currently installed at the airport cannot detect foreign aircrafts flying over the sea, according to CAAB.

Hence, the government decided to purchase the new radar after considering all these aspects. After the new radar is installed, it will be possible to cover the entire maritime area of Bangladesh, allowing the government to earn more revenues and ensuring airspace safety.

The new radar will increase surveillance over Bangladesh’s territorial waters and airspace. It will also allow Bangladesh to collect fines from trespassing aircrafts, which are required to pay a minimum of USD 500 for a single infringement.

Moreover, the new system will be able to detect aircrafts that are landing or taking off. Such procedures have to be conducted with an element of risk due to the current radar’s inability to detect such activity.

At the agreement signing ceremony, State Minister for Civil Aviation and Tourism Md Mahbub Ali, Secretary Mokammel Hossain, Civil CAAB Chairman M Mafidur Rahman, Jean-Marin SCHUH, Ambassador of France to Bangladesh and Nicolas Bouverot, Vice-President for Thales in South East, among others, were present.

 

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Smartphone giant Xiaomi began assembling mobile phones in Bangladesh on Thursday at its Gazipur factory.

The factory was set up with $10 million in Foreign Direct Investment (FDI) under the "Made in Bangladesh" scheme.

The factory will assemble 3 million units of smartphones annually.

The Chinese brand is also eyeing local production soon, said Xiaomi Bangladesh officials.

DBG Technology BD Ltd, a leading Chinese electronics manufacturing service (EMS) company, will assemble the smartphones in Bangladesh.

"The first phone of the company to be assembled in Bangladesh is under the Redmi sub-brand and it is expected to be available in the market from the first week of November. Subsequently, the POCO and Xiaomi series will be made in the country," said Ziauddin Chowdhury, country manager, Xiaomi Bangladesh.

Xiaomi revealed its "Made in Bangladesh" plan at a special programme held in Dhaka on Thursday. Salman F Rahman, adviser to the prime minister on private industry and investment, and Zunaid Ahmed Palak, state minister for Information and Communication Technology (ICT) Division, attended the event.

Salman F Rahman said the partnership with Xiaomi will create more employment opportunities for the youth in Bangladesh.

"We are delighted to be a partner in setting up Xiaomi's first manufacturing unit in Bangladesh as part of the Digital Bangladesh initiative. We believe that this partnership will create more opportunities for the country's youth and establish a world-class electronics manufacturing ecosystem," he said.

He urged the Chinese company to make Bangladesh a hub to produce their IT and electronic devices.

In a video message, Mustafa Jabbar, minister for posts and telecommunications, said local factories are meeting more than 65% of the total demand of smartphones in the country.

He also expressed strong hope that the smartphones produced by Xiaomi in Bangladesh will be exported, alongside meeting domestic demand.

"In addition to the investment-friendly environment adopted by the government, our talented youth have also attracted investors to set up mobile manufacturing plants of the world's best brands," Mustafa Jabbar added.

State Minister Zunaid Ahmed Palak said, "This is a great initiative. I believe that from now on the people of the country will be able to enjoy all the latest innovative products of Xiaomi at a competitive price."

Xiaomi set up the factory here within three years of its journey in Bangladesh, which began in 2018.

Mobile handset manufacturing and assembling began in Bangladesh in 2017 when Walton started producing electronic products locally.

Later, cellphone giant Samsung as well as Symphony, and other brands started manufacturing in the country.

With Xiaomi's new factory, there are now at least 10 local and global companies that are producing smartphones in Bangladesh.

As of now, Bangladesh Telecommunication Regulatory Commission has issued 14 licences for setting up mobile manufacturing and assembling factories in Bangladesh.

Market insiders say Nokia is also expected to set up a factory in Bangladesh, but the brand has not announced anything yet.

Currently, there is a demand for 32 million units of mobile, of which 12 million units are smartphones, says Bangladesh Mobile Phone Importers Association (BMPI).

According to Statcounter's data, Xiaomi is now the second top mobile brand in Bangladesh's smartphone market, having around 20% of the market share, while Samsung is in the top position with 30.46% share.

 

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In a bid to ensure stable gas supply, the government is planning to use the abandoned Sangu gas field in the Bay as an underground storage to store liquefied natural gas (LNG).

The plan is to import and store LNG at a cheaper price and use it when demand increases and price goes up on the international market, according to sources.

Petrobangla, the state-owned company that explores, produces, transports and sells natural gas, has already signed a Memorandum of Understanding (MoU) with the American multinational oil and gas corporation ExxonMobil for conducting an engineering study on the field to find out the feasibility of using it as an underground gas storage.

Once the feasibility study is done, it will be clear how much LNG could be stored there and what will be the cost of storage and reproduction of the stored gas, a Petrobangla official with direct knowledge of the matter told The Business Standard.

He said the MoU has been signed based on a "desktop study" of the field, with ExxonMobil claiming that an underground storage could be developed in the Sangu field.

A desktop study involves a desk-based collation of documentary data before investigating a site. This includes records of site history, geology, hydrogeology/hydrology, waste, pollution incidents etc to produce an outline conceptual model, according to Wesson Environmental, a British firm that provides such services.

Md Anisur Rahman, senior secretary at the Energy and Mineral Resources Division of the Ministry of Power, Energy and Mineral Resource, said based on a proposal by ExxonMobil, a contract has been signed for conducting a feasibility study in the Sangu field.

"It is now in a very primary stage. If we find it technically and financially viable, we will proceed to the next step," he said.

Energy experts, however, expressed concern about the recovery of the stored gas and whether it would be financially and economically viable.

Dr M Tamim, a professor at the Petroleum and Mineral Resources Engineering Department of Buet, said there are many cases of underground storage in abandoned gas fields in the United States.

At present there are 387 active gas storage fields in 48 states of the US, according to the country's Energy Information Administration.

"But such storage has to be technically viable by ensuring that there is no leakage in the storage. Otherwise, the purpose of such storage will not be beneficial," said the professor.

Currently, Bangladesh has a demand for 4100mmcf of gas every day, while production from the local gas fields is only 2400mmcf.

To meet the increasing demand for gas from industries and power sectors, the government started importing LNG in 2018 and added it to the national grid through floating storage and regasification units established in the sea near Maheshkhali of Cox's Bazar.

The two regasification units have a capacity of re-gasifying 1,000mmcf of LNG a day, though only 600 to maximum 800 has been re-gasified in a single day so far.

Due to a skyrocketing price hike in the global market, the government has refrained from full use of these regasification units by importing more LNG despite the outcry for gas.

Sources at Petrobangla said observing the volatile LNG price in the global market, the government is now trying to set up storage to ensure stable gas supply to the national grid at an affordable price.

The state-owned company earlier undertook a programme to set up land-based LNG storage in Maheshkhali and launched a feasibility study through a Japanese firm.

Apart from that, the government is now planning to use the Sangu gas field, which has been abandoned since 2013, as an underground storage of LNG.

LNG will be imported when its price is comparatively cheaper on the international market and will be stored under the sea at the location of the Sangu gas field. The stored gas will be extracted when normal import faces price hikes on the global market.

The Sangu gas field, discovered in 1996 by Cairn Energy, a British oil and gas exploration and development company, was in production until 2013. The field's probable reserves were estimated to be 577.78bcf.

But, 487.91bcf of gas was produced before it was declared suspended in October 2013. From then on, the field has been under the authority of the Bangladesh Gas Field Company Limited. As it stands, maintenance of the Sangu platform has remained off for a long time. Closed-circuit cameras to monitor the platform from land are not functioning, it has been learnt. The last known activity on the platform was for the installation of solar-powered lights.

Recently, Petrobangla decided to set up beacon lights for the safe navigation of ships.

 

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The steel market leader, BSRM Steels Ltd, has revised up its investment plan for capacity expansion amid a boost in demand for its products.

A year ago, the listed company had announced a Tk700 crore investment plan to increase its annual production capacity of construction rod and some other products by five lakh tonnes, taking the total capacity to over 21 lakh tonnes per year.

But amid soaring demand, it has now planned to increase rod re-rolling capacity by six lakh tonnes, for which it will also increase its billet making capacity by 2.5 lakh tonnes. This will make the company self-reliant for the semi-finished raw material, said company officials.

BSRM Steels Ltd produces billets through melting imported scrap metals and the billets are turned into construction rods and some other mild steel (MS) products.

For the revised melting and re-rolling capacity of 22 lakh tonnes each per year, the total investment needed has been revised up to 2.64 times to Tk1,850 crore and the project is set to be completed by the end of 2023, instead of the previous plan to begin production by mid-2023.

"We could have sold 5 lakh tonnes more in the 2020-21 fiscal year, if we had the production capacity," said BSRM Head of Accounts and Finance Shekhar Ranjan Kar.

The construction boom after the first wave of Covid-19 increased the demand for steel products by around 15% in the last fiscal year, while BSRM sold nearly one-third more rods over the fiscal year ending in June, he added.

The expansion project would be financed using BSRM's own money and some borrowed funds, the company disclosed.

Two BSRM companies listed in the local bourses announced record sales, profits and dividends for the 2020-21 fiscal year amid reduced marketing, finance and tax expenses.

Bangladesh, still one of the least per-capita steel consuming countries in the developing world, has begun using more of the material amid a long term infrastructure development phase, which includes both government mega projects and also private sector constructions.

Managing Director of BSRM Aameir Alihussain told The Business Standard that demand for steel would keep rising over the decades as the country's economic development is set to continue.

According to industry reports, in 2018, per-capita annual steel consumption in Bangladesh stood at 45 kilogrammes, having doubled in the previous five-eight years.

The BSRM MD estimated that per-capita consumption has already reached 55kg.

Government megaprojects are the major growth drivers which now consume over one-third of the steel, up from less than 15% a decade ago, according to an industry report by IDLC Finance.

Anticipating the demand, industry players over the last decade have significantly increased their installed capacity to produce over 90 lakh tonnes a year, while the annual demand is estimated to have crossed 75 lakh tonnes, according to Aameir Alihussain.

GPS Ispat opened a new plant last year, with an annual capacity to produce 8.4 lakh tonnes of billet and 6.4 lakh tonnes of MS rod and medium section products, such as support beams and flat bars.

Meanwhile, Chinese steel giant Kunming Iron and Steel Holdings Company has announced to invest $2.3 billion in a steel manufacturing project, along with a power plant at Mirsarai in Chattogram.

A consortium of 17 private sector players named Star Infrastructure Development Consortium Ltd is acting as the local partner of Kunming.

They aim to produce two million tonnes of integrated iron and steel products annually. The operation of this consortium is expected to start by 2022.

There are around 400 steel mills in the country, but more than 65% of the annual demand is being met by a few dozen modern mills selling branded rods.

According to a 2019 industry report by EBL Securities, the top three companies -- BSRM, AKS and KSRM -- serve over half of the market.


To meet the growing demand and increase their market stakes, two listed companies of Square Group will invest Tk676 crore for enhancing their production capacity.

Square Textiles will invest Tk376 crore and Square Pharmaceuticals Tk300 crore.

Square Pharma said in its financial report that the board of the company approved the investment plan to buy new capital machinery and land for expansion.

A senior officer at the company said the new investment will be implemented gradually.

"Besides, its export is on the rise. And the local pharma market is seeking double-digit growth. That is why it needs a new facility with modern technology," he told The Business Standard, seeking anonymity.

Square Pharma's main competitors Beximco Pharma, Renata Pharma, and Incepta Pharma have together invested more than Tk1,000 crore in recent years to expand their market shares.

Beximco Pharma has acquired Sanofi and Novartis factories.

Accordingly, as the market leader Square needs to increase its production capacity, according to the company insider.

Square Pharma posted Tk1,594 crore in profit for fiscal 2020-21, which was 19.38% higher than the previous year.

The profit growth boosted the top pharmaceutical company's earnings per share to Tk17.99 for the year, up from the previous year's Tk15.07.

Square Pharmaceuticals' board of directors recommended a 60% cash dividend for its shareholders, which would cost the company less than half of its annual profit.

Despite the double-digit growth and handsome dividend, its share price fell 3.25% and closed at Tk226.20 at the end of Sunday's trading session at the Dhaka Stock Exchange (DSE).

Square Pharmaceuticals is waiting to begin manufacturing at its newly built plant in Kenya.

Due to the pandemic situation, the commencement of operation abroad was delayed and the company is expecting to begin production in the African plant at the end of this year.

Meanwhile, Square Textile will invest to enhance its yarn production capacity. The company expected that the new project will produce 11,565 tonnes per annum, which will add Tk371 crore to the company's turnover. The new project will complete in April 2023.

To meet the growing demand of the country's textile abroad, most of the large companies are investing in this business to grab the opportunities, said a senior officer at Square Textile.

So, Square is investing more to grab the market stake, he added.

In fiscal 2020-21, its earnings per share jumped 11 times to Tk3.41 thanks to a reduction in the corporate tax to 22.5%, from 25%, and an increase in productivity by using modern technology.

The company declared a 20% cash dividend for its shareholders for the last fiscal year, which was 10% in the previous fiscal year.

On Sunday, its share price rose 4.22% and closed at Tk51.90 at the DSE.


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Prime Minister Sheikh Hasina today inaugurated the much-awaited bridge constructed over the Payra river in Lebukhali area on Patuakhali-Barishal highway for traffic movement, paving the way for travelling to Patuakhali from Barisal without ferry.

The premier opened the Payra Bridge, joining virtually from her official residence Gono Bhaban.

With it, a "health monitor" system has been installed for the first time on a bridge in the country.

The system will send signals of natural disasters, including thunderstorms and earthquakes or any damage, said officials familiar with the process.

They said both sides of the 1,470-metre-long and 19.6-metre-wide bridge will be connected by cables, while it is 18.30-metre-high from the water level to ease movement of ships coming from and to Payra port.

Besides, seven-kilometre approach roads have been constructed on both sides of the bridge.

In the construction of the bridge, a single pillar has been used in the middle of the river which is expected not to disrupt the normal water flow of the river.

With the opening of Payra Bridge, direct road communication will be established between Dhaka and Kuakata after the construction of the Padma Bridge is completed.

The government approved the bridge construction project in May, 2012, while the prime minister laid the foundation stone of the bridge on March 13, 2013.

The Kuwaiti Fund for Arab Economic Development and the OPEC Fund for International Development have jointly financed the construction of the bridge by Chinese firm Longjian Road and Bridge Construction Bridge.

 

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Companies worldwide go beyond their home markets to achieve economies of scale, source raw materials cheaply, lower costs and capture new markets. Similarly, many Bangladeshi firms are expanding abroad to find larger markets for their products and services and power their next phase of growth. Their success will depend on how efficiently they run the overseas operations and the regulations Bangladesh puts in place to pave the way for the expansion and eliminate any scope for misuse.

Bangladesh's people have witnessed a huge surge in entrepreneurial spirit over the last couple of decades.

Beginning with investments in garments in the early 1980s and their subsequent success, entrepreneurs steadily pushed their boundaries to explore the international and domestic markets.

Today, local entrepreneurs have a strong presence in the global apparel market thanks to their courage and resilience, putting Bangladesh on the list of the top three garment exporters in the world.

On the domestic front, a number of sectors – steel, cement, pharmaceuticals, food and agro-processing – have staged a strong emergence over the last two to three decades. And the expansion drive by entrepreneurs continues.

Now, a growing number of entrepreneurs have set their sights on international markets to grow by joining the global value chain.

The Bangladesh Bank started allowing local firms to make investments abroad in 2014.

Till last year, it gave the nod to 10 firms to establish subsidiaries or open offices in various countries such as Malaysia, Singapore, Ethiopia and Kenya, according to a central bank document.

It also gave approval for $52.2 million to be invested altogether.The firms subsequently doled out$40 million. And at the end of June this year, the central bank granted permission to six more firms to invest a total of $7.77 million in India, Ireland, the US, Singapore, and Saudi Arabia.

The companies are the NASSA Group of Industries, Pran-RFL Group, Bangladesh Steel Re-Rolling Mills (BSRM), Incepta Pharmaceuticals, Renata, andMBM Garments Ltd.

Of the first 10 firms, Akij Jute Mills poured the whole $20 million it had received permission for into its subsidiary, Akij Resources SDN BHD, in Malaysia.

Square Pharmaceuticals invested $10 million to establish a pharmaceuticals plant in an export processing zone in Kenya from the approved amount of $16 million. It is yet to begin production.

DBL, one of the leading apparel exporters, set up a garment factory in Ethiopia, investing $5.5 million. It started production on a limited scale but could not make a profit, the BB said in a document prepared in the middle of 2021.

Another major firm, MJL Bangladesh Ltd, invested over $5 million in its subsidiary MJL-AKT Petroleum Company Limited in Myanmar.

MJL-AKT repatriated $1.3 million by selling products as of June 2019, while another concern, MJL (S) Pte Ltd in Singapore incurred losses, Bangladesh Bank data showed.

Service Engine BPO, a business process outsourcing company, formed a subsidiary, AIIM International EZE, in the United Arab Emirates, investing $5,700. It was able to bring back nearly $16,000.

Beximco Limited was granted permission to invest in Sri Lanka, but it could not make any progress afterwards as the authorities in the island country changed the rule regarding allowing foreign investment in pharmaceuticals, said an official of the company.

BSRM invested $27,500 until last year to set up a steel mill in Kenya out of the authorised amount of $4.87 million.

Tapan Sengupta, deputy managing director of the largest steel manufacturer in Bangladesh, says they have recently invested $400,000 to purchase land to establish a factory.

"We are in the process of setting up the factory," he said. BSRM has opened an office in Hong Kong to make it easier to source raw materials and explore export opportunities.

The BB, in June this year, allowed BSRM to invest $500,000 from its export earnings retention quota to open a subsidiary in Hong Kong.

The quota specifies the amount of export earnings that can be retained by a business in foreign currency in an account.

"Our first priority is to invest locally. At the same time, we want to tap opportunities abroad," Sengupta added.

Ahsan Khan Chowdhury, chairman and chief executive officer of Pran-RFL Group, said a plant in neighbouring Indiawould enable his company to expand its market.

"We now export our products to a number of states in India. Now, we are in a position such that we need to set up factories in India to expand to South, North and West India."

"We see a very good prospect. If we can replicate what we have learned there, we can be one of the top food companies in India."

Chowdhury thinks Bangladesh's corporate sector should be given the opportunity to make overseas investments so that they can gain greater market access.

"The US has given tariff benefit to African nations. If a company wants to invest there to avail duty advantages and export to the US market, the authority should allow it."

This will benefit Bangladesh as local firms will be able to repatriate profits from investments made abroad.

Khokan Chandra Das, chief financial officer of Renata, says the company wants to set up a subsidiary to export pharmaceuticals and associated products to the European Union.

There is a rule that requires firms to establish a fully-owned subsidiary in Europe in order to export products to the bloc, he said last month.

Incepta Pharmaceuticals Ltd wants to open a subsidiary in the US to market drugs.

"The US is the biggest market for pharmaceuticals. Our competitors are doing good in that market since they have offices there. We need to have an office," said Incepta Pharmaceuticals Chairman and Managing Director Abul Muktadir.

"If we are allowed to use our foreign currency earnings in the export retention quota freely, we could do much bigger things."

Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue, said the interest in investing abroad was positive since the competitiveness of local firms had increased.

Over the past decades, particularly from 1980 onwards, liberalisation of policies encouraged private sector-led industrialisation, he said. And beginning with garments, industries expanded to other export and domestic market-oriented sectors.

"Now, we see a sense of confidence among entrepreneurs. They want to go abroad to try to expand the business."

"It can be said that our entrepreneurs have got a certain level of upgradation, and they are ready for global exposure," he added.

Moazzem, however, requests the government to ensure transparency in the whole process.

"As we are a country with a small foreign currency reserve base, the regulator should monitor whether investments are being made transparently and profits are being repatriated properly."

A separate policy is needed for overseas investments, he says, adding that time has come to evaluate the performance of firms that have already invested abroad.

Atiur Rahman, a former governor of the Bangladesh Bank who had overseen granting of a number of investment proposals while in office, said Bangladesh's entrepreneurs should continue learning by conducting experiments.

"We should keep the window open. But the authority should give permissions on a case-to-case basis. We can explore business prospects in countries where Bangladesh has already earned goodwill."


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The government is making a roadmap to facilitate the production of digital devices in the country to boost export earnings in the information and technology sector from the current $1 billion to $5 billion by 2025.

At the same time, the domestic market for ICT products and IT-enabled services is expected to reach $5 billion.

The government believes products such as mobile devices, computers, and laptops will play a major role in tapping in the prospective $10 billion IT market at home and abroad within next four years, which is why the new roadmap is aimed at capacity building of the local digital device manufacturing industry as well as promoting and branding domestically manufactured products in international markets, according to the ICT Division.


Proper implementation of this roadmap is expected to create at least one lakh jobs in the digital device manufacturing industry. The country will then be able to export laptops and mobile phones worth about $2 billion after meeting the domestic demand.

The new roadmap, drafted by the ICT Division, has recently been sent to various ministries and departments for their feedback.

The ICT Division expects that the implementation of the "Made in Bangladesh" action agenda will make Bangladesh a major hub of ICT and IoT (Internet of Things) device manufacturing. It will also support the agenda of universal access, the division hopes.

Officials at the division said increasing consumption of digital devices and consumer gadgets by the emerging middle and affluent classes has built the foundation for assisting the entry of Bangladesh into the international high-tech manufacturing industry.

The new roadmap recommends prioritising the use of locally produced ICT products in government procurement. To this end, initiatives will be taken to raise awareness among government officials involved in public purchases. It also suggests setting up hubs in Singapore, the UAE, England or any other country to facilitate the export of domestically produced ICT products.

In this new roadmap, emphasis is being laid on various issues including creation of skilled manpower, improvement of product quality, quality assurance, assessment of global demand, promotion of local products in foreign markets, protection of intellectual property, and increasing research.

Besides the ICT Division, various ministries, divisions, and other government entities – including the Ministry of Commerce, the Ministry of External Affairs, the Ministry of Planning, the Ministry of Posts and Telecommunications, the Ministry of Industries, the Ministry of Education, the Bangladesh Computer Council, the Bangladesh High-Tech Park Authority, the Bangladesh Economic Zones Authority (Beza), the Bangladesh Investment Development Authority (Bida), the Bangladesh Export Processing Zones Authority (Bepza), the Export Promotion Bureau, the Bangladesh Standards and Testing Institution (BSTI), the Bangladesh Industrial Technical Assistance Centre (BITAC), the National Skill Development Authority, and the University Grants Commission – will work together to implement the roadmap.

Various private institutions and organisations of entrepreneurs will also have important roles to play in making the roadmap a success.

According to the International Data Corporation (IDC), Bangladesh imported 3.4 crore phones worth $1.18 billion in 2017, and the laptop market was valued to be at $300 million in 2018.

The Bangladesh High-Tech Park Authority – established to utilise the opportunity of exploring the potential of the market with a series of incentives – declared exemption of income tax for park developers, investors, exemption of import duty, regulatory duty, and supplementary duty for producing ATM kiosks and CCTV cameras, exemption of duties on importing capital equipment and construction materials by the investors.

The new roadmap is aimed at accelerating the "Made in Bangladesh" initiative by utilising these facilities.

The availability of workforce at a competitive wage structure, an increasing domestic market demand, and a favourable policy structure are some of the factors that make Bangladesh an attractive market for digital device manufacturing, believes the ICT Division.

The success stories of manufacturing companies, such as Walton, Samsung, Oppo, and Data Soft make the division confident about further development of the domestic digital device manufacturing industry in the upcoming days.

The division, however, has also identified some constraints in the process of the roadmap implementation, and high capital expenditure in Bangladesh tops the list.

The other major limitations that the division has found include a lack of skilled manpower, poor industry ecosystem, quality assurance and international certification for locally manufactured products, a lack of regulations to prioritise local products in government purchases, a lack of awareness about locally manufactured products, and an absence of appropriate financial stimulus for the digital device manufacturers.

Key strategic factors

The new roadmap has been formulated focusing on four strategic issues – capacity building at the local level in the public and private sectors, awareness building and branding, research and development, and policy support.

The roadmap includes a set of short-term action plans to be implemented by 2023. It also incorporates some mid-term and long-term ones to be executed by 2028 and 2031, respectively.

In the short term, the authorities will estimate the demand for technology products after analysing the local as well as international markets, and formulate strategies for capacity building and marketing.

During this period, testing labs will be set up at the initiative of universities to ensure the quality of IT products. The Ministry of Commerce will take up initiatives to increase exports through bilateral and multilateral international agreements. A hub will be set up in Singapore, Dubai, England or any other country to export goods abroad.

With the help of the ICT Division, universities will create five lakh skilled workers for the ICT sector in the country by this time. The National Skill Development Authority will develop international standard training modules and syllabi.

In the next two years, the Ministry of Foreign Affairs will take measures to understand the attitude of other countries towards Bangladesh and formulate and implement an action plan to overcome the negative attitude, if any.

The ICT Division will develop a national portal with details of ICT products produced in the country. Apart from that, steps will be taken to increase awareness among officials involved in government procurement about domestic products.

The National Board of Revenue (NBR) will work to bring down various tariffs and taxes on the digital device manufacturing industry and its backward linkages to a reasonable level.

The Ministry of Finance will take steps to provide loans on easy terms to the manufacturers of ICT products, while the Ministry of Commerce will look after the issues relating to incentives for the export of these products.

What experts say

AKM Fahim Mashroor, former president of the Bangladesh Association of Software and Information Services (BASIS), told The Business Standard that the initiative to reduce imports by increasing production of ICT products and to increase exports is commendable. He, however, suggested prioritising value addition, saying, "Without a plan to increase value addition, such initiatives will not yield desired outcome," mentioning that most of the entrepreneurs in the IT products manufacturing sector currently import almost 100% of the materials from abroad and only assemble those in their factories.

"Since the assembled products are not taxed as finished products, the government is being deprived of revenue. On the other hand, the factories are being run by employing only a nominal number of people."

Citing an example, he said the Bangladesh factory of Chinese mobile phone brand Xiaomi had started operation a couple of days ago with only 250 employees. If all the materials were produced in the country, thousands of people could be employed, he added.

"Even though the country has attached importance to industrialisation, the issue of backward linkages has remained neglected. If raw materials cannot be produced in the country, value addition will not increase. There will be no employment."

Fahim Mashroor also suggested imposing a certain amount of value-addition obligation on local digital products manufacturers to qualify for various facilities, including tax exemption.

BASIS President Syed Almas Kabir said, "The software development and solution sector in the country reached a stable position. We have to strengthen the hardware industry in line with the software industry."

Mentioning that some dozen companies have started producing mobile phones in the country and very few producers are manufacturing laptops, he said, "It is a fact that local factories would assemble digital devices at the initial stage and it would take time to increase the value addition at a standard level after a significant level of skills and knowledge transfer."

He stressed having a clear vision and roadmap to increase value-addition and employment generation.

Lauding the initiative to develop the roadmap, Almas Kabir said, "The roadmap is very essential as the level of investment in high-tech parks is very low. There is a lack of coordination among several ministries and divisions concerning the digital device industry. The roadmap would boost investment and ensure cooperation."

 

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The work of pitch casting has started on the viaduct road of Padma Bridge, at Jajira point of Shariatpur.

Work began around 10:45am today, our Munshiganj correspondent reports.

On the first day, 50mm pitch casting was completed up to a length of 60 metres and a width of 10 metres. The casting has been completed on pillars N-34 and N-35 of the viaduct road, said Dewan Mohammad Abdul Kader, executive engineer of the Padma Bridge.

He said, "The length of Jajira viaduct is 1670.03 metre. The task of pitch casting will be completed gradually. After a few days, we can say how long it will take. The pitch casting on the viaduct on the Mawa point has not started yet."

"Pitch casting on the main bridge will begin in the first week of November," the official added.

 

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  • Civil Aviation Authority of Bangladesh (CAAB) renews their trust in Thales with a turnkey modernisation of their nationwide Air Traffic Management (ATM) system.
  • The new ATM system will improve capacity and safety thanks to a complete nationwide surveillance coverage using the latest ATC and air surveillance technologies compliant with ICAO standards.
  • An iconic new Air Traffic Management Centre and Control Tower as well as new radar building will be constructed at the Hazrat Shajalal International Airport (HSIA) in Dhaka.
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In 2019, Asia-Pacific was the largest market for passenger travel to Bangladesh, followed closely by the Middle East and Europe. Over the past year, the number of passengers on domestic routes in Bangladesh recovered to pre-pandemic levels. As the aviation sector gradually embarks on recovery, the CAAB is affirming its commitment to increase safety and security of its airspace with the signing of a contract with Thales for a full turnkey modernisation of the country’s Air Traffic Management system.


La CAAB et Thales ont signé ce contrat le 21 octobre 2021 à Dacca, capitale du Bangladesh, en présence de M. Md Mahbub Ali, ministre bangladais de l’Aviation civile et du Tourisme, et de son Excellence M. Jean-Marin SCHUH, ambassadeur de France au Bangladesh.

The contract was signed between CAAB and Thales on 21st October 2021 in Dhaka, Bangladesh, graced by Stat Minister for Civil Aviation and Tourism Md Mahbub Ali and his Excellency Mr. Jean-Marin SCHUH, Ambassador of France to Bangladesh.

The project will involve the modernisation of the en-route, approach and tower system at Dhaka’s HSIA airport, with equipment to be installed also at other regional airports throughout Bangladesh. Thales will provide complete new automated systems including ATC automation, primary and secondary radars (STAR NG and RSM), ADS-B, Wide Aera Multilateration, Airport Multilateration, Datalink and countrywide VSAT communications and terrestrial network as backup to VSAT. This project will provide Bangladesh with the most modern nationwide air surveillance.
An iconic 45 metre high Control Tower and Air Traffic Management Centre will be built at HSIA, equipped with a state-of-the-art security system providing CCTV coverage and access control on an integrated platform. The CAAB’s controllers will work with the latest automation technologies to support the future growth of air traffic in the country. The project is expected to be completed by 2024.
“Thales is pleased to be a trusted partner, playing a key role in establishing a safe and reliable turnkey air traffic solution, leveraging on decades of experience to support CAAB in the design, implementation and operation of the most suitable turnkey ATM solution.” Christian Rivierre, Vice-President Airspace Mobility Solutions, Thales
“Capitalizing on more than 900 ATC radars installed around the world, Thales is proud to support CAAB in its modernization offering the best in air surveillance”. Marie Gayrel, Director of civil radars, Thales

Source: Thales
Date: Oct 29, 2021



 

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Highlights:
  • The plant is being built on the banks of the Karnaphuli river
  • BPDB will purchase electricity from the plant for 22 years
  • A unit of electricity will cost Tk2.95 – Tk5.44

Bangladesh Power Development Board (BPDB) has signed a power purchase agreement (PPA) with United Chattogram Power Limited (UCPL) to set up a 590 MW combined cycle power plant at Anwara Upazila in Chattogram.

The agreement was signed on Thursday by Saiful Islam Azad, board secretary, BPDB, and Moinuddin Hasan Rashid, managing director, United Chattogram Power Limited.

According to the agreement, the plant will be built on some 12 acres of land on the banks of the Karnaphuli and will operate commercially from January 2026.

BPDB will purchase electricity from the plant for 22 years.

The power plant will generate electricity using natural gas and regasified liquefied natural gas or R-LNG. Per kilowatt of electricity generated from natural gas will cost Tk2.95, and per kilowatt of R-LNG-generated electricity will cost Tk5.44.

United Enterprises and Company Limited will own 60% of the plant and two Japanese firms will own the remaining 40%.

Md Habibur Rahman, secretary, Power Division, Ministry of Power, Energy and Mineral Resources, was the chief guest at the signing ceremony. He expressed hope that the United Group will finish construction of the power plant within the stipulated time.

Engineer Md Belayet Hossain, chairman, BPDB, presided over the event. He said the United Group's 590 MW power plant will be the largest of the combined cycle power plants in the country.

Moinuddin Hasan Rashid, chairman of United Group and managing director of UCPL, also gave a speech during the event. He said the Anwara 590 MW power plant would play a big role in implementing the Prime Minister's promise to deliver electricity to every household in the country.

Other agreements signed with United Chattogram Power Limited on Thursday, include the Implementation Agreement (IA) with the Power Division and Power Grid Company of Bangladesh (PGCB), and the Gas Supply Agreement (GSA) with Karnaphuli Gas Distribution Company Limited.

 

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Computer services export from Bangladesh has crossed the $300-million mark as the coronavirus pandemic turbocharged the global demand for data processing, hosting and consultancy services.

Local IT companies and freelancers have bagged an increased number of orders from clients across the globe since the crisis struck as customers had to rely more on digital tools to adapt to work-from-home practices.

The industry fetched $303.76 million in fiscal 2020-21, up 10 per cent year-on-year, showed data from the Export Promotion Bureau (EPB).

The higher earnings were driven by computer services such as data processing, hosting, consultancy, installation, and maintenance.

The receipts from the sales of IT-enabled services such as data processing and hosting increased around 27 per cent to $217 million.

Computer consultancy services raked in $24.07 million, up from $20.31 million a year ago. And it has continued to maintain the uptick.

In July, the earnings from computer services export grew three times to $78 million from $23 million a year ago.

"At the beginning of the pandemic, computer and IT services export plunged," said Syed Almas Kabir, president of the Bangladesh Association of Software and Information Services (BASIS).

"But when the economies around the world started to reopen after a few months, foreign companies began to outsource, and our freelancers were taking a huge number of orders."

Companies in Bangladesh have now started to get high-value tasks such as graphics, the internet of things and artificial intelligence, and the hourly rate for the works is higher.

"This can also be attributed to the increase of computer services export," said Kabir. The entrepreneur put the annual export earnings from computer services at more than $1 billion, which is far higher than the EPB figures.

"This is because the government figures don't include the earnings of freelancers properly, and many service providers bring export proceeds through non-banking channels."

For the growing export orders, many IT firms have hired new employees, and many youths have found jobs in the sector.

Computer software export suffered a blow as it dropped 30 per cent year-on-year to $47.44 million in 2020-21. The earnings stood at $73 million in 2019-20.

Kabir blamed the closure of offices in Europe owing to the lockdowns for the decline in software exports.

"Many work orders were cancelled and suspended. Payments were not cleared, so many local companies were hit," he said.

Thanks to the recovery in global demand for e-commerce platforms and fintech, some software exporters were flooded with orders in the second half of the last fiscal year.

More than 225 companies from Bangladesh export software to over 80 countries, according to Rashad Kabir, managing director of Dream71 Bangladesh Ltd.

The software developer won multiple international tenders, and its revenue also shot up during the pandemic.

"The actual export is much higher than the data we have got from the EPB. Apart from the software companies, there are about 6 lakh freelancers whose income has not been reflected in the official figure," said Rashad, also a director of the BASIS.

Ferdous Ahmad Shaon, managing director of Cefalo Bangladesh Ltd, a software exporter focused on the European market, said the first few months of the pandemic had posed a major challenge as many orders were axed since many clients had to temporarily shut business.

"But since the beginning of this year, we have been witnessing some positive growth that we never witnessed," he said.

Cefalo hired more than 50 people in the past six to seven months to cater to the increasing orders.

"Businesses around the world have realised that digitalisation is an important tool to take on the blow of the pandemic. Every entity has increased their investment for the development of IT-related things," said Shaon.

"So, we are enlarging our existing teams. We have acquired seven to eight new customers."

The biggest growth occurred in the financial technology domain, and Cefalo is developing related apps for the European market.

The company is currently working on online food ordering systems for Europe and has received an order to automate hotels.

Export receipts for installation, maintenance and repair of computers and peripheral equipment services plummeted around 50 per cent year-on-year to $5.85 million in FY21.

 

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The government has inked a loan agreement amounting $260 million with the Asian Infrastructure Investment Bank to implement the ‘Construction of Kewatkhali Bridge at Mymensingh Project’.

Fatima Yasmin, secretary, Economic Relations Division, and DJ Pandian, vice-president of the Investment Operations Region 1, on Monday signed the loan agreement on behalf of Bangladesh and AIIB respectively, said a press release.

As per the press release, Bangladesh made rapid social and economic progress in recent decades. To expedite and get benefit of the progress, there is no alternative to the development of communication.

The existing Shambhuganj Bridge over the Brahmaputra River at Mymensingh is currently connecting the region with the capital Dhaka. Every day innumerable vehicles, including trucks carrying stone, coal and other imported materials from three major land ports located in Mymensingh division are using this bridge. Now its capacity is inadequate for timely communication.

Therefore, this project has been taken by the Road Transport and Highways Division for being implemented by the Department of Roads and Highways. The construction of the proposed bridge will reduce the additional traffic congestion on the existing bridge and facilitate road connectivity between several districts of Mymensingh division and the land ports, EPZs and economic zones of the region.

This will attract new investments and open the door to economic development. The Project will be implemented from July 2021 to June 2025.

Under the project-01 steel arch bridge of 320m length, 780m approach bridge, 551m road overpass and 240m railway overpass, 6.20km highway with 4 lanes including SMVT lanes and 1 toll plaza will be constructed.

The loan will be received in standard terms and conditions of AIIB. The repayment period of the loan is 33.5 years including 5 years grace period. Payable Front end is Fee 0.25 per cent and commitment fee is 0.25 per cent per annum for undisbursed amount.

 

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Bangladesh has recorded its highest ever single-month export earnings amounting to $4.72 billion in October, thanks to a strong rebound in demand for apparels in western countries ahead of festival season and supply disruptions from key competitors that faced fresh waves of pandemic.

The export receipts surpassed the $3.46 billion target set for the month, registering a whopping 60.37% year-on-year growth, according to provisional data of the Export Promotion Bureau (EPB) released on Tuesday.

Apparel shipment grew by 53.27% to $3.56 billion year-on-year in October, raising the total export earnings to $15.74 billion in the first four months of this fiscal year.

The October earnings were 13.7% higher than the amount earned in September.

Leather, agriculture, fish, pharmaceuticals and plastic products also posted impressive growth year-on-year.

However, jute and jute goods lost out, posting over 8.03% negative growth in October.

Apparel exporters are hopeful of export growth in the next couple of months, but are concerned about lower unit prices compared to soaring costs of raw materials.

Md Shahidullah Azim, vice-president at Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said, "Our exports have witnessed a strong growth as many work orders are shifting to us from our competitor countries because of export disruptions in Vietnam and India owing to Covid-19 and political instability in Myanmar and increased production cost in China."

The BGMEA vice-president also said apparel shipment grew as a good amount of payment has come from deferred LC shipments, those were suspended owing to Covid-19.

"But it is not a matter of self-satisfaction as we have to work together for its continuation," he also said.

Dr Abdur Razzaque, chairman of the Research and Policy Integration for Development (RAPID) Society, told The Business Standard, "This record growth in October exports reflects the strong recovery of Western developed countries. The demand for goods in those markets have long been subdued by weakened economic activities."

After the withdrawal of lockdowns and other mobility restriction measures, people have started resuming their activities, including being physically present at workplaces as well as tourism related activities. Both have a positive impact on the demand for the types of goods that Bangladesh exports - apparels and other consumer goods such as leather and leather goods, he added.

"Since the demand for the items were long subdued, we will see stronger spending patterns by consumers. Also, foreign demand has been buoyed by large stimulus support in developed countries," said Dr Abdur Razzaque.

Inflationary pressures in those markets have also boosted prices of goods, he added.

However, the 60% growth over the past year does not make much sense as recovery at times was quite feeble, he noted.

"The effect of higher spending and generous stimulus are likely to unwind over the coming months and thus this boom could be short-lived. Also, not only Bangladesh, but other countries as well are benefiting from the global economic recovery. China, for instance, clocked a 30% export growth in September."

But, China's exports will soon come under tremendous pressure as the US is desperate about containing its bilateral trade deficit against China. This, therefore, presents an opportunity for Bangladesh to expand its exports as China's market share, especially in apparels, is bound to fall further, added Dr Razzaque, also research director of Policy Research Institute.

The July-October earnings were 22% higher than $12.84 billion earned in the same period last fiscal year and 13% higher than the set target.

The highest earnings, $2.04 billion, came from knitwear shipment, while woven items fetched $1.51 billion, both posting over 52% growth from a year-ago period.

The BGMEA vice-president said they will face challenges in coming days in maintaining shipment schedules as most apparel exporters have faced shortage of working capital as buyers are paying them after up to 180 days of sending goods.
On the other hand, raw materials prices have gone high, but their credit limits are not adjusted with it.

"If banks do not increase our credit limit we will not sustain in business in the coming days," said Azim.

Shovon Islam, managing director (MD) at Sparrow Group, said the US and European buyers have bought a huge quantity of goods from Bangladesh for next Christmas and the fall and winter seasons in the USA and autumn and winter seasons in the European Union as those countries' economies and stores reopened in keeping with improvement in the Covid-19 situation.

Bangladesh has become the most reliable sourcing hub for buyers as most of its competitor countries are not able to supply goods on time owing to the pandemic, he also said.

Shovon hopes such apparel export growth will continue in November and December. Generally, spring and summer season shipments start from the end of December, but this year it will be in November as buyers are trying to receive those earlier because of the supply chain crisis.

He also said prices of goods shipments in October were not good as most orders were confirmed before the yarn price hike. But they got better prices for late orders that shifted from other countries.

The Sparrow Group MD said owing to a hike in raw material prices, the overhead cost increases 5%-7%, while the garment's cost of making has gone up 3%-4%.

"But we are now receiving positive notices from buyers over getting extra prices for those to be shipped in next January-February," he noted.

 

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Bangladesh's fast growing electronic appliances market has tripled to nearly $2.4 billion in a decade, helped by the growth of the economy that has created a stronger consumer class.

Experts forecast a stronger pace over this decade as demand is set to boost further amid more investments by homegrown and foreign brands for a gradual localisation of their production to benefit from the government policy of lesser taxes and duties to reduce unit prices.

The market for televisions, refrigerators, washing machines and other home appliances would quadruple to an annual size of $10 billion by 2030, estimates UCB Asset Management, a new generation investment industry firm.

Analysts at the firm expect the average annual growth rate in the ongoing decade will increase to 17%, from the previous decade's average of 14%.

The electronics industry of the country that began with assembling radio sets way before independence is now assembling almost everything the local consumers need, including the high-tech smartphones and laptops.

An increasing number of local plants are manufacturing items like refrigerators, televisions, air conditioners, washing machines and other home appliances, while their value addition and competition dramatically reduced unit prices to make those affordable to all.

Thanks to the government policies that incentivised local productions and ignited the market takeoff as soon as companies poured billions of taka to capitalise on the localisation opportunity and bring unit prices down for the vast local market of a rapidly growing middle and affluent class.

Countrywide electrification, rising income, changing demography and lifestyle, increasing affordability, and easier consumer financing in conjunction helped the market grow.

In a recent report, "Poised to Unlock the Next Wave: Bangladesh Consumer Durables Outlook in the Fresh Decade," UCB Asset Management analysts said both the demand drivers and supply facilitators will help the expected unprecedented growth in consumer durables sector.

The demand drivers

The analysts pointed out electrification success as a major driver that boosted the demand of consumer electronics and home appliances.

In 2010, less than 60% of the population was electricity users which grew to almost 100% already as the government prioritised countrywide electrification a decade ago and invested a lot to engage the private sector power producers.

An increase in purchasing power of people is apparent as the per-capita gross national income grew by 9% from the last fiscal year to $2,227 now, while the World Bank data show that the figure was $800 in 2010.

Citing Boston Consulting Group and Light castle partners projection, UCB Asset Management said the middle and affluent class of population would grow to 3.4 crore in 2025 and at the end of the decade the number would be at least 4.5 crore.

Projected geographic distribution of the largest consumer class for electronic products is also very encouraging as 63 towns are set to host at least one lakh middle-class and affluent people each.

UCB Asset Management estimates that the number of such towns to reach 90 by the end of this decade with the consumer base further widening in the already affluent neighborhoods.

On top of the increasing financial strength of people, socio-economic changes are emerging as strong boons for the electronics and appliances industry.

Female labour force participation has increased to 38.7% now from 30% a decade ago while the South Asian average is still 23.6%.

As the number of working women grows, so will the demand for home appliances that make their lives easier.

Female labour force participation was primarily in the apparel industry and they were from low-income households. In recent years, women's participation in jobs is significantly increasing from the middle and affluent class, boosting the demand further.

In line with rapid urbanisation and more women at work, the number of nuclear families are on the rise and such families tend to invest more in the products that make their lives easier, smarter.

Nowadays, an average Bangladeshi spends 2 hours and 48 minutes a day surfing social media online, mostly on Facebook, says the UCB report.

Who would buy electronics before them, if affordable?

The supply facilitation

Increasing supply from the local plants has made electronics and home appliances ever affordable and the industry is competing more to drag their costs and prices down.

Even in the early 2000s, only a very few companies like Singer Bangladesh used to assemble television sets and refrigerators here while many firms used to import electronics and home appliances to sell at higher prices.

Local entrepreneurs' vision and continuous efforts, like that in Walton Hi-Tech Industries, supported by the government policies from time to time, turned out to be a game changer.

Walton, beginning in 2008 with a fair capital of Tk10 crore, now has grown to be the second largest listed company in the country with its annual revenue of over Tk7,000 crore and profits surpassing Tk1,600 crore last fiscal year.

As the government is facilitating their ever increasing investments by offering tax and duty incentives against local manufacturing, dozens more brands opted in for the localisation to stay in the game.

To compete with Walton, Singer invested in its local refrigerator plant in the middle of the last decade, it is also manufacturing televisions and many other products here in Bangladesh.

LG's local partner Butterfly, Samsung's local partner Fair Technologies invested in local manufacturing of refrigerators, televisions, air conditioners and washing machines.

Also the local brands including Jamuna, Minister, Vision, and Orion have built their own manufacturing facilities to better compete in the electronics and appliance market.

Keeping in mind the faster growth potential in the market, other local market players like Rangs also are investing for their own factories.

Gradual technology acquisition amid the up-scaling of manufacturing for an expanding market and of course an increasing competition helped price reduction dramatically in the very price sensitive mass market.

With increasing efficiency, the manufacturing ecosystem also has introduced bulk supply businesses for some vital parts for the electronics and appliances industry, such as compressors for refrigerators and air conditioners.

Over the last one decade, the average cost of an LCD panel here has come down from Tk18,000 to Tk2,000, an air-conditioner compressor's cost halved to Tk15,000 on average, while refrigerator compressors cost Tk4,000 now – almost one-fourth of what it used to be a decade ago, UCB analysts said citing their interviews with industry people.

Against a continuous rise in monthly income for almost all the people and the increasing disposable income for the middle and affluent class, the dramatic drop in unit prices for even upgraded electronic appliances have dropped over the decade and the trend is set to continue to create more buyers.

An increasing access to financing the durables purchases is another facilitator of the industry. If one has a credit card, one can avail 12-24 months of no-interest monthly instalment facilities to buy their needed electronics and appliances.

Those who do not have credit cards can also purchase on a hire purchase basis with a nominal down payment and pay the monthly installments from the countrywide retail outlets, especially by Walton and Singer.

The thirst for further growth

Given the low penetration levels of consumer durables products, the Bangladesh growth tale is set for a major push, said Sudipta Rashad, an analyst at UCB Asset Management who authored the report.

Bangladesh is seeing major changes in its policies, especially those related to the regulatory and business environment. Companies are going to find it much easier to set up local assembly facilities, he added.

The government recently proposed some significant policy support to consumer durables industries for their good profit margin against cost-effective catering to the increasing market demand for their products.

Home and kitchen appliances makers will avail tax exemption until mid-2031 if their local value addition is at least 30%.

Washing machine and kitchen appliances production will be exempted from value added taxes, the advance income tax reduced to 3% from 4% to make raw material imports easier, while the government also suggested that the current concessionary duties on raw material imports for refrigerator and compressors would be maintained.

"Equitable distribution of benefits for future growth will be attained with rapid advancements in the field of electronics, which is in line with Vision 2041 of the government," said Sudipta Rashad.

The policy support would further encourage wonderful rise stories like that of Walton that has almost phased out imports of refrigerators through serving more than 70% of the local market alongside exporting to almost every corner of the world.

Walton's Managing Director Golam Murshed previously told The Business Standard that his company as the largest local market player was extending its footsteps into more product lines, innovating more in the existing products and aggressively looking to position in the global market.

The appliances industry is gradually including products like vacuum cleaners, kitchen appliances like grinders, blenders and many others that only can make daily life easier and companies are investing more there too.


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To expand its business, Deshbandhu Group has made new investments of around Tk800 crore during the pandemic even as the entire economy underwent a difficult time.

The Dhaka-based conglomerate invested Tk200 crore in Deshbandhu Food and Beverage, Tk230 crore in Deshbandhu Packaging, Tk250 crore in Southeast Sweaters and GM Apparels, and Tk120 crore in other entities of the group.

At present, Deshbandhu Group has everything, such as sugar mill, cement factory, fertiliser factory, shopping mall, shipping, textile mill, readymade garment factory, beverage, captive power plant, housing, logistics and media.

In March this year, the group also declared a plan of raising $250 million (more than Tk2,100 crore) from international investors through a Sukuk bond as the conglomerate looks to expand its business and repay its local debts.

Deshbandhu Polymer Limited, another entity of the group, plans to raise Tk500 crore by issuing a Sukuk bond for repaying loans and business expansion.

Currently, the group's annual turnover amounts to more than Tk2,800 crore; it employs around 15,000 people.

The new investments are expected to create around 5,000 fresh jobs, according to the conglomerate.

Brigadier General Md Zakir Hossain (retd), director of the group, said Deshbandhu had kept all factories running during the pandemic.

He said that with a daily production capacity of around 800 tonnes, Deshbandhu Sugar Mills is fulfilling around 30% of local demand.

But it has become more challenging due to an increase in raw sugar prices and freight charges, added Md Zakir Hossain.

He said that on the other hand, Deshbandhu Food and Beverage Ltd has become popular within a short time at home and abroad. Mineral water has especially been able to create a huge demand across the country.

Mohammad Maruf Hossain, general manager at Deshbandhu Food and Beverage, said Deshbandhu Food and Beverage Ltd has around 11% market share in the country's beverage industry. It will reach 25% after the installation of new machinery by 2022, he added.

"At present, we are producing 24,000 bottles of beverage per hour. An additional 45,000 bottles will be produced every hour after the completion of the new project," said Mohammad Maruf Hossain.

"We are exporting beverage products to different counties, such as Thailand, Sri Lanka, Malaysia, Greece and the United Arab Emirates."

In 1989, Deshbandhu Group began its journey through importing and trading fertiliser. Since then, it has steadily been going forward for the last 32 years.

 

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The district administration is going to acquire 503 acres of land for Jashore Export Processing Zone (EPZ) at Prembagh union of Abhaynagar upazila in the district with a view to using the marshlands for creating employment through industrialisation.

The authorities in a letter, issued on 19 October and signed by Project Director Ashraful Kabir, asked the deputy commissioner of Jashore to take the required measures to acquire the land in the water bodies of the Chengutia.

"We have received the letter and the process of land acquisition in the beel and surrounding areas will start soon," Jashore Deputy Commissioner Tomijul Islam Khan told the media.

The EPZ project aims to industrialise the district, creating employment and improving the quality of life for local people.

It will create employment opportunities for at least one and a half lakh people and around five lakh people's lives will change for the better. New doors for trade and commerce are expected to open for local people.

Prembag Union Parishad Chairman Mofiz Uddin said waterlogging in Bhabdaha is known as "the sorrow of Jashore" as most people who own land there cannot use it. The EPZ will help revive the economy of this region.

Locals affected by the waterlogging and activists for proper drainage in the Bhabdah area, said at least five lakh people in 120 villages in the beel area have been victims of waterlogging for around 20 years.

Drainage has been blocked by siltation at the sluice gates and the water of about 27 beels in the south, including Dhaler beel, does not recede. The yards of many houses also remain underwater and as a result people in these areas have a very poor and suboptimal quality of life.

Local activists said authorities should consult people in the project area before implementing any big project, but this has not been done in this case.

Activist Iqbal Kabir said there is no denying the fact that the EPZ will help develop the economy of the district but there are many issues, such as land acquisition, compensation, and other important matters associated with the project. Authorities should hear public opinion on these issues.

According to the deputy commissioner, local government representatives and people have been informed about the project.

Project Director Ashraful Kabir said the EPZ would be similar to that in Chattogram and Dhaka and they are working on preparing the DPP for the project.

 

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