Economy shows signs of pick-up

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Economy shows signs of pick-up
High-profile meeting reviews indicators today
Rejaul Karim Byron

The rise in collection of VAT and imports of capital machinery and industrial raw materials in the first six months this fiscal year showed clear signs that increased trade and commerce and investments are helping domestic economy pick up, officials say.

Data shows July-December earnings from value-added tax have marked 24 percent growth, while opening of letters of credit for the imports of capital machinery has grown by 28 percent and raw materials by 22 percent. However, these indicators were negative a month back.

This latest macroeconomic situation comes up for review today at a high-profile meeting with Prime Minister Sheikh Hasina in the chair, according to a finance ministry official.

The ministry will also report it to parliament later.

“There are clear signs that Bangladesh economy is picking up,” the official told The Daily Star, pointing to the necessity of adequate supply of gas and power to make such trends sustainable.

Meantime, revenue recorded 18 percent growth against the overall target of 15 percent.

According to the tax administration, increased VAT collection is the major contributor to such growth, which also indicates brisk economic activities.

Private sector credit, another indicator of the economy, posted 16.73 percent growth in November last. The June growth was 14.62 percent.

Today’s review meeting will also be informed that gross domestic product growth will be between 5.5 and 6 percent, despite global recession fallout.

Also, the finance ministry apprise the crucial sitting of the contributions of the sectors like agriculture, industries and services to the GDP.

The government expects that average inflation will not cross 6.6 percent, although it marked a slight upward trend in recent times.

Top DHL official speaks on efficiency of Bangladesh in trading goods

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On course to a logistics hub
Top DHL official speaks on efficiency of Bangladesh in trading goods

Amadou Diallo

Sohel Parvez

Bangladesh is moving upward in the world ranking in logistics, and so is the confidence of the global logistics service providers operating here.

Bangladesh is an important market worldwide, says Amadou Diallo, chief executive of South Asia Pacific region of DHL Global Forwarding, one of the four divisions of DHL, the world’s leading logistics provider.

“If you consider the size of the market in Bangladesh and benchmark it, the country has almost double the population of Germany,” Diallo says in an interview with The Daily Star.

Bangladesh has improved in all dimensions in terms of air and sea freight, and customs operation.

Out of 155 countries, Bangladesh has emerged as an over-performing country in providing efficiency in trading goods.

Its ranking in the global Logistics Performance Index (LPI) is now 79, much above other South Asian countries such as Pakistan, Sri Lanka, Nepal, Bhutan and the Maldives.

In the LPI by the World Bank, Bangladesh retains the second position in South Asia after India.

Also, improved logistics efficiency is in the pipeline as the country moves to scale up infrastructure by investing in road network to join other Asian countries and build deep-sea port.

Bangladesh registered over 5 percent growth in annual output in the past decade.

“It’s all going to uplift Bangladesh,” says Diallo.

DHL, which was engaged in offering logistics services to local customers through representative since 1984, unveiled its plan last week to expand its reach in Bangladesh’s logistics market that is growing on a steady rise in exports and imports every year.

DHL teamed up with a local company — Trade Clippers Ltd.

The giant in global logistics service sector says it will invest $10 million in the next three to five years to upgrade its warehousing and cargo handling facilities, develop fashion and logistics industry and improve information system.

Diallo, the Senegal-born executive, says the entry of DHL Global Forwarding will enable Bangladesh to become more logistic-efficient.

“As we are investing and putting in place all the tools that we have and trained people, it will help Bangladesh proclaim to the world that it has the supply chain solutions that are comparable to those existing in the United States, Germany or any other places,” he says.

“We think that we can gain 10 percent efficiency in terms of logistics cost because barriers have been broken down.”

It is a few years back when DHL decided to invest in Bangladesh, one of the emerging markets because of its consistent economic growth, supported by increased exports and remittance earning.

In the last one decade, per capita GDP (gross domestic product) as well as consumption in the country has doubled, despite having a growing population — now around 150 million.

With all these factors, Bangladesh is becoming more attractive to foreign investors.

“If you ask the investment bankers, they will tell you that a lot of investors are planning to come for investing in Bangladesh,” the DHL top official says.

Diallo says DHL wants to organise itself in advance to understand the supply solution needs of both local and foreign investors within and beyond Bangladesh.

“We think if we want to help emerging markets grow and profit from those markets, we need to be there at the beginning than at the end,” he says. “We think this is the right time to come to Bangladesh.”

The DHL executive says Bangladesh’s main export earner apparel industry offers huge scope for logistics service sector.

The government move to link Bangladesh with the other Asian countries through the Asian highway, and allow India to use Bangladesh’s seaport also offers potential for a good logistic business in future.

“India has decided to use Bangladesh as a hub. So we, as a logistic company, will really be not so smart if we decide that we won’t consider using Bangladesh as a hub,” Diallo says.

“I think Bangladesh is a natural hub even for distribution from India to India,” he adds.

“Given the infrastructure that is put in place and more investments that are taking place in green areas, we think that in terms of effective supply chain, Bangladesh certainly will become a better hub.”

sohel@thedailystar.net

RMG looks to good time

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RMG looks to good time

A worker runs a machine-check on garment products for needles at a factory. In the July-November period of the current fiscal year, Bangladesh exported woven garments worth $2.13 billion and knitwear items of $2.59 billion, with the share of garments in national exports increasing. Photo: STAR

Refayet Ullah Mirdha

The contribution of readymade garment (RMG) to the national export increases with the rebound of orders from international buyers following a recovery in the global economy, according to trade data of the Export Promotion Bureau.

The share of RMG products reached 77.17 percent in the July-November period from 77.15 percent in July-October of the current fiscal year.

During the July-November period, the country exported woven garments worth $2.13 billion and knitwear items of $2.59 billion totalling $4.72 billion.

The share of woven garments in the total exports of the country was 34.84 percent and that of knitwear (including sweater) was 42.34 percent, the data said.

During the five-month period, the total national export was worth $6.10 billion.

In fiscal 2008-09 the RMG contribution was 79.33 percent, while woven segment added 38.02 percent and knitwear items 41.30 percent.

Bangladesh exported woven garments worth $5.92 billion and knitwear worth $6.43 billion in 2008-09, registering growths of 14.54 percent and 16.48 percent respectively compared to the previous year.

Shahadat Hossain Kiron, managing director of Dekko Group, said the flow of orders from the international buyers was higher this winter compared to the last season as the global economy is recovering from the recession.

“The number of orders outpaced the capacity of my factories,” Kiron said.

Chairman and Managing Director of SQ Group Ghulam Faruque said the situation is improving as the buyers are placing more orders.

“The trend of order placement indicates that the country’s apparel export will go to its previous high level at the end of the year,” he said. But the perennial problem of offering low prices by the buyers remained the same, he added.

The sign of recovery in the RMG export is also seen in the increasing trend of consumption of Utilisation Declaration (UD) by the exporters from their respective trade bodies.

Bangladesh had been experiencing a negative growth in UD consumption for the last few months because of low orders following the global recession.

The UD consumption improved in January by 4.0-5.0 percent compared to the same month last year, according to Bangladesh Garment Manufacturers and Exporters Association (BGMEA) data.

“But the concerns for Bangladesh are the sudden price hike of cotton by 25 percent on international market and yarn price rise on the local market by 30 percent as the Free on Board (FoB) value remained static,” said BGMEA President Abdus Salam Murshedy.

If a commodity is quoted on an FoB basis it means the cost of the goods and their loading on to a ship are included but not the insurance or freight charges.

He said the exporters’ cost increased as they have to send the goods by air to maintain the lead-time.

Recently the exporters are continuously failing to maintain the lead-time due to failure in on-time production caused by low gas pressure in the plants, he said.

reefat@thedailystar.net

Dutch govt eager to work for expansion of local shipbuilding industry

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Dutch govt eager to work for expansion of local shipbuilding industry

BSS, Dhaka

The Netherlands yesterday expressed its keen interest to work together with Bangladesh for expansion of shipbuilding industry here at a time when the world’s shipbuilding industry faces setback due to the financial crisis.

The interest was shown at a ‘matchmaking seminar’ for ‘Shipbuilding Sector of Bangladesh and the Netherlands’ at a city hotel here, said a Dutch Embassy press release.

Ananda Shipyard and Slipways Ltd (ASSL) and the Netherlands Embassy jointly organised the seminar backed by Holland Marine Equipment, a Dutch business group.

Charge d’Affairs of the Netherlands embassy Doris Voorbraak spoke on the occasion. ASSL chairman Dr. Abdullahel Bari delivered the welcome speech on the occasion, joined by Dutch shipbuilding companies.

The seminar was aimed at introducing the Dutch companies to the Bangladeshi shipbuilding companies and exploring the area of cooperation.

Participating Dutch companies were Vuyk Engineering Groningen, Dagin Marine Technology, Heatmaster, Rubber Design, Winteb, Eurovalve, Neddeck Marine, HRP and Gea Bloksma.

In her speech, Voorbraak said the world’s shipbuilding industry might appear gloomy as orders are cancelled and the overall trade volume is down due to the global financial meltdown.

Bangladesh is perceived 15 percent cheaper than its main components such as Vietnam mainly due to low labour cost, she said.

The Dutch companies are always eager to identify new business opportunities abroad, especially in the shipbuilding industry, which is strongly export focused, Voorbraak said.

She said the Dutch have a vast experience in shipbuilding sector which could be shared with Bangladesh for benefiting equally.

Bangladesh ‘road show’ in New York to attract FDI in power sector

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Bangladesh ‘road show’ in New York to attract FDI in power sector
BSS, Dhaka

A two-day ‘road show’ of Bangladesh for attracting the foreign direct investment (FDI) to the power and energy sector started at Marriott Marquise Hotel in New York yesterday.

Bangladesh organized the show titled “Bangladesh Investment Conference and Road Show on Power and Energy Projects” for encouraging the participation of the private sector in the power and energy sector.

A total of 160 representatives from 78 organizations, including Morgan Stanley, Olstat, ARC, Caterpillar, Konco Philips, GoaldStar Energy and HSBC, are participating in the show, according to an official handout. One-to-one meetings have been organized after the main presentation. This road show has been organized for attracting the FDI for setting up new power plants with the capacity of 4,000 megawatts (MWs) of electricity and constructing an LNG terminal.

Adviser to the Prime Minister on Power Dr Toufiq-e-Elahi, Bir Bikram, was present at the function as the chief guest.

He said there are enormous investment potentials in Bangladesh.

State Minister for Power, Energy and Mineral Resources Mohammad Enamul Haque said Bangladesh has been maintaining economic stability for a last few years and it will be more dynamic in future.

Bangladesh Ambassador to the US Akramul Kader delivered the welcome address, while Chairman of the Board of Investment Dr SA Samad presented a paper titled “Macro Economic Stability and Investment Prospects”.

Energy Secretary Md Abul Kalam Azad presented a paper on “Power Sector of Bangladesh: Policy issues,” PDB Chairman ASM Alamgir Kabir presented “Power Sector of Bangladesh: General Expansion Plan, Private Participation and New BOO Projects” and Petrobangla Chairman Dr Hossain Mansur presented “LNG Terminal at Port City Chittagong in Bangladesh.”

Chairman of Parliamentary Standing Committee on Power, Energy and Mineral Resources Ministry Abdullah al Islam Jacob, Deputy Governor of Bangladesh Bank Ziaul Hasan Siddiqui, BPC’s Chairman Anwarul Karim, member of New York State Senate MalCom Smith, US- Bangladesh Partners President Aziz Ahmed, US-Pan Pacific Chamber of Commerce President Sevio Chan, World Bank’s Lead Energy Specialist Mac Cosgrov Davis and US State Department Representative Elena spoke.

Trust Bank to go big on biogas fund

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Trust Bank to go big on biogas fund
Sajjadur Rahman

Trust Bank, a third generation private commercial bank, will fund for the first time biogas plants on a large scale to help rural people get renewable energy, which will ultimately make them more economically viable, said the bank’s chief executive.

Initially, under a pilot project the bank has allocated Tk 5 crore for the programme and the amount will go up on the basis of the feedback it receives.

“If we succeed, then such projects will proliferate,” Shah S Sarwar, managing director, told The Daily Star.

The programme will formally be inaugurated on February 8 in Manikganj district with handing over cheques to 16 beneficiaries, Tk 3 lakh for each.

A beneficiary will buy four cows with the money.

The Trust Bank MD firmly believes these biogas plants will be able to provide livestock farmers with a sustainable cooking fuel and potent organic fertiliser. This will help face power and gas crisis by using eco-friendly technology, Sarwar said.

The bank has taken up the project to avail of the refinancing facility introduced by Bangladesh Bank in August last year.

The central bank has formed a Tk 200 crore revolving fund to provide loans at low interest rate for setting up solar energy, biogas and effluent treatment plants through the commercial banks.

BB will charge 5 percent interest rates on commercial banks that will take 9 percent from the customers.

Biogas practices in poor African and Asian countries are on the rise, mainly with the help of the donor and nongovernmental organisations’ financial supports. Some NGOs in Bangladesh are also providing funds for the rural folk to implement biogas plants.

According to bankers, commercial banks took least interest in stepping into this area because of what they said high cost of delivery and supervisory role.

Trust Bank has made a strategic alliance with Enterprise Development Company Limited (EDCL) to reduce its costs for the loans.

“It’s a combination of commercial and social institutions to make the delivery easy,” said Sarwar.

The EDCL will help borrowers develop their business and commercialisation of biogas.

The move will also help the bank reach out to millions of the rural people who have less access to banking, Sarwar said.

sajjad@thedailystar.net

BB expects remittance income to cross $11b mark this fiscal

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BB expects remittance income to cross $11b mark this fiscal
Siddique Islam

Bangladesh Bank expects the inward remittance to record more than US$ 11 billion by the end of the current fiscal as a special move has already been made to increase its flow from different parts of the world.

“We expect that the inflow of remittances may cross $11 billion mark by the end of this fiscal,” a senior official of the Bangladesh Bank (BB) told the FE, adding that the central bank had estimated the figure on the basis of the last six months flow of remittances.

Bangladesh received $5.535 billion during the July-December period of fiscal 2009-10, registering a 22.89 per cent growth over the same period of the previous fiscal, according to the central bank statistics.

The latest figure shows that despite the slowdown of overseas jobs, inflow of remittance has maintained a robust growth — a continuation of the trend in last fiscal year when remittance grew 22.41 per cent, the BB officials said.

“We expect the upward trend of inward remittances to continue in the near future,” another BB official said, adding that the stable exchange rate of the local currency against the US dollar was also contributing to higher flow of inward remittances.

The central bank earlier took a series of measures to encourage expatriate Bangladeshis to send their hard earned money through formal banking channel instead of the illegal “hundi” system to boost the country’s foreign exchange reserves.

As part of the measures, the BB issued 26 more licences to 14 commercial banks recently for setting up exchange houses in different parts of the world aiming at expediting remittance inflow.

The central bank has, so far, given approval to establish 295 exchange houses and set up 840 drawing arrangements abroad to boost flow of remittance through formal channels.

Besides, the BB has given permissions to 13 both local and foreign commercial banks to disburse remittances using networks of 14 non-governmental organisations (NGOs.), including BRAC and ASA, across the country.

Four state-run commercial banks and dozens of private commercial banks have also stepped up efforts to increase remittance flow from the Middle East, the United Kingdom, Japan, Canada, Australia, Malaysia, Singapore, Italy and the United States.

“We’ve a plan to establish a good number of exchange houses at Canada, the United States, Europe, Australia and the countries in the Meddle East to speed up remittances from the counties using official channel,” Managing Director and Chief Executive Officer of the Agrani Bank Limited Syed Abu Naser Bukhtear Ahmed told the FE Saturday.

He also said the board of directors of the state-owned bank has already given permission for setting up the exchange houses aboard. “We’re seeking permission from the central bank in this connection,” he added.

“Our efforts will continue to establish new contacts with overseas exchange houses so that our overseas workers can find it easier to send money back home,” a senior official of a private commercial bank said.

Some banks are trying to expand their network to expedite the delivery of remittances to the beneficiaries across the country, he added.

RAK holds roadshow for investors

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RAK holds roadshow for investors
Ceramics maker first to go public under book building method
Star Business Report

RAK Ceramics, a Bangladesh-UAE joint venture, will offer primary shares to institutional investors in next three weeks after discovering the price of each share using the book building method.

The company will go for a public offer in 25 days from the closure of institutional bidding, officials and issue managers said at a projection meeting in Dhaka yesterday.

The meeting or roadshow — part of the book building process — was designed to woo eligible institutional investors to participate in bidding to be held in three weeks.

The tiles and sanitary-ware maker, which received primary approval for floating shares from the securities regulator in December last year, is the first to list on stock exchanges under the book building method.

“We are proud of coming to Bangladesh,” said Khater Massaad, chairman of RAK Ceramics (Bangladesh), describing the company’s prospects and future plans to impress the institutional investors.

There is huge demand for quality products in Bangladesh with its large population and growing per capita income that mainly encouraged RAK to invest in the country, he said.

“Meeting local demand, the company has already started exporting products to India, Sri Lanka and Nepal, and plans to enter the European market in the coming days.”

Arif Khan, deputy managing director of IDLC Finance, the lead issue manager, presented the company’s financial strength. Saiful Islam, director of BRAC-EPL, the co-issue manager, explained the logic of the company’s indicative price and described the bidding process.

DSE President Rakibur Rahman and RAK Ceramics (Bangladesh) Managing Director SAK Ekramuzzaman also spoke.

RAK will offer 3.45 crore shares of Tk 10 each using the book-building method. Of the shares, 20 percent will be sold to intuitional investors, 10 percent has been reserved for mutual funds, 10 percent for non-resident Bangladeshis and 60 percent will be offered to public.

An indicative price for each RAK share has already been built at Tk 40 through bidding by seven institutions from four sectors.

Now in the price discovery phase, bidders cannot quote 20 percent more or less than the indicative price, meaning they will have to offer between Tk 32 and Tk 48 for each share. Fixing the indicative price is required to obtain regulatory approval.

The institutions will not be allowed to sell shares in the first 15 trading days under the lock-in system.

RAK’s paid-up capital is Tk 195 crore. As of December 2009, the company’s net asset value was Tk 13.69 per share and earnings per share were Tk 1.83.

Foreign entrepreneurs own 90 percent of the company, while local entrepreneurs own the remainder, but local ownership will become 20 percent after the IPO.

RAK started business in Bangladesh in 2001. Presently, the company holds an 80 percent market share in the sanitary-ware market and around 35 percent in the ceramics market.

The company also holds 58 percent shares in RAK pharmaceuticals, 57 percent in RAK Power, 35 percent in RAK Security, 40 percent in RAK Paints, 51 percent in RAK Foods and 51 percent in Classic Porcelain.

The book building mechanism, a widely practised price fixing mechanism for IPO, was introduced in March, aiming to encourage private-sector entrepreneurs to list their large and profitable companies on bourses at fair prices.

In line with the book building mechanism, institutions bid for shares through which the price is discovered. A weighted average price is fixed based on the highest and lowest price and shares are allotted for institutions at the weighted average price. The lowest price is considered a cut-off price for public offers or general investors.

Pharma sector shakes off recession hangover

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Pharma sector shakes off recession hangover
Aggressive marketing leads to turnaround

Fazlur Rahman

The country’s medicine exports may witness an impressive jump in 2010 thanks to the aggressive marketing the local manufacturers pursued in the early days of the global economic crisis, the industry people said.

Local pharmaceuticals’ exports have received a blow at the start of the last fiscal year 2008-09 as many importing countries shied away as they were not able to continue their orders due to the recession.

Now they are opening letters of credit as the situation is improving worldwide, said Abdul Muktadir, general secretary of Bangladesh Association of Pharmaceuticals Industries (BAPI).

He said the exports slumped initially due to the falling demand from many importing countries who have been hit hard by the recession. “But we have strongly come back from the recession and the order is increasing day by day,” he told the FE.

Mr Muktadir said Ukraine, Bangladesh’s one of the buyers, also faced currency devaluation. “But currently they have come up and started importing medicines again.”

“Similarly, many countries in South America, who also stopped importing, have started importing. Georgia and many African countries such as Ethiopia, Kenya and Congo are taking our products,” he said.

Shipments of pharmaceutical products bearing made-in-Bangladesh tags grew 6.21 per cent to US$45.67 million in the fiscal year that ended in June, overcoming a minus growth of around 16 per cent in the first nine months of the year.

Since then the exports have continued its upward trend, achieving 15.44 per cent growth in July-November period of 2009-10 fiscal.

The revival was due to surge in orders from Western buyers and an aggressive marketing policy pursued by the local pharmaceuticals during the crunch time, Mr Muktadir said.

“We started marketing aggressively as the exports plunged due to the crisis. We have analysed the reasons why the importers stopped buying. We applied all techniques to keep the older buyers and woo the new ones, which is now giving dividends.”

Mr Muktadir, also the managing director of the country’s third largest drug maker Incepta Pharmaceuticals, said Bangladesh’s reputation as world-class drug producing country has also helped their cause.

The country’s five pharmaceutical product makers – Incepta, Beximco, Renata, Eskayef and Square – have recently obtained quality certificates from European countries.

Mr Muktadir forecasts that the export will grow significantly in 2010, as the global economy shows signs of coming out of the worst recession in six decades.

“The export is increasing significantly. In the last October-December quarter, we have seen a significant jump in shipment. We hope this trend will continue in the coming days,” Mr Muktadir said.

Officials of Beximco Pharmaceuticals, the country’s largest medicine exporter, also echoed the words.

“Our businesses have grown amid the recession,” said Nazmul Hasan, manager, International Marketing Division of Beximco. “We had very good exports both in 2008 and 2009. We hope the same will continue in 2010.”

Independent experts, however, differed, saying that it is quite tough to forecast as the country’s pharmaceuticals market is very unpredictable.

The Tk 70.0 billion local pharmaceutical industry — of which the top 10 — Square, Beximco, Eskayef, Incepta, ACME, Opsonin, Renata, ACI, Aristopharma and Drug International — take up nearly 70 per cent of the market, exporting products to a large number of countries.

Aman output exceeds target

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Aman output exceeds target
FE Report

The country’s Aman output surpassed the target by 0.4 million tonnes this season when corp cultivation was hit by a drought-like situation.

According to the Department of Agriculture Extension (DAE), local farmers harvested 13.10 million tonnes of Aman rice against the target of 12.70 million tonnes, fixed earlier by the DAE.

“Harvesting of Aman crop has already been completed across the country… The DAE has estimated Aman output at 13.10 million tonnes based on the filed-level information,” a senior agriculture ministry told the FE.

He said although the crop cultivation faced a drought-like situation a government step to facilitate irrigation and a late monsoon helped farmers harvest a bomber crop.

Besides, extra efforts of farmers, enhancement of cultivable area and plantation of high-yielding variety (HYV) and hybrid crops boosted the overall rice output.

According to the DAE figures, the country’s Aman cultivation area surpassed the 5.4-million hectares target in the season. The total Aman acreage, according to the agriculture extension, was 4.56 million hectares.

Apart from the increase of acreage, the average per hectare yield of Aman paddy was higher than the target at 2.45 tonnes, said an agriculture ministry.

Bangladesh Bureau of Statistics shows the country’s total Aman rice production was recorded at 11.2 million tones in the previous cropping season against the target of 12.3 million tonnes, set by the DAE.

Meanwhile, the DAE has also set a 19-million tones of ‘Boro’ output target this season, up by a 1.0 millions from the previous year’s production, official sources said.

To help achieve such massive target, the Department has earmarked 6.8 million hectares of land for Boro plantation in the 2009-10 cropping season.

NBR posts 18pc growth in first half of fisca

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NBR posts 18pc growth in first half of fiscal
Meeting Tk 610b goal no chimera, it feels

FE Report

The National Board of Revenue has achieved 18 per cent growth in the first half of the current fiscal compared to the corresponding period last fiscal thanks to the impressive growth of income tax and Value Added Tax (VAT).

The board has collected revenue worth Tk 264.37 billion in the July-December period of the current fiscal with the VAT collection amount recording about 24 per cent followed by 22 per cent from income tax and 9.0 per cent from customs.

The government has set Tk 610 billion revenue target for the current fiscal expecting 17 per cent revenue growth over the corresponding period last year.

“The National Board of Revenue (NBR) has achieved a satisfactory growth in the first half of the current fiscal. It will be not impossible to achieve the target if the ongoing flow of revenue collection continues,” said a top tax official.

Revenue collection growth was sluggish in the first quarter of the current fiscal as import revenue declined due to the impact of global recession, he said.

The customs department has earned Tk 105 billion in revenue in the first six months of the current fiscal with 9.0 per cent growth, recovering from its negative trend in the first quarter.

Collection of VAT posted the highest 24 per cent growth with Tk 97.02 billion, while income tax achieved 22 per cent growth collecting Tk 60.39 billion.

Revenue board officials said revenue collection has a seasonal effect as it comes up in the last quarter every fiscal, the official said.

“NBR gets a significant amount of Advance Income Tax (AIT) from the implementation of Annual Development Plan (ADP) that gears up at the concluding phase every year,” he said.

Send SMS for train tickets

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Send SMS for train tickets
Shahnaz Parveen

Bangladesh Railway will introduce SMS ticketing service through mobile phone next month to ease sufferings of commuters.

“Initially, the service will be launched on the Dhaka-Chittagong route. If successful, it will be expanded to the countrywide rail network. All necessary technical aspects have been checked and duly completed. We hope to launch the service at the end of February,” said BR Joint Director General (operations) M Shahjahan.

BR is the first organisation to introduce SMS ticketing in the subcontinent, the BR joint director general said.

Anyone can book seats and transfer credits for buying tickets by sending SMS from anywhere in the country. On completion of credit transfer, the customer will receive an SMS notification with a transaction ID number, said the official.

The software used for the service will allow mobile phone companies to check automatically whether the customer has enough credit to his or her cell phone account and deduct the amount of the fare from it.

Before boarding a train, passengers can obtain tickets from designated booths at train stations by showing the notification.

The task has been outsourced to CNS Limited, a private company. Contracts between the CNS and mobile phone companies have already been signed, the official said.

Ten percent of the total number of tickets will be reserved initially for SMS ticketing and CNS will pay the BR in advance, he said.

He said passengers can get information about intercity trains running on different routes, ticket fares for a train to a particular destination and availability of seats on a desired train by sending SMS to a specific number. They can also get train-delay schedules of seven important stations.

The same information will be available on the Internet. The BR online database will be used for the SMS ticketing service.

About 53.8 million passengers now use railway service annually. Over 40, 000 people travel to and from Dhaka through the Kamalapur Railway Station daily.

A total of 48 intercity trains, eight commuter trains and eight mail expresses operate from Kamlapur daily. The BR has 259 daily passenger train services across the country.

Thousands of homebound people go through hassles to buy train tickets before Eid every year.

On the eve of the Eid day last year, about 37,000 people left the capital by trains, said BR officials.

Crocodiles export to Germany next month

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Crocodiles export to Germany next month
BSS, Dhaka

Bangladesh is going to first-ever crocodile export next month as the country’s lone crocodile farm has finally obtained permission from the concerned authorities to this end.

“Yes, we have finally got the permission from the Department of Forest(DoF) on January 21 that paved the way for our crocodile export as well as our anxiety,” Mushtaq Ahmed, Managing Director and CEO of Reptile Farm Ltd (RFL), told BSS on Friday.

He added: “We have sought permission from the DoF to export 67 frozen crocodiles to Germany and import 10 live parent crocs from Malaysia on August 31, but after examining different aspects for about five months, the department at last gave permission.”

Mushtaq also said that their farm was ready to export crocodiles to Germany in December last, but it could not be possible as the DoF did not give green signal to them.

According to the agreement with the Heidelberg University of Germany, he said, their farm is going to export 67 frozen crocodiles ranging from nine inches to five feet in length to the university next month. “The university is importing the crocs for research purpose,” Mushtaq said.

He said that the maiden export of crocodiles from Bangladesh would fetch US Dollar one lakh, ushering in a hope of croc business in the country.

Mushtaq said the farm, situated at Hatiber village under Bhaluka Upazila in Mymensingh district, has now 825 saltwater crocodiles (scientific name: crocodydylus porosus). Of them, 67 are big size (average length 14 feet) and the rest are small to medium size ( 9 inches to five feet), he added.

After the end of the last year’s breeding season (July- September), he said, 411 baby crocodiles were born at their farm, which was 240 in 2008 and 140 in 2007.

Narrating his experience in croc business, Mushtaq, a university graduate, said he had tasted different professions, including a job in the UNHCR, but could not settle anywhere.

“I had been inquest of a profession something different and at last my choice landed in a commercial crocodile farm at Bhaluka, the first such one in the Southeast Asian region,” he said.

He along with Mesbahul Huq, a pharmacist, then set up the croc farm at Hatiber village on 15 acres of land.

While the project is Mushtaq’s brainchild, it was Huq’s investment that helped turn the dream into a reality.

The two entrepreneurs were aided in their maiden venture with technical assistance from South Asian Enterprise Development Facility (SEDF) and with financial support from the equity and entrepreneur fund (EEF) unit of Bangladesh Bank. RFL also received assistance from Southeast Bank Ltd.

The duo brought 75 reptiles ranging from 7 feet to 12 feet in lengths from Malaysia for commercial breeding of crocs at a cost of Taka 1.25 crore. Of them, eight died on the way to the farm established in October 2004.

Mushtaq said they set up the farm with an aim to export over 5,000 pieces of crocodile skin annually and create a base for earning up to US$ 5 million by 2015.

Different countries, including France, Germany, Italy and Spain, have shown keen interest in importing croc skins from their farm, he said, expressing hope that their farm would be able to export 500 croc skins by next two or three years.

He said there is a huge demand for croc skins, meat and bones in Europe, America and other developed countries like Australia, Japan, Singapore and China, and charcoal made from crocodile bones is indispensable to the global perfume industry. To meet this demand, he opined, more croc farms could be set up in Bangladesh.

Mushtaq, however, stressed the need for simplification of the procedures by the concerned department for exporting crocs from Bangladesh, saying that otherwise none would come forward for this unconventional business.

Non-ferrous metal emerges with export potential

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Non-ferrous metal emerges with export potential
Ship-breaking residue goes to Europe, Japan

Jasim Uddin Haroon

In a surprise move, local traders have started exporting of non-ferrous metals to European markets, neighbouring India and Japan as these items have huge demands there.

The term non-ferrous is used to indicate metals other than iron.

Bangladesh has no under-ground reserves of ferrous and non-ferrous metals like copper, brass, aluminium, bronze, and lead. Local traders are procuring those from the country’s ship breaking yards.

The traders also procure other non-ferrous metals like gun-metals and white metals, which are very expensive items procured from ship breaking yards.

Md Kamal Uddin, an exporter of these metals, told the FE: “We’re exporting the item to different European countries and neighbouring country India.”

Exporters said that the importing nations make valuable engineering products, especially for shipbuilding plants, by recycling the metals.

Sources claimed local traders are exporting around 100 containers of non-ferrous metals each month weighing around 2000 tonnes.

The prices for the non-iron metals range between US$ 1000-$5000 each tonne depending on quality and sizes.

Ship breakers said that each ship contains minimum 1.0 per cent non-ferrous metals.

But specialised ships contain more than 3.0 per cent such metals.

Captain Anam, a senior consultant of the ship breakers, told the FE: “Around 40,000-50,000 tonnes non-ferrous metals come out from the ship breaking fields each year.”

Mr Anam said: “Most of these items are being exported and a tiny quantity is used locally to produce different household items.”

Shaheen, another exporter of the metals, alleged that a large quantity of such metals are smuggled out into India as the country has a huge demand for household utensils made of copper and brass.

Kamal Uddin said this has diversified the country’s export basket saying: “The government should take necessary steps to stop its smuggling.”

Foreign technicians in EPZs to get tax-exemption facilities

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Foreign technicians in EPZs to get tax-exemption facilities
Doulot Akter Mala

The government has decided to re-introduce the tax-exemption facilities for foreign technicians engaged in export processing zones (EPZ) in a bid to encourage foreign direct investment (FDI) and acquire technical know-how.

Income of the foreign technicians will be exempted from income tax for the first three years of their job, said a senior tax official.

“We are going to re-introduce the tax benefit to lure FDI and share technical knowledge with foreign experts,” he said.

The government discontinued the facility in fiscal 2008-09 after it found massive abuse of the opportunity, he said.

“The NBR will offer the facility on some conditions to check the abuse of the tax benefit,” he added.

The board will issue a Statutory Regulatory Order (SRO) within a short time make the decision effective.

The government is going to offer the facilities only for foreign technicians, not the foreign residents. A number of foreign residents earlier enjoyed the facility illegally, he said.

The NBR will offer the facility to the working nationals of foreign countries that have ‘double taxation avoidance agreement’ with Bangladesh, he said.

“The country has, so far, signed the agreement with 29 countries. Technicians of those countries will be entitled to enjoy the tax benefit,” the official said.

The NBR has taken the move following requests of the Bangladesh Export Processing Zones Authority (BEPZA) as majority of the foreign technicians work in the EPZ areas.

Foreign technicians will have to furnish all necessary information to the NBR and the BEPZA within one year of their job to get the tax-exemption certificate, he added.

Executive chairman of BEPZA Jamil Ahmed Khan recently requested the NBR to simplify the procedure of offering tax benefit for foreign technicians. In a letter, he urged the revenue board to provide the opportunity on the basis of documents submitted in BEPZA office.

The government is committed to provide one stop service to investors, the letter said.

Foreign investors may have negative impression if they are forced to submit same documents to two government entities, he wrote in the letter.

“The BEPZA closely monitors the furnished documents of investors before issuance of work permit and permission for setting up industries,” he said.

A five-member work permit standing committee comprising representatives of home ministry, Board of Investment (BoI) with the executive chairman of BEPZA as its head scrutinises all relevant documents before the issuance of work permit, he added.