Shipbuilding industry sees growth spree

http://www.thefinancialexpress-bd.com/more.php?news_id=84738

Shipbuilding industry sees growth spree
Munima Sultana

The country’s fast growing ship building industry is likely to see another growth spurt within a year as a number of foreign companies are seeking local partners to develop backward linkage industries.

Ship building owners said joint venture investment are likely to come from Denmark, Germany, France and few other countries that would help reduce the foreign dependence from ship designing to painting to make world class ocean-going vessels.

Officials of Danish Embassy said at least nine Danish entrepreneurs are working on establishing joint ventures to develop deck equipment, windows, generators, hydraulic system and marine electrical equipment.

Besides, some Danish Naval architect firms are also considering to set up design houses to help the Bangladesh shipyards develop their own design for which they spend about 10 per cent of the production cost.

Officials said a good number of German businessmen who visited the country in October also expressed their willingness to enter into joint ventures for setting up heavy tech industries to build engine and generator.

Though most of these deals are at negotiation level, they said, the joint ventures from Germany would help the country double its ship building capacity.

Md Shakhawat Hossain, Managing Director of Western Marine Shipyard, said joint ventures would be a win-win deal as foreign companies business costs will lower and Bangladesh would get home grown supply of allied products thus saving valuable foreign currency.

“This will help reduce production cost and increase value addition of Bangladesh made oceangoing vessels,” he said and added that foreign investment here would increase value addition of the country’s product to 50 per cent which is now 35 per cent.

The country now has some 10 shipyards which have capacity to make trawlers, containers ships, multipurpose vessels, tankers, various types of tugs, patrol boats, passenger vessels seismic vessels and fisheries research vessels.

Morten Siem Lynge, Programme Coordinator of Danish Embassy to Bangladesh told the FE that though the investment would not create big employment, it would help the country get skilled workers and experts of international level.

He said within a short time, memorandum of understanding (MOU) would be signed between a few Danish and Bangladesh companies to start joint ventures in the country.

Shakhawat Hossain said at present the country’s carpentry and electrical industries can support the needs of different sectors other than ship building as they have lack of technology and skill to do so.

“The joint venture deals would ensure technology transfer and building capacity of these companies to carry these carpentry and electric works especially for the growing industry,” he added.

According to a study of Danish Embassy, investment cost in the ship building industry in the country is 15 per cent lower than other ship building nations due to cheaper labour cost.

It shows that the country can supply only 10 per cent components for building exportable ships but its support to the domestic inland and coastal vessels manufacturing is around 40 per cent, most of which are believed to be by small and medium enterprises (SMEs) with low skill and training.

The Danish study says that though cost of labour in ship building is typically around 20-30 per cent of the total ship manufacturing costs, the study says that the value of the local items which is 40 per cent of the total ship cost could accordingly be upgraded to 70 per cent.

Among the 200 shipyards, the country has four shipyards capable to build ocean going small vessels but there are six others which would be able to reach the same category by a year or two.

The Danish study finds potentiality to develop 18 backward linkage industries in the country which include ship’s out fittings, safety accessories, marine lighting, maritime signs, symbols and posters, piston rings, switch gear, furniture, marine cables, anchor and chain, electrical and electronic items and shipbuilding steel plate.

Footwear exporters see silver lining

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Footwear exporters see silver lining
Sayeda Akter

Leather footwear exports are expected to turn around in two months as the shocks of recession are easing in parts of the world.

Exporters are trying to increase product quality and make prompt delivery to get more work orders from abroad. Simultaneously, they have moved to diversify products to attract new buyers, said industry leaders yesterday.

Local leather footwear and bag exports slowed in July-September, mainly due to the delayed effects of the global financial meltdown.

In the July-September period of 2009, leather footwear exports stood at $56.22 million, which was a 3 percent decline from last year’s figures, according to Export Promotion Bureau (EPB) data.

Leather bag and purse exports have also slowed with sold products worth $4 million during the period, a rise of 5.56 percent from a year ago, although they failed to reach the export target set by the government.

But growth in exports of leather bags and purses was more than 90 percent in the April-June period.

Industry insiders said the global financial meltdown has had a delayed effect on demand for finished leather and leather goods that caused a decline in exports.

But the decline will not continue for long, as developed markets demand low-cost footwear, bags and purses, industry leaders said.

Syed Nasim Manzur, managing director of Apex-Adelchi Footwear Ltd, said footwear exports declined as a result of global recession that affected consumer expenditure on fashion accessories, like footwear and bags.

“Export earnings were satisfactory even three months back, but it dropped in September, mainly because of the delayed effects of global recession on demand for luxury fashion accessories,” he said.

“Another reason for the decline in exports is the seasonality factor. We take orders twice a year and produce different products in different seasons — for example, sandals for spring and boots for winter.”

“Every time we go for new orders, we have to change the entire factory set-up that slows local production initially,” Manzur explained. “But we are trying to smooth the transition further.”

He also said the situation will get better in coming months. “There is demand for our products on international markets, as we produce high quality products and many countries such as Italy have stopped producing high quality shoes.”

The market size of Bangladeshi-made leather footwear stands at around Tk 1,700 crore, of which about 45 percent is exported. The country exports around six million pairs of leather footwear a year.

Apex-Adelchi Footwear Ltd is the country’s leading footwear exporter, claiming more than half of total exports. The company earned Tk 450 crore last year.

Exports of leather bags and purses have also slowed mainly due to lower work order flow during this period. Earlier, the bag exports have risen by more than 90 percent from September 2008.

“We still have a little growth in exports of items like bag and purse, but the flow of work orders have slowed by 50 percent in recent months. Our present growth figures are resultant of the orders we received at least 8-10 months back,” said Ashikur Rahman, managing director of Rahman Leather Bangladesh, a Hazaribagh based leather bag exporter.

“The main reason behind the slower growth is the lack of consistent work orders. Yet we don’t have old and loyal customers abroad, as we are quite new in exporting bags in a large scale,” he said adding, “We still get orders from newer and irregular buyers.”

The annual market size for leather bags and purses stands around Tk 100 crore.

Meanwhile, Rezaul Karim Ansari, chairman of Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association, demanded government support to enhance export performance.

sayeda@thedailystar.net

Bangladesh now a hub of sportswear outsourcing

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Bangladesh now a hub of sportswear outsourcing

Workers at a factory in Gazipur check Puma sportswear. The production of quaility ready-made garments made Bangladesh a global hub of sportswear outsourcing. Photo: Amran Hossain

Refayet ullah mirdha

Bangladesh has become a global hub for outsourcing sportswear as internationally renowned brands in large numbers are flocking here to purchase such special clothing ahead of big global sports events.

Quality and cheaper rate of such local apparels attract the buyers, industry insiders say.

Sportswear brands such as Nike, Puma and Adidas are already engaged in outsourcing sportswear items from Bangladesh.

“I have exported sportswear for the players and audience of different countries in the last World Cup football, held in Germany. I am sending huge number of such item for the South Africa World Cup, too,” said M A Rahim Firoz, a director of DBL Group, mainly a knitwear maker.

He sees the rise in buying orders from renowned companies as a sign of better days in the coming years. “The higher demand manifests that foreign buyers have confidence in Bangladesh made sportswear items,” Firoz said.

Dozens of garment factories are now getting export orders round the year, he added.

Talking to The Daily Star, Viyellatex Group Chairman and Managing Director K M Rezaul Hasanat pointed to another factor that contributed to the high demand for sportswear.

This clothing is being used as a fashion item as western styles pass through a wider change.

“Nowadays, people also wear sportswear as casual dresses at home or office. This is why the demand for such clothing is increasing in the western world,” Hasanat said.

Bangladesh has been supplying sportswear for different renowned football, cricket and baseball clubs in USA, EU and other countries, he added.

When asked, Managing Director of Epyllion Group Reaz Uddin Al-Mamoon said his company has already started shipment of jerseys for audience of the World Cup football in South Africa in 2010.

“I hope I fetch $5.0 million this year from exports of at least 25 lakh pieces of sportswear to South Africa,” he said, pointing his finger at the recently-signed agreement with the Federation of International Football Association (FIFA).

Mamoon said he has already completed the shipment of 2 lakh pieces of sportswear to South Africa and the rest of the shipments will be completed soon. He said he sent sportswear also for the Germany World Cup.

“Bangladesh has ample scope for being a major global market player in sportswear as the country can supply fine stitched products with cheaper rates,” Mamoon said.

Meanwhile, Bangladesh exported RMG products worth $3.03 billion in the first three months (July-September) of the current fiscal year compared with $3.35 billion in the same period last year.

The target for knitwear export was fixed at $7.29 billion in fiscal 2009-10 against the achievement at $6.429 billion in 2008-09. In the case of woven, the export target was fixed at $6.68 billion for the current fiscal year against $5.91 billion earned in 2008-09, the Export Promotion Bureau said.

reefat@thedailystar.net

Local fingerprints on world stage

http://www.thedailystar.net/newDesign/news-details.php?nid=114184

Local fingerprints on world stage

Ziaur Rahman

Md Hasan

It may be hard to believe fingerprints, a traditional substitute for signatures, could craft business worth millions of dollars.

TigerIT BD.com, a local IT company, is bagging work worth millions from the global market by selling its Automated Fingerprint Identification System (AFIS), an identity solution. It is a process of automatically matching one or more fingerprints against a database of known or unknown prints.

Local companies may also adopt the innovation after knowing the US Federal Bureau of Investigation intends to work with TigerIT for the ID solution.

Local software makers are neglected in regards to obtaining deals from the government and private entities for providing technology solutions. However, confidence rose after TigerIT successfully provided voter IDs for 80 million people with the help of the Bangladesh Army in 2007-08.

TigerIT provided software solutions to build the national database.

“Our success could be a positive example for local software makers who fail to convince local policymarkers,” said Ziaur Rahman, chairman and chief executive officer of TigerIT, in a recent interview with The Daily Star.

Local IT firms fail to tap international markets due to a lack of recognition, he said. “There is no other alternative to having local reference in getting work abroad.”

He said the size of Bangladesh’s IT (information technology) market will grow rapidly as the government announced a target to create a ‘Digital Bangladesh’ by 2021.

In Bangladesh, more than 300 firms are developing IT-based solutions, but most failed to compete in the local market despite performing smoothly in global markets.

Several local IT firms are providing IT solutions to multinationals across the globe. But the sector could strengthen in Bangladesh if the government patronises local IT firms, as in India, Rahman said.

He said local firms in India get priority over foreign companies. “We should change our traditional mindset that foreign solutions are always better than the local ones,” he said, adding that Bangladesh should go for foreign technology solutions that are not available here.

TigerIT is software maker specialising in ID and fingerprint-based solutions. The company’s AFIS fingerprint matching solution ranked number one in the Minutiae Interoperability Exchange (MINEX) test by the US based NIST (National Institute of Standards and Technology).

The TigerID AFIS is a set of services that can reside on a single server, or be distributed across an array of servers, depending on the anticipated transaction volume.

With the close of a successful chapter in making voter IDs in Bangladesh, TigerIT ID solutions are now being used in the US, EU and African countries.

TigerIT also engaged in providing ID solutions to Indonesia, Nepal, Thailand, Sri Lanka, Africa, Canada, Columbia and some other parts of South America.

“Our software solution is being used by 22 states in the US under a government e-commerce project,” Rahman said.

TigerIT has developed an application by which the US government collects online reports from homes for disabled citizens on utilisation of government funds.

More than 100 Pizza Hut outlets in the US are also providing sales services by using TigerIT’s solution, said the company chief.

Besides, TigerIT also developed a cell phone browser, which has become popular in the US, Rahman said. It is now in talks to sell the cell phone browser to the EU.

“The Nigerian Army also selected us for their ID project,” said Rahman.

In regards to recognition from the US, Rahman said, “We are now the number one in fingerprint matching solutions. We see this success as a step towards being a global player.”

He said the FBI has also expressed interest to work with TigerIT after receiving the recognition.

TigerIT has recently submitted a bid for the machine-readable passport (MRP) project in Nepal.

“We want to become a global leader in ID solutions,” said Rahman. However, he said like other local IT firms, he also faces hurdles in exporting solutions to the global market.

Bangladesh produces more than 2,000 programmers a year. “We are even more advanced than India in making IT solutions, especially high-end products,” he said.

On company revenue, Rahman said: “We are doing business worth millions of dollars.”

hasan@thedailystar.net

Shimamura set to buy garments from Bangladesh

http://www.newagebd.com/2009/nov/13/front.html#16

Shimamura set to buy garments from Bangladesh
Kazi Azizul Islam

Japan’s clothing brand Shimamura is set to start buying garments from Bangladesh, industry sources said. Fast Retail, owner of top Japanese clothing brand Uniclo earlier started buying garments from Bangladesh.

Two top executives of the Shimamura Company Limited arrived in Dhaka on Thursday and discussed with industry leaders the possibility of apparel trade with Bangladesh. They also visited garment factories.

We are very much hopeful as the top men from Japan’s Number 2 clotting retailer are in Dhaka,’ said the Bangladesh Knitwear Manufacturers and Exporters’ Association president, Fazlul Hoque, after the meeting with the Shimamura president Masato Nonaka.

Jyunichi Yanagisawa, the general manager of the $4.5b Shimamura, also attended the meeting.

Invited by the BKMEA delegation which visited Japan recently, Nonaka was expected to be in the Japanese delegation of apparel importers which attended the Bangladesh Knit Expo and BATEXO in the first week of November. But Shimamura executives later decided to visit Bangladesh individually.

Eighty per cent of Shimamura’s apparel import worth $2 billion is supplied by China; the remaining of Shimamura’s import is supplied by Vietnam, Indonesia and Thailand.

Industry sources said after its rival Uniclo had started buying garments from Bangladesh, Shimamura started inquiring about made-in-Bangladesh ladies wear, knitwear and other garments and hosieries.

Shimamura operates nationwide chain stores under the name Fashion Centre Shimamura, which sells fashion and utility apparel products and related items for females aged between 25 and 45.

It also operates other stores such as Birthday, which sells baby products, Chambre, which sells fashion accessories for women, and Divalo, which offers women’s shoes and other apparel items.

Shipbuilding holds out high promises

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Shipbuilding holds out high promises
Shahiduzzaman Khan

A ‘pragmatic’ policy for the shipbuilding industry is reportedly under consideration for attracting new investments and orders from abroad. The country has earlier witnessed some notable success in export of small ocean-going vessels.

In this backdrop, the government is also examining the possibility of setting up a separate export processing zone (EPZ) exclusively for the shipbuilding sector.

A visiting 21-member Danish business team is, according to reports in the media, looking for local partners and investment potentials of the country’s budding shipbuilding industry. At a function styled Denmark-Bangladesh Matchmaking Event at a local hotel, Danish business leaders expressed their willingness to invest their funds in this sector in Bangladesh. Earlier, a German business mission, while visiting Bangladesh, expressed its interest in forming a sustainable, long-term partnership in shipbuilding sector in Bangladesh.

Commerce Minister Faruk Khan announced at the Danish embassy function that the government would consider tax holiday facility for this potential sector. If the Danish companies invest in the backyard linkages of shipbuilding, the sector, as the minister did rightly note, will be able to save a sizeable amount of foreign currency by reducing dependence on import of machinery and equipment.

Like the case in garment industries, Bangladesh is largely dependent on import of equipment and accessories for the shipbuilding industry. If these can be manufactured locally, the domestic value addition content, out of export proceeds from ocean-going vessels, will be substantial. In fact, accessories for the shipbuilding can be made cheaply from places like Dholai Khal if some of its units are offered soft-terms loans at low rate of interest. Local entrepreneurs should, thus, be facilitated and encouraged to manufacture such linkage facilities for the shipbuilding industry.

Investing in Bangladesh has otherwise different advantages including that of cheap labour. In the past several years, two local shipbuilders bagged orders for making more than 50 vessels worth $600 million mainly from European buyers. Some of the ships have already been handed over to the buyers in Denmark and Mozambique. Nearly 200 shipyards and workshops, employing about 100,000 skilled and semi-skilled workers, are in operation to meet demand of this riverine country. Man-hour cost in Bangladesh is lower than any other shipbuilding nations. Ships built in Bangladesh, according to industry operators, are 15-20 per cent cost-competitive compared with countries such as China, Korea, India and Singapore.

Bangladesh has become a new home for making small ocean-going vessels; traditional shipbuilding nations such as South Korea and China are now focusing on constructing large ships. This has offered an opportunity to Bangladesh to tap its full potential in shipbuilding country. More local companies have already come on the scene. Reports say six Bangladesh business houses will invest Tk 5.0 billion within a year to establish shipbuilding facilities across the country. Such business groups, having expertise in real estate, steel and engineering works, have reportedly formed already separate firms and acquired land for their shipbuilding projects. The initiatives have been taken by some of such businesses to set up projects mainly in Narayanganj, Munshiganj and Chittagong.

Danish Ambassador Einar Hebogard, speaking at the matchmaking event in question, appeared optimistic about future of Bangladesh shipbuilding industry. For the last three to four years, he has been watching the shipbuilding industry with interest and was finally convinced that Bangladesh would fare well in this burgeoning business.

According to the baseline study done by the Danish embassy, 10 Bangladeshi shipyards are expected to become capable of building high quality international standard ships of up to 10,000 DWT within a year or two. Two shipyards have already made it on the international scene and have at present around 50 vessels in their order books from the Danish, German, Dutch and Finish buyers. The size of the contracts is valued at around of $500 million and a memorandum of understanding has been signed for an additional $200 million.

If the Danish know-how is combined with Bangladesh’s low labour costs and hard work in joint ventures or other forms of strategic partnerships, local companies will be able to acquire necessary skills and experience for shipbuilding industry.

However, the main strengths of shipbuilding in Bangladesh are its long history of maritime activity, presence of favourable geographical advantages, availability of a low-cost shipbuilding workforce and industry-related educational and training institutes, according to the study. The Danish embassy study found that significant government focus was placed on aiding the shipbuilding industry — green channels for duty-free market access and easy importation facilities have been created, besides a tax holiday in the making.

Bangladesh is believed to be 15 per cent cheaper in building small ocean-going vessels than its main competitors like Vietnam, primarily due to low labour costs. At present, Bangladeshi companies can manufacture around 40 per cent of the components for vessels built for local demand. With a vigorous marketing plan, the new breed of entrepreneurs will be able to obtain a large slice of the $400 billion global shipbuilding business. If that were done, this sector would play an important role in helping the country attain the status of a mid-income country within the stipulated time.

Shipbuilding is predominantly a technology-driven sector where constant improvement of engineering skill keeps one ahead of the others in competition. The government, on its part, will need to extend all-out support to the sector by framing a new policy so that it can brighten the country’s image, besides earning valuable foreign currency.

szkhan@thefinancialexpress-bd.com

Eskayef signs insulin deal with Novo Nordisk

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Eskayef signs insulin deal with Novo Nordisk

Kawsar Khan

The world’s biggest insulin maker Novo Nordisk yesterday signed a major deal with Eskayef to extend its manufacturing base to Bangladesh as the third destination in Asia after China and India.

Eskayef Bangladesh Ltd, a leading pharmaceutical company and exporter, will set up an exclusive formulation, filling, inspection and packaging facility near Dhaka for the Novo Nordisk insulin.

The local company will make insulin from bulk drug (insulin crystals) supplied by Novo Nordisk, a world leader in diabetes care based in Denmark, said officials.

The agreement was signed by two top officials of both companies at a ceremony at Dhaka Sheraton Hotel, also attended by other dignitaries.

Speaking at the function, Dr Alauddin Ahmed, adviser (education, social development and political affairs) to the prime minister, said the deal was a landmark event for the pharmaceuticals sector.

“It’s a very fortunate thing that such a technologically advanced company would have a manufacturing base here,” he said.

Jan Møller Hansen, deputy head of mission, Danish Embassy in Bangladesh, said: “I hope Novo through its vast experience of more than 85 years of providing high-quality insulin will continue to be an important factor in fighting diabetes in Bangladesh.”

A symposium titled “Diabetes: A Growing Challenge for the Developing Countries” was also held at the ceremony.

Chairman of Eskayef Bangladesh Latifur Rahman said insulin is a sensitive product that requires careful handling.

Rahman also said he was happy over the partnership with the global leader in diabetes care.

The current size of Bangladesh’s insulin market is more than Tk 120 crore, according to officials of Novo Nordisk.

In a keynote speech, Prof Ashok Kumar Das, director and medical superintendent of Jawaharlal Institute of Post Graduate Medical Education and Research in India, said diseases such as diabetes are increasing rapidly. Around the world, one person dies from diabetes every 10 seconds while another two develop the disease by the same time, he said.

AM Faruque, managing director of Eskayef Bangladesh, and Melvin Oscar D’souza, head of the Regional Office India of Novo Nordisk, signed yesterday’s agreement.

“We are going to set up a plant in Bangladesh by SKF and by this we will reduce diabetes here,” said Sanjeev Shishoo, vice president of the Regional Office Far East of Novo Nordisk.

Prof AK Azad Khan, president of Bangladesh Endocrine Society and Diabetic Association of Bangladesh, Dr Hajera Mahtab, professor emeritus of Bangladesh Institute of Health Sciences, also spoke.

Novo Nordisk employs more than 25,800 people in 79 countries and markets its products in 179 countries.

Eskayef makes and markets a range of therapeutic drugs, bulk pellets and animal health and nutrition products. It has recently received accreditation from UK MHRA, which assures European-standard medicines from its manufacturing plant.

kawsar@thedailystar.net

Walton eyes int’l market with high production

http://www.thefinancialexpress-bd.com/2009/11/08/83704.html

Walton eyes int’l market with high production

Walton Refrigerator. Source: http://www.waltonbd.com/

Mehdi Musharraf Bhuiyan

Local consumer electronics giant Walton has aimed at more than doubling its daily production of refrigerators by the end of this year as the company is looking to make its mark in the wider international market.

The wholly Bangladeshi owned company- which is a concern of the local R.B. Group, is planning to increase its daily production output of refrigerator to 2,500 from its present level of around 1000, the company authority said Saturday.

“With the Eid ul Azha in the offing, demand for refrigerators, which is our trademark item, is running high in the local market at the moment” a senior marketing official of Walton told FE.

“However, after the end of the Eid season, we would increase our daily production to 2,500 per day as we are eyeing a number of overseas markets for our export”, said Moudud Parvez Mamun, Marketing Manager of Walton.

The conglomerate says that recent years have seen a boom in sales of its locally manufactured refrigerators in the domestic market and currently a total of 11 various brands of Walton refrigerators are available in the local market.

“We already have talked with dealers from a total of 13 countries around the world and by next year we would begin to export refrigerators in Malaysia and Saudi Arabia” Mamun said, adding “Walton has already shipped a range of its refrigerators to Sudan”.

The company says that the lower price of its products would give them a competitive advantage over other international competitors in the overseas market.

In addition, Walton is also looking to gear up its production of locally manufactured motorcycles by more than three fold, which it has identified as another highly potential market both home and abroad.

“Currently we churn out around 300 motorcycles per day from our factory in Gazipur. But by the beginning of the next year, we aiming to increase it to almost a thousand”, Mamun said.

The Bangladeshi company has recently signed an agreement with the Malaysian auto manufacturer Ageth to set up an automobile plant in its factory premise.

“Now we are hoping to commence the establishment of the plant by December which would ultimately see us manufacturing private cars and other automobiles within the country”, Mamun added.

Apart from the manufacturing of refrigerators and motorcycles, the company also assembles television, washing machine, generator, battery and energy saving lights while in the next summer; it is also planning to market its locally manufactured air conditioners.

R.B. Group- to which Walton is a subsidiary, first started its journey in 1977. The company started manufacturing and assembling electronic products back in 1996 and thus has played a pioneering role in electronics manufacturing in the country.

Foreign apparel makers plan relocation to Bangladesh

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Foreign apparel makers plan relocation to Bangladesh
BATEXPO ends amid warm response from buyers

Refayet Ullah Mirdha

Foreign buyers see Bangladesh as a lucrative destination for global apparel outsourcing as the country manufactures quality items at a cheap cost.

Many entrepreneurs now plan either relocation of their factories or venturing into joint business here, they said while narrating their experience as participants in the 20th BATEXPO in Dhaka.

The annual largest apparel exhibition concluded yesterday. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) organised the three-day fair. A total of 62 companies from home and abroad participated in 86 stalls.

Talking to The Daily Star at his stall, Gao Zhourong, marketing manager of Changzhou Giantsun Textile Company Ltd, a Chinese company, said they will set up a garment unit in Bangladesh soon as this is a good place for cheaper labour cost.

“We have already completed talks with a local partner to set up the garment unit,” Zhourong said.

Currently, this company has been supplying fabrics of woven garment in Bangladesh, he said. He thinks the response from local and international buyers was very high at the BATEXPO.

Bangladesh imports a substantial quantity of such fabrics from China as the local backward integration can only supply 35 percent of the total demand.

However, the local textile millers have been able to supply around 80 percent fabrics for the knitwear sub-sector for setting up of strong backward integration over the last few years, mainly backed by the GSP (Generalised System of Preferences).

Agha Dastageer of Kassim Textiles, a denim manufacturing company from Pakistan, said Bangladesh’s export trends show a huge rise in orders from importers in future.

He said Bangladesh is doing well also in denim manufacturing as many companies have already started exporting fine denim products.

Dastageer said the quality of Bangladesh made apparels is better compared to other competitive countries as the country mainly depends on the European machinery. “European machinery is really good for apparel manufacturing. And Europeans like such quality,” Dastageer said.

But Bangladesh is suffering limited products diversification as the country still mainly manufactures basic items, the foreign apparel businessmen said.

Meanwhile, the local makers said orders from international buyers are on the rise, as the world is coming out of recession with the signs of improvement in the advanced economies.

Golam Ahmed, general manager (product) of Intramex Group, a local firm, also pointed to the upward trend of buying orders saying that foreigners are coming to Bangladesh in large numbers.

He suggested that Bangladesh should focus on product diversification in a bigger way, as buyers always demand some new items.

Meanwhile, a considerable number of foreign investors and buyers flocked to the recently concluded 5th Knitexpo in the capital. A record 156 international buyers and investors attended the show, held at Dhaka Sheraton Hotel on November 2-4.

Bangladesh exported $5.918 billion woven garment and $6.429 billion knitwear products in 2008-09 fiscal year, the Export Promotion Bureau (EPB) data said.

reefat@thedailystar.net

Bangladesh seen next hot spot for Japan’s outsourcing

http://www.newagebd.com/2009/nov/04/busi.html#5

Bangladesh seen next hot spot for Japan’s outsourcing
Kazi Azizul Islam

The opening of a direct sourcing office in Dhaka by Japanese apparel giant Fast Retail in September 2008 brightened Bangladesh’s prospects to become a hot spot for investors and importers from the world’s second biggest economy.

‘That was the beginning and many Japanese garment retailers and importers have grown interest in sourcing from Bangladesh,’ Tetsuji Okamoto, president of the Okamoto Corporation, leg-wear market leader in Japan, told New Age on Monday.

Tetsuji is among the top executives of nearly 50 Japanese firms who are attending the three-day Bangladesh Knit Exhibition at Hotel Sheraton making the biggest presence of Japan’s apparel industry players in a single event in Dhaka.

Some 130 million pairs of socks were sold in Japan last year under the Okamoto brands and Tetsuji’s organisation also dominates the market of pantyhose, tights and other kitted wears.

Upmarket apparel brand leaders of Japan are now shifting their focus from traditional low-cost production bases like China and Thailand, and looking for newer locations, and many of them find Bangladesh a good choice, local industry leaders and investment promotion officials said.

Major manufacturing facilities of Okamoto, having $240 million annual turnover, had shifted to China and Thailand to cut back on costs and boost profit. But the company is also looking for a way out amid soaring production costs in other Asian locations.

Tetsuji turned up to knitwear fair in Dhaka to identify Bangladesh’s quality socks suppliers, a search he began six months ago. One has already been selected and search for more is on, Tetsuji said.

‘Japanese garment importers never compromise the quality and timely delivery,’ he pointed out adding that Bangladeshi suppliers must ensure that first.

Asked about the possibility of establishing any manufacturing facility in Bangladesh, Tetsuji said, ‘It will take time.’

In the first phase, Bangladeshi suppliers should attain the capacities for meeting Japanese standards and option of joint ventures would come later, he said.

Tetsuji was of the opinion that the Bangladesh’s government should go for promotional activities and using diplomatic channel to get total duty-free market access to Japan. As an LDC, Bangladesh gets duty-free market access to Japan, but socks and some other categories of knitted wear do not get that due to certain rules of origin criteria.

Although Bangladesh is self-reliant in cotton yarns but dependent on import for some specialty yarns and man-made-fibre yarns, which are used in fancy knitted wears and leg-wears.

Tetsuji said that if Bangladesh government persuades the Japanese government to relax rules of origin, many knitted wears will be relieved from seven per cent duty at Japanese ports.

‘Unconditional duty-free access will boost Bangladesh’s garment export much more,’ he said.

In the 2008-2009 fiscal year, Bangladesh exported $74 million worth garments to Japan and the year-on-year shipment growth was more than double.

But industry people hope for a billion dollar plus share in the $24 billion Japanese market of imported garments. Japan’s strategy of shifting focus from one country [China] to more countries further brightens that prospects, they believe.

Tiles market heats up

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Tiles market heats up

Sajjadur Rahman

More players are joining the ceramic tiles business that has so far pulled in over Tk 1,000 crore investment with around 20 percent annual growth rate.

The latest entrant is Dulal Brothers Ltd (DBL), one of the leading apparel manufacturers and exporters in Bangladesh, while X Ceramics is going into trial production next week.

Several other companies, including Akij Group, Padma Ceramics and Tamanna, are in the pipeline to hit the market in the next two years.

“Civil construction of our company is going on in full swing. We hope to go for production by 2010,” said Fariduddin Akhter, general manager of DBL Ceramics, a project of nearly Tk 200 crore located at Sreepur in Gazipur district.

He said the demand for ceramic tiles both for interior and exterior is rising rapidly in Bangladesh.

“Use of tiles is no more a fashion now. It’s become an essential increasingly being used in urban and semi-urban areas,” said Akhter who has 21 years of experience in the industry.

Bankers also consider the sector as a potential industry for financing.

Touhidul Alam Khan, executive vice president (corporate banking division) of Prime Bank, said the construction industry, including residence, shopping malls and others, is growing so fast that the tiles business is becoming one of the booming and prospective sectors.

“If we look on the local production in the period between 1984 and 2009, we will see tiles production has increased from 300 square metres to around 100,000 square metres per day,” Khan said.

Already 11 companies are now operating in the market with over Tk 1,000 crore annual sales turnover, industry people said.

According to a market study, the existing factories produced nearly 322 million square feet (sft) of tiles in 2007, up from 277 million sft a year ago. Production reached 374 million sft in 2008 and it is estimated to grow at 17 percent in 2009 and 2010.

Of the total production in 2007, RAK Ceramics alone made 74 million sft, followed by China-Bangla, Fu-Wang and Mir each slightly over 30 million sft.

Industry people said the history of tiles production in Bangladesh is not very old. The first factory was set up by Bangladesh Chemical Industries Corporation, a state-owned enterprise, in 1982. Private sector established the second one, Modhumoti Tiles, in 1988.

The situation started changing rapidly after 2000 when tiles became too cheap to easily replace mosaics.

RAK Ceramics (Bangladesh) Ltd, a UAE-based company set up in 2003, brought a drastic change in the tiles industry and now grabs one-fourth of the domestic market share.

According to the industry people, sales of the locally produced tiles did not go down even in the past two years, the worst time for the country’s construction industry.

They attributed the growth to the demand and low production cost. Gas and labour account for 23 percent and 16 percent respectively of the total production cost, and so Bangladesh has an edge on these inputs over other countries.

“Bangladesh has an opportunity to export tiles because the major global player, China, is losing advantage to rising production cost,” said Akhter.

sajjad@thedailystar.net

Adidas to invest $100m in country

http://www.thefinancialexpress-bd.com/2009/10/29/82880.html

Adidas to invest $100m in country

Fazlur Rahman

The World’s second largest sports goods maker Adidas will invest US$100 million to set up a footwear manufacturing plant in Bangladesh, exclusively targeting fast-growing local market, officials said Wednesday.

The plant will be the largest footwear manufacturing unit in Bangladesh and the single biggest foreign investment by a German company, said a top official of Bangladesh-German Chamber of Commerce and Industry (BGCCI).

“The company plans to start constructing the factory in January 2010. I know that Adidas will invest $100 million in the state-of-the-art plant. But the location for the project has not been decided yet,” he said, preferring anonymity.

“Adidas and its partners in Bangladesh are still finalising the details of the joint venture,” he said.

The move by Adidas is the latest in a series of investment in the country’s footwear sector, which is quickly emerging as one of the leading export earners and job creators.

In the last three years, more than a dozen Taiwanese investors have bought plots in the country’s export processing zones (EPZs) to set up footwear plants, mainly for exports.

Pouchen, world’s leading footwear maker, is investing over 25 million dollars in its plant at Karnaphuli EPZ.

The company is now looking for a 200-acre land to build one of the world’s largest footwear units that can employ more than 40,000 people.

South Korean Youngone Corporation has also said it would invest more than $100 million in phases to build a footwear plant in its Korean EPZ situated on the other side of the Karnaphuli river.

Experts have said Bangladesh is poised to become a leading nation in global footwear thanks to its cheap labour force and nimble fingers — a crucial component to hand-stitch shoes — of its army of female workers.

In the 2008-9 financial year Bangladeshi companies exported footwear worth $187 million, recording a decent growth of 10 per cent despite the global recession.

The BGCCI official said the global footwear maker would initially make low-cost footwear products exclusively for local Bangladeshi consumers.

“The German brand will think of diversifying their products later,” the official said.

He said the size of Bangladesh’s footwear market is around Tk 30 billion, which is a big market for such a large investment and has been expanding at a double-digit rate.

Adidas is the largest sportswear manufacturer in Europe and the second biggest sportswear manufacturer in the world after its American rival Nike.

The company also produces bags, shirts, watches, eyewear and other sports and clothing related goods.

It reported 10.799 billion euro revenue last year, up from €10.299 billion, or about $15.6 billion, in 2007.

German investors to set up energy-efficient bulb plant

http://www.newagebd.com/2009/oct/29/busi.html#1

German investors to set up energy-efficient bulb plant
Staff Correspondent

The German investors have almost finalised an investment project jointly with a local company to produce energy efficient bulbs targeting the whole South Asian market.

This was disclosed by visiting Germen business delegation chief Peter Clasen at a press conference in a city hotel.

Clasen is leading more than 20 member team on a week long visit in the capital to explore the business opportunities in the country, which has plenty of cheap labours, but lacked adequate power and transport logistics to attract large scales foreign direct investments.

Despite the disadvantages two other investment projects were in pile line, he added without disclosing the type of projects.

He also did not disclose the amount of foreign direct investment in connection with these three projects.

He, however, hoped that successful implementation of the projects especially the first one, which was targeting to make Bangladesh as energy efficient bulb manufacturing hub in South Asia, would open the floodgate of German investments.

Clasen who has high opinions about the country’s century old ship building tradition and craftsmanship of local carpenters observed that power shortage and transport logistics were bottlenecks in attracting big foreign investments.

He also observed that German energy giants would not feel encourage to invest in power sector in Bangladesh unless the government formulated long term policies on power sector with promise of consistency.

He termed that the existing energy policy was ‘obscure’. On open pit mining in the country’s potential coal reserve in Phulbari, Clasen said it was linked with dislocation of huge population.

German Ambassador Holger Michael who attended the press conference hoped that the present government would be successful to implement the ‘charter of change’ to overcome the bottlenecks of power and transportation.

He pointed out that maintaining ‘secularisms’ and proper function of parliament by participants of ‘all political parties’ representatives would be the other key positive signals to the foreign investors.

He expressed his dissatisfaction with the traffic congestion in Dhaka and major highways saying that it was leading to waste substantial time of every day business hours.

Bangladesh German Chamber of Commerce and Industry arranged the programme making visit of high profile German delegation known as OAV, which looks after the Asia Pacific region.

BGCC president Saiful Islam said that the OAV would make a comparative study on the country’s business opportunity with Vietnam on returning home.

He hoped that many positive things would come up in that study as Bangladesh was to spend $60 million to develop its inlands waterways in the current fiscal year which was only $2 million in the last fiscal year.

Besides, the inland container terminal adjacent to the capital was to be readied in the next year to help addressing transportation problem of export and import containers between Chittagong sea port and Dhaka, he said.

KK organic tea to hit market Nov 1

http://www.thefinancialexpress-bd.com/2009/10/28/82747.html

KK organic tea to hit market Nov 1

FE Report

The country’s first black organic tea producing company will launch two new packages of green and tulsi flavours in the market on November 1.

“Kazi and Kazi (KK) Tea Estate Ltd plans to cultivate organic tea aiming to exploit the growing consumer demand for the new line of products in domestic and global markets,” Director and Chief Executive Officer of the company Kazi Anis Ahmed said at a pre-launching press conference Tuesday.

Claiming KK as the country’s only internationally certified premium blend organic tea brand, he said KK tea was grown without using any chemical fertiliser and pesticides at any stage of the production process.

To ensure organic product neem oil and leaf, basil, marigold, turmeric, garlic and lime are used as natural pesticides, while cattle urine and cow dung as fertiliser in the tea garden.

“It not only ensures consumer’s health but leaves a positive impact on nature,” he said.

Explaining the two new flavours, Mr Anis said KK’s green tea evokes the softness of the Chinese brew of antiquity, with a sweetish aftertaste and grassy undertones containing medicinal substances of disease prevention and anti-aging.

KK’s tulsi tea boasts properties that lower cholesterol and reduces negative effects of stress, he said.

KK’s premium quality tea is bought by Harrods of London and the tea is exported to the USA and Japan at premium price, he claimed.

Demand for organic food is being created in different parts of the world which is sure to rise in the coming days; he said adding that Bangladesh is on the tenth position of the tea exporting nations.

New avenue for RMG exports

http://www.thedailystar.net/newDesign/news-details.php?nid=110906

New avenue for RMG exports
Items made of organic cotton in high demand
Refayet Ullah Mirdha

The increasing demand for Bangladesh’s readymade garments (RMG) made of organic cotton fabrics in western countries has opened up new avenues for apparel makers and exporters, according to industry insiders.

Exports of such products are on the rise, they say, as major buyers are ready to pay more because the health-conscious customers in the west find the items environment-friendly.

Meanwhile, cashing in on such high demand, local spinners now lean towards manufacturing organic cotton yarn, finds a survey, recently conducted by a giant international RMG brand working in Bangladesh.

In this context, an official of this international company pointed to the fact that the RMG makers are to import such fabrics from India, China and Pakistan as local organic cotton yarn makers cannot meet the entire demand.

The main feature of organic cotton fabrics is a sustainable farming method that discourages use of heavy chemicals and maintenance of soil fertility.

Talking to The Daily Star, Abdullah Al Mahmud Mahin, managing director of Mahin Group who uses organic cotton fabrics for export-oriented RMG products, expressed his high hope of a better chance for higher prices for the RMG products made of organic cotton fabrics.

“If I use five percent organic cotton fabrics for RMG products, the prices increase at least 25 percent,” Mahin said, pointing to a value addition to Bangladesh made apparels through the use of such fabrics.

The manufacturers using organic cotton fabrics more than five percent in garments, the Mahin Group boss said, are to go by a system that binds them to obtain certification from growers, yarn spinners on such usage. Finally, the manufacturers are required to make such certification to the prospective buyers.

Global Organic Testing System is a world class organisation who certifies such usage of organic cotton fabrics.

Actually, demand for organic cotton yarn marked a rise over the last one year, said an official of a Chitagong textile mill.

“As a result, we are also receiving huge number of orders from local manufacturers and international buying agents,” he added.

reefat@thedailystar.net