Monthly Archives: June 2008

Showcasing light industrial products

Showcasing light industrial products

EVERY modern nation chooses its path to industrialisation, basing on its specific conditions. The recent history of the East and Southeast Asia provides ample proof for this. But such uniqueness apart, what those nations that have undergone the phase of industrialisation has one feature in common. That is, they develop light industrial base first, on which the heavy industries stand. In fact, there is no shortcut to this tested growth path of the industry. As an aspirant to the status of an industrialised nation, Bangladesh must, therefore, choose its own path. But to all appearances, it has not purposefully chosen one. As a result, the actual actors that could expedite this process did not get the necessary patronage they deserved due to lack of attention from the government. So, the entrepreneurs in this sector had to make do with whatever they found it handy. Unsurprisingly, they made the most of the obsolete and old technology they found in their surroundings.

Left to their own devices, the local entrepreneurs in the light engineering sub-sector, meanwhile, has grown to be an emerging force in the economy. According to the Bangladesh Engineering Industries Owners Association (BEIOA), in the fiscal 2006-07, this sub-sector exported light engineering products to the tune of US$310 million. Similarly, in the next fiscal, it has a target of exporting products worth US$ 500 million. But it is not just due to its capacity for growth and export potential that this particular segment of the industry, which is worth Tk.200 billion with its 40, 000 units spread all across the country, should be treated with respect. These self-developed industrial units are producing and supplying valuable spare parts for a wide swathe of the industry from textiles, jute, tea, food processing, construction, furniture industry to the agriculture. It is also producing whole power-tillers as well as their spare parts, irrigation pumps, automobile components and spares for marine engines. Add to this long list also bicycle, spares for shallow pumps, carbon rod for dry-cell batteries, pistons, you name it. Or in other words, the contribution of this self-grown light industrial sub-sector to all other sectors of the industry and the economy is immense, to say the least.

The BEIOA leaders have recently made a move to set up an industrial park, where they will display their products as well as develop infrastructures for providing training, holding workshops, conferences, etc. For the purpose, they have selected a site in Naryanganj, where some 200 display centres would be built on about 50 acres of land. Now what the light industrial sub-sector wants is not simply appreciation. They need patronage and so some work has to be done considering the largest untapped prospect of employment creation, high value addition to the products the light engineering units produce and the hard currency they are poised to add to the economy.

The case for the light engineering sub-sector, which is but part of the Small and Medium Enterprises (SMEs), should not be looked upon as just one of the so many other claimants to government largesse. In fact, the light engineering sub-sector is the key to the development of heavy industry. And in that sense, it has not, so far, claimed its due share from the government in marked contrast to many others. The leaders of the BEIOA, who reportedly have already convinced the SME Foundation of their project, are planning to put across their case to the Commerce Adviser. After getting the necessary government nod of approval as well as support, they may then go ahead with their light industrial park project. Setting up of an industrial park is but one of the ways to showcase the potential of an industry before the wider audience. All concerned would, therefore, like to share the hope that the effort would also open up another avenue for foreign investment in the economy.

Maize farming on Teesta shoals brings joy to monga-hit people

Maize farming on Teesta shoals brings joy to monga-hit people in Nilphamari, Lalmonirhat

37,000 hectares to produce 2, 60,000 tonnes this year
Our correspondent, Nilphamari

Once quiet and lifeless Teesta shoals are now buzzing with activities.

Introduction of maize cultivation by Agriculture Extension Department (AED) under its crop diversification programme ahs changed the socio-economic scenario on several thousand hectares of land on Teesta shoals in Nilphamari and Lalmonirhat districts.

Five years ago, AED tested the soil in shoal areas that had been left barren and unproductive for decades and found the soil suitable for this crop.

Next, year maize was cultivated on an experimental basis which achieved an unexpected success. From then maize is being cultivated there and increasing tremendously.

Last year, maize was cultivated on about 23,270 hectares of land in Nilphamari and Lalmonirhat districts. But this year maize was cultivated on 37,000 hectares of land to produce 2,59,000 tonnes of maize.

Now thousands of landless farmers in Teesta shoals including Char Kharibari, Purbo Kharibari, Fakrater Char, Vendabari, Jharsingheswar, Gopaljhaar, Bhasanir Char, Tapur Char Baishpukur and others areas of Nilphamari district.

The Teesta shoals in Lalmonirhat district where maize is being cultivated are Saniajan, Bhotmari, kishorganj Char, Dauabari Char, Holdibari Char, Dhubuni Char, Sindurnar Char, Guddimari Char and others.

People are vibrant with hopes that monga (a pre-harvest lean period between September and late November when there is no farm work) will not affect them this year. The maize cultivation has created job opportunity for a number of unemployed people in the region.

“We are hopeful that we can go a long way to combat monga with maize cultivation,” said Eunus Ali, the deputy director of AED, Nilphamari.

Sandy and sand-alluvial soil in the Teesta shoals is very suitable for maize cultivation, he said, adding that several thousand women and men have been provided short training under AED’s North West Crops Diversification Project (NCDP) to cultivate maize and other crops.

AED sources said the Asian Development Bank (ADB) provided fund for giving loans to farmers in Rajshahi region under NCDP’s Rajshahi Division zone. A few NGOs are cooperating in this project while some commercial banks are providing soft loans to poor farmers in the shoals of Teesta.

AED block supervisors of and some NGO workers are providing technical support.

The shoal lands where silt is deposited during yearly floods, are suitable for maize cultivation, Lalmonirhat AED Deputy Director Md Abtabuddin said. However, it is very difficult to grow other crops in the sandy and barren shoals, he added.

Farmer Motaleb of Char Purbo Kharibari said about 500 acres of land in his shoal was covered with to 2-3 feet layer of sand due to flooding of the area after a Water Development Board embankment burst in 2000.

One thousand families became virtually beggars and there was none to buy the sand-covered lands even at Tk 200 per decimal, he said.

Motaleb got a new life when maize cultivation began in this shoal last year.

“This sandy land is my asset,” he said.

“I cultivated hybrid maize on two acres of land and got 140 maunds worth Tk 56,000. Presently a maund (around 40 kg) of maize is selling at an average rate of Tk 400. But last year it was Tk 500. Despite the lower price, maize brought us profit as production is higher,” Farmer Hatem Ali of Char Saniajan said.

Maize farmers Yunus Ali, Abul Hasem, Zulhas, Wasuddin and other farmers of the char areas also echoed the same.

Abdul Latif, chairman of Purbo Chhanai union in Dimla upazila, an area worst affected by monga said maize has changed the socio-economic condition of his area.

“People who would queue for relief in front of the union parishad office earlier are not seen now,” he said.

Square joins hands with PC Pharma in Sri Lanka

Square joins hands with PC Pharma in Sri Lanka
Business Desk

The Square Pharmaceuticals Ltd has recently gone into a strategic partnership with PC Pharma of Sri Lanka, a subsidiary of PCH Holding, a corporate group having an integrated chain of well diversified businesses in Sri Lanka.

Under the strategic partnership, PC Pharma, which is the first of its kind in attaining the ISO 9001-2000 certification for pharmaceutical importation in Sri Lanka, would market a large range of Square’s products, said a press release.

Apart from the regularly demanded pharmaceutical products, this partnership would also see the launch of molecules in such therapeutic categories as antidiabetic, neuropsychiatry, antibiotics, cardiac, respiratory, dermatology and ear and eye preparations coupled with forming a partnership with Square Cephalosporins Ltd, enabling to serve with the latest generations of cephalosporin products including injectables for the Sri Lankan market.

Govt mulls NRBs’ offer to set up pharma research centre

Govt mulls NRBs’ offer to set up pharma research centre

Kazi Azizul Islam

The government is considering a proposal, of some non-resident Bangladeshis in Australia, for setting up a pharmaceutical research centre in the country. Sources in the Board of Investment, which is working on the proposal, told New Age the government high-ups responded positively to the proposal feeling the necessity of such a centre to support growth of the pharmaceutical companies as well as their export mission.

According to the BoI officials, a group of NRB investors proposed raising funds from Australia for setting up of the multimillion dollar centre which required sophisticated equipment.

The BoI officials told New Age that Dr. Zahir Khan, an NRB and a renowned pharmaceutical expert Australia in, forwarded the proposal to the BoI through the Bangladesh embassy in Canberra.

The BoI is discussing the proposal with the representatives of pharmaceutical entrepreneurs, officials of the Export Promotion Bureau and other stakeholders.

‘We are considering the venture as potential for the growth of increasing number of drug exporters in Bangladesh,’ a senior official of the EPB said.

As the proposal came from private sector and people having experiences in the developed counties, the official said, the venture is expected to gain success.

The BoI was apprised that several hundred Bangladeshi pharmacists, microbiologists and other pharmaceutical professionals were working in the EU, US and Australian private and public organisations.

‘The venture can help the local companies in promoting drugs for both local and overseas markets,’ said one BoI official.

Local exporters are preparing to capture the EU and US drug markets as Bangladesh, being advanced among other LDCs, has potential to utilise the easy market access with its cost-effective products.

According to a WTO agreement, the LDCs do not have to implement any kind of intellectual property rights at least before 2016 for medicines and drugs.

Around 30 Bangladeshi drugs producers have so far explored markets in more than 50 countries including Africa, Latin America and Asia.

According to the EPB sources, export figure will surely reach $40 million with a growth of 50 per cent in the current fiscal.

But, the industry insiders said the current amount is almost nothing compared to the industry’s capacity and potential in the global market.

They claimed that with already increased production capacity for 20 billion pieces of tablets, only for export, local drug makers can immediately feed a market for $2 billion.

Mittal seeks one more year to renew investment proposals

Mittal seeks one more year to renew investment proposals


The UK-based Mittal group has sought the government’s permission to renew its $2.9 billion investment proposals for a further one year period, said a senior official Thursday.

He said the UK based group sought permission of the government as its Memorandum of Understanding (MoU) signed last year with the Board of Investment (BoI) is expiring this month.

The UK-based group signed the MoU in June last year proposing to invest about $2.9 billion in coal mine development, oil exploration and production, power plant, petrochemicals, NGL/LNG production and other infrastructure projects in Bangladesh.

Md Nazrul Islam, the then executive chairman of the BoI, and Vinod K Mittal, managing director of the Global Oil and Energy Ltd, a subsidiary of Mittal Group, signed the MoU on behalf of the respective sides in the city.

Of the total investment plan, an estimated $300 million will be spent for coal mine development, $100 million for oil exploration and production, $500 million for power plant, $1.50 billion for petrochemicals, and $500 million for NGL/LNG production and other infrastructure projects.

In line with the MoU, the BoI official said the UK group was supposed to complete its feasibility studies on investment proposals, form a company here and other related works by last one year.

“The executive committee of the BoI is positively considering to renew the tenure of the MoU for a further one year,” he said.

BoI officials like many potential global investors the Mittal’s subsidiary is also taking time to see the developments in Bangladesh’s politics in implementing its investment proposals.

Briefing the newsmen after signing the MoU, the then BoI executive chairman said the investment offer of the company is not complicated like that one of Tata.

After the Indian industrial giant Tata’ $ 3 billion investment offer, this is the second largest investment offer from an UK-based, another Indian giant.

The Mittal Group is one of the largest business conglomerates in India and the United Kingdom (UK) with $ 28 billion investment in 27 countries of Europe, Asia, Africa and America.

An official said the company first intimated the BoI April 18 to invest 1.6 billion through an expression of interest (EoI) but it revised the proposal twice to $ 2.9 billion.

Lt Col (Retd) Kamal Ahmad, chief executive officer of GRH Bangladesh Ltd and also local agent of the company, said: “Though Mittal is signing the initial MoU for investment worth $2.8 billion, the company’s ultimate investment will be over $5.0 billion in the country in the long run.”

The GSHL, based in UAE, manages steel plants with annual production capacity of 14 million tonnes in many countries across Europe, Africa and the Asia Pacific, besides India.

Use of biogas gains ground in Lalmonirhat rural areas

Use of biogas gains ground in Lalmonirhat rural areas
S Dilip Roy . Lalmonirhat

Low-cost biogas, an alternative fuel for cooking, is increasingly getting popular among the people in different rural areas of Lalmonirhat. Biogas is not only used as fuel for cooking foods it is also being used for producing electricity.

The people, who never thought of having electricity in their remote areas, are now using electric bulbs, operating radio and television thanks to biogas plants. Currently, more than 250 rural families in the district are using biogas instead of firewood to cook foods and to electrify their houses, local sources said.

The number of biogas users continues to increase in the district as they find this alternative fuel much cheaper than firewood, they said. Some 280 biogas plants have so far been installed in rural areas of the district since 1997, according to official sources concerned. One biogas plant is enough to meet the fuel and power demand of a five-to-six member family, they added.

Ebarot Ali, 42, of village Hazigonj under Aditmari upazila of the district said ‘I have been using biogas for the last four years as it is cheaper than firewood.’

‘I can save Tk 12,000 annually. Biogas is not only serving our cooking purpose, we are getting electricity produced in the biogas plant. ‘We can now eletrify our house, operate fan, radio and even television by the electricity produced in the biogas plant.’

Hemat Uddin of village Bongram in district sadar upazila, said, ‘Use of biogas has changed the lifestyle of my family.’ ‘Ours is a remote village. We never thought of having electricity in our village. But biogas has made things happen.’

Ruhul, 10, a Class-IV student, son of one Manir Uddin at village Char Gokunda in sadar upazila said they took biogas facility last year. ‘I and my sister Rahima, a Class-VI student, can now read in electric light because of biogas.’

Biogas is produced by anaerobic fermentation of decomposed materials including cow dung, human excreta, poultry wastes and garbage. All the biogas plants have been installed in the district on the basis of cow dung. Seven to eight cows are required for preparing a biogas plant.

A family of five to six members can easily cook their foods and electrify their houses from one plant. The Institute of Fuel Research and Development under the Bangladesh Council for Scientific and Industrial Research introduced biogas plants in Lalmonirhat in 1997 under a pilot project.

Different non-government organisations, including the BRAC are providing biogas plant to the people in remote areas of the district on payment in instalments.

Sources at Lalmonirhat BRAC office said the cost of installing a biogas plant with daily capacity of 100cft gas is Tk. 16,000, while Tk 23,000 for 200cft capacity, Tk 30,000 for 300cft capacity, Tk 41,000 for 400cft, Tk  48,000 for 500cft and Tk 75,500 for 1,000cft capacity.

One plant having 100cft capacity is enough to meet the fuel demand of a 7-10 member family, BRAC sources added. According to sources in Lalmonirhat Forest Department only 25 per cent of the country’s total population can be brought under biogas facility.

Korea to invest $45m in Karnaphuli EPZ

Korea to invest $45m in Karnaphuli EPZ

DHAKA, Bangladesh, June 26 (BSS)- M/s Pungkook Chittagong (Pvt) Co Ltd, a Korean company, will set up a bags, packs and luggage manufacturing industry in the Karnaphuli Export Processing Zone.

This hundred percent foreign owned company will invest initially about Taka 315 crore in setting up their plant and will produce annually 8 million pcs of all kinds of bags and carrying cases, said a BEPZA press release here today.

The company will also create employment opportunity for 2,000 people, including four foreign nationals.

Read the whole article at:

Japanese co to build Tk 200b marine drive, river side road in Ctg

Japanese co to build Tk 200b marine drive, river side road in Ctg

Our Correspondent

CHITTAGONG, June 26: A Japanese engineering company has shown keen interest in investing Tk 200 billion to construct a marine drive and a riverside road in Chittagong.

The company will construct a 12.5-kilometre long marine drive road comprising four lanes from Fouzdarhat to Patenga area and a 12-kilometre long river sideroad from Shah Amanat bridge to Kalurghat bridge.

Nippon Engineering Consul-tant of Japan will conduct the overall survey of the project involving Tk 100 billion to be financed by Japan Bank of International Co-operation (JBIC).

CDA Town Planner Sarwaruddin Ahmad would co-ordinate implementation of the project under the supervision of CDA Chairman Shah Mohammad Akhtar Uddin Ahmad.

Draft report of the survey would be submitted in October next and final report would be submitted in November next.

An agreement will be signed in December next while work on the project would begin in the month of January next year, sources added.

An expert team of the company has recently visited Chittagong and held meeting with the officials of some government agencies including Chittagong Development Authority (CDA) at CDA Bhaban for conducting the feasibility study, concerned sources said.

CDA Chairman Shah Muhammad Akhtar Uddin presided over the meeting while concerned officials of CDA, Chittagong City Corporation (CCC), Water Development Board (WDB), BRTA, Roads and Highways and different government agencies were present on the occasion.

The Japanese team of experts displayed at the meeting how the feasibility study for constructing marine drive and riverside road would be planned.

Country’s largest chemical plant to be launched in August

Country’s largest chemical plant to be launched in August

Jasim Uddin Haroon

The country’s largest chemical plant will be commissioned in August next, which will produce a number of import-substitute products for local industries, particularly the textile, company officials said Wednesday.

Chittagong-based Aziz Group and CBN have set up the plant jointly at Sreepur in Gazipur on 42 bighas of lands. This is the first such plant built under private sector in Bangladesh.

The plant — ASM Chemical Industries Limited — built at a cost of Tk 2.5 billion is now ready to introduce six high quality chemical products.

These are Caustic Soda, Chlorine, Sodium hypo chlorite, Hydrochloric Acid, Stable Bleaching Powder, Chlorinated Paraffin Wax and Hydrogen Peroxide for the local and international market.

The chemicals are mainly used in textile, soap and detergent factories.

Company sources said the ASM Chemical Industries Limited is one of the few plants in the world where Caustic and Hydrogen Peroxide are produced simultaneously. The plant will be using German, Swiss, Norwegian and Japanese technologies.

While talking to the FE, Joynal Abedin Chowdhury, Chief Executive Officer of the ASM Chemical Industries said it is going to roll out quality products with international standards.

“Our plant will help the country save foreign exchange worth at least Tk 1.5 billion initially a year,” said the chief executive officer of the ASM Chemical Industries Limited . Local industries are currently using those chemicals through imports from China, Belgium, the United Arab Emirates and other countries.

Only TK Group, a local company, built a plant of Hydrogen Peroxide recently.

The ASM Industries Limited has set up a 10 megawatt Power Plant at its premises to maintain uninterrupted production.

It has also employed around 400 people, which include a large number of foreign-trained personnel.

e-procurement system to bring transparency in using public funds soon

e-procurement system to bring transparency in using public funds soon

Special Assistant to the Chief Adviser for Power, Energy and Mineral Resources Dr M Tamim has said the government would set up an e-procurement system to bring transparency and reduce corruption in handling public funds, reports BSS.

“We will establish the e-governance in the procurement system to ensure transparency and accountability for using the public money,” he said while speaking as the chief guest at the concluding session of a three-day international workshop at a city hotel Wednesday.

The Asia regional workshop on `Implementing Procurement Reforms and Improving Procurement Performance’ was organised by the Planning Commission with the support of World Bank, Asian Development Bank (ADB), UK’s Department for International Development (DFID) and Australian AusAid.

IMED Secretary Sheikh AK Motahar Hossain chaired the concluding session of the workshop.

The special assistant said harmonisation is needed among the development partners as various development partners have various procurement policies, which is one of the major causes of delaying the implementation of government projects.

“I personally faced such kind of problems in handling various procurement policies,” he said, adding “Reform is also needed in the donor’s procurement policies side by side with the government’s initiatives.”

Dr Tamim said reforms in the public procurement system started from 2003 by formulating a regulation. After that, in 2006, a public procurement act was passed and to implement the act properly, the present government has enacted public procurement rules-2008, he added.

Dr Tamim expressed the hope that the public procurement law and rules would bring accountability and transparency in the whole procurement process, including tender, project approval, work execution and duties of civil servants.

He said training and updating knowledge are very important for proper understanding of different procurement laws and policies to bring efficiency in the entire process.

Later, Sheikh Motahar said they have already appointed an international and a local procurement experts under the central procurement technical unit (CPTU) to set up the e-procurement system.

“We could be able to start the e-procurement system by July next year on a pilot basis and within two to three years it could be run completely,” he said.

After setting up the e-procurement system, anyone could get information from website even from his/her home.

Nearly 100 participants from host Bangladesh and 16 other countries participated in seven working sessions of the workshop.

Glass industry meets 95pc local demand

Glass industry meets 95pc local demand
Suggests more export incentives
Sayeda Akter

The local multi-billion taka glass industry that sprang up in a span of three years now exports produces to a number of countries after meeting around 95 per cent of the domestic demand.

According to industry insiders, a growth in real estate business and construction of huge establishments has helped the industry flourish.

The present market size of the country’s four glass manufacturing units is around Tk 300 crore.

These factories, with a capacity of producing 250 tonnes of glass a day, are Nasir Glass Industry, PHP Float Glass Industries Limited, Usmania Glass Sheet Factory Ltd and MAB Glass Industries.

Of these, Nasir Glass Industry and PHP Float Glass Industries Limited started commercial production in 2005.

The sector people said by the end of 2002, Bangladesh’s entrepreneurs started thinking about manufacturing glass locally noticing the growth of high-rise buildings and the dearth of quality glass. Previously the country was fully dependent on imported glass, whereas it now imports only 5 per cent of its demand for coloured and luxurious designed glass from China, Thailand and Indonesia.

Among the local industries, Nasir and PHP are producing float glass and the rest are producing sheet glass.

Palash Ahmed, GM of Nasir Group, said this industrial unit started its journey with an investment of Tk 300 crore, which now holds more than 40 percent of the total market share.

He said his company produces every year around 73000 tonnes of glass, including float, shades (commonly known as mirror), tempered and reflective ones.

A director of PHP Float Glass Industries Limited claimed that his company is the first one that manufactures the float glass with the thickness ranging from 2mm to 12mm.

He said his company produces around 55000 tonnes of float glass per annum and it now puts its efforts for capacity building.

Most of the raw materials, including dolomite, limestone and chemicals, for float and sheet glass need to be imported from abroad. However, the specialised sand, another essential material for producing glass, is available in the local market.

The local glass companies are also exporting their produces mainly to South Asian countries, including India, Nepal, Bhutan and Sri Lanka.

Palash Ahmed said apart from exports to these countries, his company eyes South Korea as its next export destination.

Despite all successes, the industry as a whole is faced with some difficulties, which, according to insiders, need to be addressed.

The Nasir Group general manager identified the weak transportation system as a major problem in the sector.

He also urged the government to take necessary measures to ease the border difficulties to smoothen the shipment of consignments, as glasses are usually exported through borders.

Rakib Un Nabi, manager of Usmania Glass Sheet Factory Ltd, a famous sheet glass producer, suggested the government provide export incentives for the sector at an enhanced rate, citing the example of China who gives 25 percent incentives to such a sector.

Recently, the commerce ministry said the government is considering giving 10 percent incentives on exporting sectors, which, the industry people hope, would help the sector boom.

Label export earns $500m in 2007

Label export earns $500m in 2007

FE Report

The label-manufacturing sector of the country has an investment of Tk 50 billion involving about 40,000 persons and the total volume of export amounted to $ 500 million in 2007 with an annual growth rate of about 20 per cent.

This was revealed at the 6th annual general meeting of Bangladesh Label Manufacturers and Exporters’ Association (BLMEA) held at the office of the Association Tuesday. BLMEA Acting President Shibbir Mahmud presided over the meeting

The meeting reviewed the over-all performance and position of label and accessories sector of the country. It also adopted the annual report of the executive committee and audited accounts of the Association for the year 2007.

The names of president, vice presidents and four-member executive committee, elected for the next two-year term – 2008/2010, were announced at the meeting.

They are: President- Labels for Less Director Mohammed Hossain Sattar, First Vice President- Sikder Computerised Labels Managing Director Shahidul Haq Sikder, Vice President (Finance)- Azad Label Industries Managing Director Abul Kalam Azad, and executive committee members- Union Accessories Ltd Managing Director Ahsan Shahed Khan, Jupiter Accessories Chairman Mohammad Shaukat Hossain, Codes and Labels Managing Director Md Moniruzzaman Khan and SRA Label Managing Director Mizanur Rahman Azad.

AKTEL to fight back with 3G

AKTEL to fight back with 3G
Hope Telekom Malaysia, NTT DoCoMo
Md Hasan

Telekom Malaysia and its new partner in AKTEL, NTT DoCoMo, aim to fight back in Bangladesh’s highly competitive telecoms market by introducing the 3G (3rd generation) technology.

“We will aim to increase AKTEL’s corporate value by providing DoCoMo’s business know-how regarding 3G and increase returns in the form of consolidated revenue and dividends, higher roaming income, and stronger domestic competitiveness,” said the Japanese telecom giant in a reply to the Daily Star.

The share sales issue ended last week by an announcement that DoCoMo will buy AK Khan and Company’s 30 percent stake in AKTEL.

“The deal, worth $350 million, is expected to be completed by the end of 2008,” according to the DoCoMo announcement posted on their website.

Yusof Annuar Yaacob, chief executive officer of Telekom Malaysia echoed the DoCoMo’s plan regarding Bangladesh market and said, “DoCoMo is one of the world’s largest telecoms companies and therefore is able to provide a significant amount of expertise in areas such as technology and marketing that will further strengthen our position in Bangladesh”.

Industry insiders said DoCoMo’s partnership with AKTEL is definitely a ‘worry’ for the other market players.

“Besides the capacity of introducing new technology, the Japanese giant can push things for TM in terms of investment,” said a high official of a leading mobile phone company.

It has always been TMI’s ethos to provide the Bangladesh market with the latest technological advances in the field of telecommunications, Yaacob said adding,

“TMIB now has TMI and Docomo, two of the most respected telecommunications companies in Asia as its shareholders that will drive TMIB to the next level”.

Industry sources said it is obvious that big operators are waiting for next generation technology like 3G.

Most of the operators including Grameenphone, Banglalink have already showed their interest in 3G licenses. The telecoms regulator may issue 3G licences by the year-end.

“It’s a matter of debate whether the 3G will hit the market. But every operator is keen to introduce it,” said an official of Bangladesh Telecom Regulatory Commission (BTRC), the regulator.

AKTEL lost its market position at the end of last year from second to third in terms of subscriber acquisition. The company’s officials said it happened basically because of AKTEL’s illegal international call termination (VoIP) scandal and the dillydallying of the share sales as well.

Pharmaceuticals eye EU market

Pharmaceuticals eye EU market
Kazi Azizul Islam

Export of drugs manufactured in Bangladesh will see big boost soon as major Bangladeshi drug makers, having secured vital accreditations for the European market, are preparing to export to this lucrative market.

According to industry sources, Beximco the leading exporter that explored markets from the Fareast to Latin America, is set to acquire accreditations for Australia and countries under the Gulf Cooperation Council.

Incepta and Renata are getting ready for the highly sensitive European market while Square, the local market leader, is working on several follow-up orders for buyers in UK after sending its first consignment a few months back.

‘We will ship our first consignment to Europe within three months,’ said Abdul Muktadir, managing director of Incepta that secured EU-GMP (Good Manufacturing Practice) certificate in December, 2007.

Incepta is preparing consignments of anti-diabetics, anti-hypertency, anti cholesterol and naturopathic drugs to be procured by a major EU importer.

‘Just during the past one month we received four potential enquires from Europe,’ said the Incepta official which is third in the local market with sales worth about 300 crore ($43 million) in 2007.

He, however, observed that it was not significant how much money Bangladeshi drug makers earned from the EU market. ‘Ensuring importers’ confidence and consistency is crucial now as global drug importers are desperately searching for reliable alternative sources to China or India. So a multibillion dollar market beckons Bangladesh.’

Renata, another giant pharmaceutical, is preparing to export significant number of consignments, contracted with a major pharmaceutical company in UK, of steroids, apparently used in number of life saving drugs.

‘We will be able to ship our first consignment within in a couple of months,’ Monjurul Alam, head of the international business department of the Renata, told New Age on Tuesday.

Renata’s export division, which at present markets drugs in Sri Lanka, Philippines, Hong Kong, Jordan and is eyeing the million dollar mark this current year, is enthusiastic about opportunities in the EU.

‘I see a drug import market worth billions of euros staring at Bangladesh,’ said Alam.

At present multinational Novartis (Bangladesh) exports drugs to Germany and Austria.

Ashfaque Ur Rahman, managing director of Novartis, which shipped mainly cardiovascular and neurological drugs worth about $17 million to Europe in 2007, expects entrance of more Bangladeshi companies into the European market would reap more benefits.

‘200 per cent!’ said Ashfaque when asked about European clients’ impression about the quality of Bangladeshi drugs.

Around 30 Bangladeshi drugs makers explored markets in more than 50 countries including those in Africa, Latin America and Asia.

According to the Export Promotion Bureau, export figures will surely reach $40 million with a growth of 50 per cent in the current fiscal to be closed at the end of this month.

But, Nazmul Hasan, the chief executive of Beximco Pharmaceuticals, that eye more than $3 million as its 2008 export proceeds, said, ‘The current amount is almost nothing compared to the industry’s capacity and potential in the global market.’

Nazmul said besides Beximco’s capacity to produce 4 billion pieces, only the large drug manufacturers are ready for manufacturing drugs for the export market, which would require at least 20 billion pieces. ‘If one tablet sells at 10 cents on an average we are ready to earn $2 billion.’

Nazmul foresees that by mid-2009 Bangladesh drug makers will find global markets especially the advanced markets ripe for them.

‘By early next year, most of the patent related cases in WTO will be settled and drug markets will clearly see which items are beyond the purview of patents thus and open for LDCs to produce,’ he said.

According to a WTO agreement, LDCs do not have to implement any kind of intellectual property rights before 2016 for medicines and drugs.

Creating a better business environment

Creating a better business environment
Samir Asaf

THE Bangladesh Better Business Forum (BBBF) is an unprecedented organising apparatus for partnership between the public and private sectors in Bangladesh. It aims to implement reforms to improve the business environment. BBBF planned to achieve concrete results in the short-term through ministerial action, and a pragmatic and focused approach was taken, knowing that certain long-term reforms would require legislative action.

BBBF seeks to brand a stronger Bangladesh to foreign investors and to improve the overall business climate in this country with short-term high-value policy decisions, also initiating long-term structural improvements in a various areas that affect doing business. The result should be an increase in business activity, investment, domestic demand and well-being by building up local enterprises.

For example, an incubator for SMEs with proper policy support could develop industrial clusters with agglomeration economies and the associated positive externalities, where collocation of firms generate substantial direct and indirect employment, give rise to numerous links including fiscal links, and crowd in many other services such as value added supply chains.

BBBF seeks progress and solutions through building coalition of partners in national development among a broad range of relevant stakeholders rather than capture and confrontation. Stakeholder consultation has brought in diverse range of interests and views to the table. The stakeholder process was based on a sufficiently broad balance of interests to give BBBF recommendations the economic and social support it needs. We focused on priorities, and deliver time-bound and workable action plans. Recommendations cut across government jurisdictions with the aim of unifying the government behind a common set of goals.

BBBF has been in operation since mid-December 2007. In the last six months, the members of all five working groups worked diligently and through numerous interactions and iterations of public-private partnership dialogue, and finalised several recommendations.

Many of the BBBF recommendations for streamlining tax administration, and eliminating non-conforming fiscal policies are reflected in FY08-09 national budget. Additional recommendations shall be presented to BBBF on an ongoing basis.

The business finance working group, in consultation and partnership with the respective line ministries, made 41 recommendations and received approval for the majority of them. Salient reforms include the following: require accounting and financial audits of business enterprises by accredited accounting firms only, take punitive action against fraudulent audits, Bangladesh Bank (BB) will advise all commercial banks and financial institutions (FI) to reduce and rationalise their interest rate charges so that the weighted average spread is less the 5.00%, and reduce L/C charges and various fees.

For SME financing, as per the business finance working group recommendations, BB will advise FIs to allocate 40% of their SME loanable funds to Small Enterprises and 60% to Medium Enterprises; re-finance increased amounts of loans for the SME sector; provide necessary permissions to FIs to set up Medium Enterprise Service Centres; recommend FIs to provide preferential treatment to women entrepreneurs; and allow a lower 1% provisioning for SME loans instead of the usual 2%.

The business entry and operations working group, in consultation and partnership with the respective line ministries, made 22 recommendations and received approval for most of them.

The infrastructure working group also has a mission to enhance the national logistics system as a comprehensive approach the operating infrastructure that supports production and trade. This working group, in consultation and partnership with the respective line ministries, made 28 recommendations and received approval for most of them.

The macro-economic policy working group, in consultation and partnership with the respective line ministries, made 24 recommendations regarding the investment and tax policy environments. Reforms include: Bangladesh Bank to put moral pressure on banks/FIs to reduce lending rates and spreads; NBR will ensure that import duty on raw materials is lower than finished goods in every industry, and provide facilities to publicly listed companies to plough back profits into industry; and many more.

The skills development working group has a mission to create an enabling environment for competitiveness through human resources development. This working group, in consultation and partnership with the respective line ministries, made 14 recommendations and received approval for 3 of them with regard to various timeframes for implementation. The rest of the recommendations will be presented upon further deliberation among the working group and concerned ministries.

In line with Bangladesh’s national development plan, BBBF aims to improve the business environment and create conditions conducive to faster private sector-led growth that can be sustained, consistent with our private sector development strategy.

BBBF recommendations reflect not only the realities of the market, but also the priorities and values of the country and its capacity to adapt to change. As the private sector becomes more competitive, coherent and carefully planned reforms are expected to produce benefits faster.

We are focusing on execution effectiveness through an orderly approach, which helps to reduce the risks and costs of adjustment. BBBF is poised and determined to improve private sector performance with a two-pronged approach. First, freeing up the market and stimulating competition so that enterprises can adapt and innovate more quickly, and second, by enhancing the capacity of the public sector to provide an enabling environment of sound regulation and efficient public services.

Broad support is necessary to sustain the reforms initiated, and the professional civil servants who are essential to its success might need incentives to be tied to performance results. At BBBF, we are cognizant that in such reforms piecemeal efforts are less successful than a comprehensive set of reforms. Institutions are key to the quality of the investment climate, while early and broad-based stakeholder engagements leading to a shared commitment to an action plan are a sine-qua-non. The BBBF consultative process was therefore at multiple levels.

Governments influence the quality of their investment climates through policies, institutions, and their relationship with the private sector. Not until the formation of the BBBF has there been a structured public-private partnership initiative in Bangladesh, which aims to design integrated strategies and to balance the private sector perspective with broader economic and social goals.

Although Asian countries have been slow to adopt comprehensive competition policies, a new “Competition Policy” is contemplated for Bangladesh by way of a Competition Commission, which will be a watchdog ensuring fair-play and efficiency in the market that ultimately benefits the consumer.

In addition, a Bangladesh Economic Zone Ordinance 2008 is in the final stages of approval for beginning the process of formation of Special Economic Zones (SEZs) such as Export Processing Area (EPA), Domestic Processing Area (DPA), Commercial Area and Warehouse (CAW), and Non Processing Area (NPA). A one-stop single-window service will be provided to investors who will also receive various fiscal incentives and regulatory allowances.

The design of the operational model for Private Sector Development (PSD) strategies is certainly the first step, but lack of implementation due to weak institutional capacity has been a major cause of the failure of PSD strategies in many countries. Implementation of BBBF recommendations is therefore being enhanced by follow-up projects and capacity building components.

We intend to streamline the engagement processes and facilitate enhancement of institutional capacity building so that public service becomes more efficient in serving the investors. Institutionalising the PSD administrative responsibilities within the permanent civil service is essential for sustaining the PSD strategy process across political cycles.