Monthly Archives: August 2008

More Asian shoemakers plan relocation in Bangladesh

More Asian shoemakers plan relocation in Bangladesh
Kazi Azizul Islam

After such plants from China and Taiwan have found there new bases here, foreign shoemakers from Vietnam and Cambodia are mulling relocating their plants to Bangladesh’s export processing zones.

According to industry insiders, in the global map of shoe manufacturing Bangladesh has been identified as a most suitable location because of the availability of very cheap labour and the country’s privileged market access to Europe. These factors are definitely alluring to the investors.

‘At least seven foreign shoe manufacturers are now in advanced negotiations with us to relocate their factories to Bangladesh’s export processing zones from Vietnam and Cambodia,’ a top official of the Bangladesh Export Processing Zones Authority told New Age.

The official said most of the investors were seeking industrial plots in the EPZs in Dhaka, Comilla or Chittagong, but the BEPZA authorities were trying to convince them to set up their plants in some remote EPZs like those in Mongla and Iswardi.

If the negotiations end positively, the number of shoe factory owners with whom the BEPZA has signed contracts in the past few months will increase significantly.

In the past four to five months, the BEPZA has made agreements with at least a dozen of investors in shoe industry, most of them Taiwanese and Chinese, on setting up plants in Bangladesh. Their estimated cumulative investment would be to the tune of $300 million.

The investment deals include $52.50-million Genfort Shoes Limited and $50.09-million Xin Chang Shoes – both owned by Taiwanese companies.

‘Bangladesh has become significantly spotted in the global map for shoe manufacturing industry,’ said Syed Nasim Manzur, managing director of the Apex Adelchi Footwear Limited, Bangladesh’s largest shoe exporter.

Manzur pointed out that availability of a huge pool of cheap labour in Bangladesh and antidumping duty in European market on shoes made in China or Vietnam motivated the investors to relocate their factories to this country.

The shoe industry whizkids, who is also a leader of the Leather-goods and Footwear Manufacturers and Exporters’ Association of Bangladesh, however thinks the government should scrutinise the aspiring investors.

He suggested that the government should ask the investors to pledge to operate their plants here for a long term and make significant local value addition.

Bangladesh’s export earnings from footwear stood at $170 million in the last fiscal year, posting a 25 per cent rise from that in the previous fiscal.

[Maybe] ‘A billion dollar shoe export sector will remain no more a daydream by the next fiscal or so,’ quipped an official of the BEPZA.

Govt, private sector to float venture capital co soon

Govt, private sector to float venture capital co soon

Shakhwat Hossain

The government will form a ‘venture capital company’ in months with private partnership to provide collateral free loans to companies having potentials to emerge as trail blazers, officials said Thursday.

Top finance ministry officials said the first such company in the country’s history will have an initial capital of Tk 5.0 billion and will be majority controlled by the government.

“About 51 per cent of the capital of the company will be invested by the governmnet. Private entrepreneurs will invest the rest,” said a senior finance ministry offical speaking on condition of annoymity.

The finance ministry has sought opinion on outline and modus operandi of the ‘venture capital company’ from the central bank and the Securities Exchange Commission, he said.

“We hope after the completition of the necessary consultations, the first venture capital company can go into operation within months,” he added.

Venture capital funds are abound in thee western countries where they provide collateral free credits to ‘highly potential yet risky enterprises’ in exchange for equity in the same.

Many of the top software companies in the United States, India and China have been bankrolled by the venture capital funds in the past one decade.

Finance ministry examined rules and operational methods of successful venture capital funds across the globe, but mainly adopted the Indian experience while preparing the outline.

India has emerged as one of the top magnets for big global venture capital funds after allowing them to operate since 1988.

In the second quarter to June, private venture capital funds have invested US$238 million, a 120 per cent increase over the same period last year, according to Dow Jones newswire.

The move to form a venture capital came after a central bank study found that companies with potentials to emerge as new industrial pathbreakers hardly have any access to credit in the conventional banking system.

The study said limited banking finance is a major constraint to the growth of the country’s small and medium enterprises (SMEs), which account for almost 80 per cent of total employment in manufacturing sector.

Between 1986 and 2006, the country’s labour force grew by nearly three per cent annually with SMEs including some non-conventional sectors absorbing the new workers.

Officials said the new company will be a major boost for high-tech, software, agro-based and engineering enterprises who find it hard to raise capital through the conventional banking sources.

In Bangladesh the banks only lend money to ‘safe’ and “established” companies which can ensure a good return to their investment, said another finance ministry official.

“The companies, which have great potentials to be big global players creating hordes of new jobs but need huge seed money to grow, hardly get any backing from banks or non-banking creditors,” he said.

“The new venture company will give top priority to the enterprises which can make it big at home and abroad. Some of them will be trail blazers,” he added.

Garment exports to hit $25b in 2013

Garment exports to hit $25b in 2013

FE Report

Bangladesh’s garment exports will hit US$25 billion by 2013 as buyers are impressed with the country’s quality products and competitive price, despite its rickety infrastructure and growing shortage of skilled manpower, a top industry chief said.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Anwar-Ul-Alam Chowdhury Parvez said the growth would create an additional 1.4 million new jobs, as the country’s over 4000 garment factories have graduated into a world-class standard.

“Our mission is to attain $25 billion export in 2013 and we expect the goal will be achieved although we have lack of skilled man manpower in mid management,” the BGMEA chief told a meeting in the city.

Export earnings from the garment sector soared to $10.7 billion in 2007-8 fiscal year– up over 16 per cent than the previous fiscal-despite the shipment was negative 5.47 percent in the first quarter.

“The growth rate of the industry over the last three years was 64 per cent that makes us confident to set a target of reaching $18 billion by 2010 and $25 billion by 2013,” Parvez said.

“Such an expansion will create jobs for approximately 1.4 million people directly in the Ready made garments industry and will subsequently open up opportunities across the different occupations,” he said.

Currently, the sector, which makes up 10 per cent of the GDP, employs 2.4 million people which is about 40 per cent of the country’s total industrial workforce. Some 85 per cent of the workers are women.

He made the comments while presenting a key-note paper on the Garment and Textile: Its Future and Challenges at a luncheon meeting of Switzerland Bangladesh Business Forum (SBBF).

Elisabeth Bosch Malinen, deputy head of mission of the embassy of Switzerland joined the programme as chief guest.

The BGMEA president said buyers now have confidence in the country’s products and price, but the sector faces multi-prong challenges such as rickety infrastructure, a poor image of Bangladesh and growing shortages of skilled mid-managers.

“Each month 600 students become graduate from our institute but this figure is too small than that of the required manpower,” he said, adding the skill shortages in the industry has now risen to 25 per cent of the total workforce.

He said the industry’s future lies in “two pillars-compliance and eco-friendly environment” and the manufacturers have been striving to narrow the gap between the management and the unions.

The industry also needs uninterrupted supply of gas and power and highways to spur its growth in the near future, he added.

“We will be a true emerging tiger in the Asia and in order to achieve such target we have started to do our homework and sketching the rod map,” he added.

He said this sector has been proven as a stable sector and it now needs a private-public partnership and exclusive economic zones for providing a sustainable an infrastructure for the sector.

$1,404m deal to set up industries at EPZs

$1,404m deal to set up industries at EPZs

BSS, Dhaka

A total of 78 companies signed investment agreements worth US dollar 1,404 million during the last fiscal year to set up various industrial units in the country’s eight Export Processing Zones (EPZs).

Besides, US dollar 302.19 million actual investments were made in 283 running industrial units in these EPZs, officials of Bangladesh Export Processing Zone Authority (BEPZA) said here on Friday.

They also said that the trend of investment in 2007-08 was 148 percent higher than the previous year’s level when the actual investment increased by 98 percent.

During the last fiscal year, the actual investment was US dollar 126.46 million at Chittagong EPZ, US dollar 110.34 million at Dhaka EPZ, US dollar 9.72 million at Comilla EPZ, US dollar 33.71 million at Adamjee EPZ, US dollar 0.15 million at Uttara EPZ, US dollar 18.34 million at Karnaphuli EPZ, US dollar 1.43 million at Ishurdi EPZ, and US dollar 2.03 million at Mongla EPZ.

The total actual investment in the EPZs till June this year amounted to US dollar 1,434.45 million, the officials said adding that the industries in the EPZs exported products worth US dollar 2,429.58 million in 2007-08. It was US dollar 2,063.67 million during the 2006-07 financial year.

During the last fiscal year, a total of 140 industrial units at Chittagong EPZ exported products worth US dollar 1,117.17 million, while 96 units at Dhaka EPZ exported goods worth US dollar 1,146.50 million, 18 units at Comilla EPZ US dollar 131.38 million, 12 units at Mongla EPZ US dollar 8.26 million, 5 units at Uttara EPZ US dollar 0.95 million, 3 units at Ishurdi EPZ US dollar 1.21 million, 5 units at Adamjee EPZ US dollar 15.10 million and 4 units at Karnaphuli US dollar 9.86 million.

The total number of workers in these EPZs is 2,18,299 and another 400,000 are indirectly doing various jobs there, the officials said.

As many as 17,130 Bangladeshi workers got employment in different units of these EPZs during the last fiscal year. Of them, 6,805 workers were employed at Chittagong EPZ, 1,029 at Dhaka EPZ, 218 at Mongla EPZ, 1,672 at Comilla EPZ, 388 at Uttara EPZ, 4,173 at Adamjee EPZ, 29 at Ishurdi EPZ, and 2,816 at Karnaphuli EPZ.

Six private companies signed agreements as Service Oriented Industry to operate and maintain six power plants with 50 MW capacity each at six EPZs to generate a total 300 MW electricity. Some foreign firms have also applied for setting up power plants in other EPZs, they said.

After these power plants are established, the officials said uninterrupted power supply will be ensured in these industrial unites of the EPZs. Besides, they added, excess power could be added to the national grid after meeting demands in the EPZs.

The officials said that the private companies would be offered for establishing water treatment plants and effluent treatment plants in the EPZs.

Prolog BD to make laptop affordable to all students

Prolog BD to make laptop affordable to all students

Mahbubur Rahman Khan

Prolog BD, the sister concern of Prolog US, is going to offer attractive laptop of Intel Core2 Duo Processor series at cheaper rate for the students of the country soon in an attempt to ensure each and every student of Bangladesh having own laptop by the year of 2020.

A lot of brilliant Bangladeshi scientists and engineers are working in reputed companies in abroad who think a lot about the country and are always eager to give something back to the nation. A living example of such an attempt is Prolog BD, a new IT venture in Bangladesh.

The main aim of Prolog was to contribute in the academic sector of Bangladesh and help students gain access to the latest available technologies. As a result it came up with a mission- to make sure that each and every student of Bangladesh owns a laptop by the year 2020- named “Vision- 2020”.

As a part of the vision the engineers of Prolog decided to manufacture Prolog Laptop- targeting the students of Bangladesh. Initially, Prolog US engineers came up with the design that is tailored to meet the need of a student. They manufactured three laptops- Afford Top, Standard and Performance.

Afford Top is made up by exclusively with the combination of Intel Celeron Duo 1.73GHz microprocessors and Mobile Intel 965GM motherboard. Prolog named it Afford Top which also consists of 1 GB DDR 2, 667MHz RAM, 80 GB SATA Hard Disc, Optical DVD R/W Drive, 14.1″ WXGA LCD Display, 56K Dial Up Modem, 10/100 MB ONBOARD Ethernet, 10/100 MB ONBOARD Wireless, 1.3 Mega Pixels Webcam, 6 Cells intelligent Li Battery, On Board Sound System, Built-in microphone, Sound Volume control by keyboard hot keys 3xUSB 2.0, 1xRJ 45,4 in 1 Card Reader, 1×Express card Type 34/54mm, 1xMic-in, 1xHeadphone-out/SPDIF, 1xDC in, 2×SO-DIMM DDR2, 1xS-video and 1×IEEE 1394 port.

Prolog US engineers have designed two other laptops-Standard and Performance- using the Intel Core Duo 1.83GHz processor with 2 GB DDR 2, 667MHz RAM, 120 GB SATA Hard Disc and the Intel Core2Duo 1.83 GHz processor with 160 GB SATA Hard Disc respectively for corporate executives and of course the students who can afford to pay more than their requirement. The motherboards and other hardware parts and ports of the Standard and Performance are remained same as Afford Top.

The biggest catch of Prolog branded laptops lies in its hardware compatibility. Most of the hardware inside a Prolog laptop is of from Intel, which ensures optimum compatibility among the hardware components.

They import other parts from the US to Hong Kong and have the Hong Kong Prolog team assemble the laptops. As mentioned before, keeping student’s needs in mind Prolog decided to introduce the Intel Celeron Duo processor for the first time and exclusively in Bangladesh. This processor makes a perfect balance between a student’s requirement and affordability. Officials of Prolog informed that the price of the laptops would be cheaper than that of any other companies of Bangladesh.

Dr. Shaestagir Chowdhury, former lecturer of BUET who is now working at Intel Corporation, said that with the advent of new wireless technologies like WiMax, every student would have Internet access once they have a laptop with them. They can even access their university servers from their home and obtain all the academic materials while at home.

At the same time a laptop integrated with WiMax technology would provide a tremendous boost to the yet untapped potential of distance learning he added. Referring to the most of the reputed universities in India and all in the where purchasing a laptop before admission is mandatory for a student Chowdhury mentioned that students of Bangladesh should have access to laptops for academic purposes; and the only hindrance for them is the high price and the quality of laptops, which Prolog intends to shatter.

Esquire to set up Tk180cr chemical plant

Esquire to set up Tk180cr chemical plant
Star Business Report

Esquire Group will establish a Tk 180 crore chemical plant to produce Hydrogen per Oxide, mainly in the textile dyeing industry.

The chemical is used as a bleaching or cleaning agent in textile, dyeing, pulps and paper industries. Industry people said a new plant to manufacture the chemical would reduce the country’s dependency on the import of the product.

“There are ample opportunities for marketing the product as it is imported every year to meet demand by local industries,” said Mofazzal Hossain, chairman of Esquire Group, known for its flagship company Esquire Electronics, the distributor of such electronics brands as General and Sharp.

The Group chairman made the remark as one of the subsidiaries, Esquire Chemical Industries Ltd (ECIL), struck a deal with 11 banks and financial institutions for a syndicated term loan of Tk 126 crore to set up the chemical factory in Gojaria, Munshiganj.

People close to the deal said the sponsors would provide the rest of the fund through equity financing.

AB Bank arranged the syndicated term loan as part of an agreement signed in Dhaka on August 19, when Kaiser A Chowdhury, managing director of AB Bank, managing directors and senior executives of other participating lenders were present.

The other participating banks and financial institutions are: Bank Asia, Bangladesh Commerce Bank, LankaBangla Finance, Mutual Trust Bank, One Bank, Phoenix Finance and Investment, Pubali Bank, Saudi Bangladesh Industrial and Agricultural Investment Company, Southeast Bank, and The City Bank.

ECIL officials said the company wants to produce 20,000 tonnes of Hydrogen per Oxide annually with the completion of the project next year.

“But together with all other local factories we will be able to supply only about 20 percent of total demand,” said the chairman of Esquire Group which moved to diversify its business into textile in 1993 by establishing a dyeing factory and subsequently expanded to knitting.

Esquire officials said the new venture would further boost the company’s revenue earnings, as demand for the chemical product will continue to increase.

Esquire also intends to tap the potential of exports to India, saying the country has banned chlorine and bleaching powder as the chemicals pollute the environment.

Arifur Rahman, managing director of Esquire Chemical, said the plant would be completely environment friendly as he claimed the product to be completely environment friendly as well.

“It will ultimately replace the chlorine based bleaching in Bangladesh dyeing industries,” he said.

Industry insiders said ECIL would be the fourth local company to produce Hydrogen per Oxide with HP Chemical Industries leading among the locally established chemical factories.

Samuda Chemical Complex, another chemical company, is also producing the product. The company has recently planned to double its production capacity from about 10,000 tonnes a year to about 35,000 tonnes.

However, industry people said the local plants largely fail to meet demand for the chemical.

CA for broadband policy to expand internet facilities

CA for broadband policy to expand internet facilities

Chief Adviser (CA) Fakhruddin Ahmed directed the authorities concerned to formulate a national broadband policy with a view to expanding fast internet facilities across the country at an affordable cost, reports BSS.

He gave the directives at a high-level meeting on national broadband policy formulation in Bangladesh at his office Saturday afternoon.

Finance and Planning Adviser AB Mirza Azizul Islam, Special Assistants to the CA Brig Gen (Retd) MA Malek and M Tamim attended the meeting.

The Governor of Bangladesh Bank, Secretary to the CAO, Secretaries concerned, BTRC Chairman, NBR Chairman and high officials were present.

Two power point presentations were made at the meeting depicting the existing internet facilities and its prospects in the country.

The presentations emphasised on integration of the institutions, departments and companies concerned with the IT components like Submarine Cable, Back Bone and Connection Network for raising access and penetration of broadband in the country.

It has fixed a target of raising broadband penetration to 30 per cent from the existing one per cent by the year 2015.

The CA asked the stakeholders to find out ways in light with the experiences of other countries for making computers and its connections cheaper to the consumers.

In this connection, Fakhruddin Ahmed directed the NBR and customs authorities to review VAT and import duties on computers so that their prices came down to the purchasing capacity of common consumers.

Besides, the CA directed the Bangladesh Bank to provide financial facilities to the internet service providers and other call centres to make the service available and be cheaper for the people.

Broadband is an ‘umbrella term’ having multiple meanings, which is now commonly used to represent fast speed data communication replacing conventional dial up technologies. In Bangladesh context, broadband may be defined as an ‘always on’ data or internet connection that ensures a minimum bandwidth of 128 kbps.