Monthly Archives: September 2008

Bangladeshi co to invest $2.254m in Ishwardi EPZ

Bangladeshi co to invest $2.254m in Ishwardi EPZ


Brothers Plastic Industries, a Bangladeshi company will set up a plastic industry at Ishwardi Export Processing Zone.

This 100 percent locally owned company will invest about Taka 15 crore in setting up their plant and will produce to export plastic items. The company will also create employment opportunity for 191 Bangladeshis including one foreign national.

An agreement to this effect was signed between the Bangladesh Export Processing Zones Authority and Brothers Plastic Industries in BEPZA Complex, Dhaka on Wednesday.

Prasanta Bhushan Barua, Member (Investment Promotion) of BEPZA and Ratan Kumar Agarwala, Proprietor of Messrs Brothers Plastic Industries signed the agreement on behalf of their respective organisations.

Brig General Jamil Ahmed Khan, ndc, psc, Executive Chairman of BEPZA and other officials from respective organisations were present on the occasion.


Thai entrepreneurs keen to invest in Bangladesh

Thai entrepreneurs keen to invest in Bangladesh

BSS, Chittagong

Leader of the visiting Thai trade delegation Pisanu Chanvitan said here today Thai entrepreneurs are keen to invest in Bangladesh taking advantage of its huge investment and trade opportunities.

Chanvitan, Director General of Thai Foreign Ministry’s

Department of South-Asia, Middle East and African Affairs, was exchanging views with Chittagong chamber leaders on existing bilateral trade and investment and the scopes lying ahead.

Thai Ambassador to Bangladesh Chaleprmpol Thanchitt told the meeting in the conference hall of Chittagong Chamber of Commerce and Industry (CCCI) that his country was considering inclusion of more Bangladeshi products on duty free access list in addition to present 229 items on request.

He said his government is willing to provide duty free

access to those Bangladeshi products which have or may have more demand in Thai market.

The Thai delegation leader said geographical location, a growing market and availability of cheap labour have made Bangladesh an attractive destination of Thai investment.

He said Thai importers would be encouraged to import more from Bangladesh to reduce the trade gap between the two countries.

The two sides held focused discussion on the potential areas of new investment and expansion of trade using the optimum opportunities now available on both sides.

President of CCCI Saifuzzaman Chowdhury said bilateral business prospects have remained largely unexploited.

He said trade volume between the two countries is on the rise but Bangladesh is not getting the desired benefit while the trade balance remained largely against it.

Bangladesh’s exports to Thailand was US dollar 23.63 million and 25.95 million in 2005-06 and 2006-07 against imports of US dollar 322.80 million and 429.73 million.

He requested the Thai entrepreneurs to pursue their government to provide duty-free access to all Bangladeshi exportables to Thai market.

The CCCI chief also called upon the Thai delegation to consider Bangladesh as potential sub-contracting base of Thailand’s hi-tech industries and take initiative to relocate looming sunset industries here for mutual benefits.

SEZs to facilitate economic growth, more investment

SEZs to facilitate economic growth, more investment

FE Report

Formation of special economic zones (SEZs) will pave the way for more productive use of land, labour, capital and infrastructure leading to greater investment, economic growth and social development in the country, experts said on Sunday.

They agreed that SEZ was not a choice between agriculture and industry, rather an excellent tool for integrating industrial, agricultural and service sectors.

The remarks were made at a ‘Media Presentation Briefing on Economic Zone’ held at a city hotel on the day.

IFC Bangladesh Investment Climate Fund (IFC BICF) organised the event which consisted of two sessions — one focusing on the basic concepts of economic zones and the second on one particular type of zone, namely, the SEZs — using case studies from all around the world.

The experts said both foreign and local investors feel comfortable in setting up their industries in economic zones as they get ready-to-use land, utilities and the right environment to do business.

They expressed the opinion that the proposed ordinance on SEZs should be flexible in allowing those to be set by the private sector or under private-public partnership (PPP).

“We are expecting that the ordinance on SEZs will be approved next month,” IFC BICF senior programme manager Syed Akhtar Mahmood said.

Referring to lower economic growth in western part of the country compared to that in the east, Mr. Mahmood said this is high time to initiate move for formation of SEZs which can help reduce the gap.

Though land for ensuring the country’s food security is very important, he said, but “We need to think about industrialisation through proper use of land to hasten the eradication of poverty.”

Presenting two papers, IFC Investment Policy Analyst Mustafizul Hye Shakir defined economic zones as a geographically delimited area with a special regime and a single administration/management that delivers services to zone tenants on a day-to-day basis.

“SEZs often have streamlined procedures and are considered to be a separate customs area,” he added.

International Economic Zones Expert Deborah Porte said: “Proper planning is the key to the success of economic zones.”

Many countries across the world, including China, Jordan and the Philippines, have attained excellent economic growth through such economic zones, Ms Porte added.

She said that the media is the ideal stakeholder to ensure that the zone development process is transparent, and that the decision on how to develop the zones and where to locate them is not based on vested interests of a selective few.

IFC BICF programme manager Martin Norman, however, pointed out the media’s role is to ensure accountability and transparency of all stakeholders, government and private sector alike, in the development and implementation of SEZs in the country.

Bangladesh Investment Climate Fund (BICF) of IFC, a member of the World Bank Group, is a long-term technical program targeting a better operating environment for businesses.

IFC BICF is funded by the U.K. Department for International Development (DFID) and the European Commission (EC), which are consistent with the Bangladesh government’s strategic vision for private sector development within its poverty reduction strategy.

Government agencies and IFC BICF-in close collaboration with key stakeholders jointly design and implement programmes to institute business friendly policies, laws and regulations, and strengthen the institutions that implement them.

Investment scope, mkt promotion to be explored

Investment scope, mkt promotion to be explored

FE Report

A 12-member delegation of the newly formed trade body — the European Bangladesh Federation of Commerce and Industry (EBF) — led by its joint presidents Dr Wali Tasar Uddin and Fred Oldenhuizing will be visiting Bangladesh from October 26 until November 3.

The delegation also includes executive directors Dr Sanawar Chowdhury, Nurul Islam, Dr Azizur Rahman, Enam Ali and Ron Huisma, said a press release.

As the EU is Bangladesh’s largest trading partner, steps have been taken to establish EBF chambers in six member states including the UK, Netherlands, Germany, France, Italy and Greece with possibilities of including Ireland, Belgium, Sweden and Spain later on.

The main objectives of the delegation will be to introduce EBF to the business community and policy makers in Bangladesh, create networks, identify investment opportunities and prospects, understand the regulatory framework and market promotion.

The key aims of EBF include: (1) Promoting commerce and industry between the EU and Bangladesh, (2) Promoting commerce and industry amongst the Bangladeshi diaspora within the EU and between EU Member States, (3) Providing a network and resource facility for the business community of Bangladeshi origin/interest, and (4) Setting up of chambers or similar entities within each of the 27 EU countries.

The delegation is expected to meet senior members of the caretaker government, the British High Commissioner, the Ambassador and Head of Delegation of the European Commission to Bangladesh, the members of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

The delegation is also scheduled to attend an International Business Conference to be held on Oct 30 to Nov 1, 2008 on the occasion of Golden Jubilee Celebration of the Dhaka Chamber of Commerce and Industry (DCCI) and Non-resident Bangladeshi (NRB) conference at the national press club on November 3.

The group would also visit Sylhet Special Economic Zone and exchange views with the members of Sylhet Chamber of Commerce & Industry (SCCI).

Joint President, Fred Oldenhuising stated that whilst country specific chambers have led similar delegations, EBF, based in Brussels, will be more resourced and concentrate on identifying key markets, distribution networks, investment opportunities and provide a better understanding of the regulatory framework of the European Union, its member states and Bangladesh.

Dr. Wali, the other Joint President, said : “EBF will put their combined efforts for EU countries and our mission is to increase more trade, business and investment between EU and Bangladesh. Through our delegation’s visit to Bangladesh we will be able to explain to Bangladesh’s policy makers and business community how we can work together to achieve our mutual goals. We are looking forward to growing more business-to- business links between the EU and Bangladesh.”

Botswana shows interest to recruit Bangladeshi professionals, import goods

Botswana shows interest to recruit Bangladeshi professionals, import goods

FE Report

Botswana, an African nation, has shown interest to recruit professionals and import pharmaceutical products from Bangladesh.

It also has expressed its desire to sign a trade and investment agreement with Bangladesh and invited Bangladeshi entrepreneurs to set up joint venture textile and apparel units to avail themselves of duty free export facility extended by the United States.

Bangladesh High Commissioner in South Africa Shahidul Islam wrote a letter to Foreign Secretary Touhid Hossain recently explaining the benefits offered by Botswana.

The high commissioner visited the country recently and presented his credentials to President of the Republic of Botswana Lt. General Seretse Khama Ian Khama at the office of the latter.

The President expressed his desire to have Bangladesh’s support and cooperation in developing the quality of cricket of Botswana and proposed to sign an agreement in the fields of sports and culture with Bangladesh.

During the meeting, the acting Foreign Minister Daniel K Kwelagobe, who is also the Minister of Presidential Affairs and Public Administration, expressed satisfaction for contribution of the Bangladeshi professionals for development process of the country.

In response to the high commissioner’s request for recruitment of more Bangladeshi professionals, the minister mentioned that at present they need to recruit against 900 vacancies of surveyors, architects, engineers, dieticians, psychologists and physiotherapists, according to the letter that has been forwarded to different ministries and departments for taking necessary measures in this connection.

The minister also stressed on the employment of Bangladeshi agriculturists in Botswana.

Health Minister of Botswana Ms Lesego Motsumi while mentioning about acute shortage of drugs and medicines in his country said they would like to have a Bangladeshi pharmaceutical company to manufacture medicines locally in Botswana.

“There is no pharmaceutical manufacturer in Botswana and at present they are importing pharmaceuticals through the South African agents,” the high commissioner said in his letter.

Botswana enjoys one of the most stable political systems and strong financial bases in Africa.

“Although not a big country, I believe Botswana may become a good destination for Bangladeshi goods and services,” the high commissioner observed.

Botswana has established itself as one of the few successful multi-party democratic states in Sub-Saharan Africa.

Though English is the official language, the country is multiracial and inhabited by different ethnic groups who live peacefully and in harmony with each other.

The country has enjoyed remarkable economic growth since independence; once one of the poorest the country is now the fastest growing economies in the world.

The Republic of Botswana originally a British protectorate called Bechuanaland Protectorate gained its independence on September 30, 1966.

Aluminum foil, plastic, milk and dairy, ready food cos dominate

Aluminum foil, plastic, milk and dairy, ready food cos dominate

FE Report

Companies under aluminum foil, plastic products, milk and dairy products and ready food products bagged the top positions in the list of demand forecast made in a pre-feasibility study on the proposed Sylhet Economic Zone (SEZ).

The list was made in the pre-feasibility study report on the SEZ, prepared by International Finance Corporation (IFC)-Bangladesh Investment Climate Fund (BICF).

The report prepared in a span of four years from 2004 to 2007 forecast that the above companies would be established in the proposed SEZ within the first 15 years after the establishment of the economic zone, first of its kind which will also create job opportunities for 90,000 persons by the projected timeframe.

According to the ‘base case demand’ of the study report, the other companies to be established as forecast are poultry (boiler and layer), animal and fish feed, fish processing, meat processing, edible oil industries, fruit processing, spices, bakery and confectionary, sweetmeat, honey processing, tea blending and packaging, cereal, agar and RMG.

The list of companies also include composite textile, jute, ceramic, cement, glass, pharmaceuticals, chemicals, fertilizer, herbal cosmetics, toiletries, kitchen cabinet and oven, aluminum utensils, electric bulb, electric cable, appliance assembly, pvc pipes, melamine, plastic package and rubber.

The list also includes warehousing, leather and footwear, furniture, offset printing and packaging, corrugated carton, computerized automobile service and private power plants.

The government is set to establish a Special Economic Zone Authority by year-end to speed up local and foreign investment in the newly-fashioned industrial parks, an official said

The Chief Advisor’s Office is now scrutinising the final draft of a proposed ‘Special Economic Zone Ordinance-2008′ under which the authority would be created, a Board of Investment (BoI) source said.

“The proposed ordinance has already been approved in principle by the council of advisers,” he added.

The IFC study has recommended for selecting a new site for establishing an economic zone in Sylhet as the current site does not allow a profitable public-private partnership (PPP) due to its high developing costs.”The high development costs for the Sylhet site do not allow for a profitable PPP structure. (But) demand for an economic zone in Sylhet does exist, so a new site should be considered,” said the study. The BoI, which had earlier identified a site for establishing an economic zone in Sylhet for encouraging non-resident Sylhetis’ investment, initiated the pre-feasibility study. The study, considering four PPP scenarios, observed that the project generates an internal rate of return lower than the cost of capital, making it a poor investment choice.”The results of the financial modelling show that the Sylhet economic zone at that particular site is not a financially feasible project for a developer/ operator unless capital costs can be reduced substantially,” the study said.The BoI initially chose an area of 961 acres of land in Sylhet. The land, comprising low and wetlands, rivers and a lake, is situated five kilometres south of Sylhet, and has direct access to the highway and adjacent rail corridor.

A Sylhet Chamber of Commerce and Industry source said about 500 bank branches in the region have a huge amount of idle money, mostly sent by expatriates but there is little investment. Besides, lengthy and complex procedure of official formalities also stand on the way of setting up new industries, he added.There is good prospects for establishing small and large scale industries in Sylhet region, which has now good road links with the capital and the port city. There is abundant natural resources including gas, stone, sand and fish in the region.

The special economic zone, adjacent to Fenchuganj-Tamabil Bypass Road Link, will provide land and other infrastructural facilities to the entrepreneurs to set up manufacturing and other industrial units.The SCCI has also signed a memorandum of understanding with the British-Bangladesh Chamber of Commerce and Industry (BBCCI) in 2006. Under the deal, the BBCCI will bring together the non-resident Sylheties to invest in the economic zone. It is expected that 65 percent land of the zone will be provided to the expatriates.According to the study, Sylhet has available land, abundant natural and forest resources to set up an economic zone or industrial park. There is an ample scope to increase production of various agricultural commodities. In Sylhet division, there is also scope to increase fish production through undertaking aggressive programmes and activities. Sylhet has economically significant storage of minerals for industrialisation. Natural gas, limestone, sand stone and sand, glass sand and coal are available in this region.As the seven sister states of India are very near from Sylhet, the entrepreneurs or the investors will have an easy access to the seven sisters to export their products, he said.”We are hoping to get a huge response from the Sylheti expatriates,” he added.

The ordinance is being expedited after the advisory council led by Chief Adviser Fakhruddin Ahmed in July okayed creation of a SEZ in Sylhet.

The government has said it would develop several SEZs across the country to woo investment in the country’s manufacturing sector.

The SEZ, the first of its kind in the country, will be modeled after similar ‘successful’ zones located in China, Vietnam, South Korea, Dubai and Jordan.

Unlike the existing publicly owned and managed export processing zones (EPZs), an SEZ will be larger in scale and be linked to the domestic market.

The BoI executive member said the special economic zone authority would oversee the development and plot allotments in the SEZs, to be established on public-private partnership.

An official said site for the first SEZ is being searched in greater Sylhet district in line with the demand from the expatriate Sylheties.

Local investment plans spike

Local investment plans spike
Sajjadur Rahman

Domestic investment proposals, both in terms of numbers and volume, are set to surpass all records this year although foreign investment has witnessed a broad decline, Board of Investment (BoI) officials said.

This year’s trend shows that local businesses have regained their confidence that they had lost in the middle of 2006 when political chaos gripped the country with the scheduled national polls at the heart of it. Private domestic investment suffered the most from fears of a change in the political regime.

According to statistics of BoI, 1,055 domestic investment proposals worth Tk 13,706 crore, equivalent to $1.63 billion, have been registered with the BoI in the first nine months of 2008.

In 2007, some 286 proposals, worth $441 million, were registered with the BoI. The number of proposals and the total volume of investment were 519 and $1.12 billion, respectively, in 2006.

“Proposals registered with the BoI are set to break all previous records in terms of value and numbers of projects,” a senior BoI official told The Daily Star yesterday. “This is a sign of an improvement in the country’s overall investment climate,” he said. “We are confident that 2008 will be a booming year for domestic investment,” the BoI official said.

During the launch of the global investment report last week, BoI Executive Chairman Kamaluddin Ahmed said: “The trend shows a sharp rise in domestic investments this year.”

BoI recorded $1.68 billion worth of domestic investment proposals in 2003. The number of projects registered in 2003 was 1,703, a record high expected to be surpassed this year.

Textiles, services, chemical, ceramics, light engineering, food and allied, pharmaceuticals and leather and tannery are the major sectors in which this year’s domestic investments have gone into, according to BoI statistics.

The interim government, led by Fakhruddin Ahmed, formed Bangladesh Better Business Forum and the Regulatory Reforms Commission last year to help the businesses back on track. The government held a series of meetings with different stakeholders in business, placing dozens of recommendations in the process.

However, Zaid Bakht, an economist, said the increase in registration of domestic investment does not mean that real investment has increased.

“There is a huge gap between real investment and registration of proposals,” Bakht, also the research director of Bangladesh Institute of Development Studies (BIDS), told The Daily Star. He however said businesses are getting their confidence back.

“Businessmen have started on their investment plans this year. They had stopped making any progress in their investment plans last year because of a changing political situation and massive anti-corruption drive,” Bakht said. He also said present political uncertainty is not affecting the investors.

Bangladesh is a poor performer in terms of investment as percentage of GDP, which is only around 25, with about 80 percent of which coming from the private sector.