Monthly Archives: November 2008

Local firms to win global edge

Local firms to win global edge
Hopes pharmaceuticals consultant Rob Walker
Jasim Uddin Khan

Bangladesh has ample scope for its pharmaceutical companies to become the most competitive players in global market in the days to come due to the availability of cheap labour and utility services, said an internationally acclaimed consultant.

“The labour cost and other expenses at major medicines supplying nations like India and China are growing rapidly, which has created openings for Bangladeshi companies to compete in the world market,” Rob Walker told The Daily Star in an exclusive interview recently.

Walker now works on graduating a local pharmaceutical plant, Acme Pharmaceuticals, to MHRA (Medicines and Healthcare Products Regulatory Agency) standard of the United Kingdom (UK).

An MHRA certificate allows any Bangladeshi company to produce and market any registered drug of UK and other European countries.

Having a vast experience in such a consultancy for Indian, Chinese and South African pharmaceutical factories, he had earlier worked for Eskayef and Renata.

Walker successfully helped the two Bangladeshi firms reach MHRA standards within the shortest possible time.

Eskayef has gained this achievement for tablets and capsules, while Renata tablets with hormonal preparations gained UK recognition.

The country has enhanced its capacity to manufacture quality and low-cost pharmaceuticals, Walker said, pointing to the fact that the prices of medicines made in India and China marked a rise after those countries entered the World Trade Organisation (WTO).

“So, Bangladesh is in a favourable condition because of its low-cost high-qualified manpower and LDC (least developed country) status,” he added.

Asked whether all the large pharmaceutical factories should develop their plants in line with ‘good manufacturing practice (GMP)’, Walker said it depends on business decisions of the factories concerned.

“If a company has the strength to browse international market for export and if it wants to enter developed market, it should invest for MHRA accreditation,” he said.

He said many local pharmaceutical companies have already started marketing their products to European and other developed markets.

These companies have been inspired by low labour and power costs, depreciation of US dollar against most currencies and comparative advantages for Bangladesh under the WTO’s agreement on trade-related aspects of Intellectual Property Rights.

Walker suggested that the companies expanding their existing plants, and those who need to overhaul their older facilities could make investments for building their capabilities to get the MHRA approval.

“It will increase the product acceptability both locally internationally and the company can easily explore international market if it has the accreditation,” he said.

Although evaluation for the MHRA accreditation is a complex process, which includes thorough inspection of any company’s quality system, machinery and equipment, HVAC (heating, ventilation and air-conditioning) system, purified water system and effluent treatment system.

This process ultimately enables a company to improve its suitability with the changing GMP demands of the market.

Walker also pointed out that many UK firms suspended production of some of their generic drugs on the plea that manufacture of those products would not be viable on the big companies’ part because of a little demand due to a high cost.

This situation might be considered as an advantage by the local pharmaceuticals, he added.

Besides, the UK and European government policies are now encouraging people to buy low cost medicines. This policy changes may also be helpful for the UK and EU firms to procure pharmaceutical products in Bangladesh, Walker said.

B’desh third largest knitwear exporter to EU

B’desh third largest knitwear exporter to EU

FE Report

Bangladesh has emerged as the third largest exporter of knitwear garments to European Union in last fiscal year after China and Turkey, chief of the country’s knitwear manufacturers’ association said.

President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Fazlul Hoque told the FE that the sector was gaining momentum due to skilled workforce and strong backward linkages.

Of Bangladesh’s total knitwear export worth around $5.532 billion in the last fiscal year to over 90 nations of the world, he said: “The country fetched around $3.50 billion from export of knit items including t-shirts, sweatshirts, trousers and tops to European Union (EU) countries.”

“We are giving relentless effort to consolidate our position which we managed to achieve in the last fiscal year as Indonesia and Hong Kong lost their grounds in export of knitwear to EU,” said the BKMEA president, an association of around 1500 knit manufacturers of the country.

Some BKMEA insiders said Bangladesh’s knitwear garments industry now requires to compete with countries like Turkey, India and Pakistan, not China which has shifted its focus on manufacturing high-end products.

Bangladesh has the potential to take the number one position in the near future if it avails it self of the advantage by employing high tech machinery, sector insiders said.

They added the country’s knitwear industry, which accounted for more than 37.3 percent of Bangladesh’s total exports of US$14.11 billion by exporting 199.54 million dozens of knit items in the last fiscal year, will continue to grow despite the fear of financial woes in the developed economies.

About the effects of world’s financial woes, an exporter said: “knitwear export performed more than expectation in the first quarter. We are expecting that the growth will continue in the rest of the period unless the financial slowdown in EU region prolongs.”

In the first quarter, spanning from July to September, of the current fiscal 2008-09 year, Bangladesh knitwear exporters fetched $1.831 billion, registering 52.05 percent growth over that of the corresponding period last year.

Chhatak Cement Factory ready for exporting cement to Assam

Chhatak Cement Factory ready for exporting cement to Assam

SYLHET, Nov 28 (BSS): The production of Chhatak Cement Company has been increased as the factory is producing quality cement.

The company is not only fulfilling the local demands but also going to export cement to Indian state of Assam soon.

‘Sylhet Mart’, a local business firm will export cement produced in Chhatak Cement Factory.

Official sources said that the factory is producing quality cement using modern equipment and following special process.

The production target of the factory this year has been fixed at 150,000 metric tonnes as demand for cement increased both at home and abroad, they said.

They further said, “We will have to ensure the quality of our product to face the challenges in the competitive market.”

The Chhatak Cement Company Limited, an enterprise of the Bangladesh Chemical Industries Corporation (BCIC), was established on 254.87 acres in 1937 in Chhatak Upazila.

The factory is also producing sulphate resistant cement for using in constructing underground structure as well as in the seashore.

The annual capacity of the factory has increased to 233,000 metric tonnes after BMRI from 135,000 metric tonnes in 2000 year. It has produced 187,000 metric tonnes in 2003-04, the highest production in the factory.

Factory sources said the full capacity of the factory could not have been utilised due to lack of skilled workforce and other facilities.

The company entered into a 20-year agreement with an Indian company to supply limestone to Chhatak Cement Factory.

Mosque-based education achieves success in Natore

Mosque-based education achieves success in Natore
Our Correspondent . Natore

The mosque-based children and mass education project in Natore has brought a great success in the country’s education sector.

The Islamic Foundation is implementing the project introduced by the religious affairs ministry in 1992.

KM Munirul Islam, deputy director of the Islamic Foundation, Natore, informed that at present 14 ,475 children and adults were being given education on Bangla, English and maths at 455 centres in six upazilas of the district.

They are also receiving religious education under the project. All sorts of teaching material are supplied to the learners free of cost.

After receiving this year-long education, the children can become fit to receive education at the government and non-government primary schools.

After completion of the 3rd phase in 2005, the 4th phase (2006-2008) of the project is now under implementation with a target of educating 29,37,600 children and adults by the year 2015 across the country.

Up to the 3rd phase, (1992-2005), a total of 74,325 people were taught, of which 53 965 children were given pre-primary education, 1,775 adults general education while 18,585 people were taught the holy Quran in the district.

All of the learners were family members of poor farmers, labourers, porters, fishermen who were underprivileged. Three hundred and thirty-five trained imams work as teachers in the project. Each of them is given additional Tk 1,200 per month as honorarium for teaching.

These imams are also playing an important role in awareness building about dowry, violence against women, child marriage, human trafficking, smocking, HIV/AIDS, immunisation, tree plantation and other socio-economic issues.

Six model resource centres and additional 13 general resource centres have been set up in six upazilas of the district so that the learners of the project can put their knowledge into practice.

To ensure smooth operation of the project, a district level monitoring committee headed by the deputy commission and a upazila level monitoring committee headed by the upazila nirbahi officer have been formed.

Moreover, the education project is under supervision of the field officers, supervisors, master trainers and the caretakers of the model and general resource centres.

The local elites think that it will be possible to build an ‘illiteracy free’ Bangladesh by the year 2015 if this type of education system continues.

Industrial credit disbursement rises by 30pc in Q1 of FY ’09

Industrial credit disbursement rises by 30pc in Q1 of FY ’09

Siddique Islam

Industrial credit disbursement recorded a significant rise by over 30 per cent in the first quarter (Q1) of the current fiscal compared to the corresponding period of the last fiscal.

“The upward trend of the industrial term loan disbursement will continue in the next quarters to meet the growing demand of the businessmen and entrepreneurs,” a senior official of the Bangladesh Bank (BB) told the FE Thursday.

The disbursement of industrial term loans stood at Tk 49.50 billion during the July-September of the fiscal 2008-09 (FY09). A total of Tk 37.84 billion was disbursed during the corresponding period of last fiscal, according to the central bank statistics.

This includes fresh credit, rescheduling of term loans and fund release for balancing, modernisation, rehabilitation and expansion (BMRE) of industrial units, the BB official said while explaining the reasons for the hefty growth of industrial credit flow.

“Import of capital machinery and industrial raw materials increased during the period against the corresponding period of the last fiscal following the higher disbursement of industrial term loans,” the central bank official noted.

Industrial raw materials import increased by 40.36 per cent to $2.474 billion during Q1 of the FY09. The amount is up at least $711.58 million from that of the corresponding period of the last fiscal, the BB’s data showed.

The BB said import of capital machinery — industrial equipment used for production — rose by 15.50 per cent to $423.74 million, reflecting a rising confidence among entrepreneurs in the country’s future industrial prospects.

Commercial bank officials, however, expect the uptrend in disbursement of industrial term loans to continue in the near future in different sectors, including power and telecommunications.

“We see the increased demand for term loans, particularly in power sector, will continue in the near future to meet the growing demand for electricity across the country,” a senior official of a private commercial bank (PCB) told the FE.

He also said the energy and power, telecommunications, pharmaceuticals and textile sectors have received the lion’s share of such loans.

The major shares of loans were disbursed through syndications among the commercial banks and non-banking financial institutions during the period, the PCB official added.

The recovery of term loans increased by more than 47 per cent during the period under review as the banks and non-banking financial institutions (NBFIs) intensified their recovery drive in line with the central bank directives, the BB officials said.

During the period, the industrial credit recovery stood at Tk 38.78 billion compared to Tk 26.25 billion of the corresponding period of the previous fiscal, the data showed.

Taiwanese company invests $28m in Comilla EPZ

Taiwanese company invests $28m in Comilla EPZ

DHAKA, Bangladesh, Nov 27 (BSS) – Eusebio Textile (Bangladesh) Limited, a Taiwanese company, will invest 28 million US dollars to set up a polyester and nylon fabrics industry in the Comilla Export Processing Zone (EPZ).

The 100-percent foreign-owned company will produce and export 60 million meters of polyester and nylon fabrics annually. The company will also create jobs for 2,145 Bangladeshis, besides 15 foreigners.

Read the full article:

Footwear exporters see brisk business as foreign buyers shifted focus to BD

Footwear exporters see brisk business as foreign buyers shifted focus to BD

Staff Correspondent

The country’s footwear exporters will remain busy until January next as they have received advanced orders since foreign buyers have shifted their focus onto Bangladesh from mainly China and Vietnam.

Leathergoods and Footwear Manufacturers and Exporters’ Association of Bangladesh President Md Saiful Islam said, “We will remain busy until January next. Orders for the period will be 30 percent higher than that of last year.”

The local footwear manufacturers have managed to receive substantial number of orders as the world’s renowned shoe retailers have shifted their focus onto Bangladesh as major source of supply since the European Union decided to scrap the facility offered to Vietnam from January next.

The 27-nation EU recently scrapped the Generalized System of Preference (GSP) facility for Vietnam-made footwear, arguing that the Southeast Asian country, which earned almost US$ 4.0 billion last year from export of footwear, no longer qualifies for the facility because of the industry’s relatively stronger position. Apart from this, Islam, also Managing Director of Picard Bangladesh Ltd, said, “A stable political situation in the country also contributed to the rise in orders we received.”

Bangladesh is now strategically in a better position than any of its South East Asian neighbors including India and Pakistan, as Chinese and Vietnamese shoes have become costlier in the global market for various reasons including soaring labour costs and withdrawal of GSP facilities, industry insiders said.

China, the world’s largest shoe exporting country, accounts for around 62 percent of the global market while Vietnam accounts for 8.0 percent, Italy 12 percent and the rest of the world the remaining 18 percent. Currently, the world market size for shoes and other leather products is worth more than US$ 100 billion a year, and sport shoes account for nearly $40 billion. With more than 80 percent value addition, Islam said, the industry that now employs around 100,000 workers emerge as another potential sector for the country’s economy.

“The amount of earnings from footwear exports in the next five years will be around half a billion dollar while the sector will employ nearly 0.2 million people,” Islam added. He said “We are yet to see any impact of global financial woes on the country’s footwear industry. It is unlikely to hamper our booming growth.”

Following the potentials, he said a large number of local entrepreneurs have already started investing in footwear industry on their own or in joint ventures with any foreign company.

Sector insiders said experts from Gucci of Italy, Nike of the United Kingdom, Reebok of Germany, Timberland of the USA and the ABC-Mart Incorporate of Japan recently visited a number of local shoe factories including Apex Shoes, Jennys Footwear Limited, HNH Footwear and Bay Footwear and enquired about their existing infrastructures. Apart from this, a good number of giant shoe makers of South Korea and China have already come here for investment.

China’s high prices boost BD garment exports

China’s high prices boost BD garment exports
Tuesday, November 25, 2008

DHAKA: Bangladesh’s garment industry is growing rapidly despite the global economic turmoil as China loses orders due to high prices and worldwide demand for cheap clothing soars.

Nearly 5,000 apparel makers here initially sought government help when some top US and European buyers postponed and cut orders in the wake of the worst financial crisis since the 1930s Great Depression. But clothing makers say that a massive diversion of orders from China, the world’s largest producer of apparel, has more than compensated.

In the first quarter to September, garment shipments grew by a record 45 per cent to $3.4 billion, government data this week showed, with more than 90 per cent of the exports going to the US and Europe. “It’s a huge change in fortune for us,” said Golam Faruq, owner of the country’s largest sweater manufacturer and a key supplier to British up-market retailer Marks and Spencer. “This month I got an unexpected $12 million order to make sweaters for a Swedish manufacturer. They told me in the past they used to give the order to Chinese manufacturers. But this year we offered a far better price,” he said.

Faruq said his SQ Sweaters had also received dozens of small orders diverted from China as Bangladesh has became the top choice for producing low-priced basic items like T-shirts, denim pants, sweater and shirts. Now the government’s Export Promotion Bureau, which monitors shipment trends, is urging the industry to prepare for a “flood of orders” as the global recession boosts sales of the low-cost items it produces.

“We held several expositions in Europe and North America in the past month and top buyers told us to be prepared for a massive increase in orders in the months and years ahead,” said Export Promotion Bureau head Shahab Ullah. “They said people in the West have cut purchase of luxury goods and are switching to cheaper items. And it’s our manufacturers, not the Chinese, who can supply the items at a price they now want.”

Bangladesh’s garment sector specialises in low-end clothing and is the impoverished country’s main industry, pumping $11 billion a year into the economy. It accounts for about 80 per cent of exports and employs more than 40 per cent of its industrial workforce.

Bangladesh logged 6.2 per cent economic growth last year, bolstered by a 17 per cent increase in garment sales. This year, the government projected growth of 6.5 per cent, banking on garment exports remaining strong. Knitted items, led by T-shirts which last year made up a quarter of garment exports, were the main drivers of the growth, manufacturers said.

“This year thousands of Chinese factories have shut as they are no longer competitive because of higher wages and currency appreciation,” said Fazlul Haque, head of the Bangladesh Knitwear Manufacturers and Exporters Association. “The buyers have no choice but to switch orders to another country. It has emerged as a new pattern in global sourcing. And so far it looks like Bangladesh is the main beneficiary,” said Haque. Haque said his group, which includes 1,500 factories, had enough orders to the end of the year, although it was still a bit worried over the long term impact of the global financial turmoil.

The Export Promotion Bureau’s Ullah said Bangladesh, now the world’s second largest producer of apparel according to the International Monetary Fund, would continue to dominate in the basic apparel sector if it scales up investment in new factories. “Data shows we’re cashing in on the new trend,” he said. “But we can do more, provided our factories increase capacity and set up backward linkages such as yarn manufacturing, dyeing and washing facilities as early as possible.”

Germany eyes broader business in Bangladesh

Germany eyes broader business in Bangladesh
Sajjadur Rahman

Germany targets Bangladesh as a lucrative investment destination considering the latter’s steady economic growth for the past several years despite political instability.

As part of the move, a German trade delegation will visit Bangladesh in April next year to explore trade and investment possibilities in areas like light engineering, renewable energy, ICT and jute and other agro products, a senior German diplomat said.

“Bangladesh with a population of more than 150 million is a big market. The economy is growing steadily,” Rolf Dieter Reinhard, deputy head of mission and counsellor of economic affairs and press at the German Embassy in Dhaka, told The Daily Star.

Bangladesh’s economy witnessed a 6 percent growth for the last three fiscal years. The economy is poised to grow between 6.2 percent and 6.5 percent also this year.

He said an increase in purchasing capacity and a huge and dedicated workforce would help Bangladesh attract Germany’s investment. But, he sees congenial climate with political stability and improved infrastructure as an important prerequisite to investment.

Data show that around 41 percent of the German enterprises now make investments overseas, which was 30 percent ten years back.

However, German investment in Bangladesh has so far been only 50 million euros, mainly in the textile sector. But the trade between the two countries is growing and the figure reached about 1.5 billion euros in the fiscal year 2007-08.

Now the biggest economy in Europe is seriously considering a big investment here to reduce the bilateral trade gap cashing in on the cheap workforce and rising economic activities.

“We hope that this interest of investment will turn into a reality,” German Ambassador Frank Meyke told a recent meeting of the Foreign Investors’ Chamber of Commerce and Industry (Ficci) in Dhaka.

Rolf Reinhard said: “I think the workforce is one of the biggest assets in Bangladesh.”

On poor German investment in Bangladesh, he said, “As long as Bangladesh is widely perceived as a country afflicted with confrontational politics, hartals and politically motivated violence, potential investors will shy away.”

“Constructive parliamentary work, renouncing and banning hartals, curbing corruption, structural reforms and achievements of the caretaker government could send a positive signal to German investors,” Frank Meyke said.

Fiscal responsibility ordn being made for next government

Fiscal responsibility ordn being made for next government
Khawaza Main Uddin

The government will shortly promulgate a fiscal responsibility ordinance with a provision for presentation of quarterly review report of the government’s revenue earning and expenditures before the Jatiya Sangsad, officials said.

They said such a law would not only establish supremacy of the parliament but also pass more responsibility to the members of parliament in preparing and reviewing the annual budget to establish fiscal discipline.

Once come into effect, the law will provide the lawmakers with scopes for punishing the presently key players in the budget-making and implementation, the bureaucrats, for any financial misconduct relating to the budget.

The final draft of the ‘Public Resources and Budget Management Ordinance 2008’ is expected to be endorsed by the council of advisers soon for promulgation of the ordinance by the president. The finance ministry sent the draft of the law twice earlier to the law ministry for vetting, the officials said.

According to the constitution, the ordinances promulgated during the caretaker government need to be enacted as laws by the subsequent parliament within 30 days of summoning its first session by the president.

‘This law will be prepared in the form of ordinance now so that the next elected government and members of the parliament can exercise it.

This will significantly improve the budget-making and implementation process,’ a finance ministry official told New Age.

The draft law has been prepared in comparison with laws in countries like India, Pakistan and South Africa, the finance secretary wrote in a letter to the Cabinet Division.

The draft law proposes that every ministry or division will have its budget-management wing and section. The finance ministry had taken inputs from different ministries and divisions.

Some of the most burning development issues of recent times — devolution of power and addressing regional disparity — have also been accommodated into the draft law, said finance ministry officials.

The planned law has proposed restriction on diversion of already allocated money under one head to another or re-allocation of budgetary funds without the permission and knowledge of the parliament — a provision which is almost repetitive of the constitutional provision.

Article 90 of the constitution says: ‘No amendment shall be proposed in parliament to any such bill, which has the effect of varying the amount of any grant so made or altering the purpose to which it is to be applied, or of varying the amount of any expenditure charged on the consolidated fund.’

A policy statement on the state of macro-economy shall be issued in parliament alongside the annual financial statement usually made by the finance minister during the presentation of the proposed budget before the beginning of the fiscal year, says the draft ordinance.

Also, a medium-term budget will also be placed in parliament, stating the government’s projected allocations for subsequent two fiscal years.

The draft law stipulates a cap on the government’s borrowing from domestic sources at a maximum of 2 per cent of the gross domestic product and also stresses on keeping budget deficit at ‘sustainable limit’.

The planned law says that budgetary resources equivalent to at least 8.5 per cent of the gross domestic product must be allocated to meet the expenses targeting at poverty alleviation programme. Gender balance and equity have also been emphasised, the officials said.

Kitchen market waste turns bio-fertiliser

Kitchen market waste turns bio-fertiliser
World’s first clean compost plant goes into operation in N’ganj
Staff Correspondent

Bio-waste generated at the city’s kitchen markets might no more be used for land filling and such other purposes since it is now being utilised as a raw material for producing quality bio-fertiliser.

Collecting the organic waste from the markets, mainly Karwan Bazar vegetable market, local private firm Waste Concern, in association with its Dutch partners, has launched a compost plant at Bhulta in Narayanganj.

This is the first ‘carbon trade-based’ bio-fertiliser plant in the world and also the first Clean Development Mechanism (CDM) project in Bangladesh. Waste Concern is working on waste management for long.

The executive board of the UN-approved CDM under the Kyoto Protocol has already registered the project which will entitle its owners to get certificates for ‘non-generation of carbon’. And they will sell those to developed countries.

“We are producing fertiliser in such a process that we prevent generation of half a tonne of greenhouse gas by producing one tonne of fertiliser,” said AH Md Maqsood Sinha, managing director of the plant–WWR Bio Fertiliser Bangladesh Ltd.

A UN-approved body– Designated Operating Entity (DOE)– examines whether a plant generates carbon or not, and provides certificates in this regard. Such certificates have a $ 25 billion global market.

Under the CDM, developed countries seek to meet their obligations to cut carbon emissions by sponsoring carbon-cutting schemes in poor countries.

Organic waste is collected from the kitchen markets and carried to the fertiliser plant. Dried and fresh waste is then mixed and piled up at specially-made pre-composting site at the plant. In the composting process, temperature is kept at 60 degrees Celsius and oxygen level above 10 percent.

Composting and drying in different phases take 40 to 55 days before the production of bio-fertiliser. As much as 25 to 30 tonnes of bio-fertiliser can be produced from 100 tonnes of waste.

Fertiliser produced at this plant will be sold at Tk 4 to 5 per kg while bio-fertiliser now sells at Tk 10 to 12 per kg.

The plant built at a cost of 12.5 million euro now handles 138 tonnes of organic waste a day. Two more plants will be set up at Gazipur and Savar next year, raising the total capacity of handling waste up to 700 tonnes per day.

In the capital, 3,500 to 4,000 tonnes of waste are generated every day, of which 80 percent is organic.

Agriculture Adviser CS Karim yesterday inaugurated the plant while Dutch Ambassador in Dhaka Mrs Bea Ten Trusscher attended the opening ceremony as special guest.

Others present on the occasion included Mayor of Narayanganj Pourasabha Selina Hayat Ivy, Jan Banooe, chairman of the plant, Mohammed Reazuddin, member-secretary of Designated National Authority on CDM of Bangladesh government, and Shirin Kamal of the UNDP.

Britain to fund Sylhet catering institute

Britain to fund Sylhet catering institute

SYLHET, Bangladesh, Nov 25 (BSS) – Adviser for Foreign Affairs and
Expatriates’ Welfare and Overseas Employment Dr Iftekhar Ahmed Chowdhury today unveiled a plaque to mark the beginning of the construction of a Hotel Management and Catering Institute here.

The UK, through its Department for International Development (DFID), is providing 400,000 pounds to build and equip the Hotel and Catering Institute.

The institute will operate with the private-public partnership between the Government of Bangladesh and the project implementers – the Skills and Opportunities for Employment Project (SKOPE) and Underprivileged Children’s Education Project (UCEP).

The state-of-the-art institute will provide practical training in food preparation and cooking, beverages, reception, and accommodation services, in specially created realistic hotel and restaurant environments.

It will provide skills and training for the urban poor that are directly linked to jobs in the private sector and it is expected that around 300 students will complete training in the first five years.

Read the full article:

Garment purchase orders pour in

Garment purchase orders pour in
Refayet Ullah Mirdha

More international buyers are coming to Bangladesh despite the global financial recession as they think China, one of the major competitors of Bangladesh, is no more viable for them due to higher prices of apparel items.

“Chinese are no more interested in labour intensive industries like textile and ready-made garment (RMG) sector because of the currency appreciation against the dollar and higher wages of workers,” said Rasheduzzaman, a local buyer in Dhaka.

Recently, almost all renowned international retails stores, including Wal-Mart, JC Penny, Marks and Spencer, H and M, Tesco, GAP, Li and Fung, Puma and G-Star, have enhanced their volume of purchase from Bangladesh, said a supplier of the RMG products.

The recent change in the purchase pattern is because Bangladesh is a vital destination for international buyers of readymade garments (RMG) items in the wake of less cost-effectiveness of Chinese apparels.

A strong presence of foreign retail buyers of apparel items from Bangladesh has outshone the growth of local buying houses, as they now focus more on direct purchase from manufacturers, according to sector people.

“Bangladesh is receiving a huge number of orders from international buyers as they have been shifting their orders from China in the age of financial recession,” said KI Hossain, owner of Total Apparel, a local buying house.

Up to May, at least 200 new local buying houses have opened in Bangladesh, while the number of such new buying houses was 150 in 2007, said Hossain, also the vice-president of Bangladesh Garment Buying Houses Association (BGBA).

A buying house, a hub for sellers comprising of leading manufacturers, exporters and suppliers, displays their latest and trendiest collection of apparels to a huge audience round the year.

Buyers from across the world can meet sellers at this permanent showroom and source their products as per their exact specifications.

Meanwhile, some international buyers like Sweden based IKEA, a global giant in home textile business, has already opened its liaison office in Dhaka to make any business deal directly with manufacturers.

At the recent inaugural function, the IKEA’s local representatives said it would raise its purchases from Bangladesh, mainly home textiles, to 300 million euros from 100 million euros in the next few years.

Talking to The Daily Star, Shahadat Hossain Kiron, chairman of Dekko Group, said although there is no exact statistics of the orders Bangladesh now receive, which are being shifted from China, the country has turned out to be a good destination for outsourcing apparel items.

Global slump won’t affect RMG exports: BKMEA

Global slump won’t affect RMG exports: BKMEA

BSS, Dhaka

The current global financial recession will not create any fearful situation for the garment exporters.

The country is facing both negative and positive influences of the global economic slowdown in the knitting sector, President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Fazlul Haq yesterday said this while briefing the reporters on a three-day exhibition of knitting technology and machinery from November 28 in the city.

Though the country lost 30 percent international orders for its knit products due to the slump, but new orders from various countries, including China, are filling the gap, he added. The current rate of growth in the fields of manufacture and export of readymade garments is above 15 percent and that will be continuing, he added. Fazlul Haq said every two days a new knitting unit is being established. About Taka 2,000 crore is being invested in the sector annually.

Besides, Taka 1,000 crore more is also being spent in a year for expansion and modernisation of the knit sector, the BKMEA chief said.

Citing the knitting machinery exhibition as a bold step, which has been organised for the first time in the country under the cloud of the global recession, Fazlu Haq said many countries did not hold such exhibition due to the existing situation. A total of 75 organisations from 10 countries, including Germany, the UK, China, South Korea and India, will participate in the fair at the China-Bangladesh Friendship Centre in the city.

Fazlul Haq urged the BKMEA members not to accept selling prices of knit products fixed by the foreigners. “Rather, we should develop a price fixation mechanism,” he added.

Govt to allow private power plants for bulk consumers

Govt to allow private power plants for bulk consumers

M Azizur Rahman

The government Monday approved a policy allowing the private sector to set up power plants to feed only bulk consumers.

The new policy approved at the council of advisers’ meeting allows private entrepreneurs to set up individual and joint venture power plants with public sector, rehabilitate the existing old and inefficient ones.

Under the provision, the investors will have the liberty to establish and operate private power plants subject to obtaining licence from Bangladesh Energy Regulatory Commission (BERC).

But they have to find their own clients, who must be bulk consumers, to sell the electricity from their plants at a rate to be fixed through negotiation.

The developers for private power plants will also have to arrange the source of energy to run their plants.

Given the fast depleting reserves of natural gas, the new power plants should preferably rely on coal, imported gas, liquid fuel, or renewable energy sources like solar, wind, hydro, biomass, municipal waste, and others, as fuels, instead of domestic natural gas.

Distribution licencees may purchase power from private power plants subject to approval of the BERC, but the government will not provide any guarantee in favour of any distribution licencee.

Under the new policy, the private sector entrepreneurs will be allowed to rehabilitate old and inefficient power plants of government under rehabilitate, own and operate (ROO) or rehabilitate, own and transfer (ROT) basis.

The public sector power utilities will invite public-private partnership for rehabilitation of old and inefficient power plants through a tender and award the job in accordance with provisions under the Private Sector Infrastructure Guidelines 2004 or Public Procurement Act, 2006 or both, as applicable.

The valuation of the assets of relevant power plants will be done by an independent agency.

The valuation report determining the market value of the existing assets of such plants will be made available to all bidders.

The successful bidders will be required to pay the consideration money upfront to public sector power utilities.

Alternatively, subject to government approval, the consideration money might be adjusted against the tariff.

Local private investors will be able to develop new power plants under joint ventures with the public sector power entities on build, own and operate (BOO) basis.

A special project vehicle (SPV) with at least 51 per cent shares owned by local private investors should be established to implement and operate such projects, the newly established policy, spells out.

The terms and conditions of the joint venture will be stipulated in a joint venture or partnership deed.

Contribution of public sector power entities like project land and other relevant assets will be monetised and added to the cash contribution, if any, and should form the basis for determining its share in the joint venture.

To avail the opportunities as offered in the policy the private entrepreneurs must have proven financial capacity to arrange financing for development of private power plant, proven experience in developing and operating power plant of same or higher capacity as independent power plant, rental power plant, small power plant, or captive power plant and selling power to large consumers.

“The policy has opened up a new window of opportunity for investments in the power sector,” chief advisor’s special assistant professor M Tamim told the FE Monday night.

It will help augment power supply in the country, he said.

The new ‘private power policy’ will facilitate electricity supply to only large consumers that include large industrial enterprise, export processing zones, special economic zone, private economic zones, high tech parks, large real estate, Mr Tamim added.

Also, the council gave final approval to the Private University Ordinance 2008 for bringing dynamism in the academic activities of private universities, ensuring transparency and accountability.

Furthermore, the meeting approved the Bangladesh Economic Zones Ordinance 2008 aimed at “enhancing industrialization and employment generation in the country”.

It also approved some additions and amendments to the BEPZA Act 1980.

The council of advisers also discussed the Voters’ List (Amendment) Ordinance 2008 and sent it back for further examination.

CA’s Press Secretary Syed Fahim Munaim briefed newsmen about the outcome of the meeting.