Monthly Archives: December 2009

Bangladesh ahead in apparel export

Bangladesh ahead in apparel export
BSS, Dhaka

Bangladesh has overtaken India in apparel exports this year as for the first nine months, its exports stood at 2.66 billion US dollar, ahead of India ‘s 2.27 billion US dollar.

In 2008, both the countries were at the same level (US $10.9 billion) with each having three per cent of global apparel exports, the premier economic English daily “Business Standard” in a front-paged story on Monday reported.

It said, India’s export volume is down 80 per cent this year for two reasons: one, the global economic downturn and increasing competition from Bangladesh , Vietnam and Sri Lanka . During the downturn, buyers looked for cheaper deals and Indian exporters were unable to compete on costs due to rising raw material and power costs.

The second reason: many domestic are setting up units and offices in Bangladesh to avail the benefits of duty-free access. Prominent among those who have set up units in that country are House of Pearl Fashion (two units) and Raymond (one unit).

“Bangladesh has a cost edge of 9-29 per cent across various products. The country has duty-free access to European markets and labour is cheap. It is more profitable to export from Bangladesh, than from India.” the Business Standard quoted Sudhir Dhingra, managing director of Orient Craft Exports, as saying.

Deepak Seth, chairman of the House of Pearl Fashions, said the company’s units in Bangladesh had been operating “efficiently and profitably”.

The company would double its capacities for T-shirts and woven tops/bottoms in Dhaka in the next financial year. Seth said labour costs in Bangladesh were 50 per cent of that in India and there was no duty on imports to EU, Australia and Canada .

“The Bangladesh government’s huge priority to the sector is another big draw.” House of Pearls has units in Indonesia and Vietnam as well.

Bangladesh-Apparel-two-last Orient Craft was planning a unit in Bangladesh a year ago but dropped the idea due to changed focus of business.

“There are no difficulties in setting up a unit in Bangladesh and we considered setting up a base there. However, we are focusing more on domestic markets now,” said Dhingra.

Analysts and textile experts said it was not common for Indian companies to set up units in Bangladesh.

“There are distinct advantages of setting up units in Bangladesh but only a few big players have done it. Smaller players will not venture into setting up units in other countries,” Prakash Agarwal, vice president of consulting firm Technopak told the newspaper.

D K Nair, secretary general of the Confederation of Indian Textile Industry (CITI), said some of the Indian companies had set up garment manufacturing units in Bangladesh, but it didn’t mean much.

Medium and small exporters have not yet warmed up to the idea of setting up offshore units. “It is difficult for smaller units to understand, invest and operate in a foreign location. The Indian players who have set up units there have not actually relocated. They still have units in India and, therefore, are not necessarily our competitors,” said Praveen Nayyar, managing director of Delhi-based Dimple Creations Private Ltd.

The problem, Indian exporters said, was elsewhere. With fabric prices shooting up by 51 per cent in recent months, along with speculative activities in the cotton market, woes of exporters have multiplied.

“We are not able to take reorders as out costs have multiplied due to steep rise of raw material costs. We are not able to maintain our margins and are rendered uncompetitive.

Orders once lost are not going to come back,” Nayyar added.

Call centres on the rebound

Call centres on the rebound
Md Hasan

Call centres have emerged as a new foreign currency earning sector, generating more than 30,000 jobs since its boom in mid-2009.

With around 1,500 seats in 47 such centres currently in operation, experts say, this sector has every potential to flourish, bagging high-end work contracts from global markets.

Successes are many. So are the industry insiders encouraged for expansion of business that now enjoys 60 percent growth.

“It is quite encouraging to see what call centres have accomplished in a short span of time,” said Habibullah N Karim, president of Bangladesh Association of Software and Information Services (BASIS).

Bangladesh Telecommunication Regulatory Commission (BTRC) allowed setting up of call centres in April 2008. However, such business started springing up this year.

A call centre is an office where a company’s inbound calls are received, or outbound calls are made.

The industry here mainly works for different companies based in the US, UK, Canada and Australia. Its job responsibilities include selling products, verifying international credit cards, campaign for new product sales, booking hotel rooms and even selling laptops.

In addition to outsourcing different services globally, the industry now eyes grabbing Tk 500 crore a year from the local market, although a dearth of skilled agents haunts call centre business.

“A learning phase we’re now passing. We have success stories as well. More than 60 percent call centres are now in break-even,” says Reazuddin Mosharaf, secretary general of Bangladesh Association of Call Centre and Outsourcing (Bacco).

An amount of al least Tk 1 crore is required to set up a centre having 25 seats.

Initially, entrepreneurs deemed global recession a threat to their business, which eventually proved to be wrong as the financial firestorm had left some openings. The foreign companies using the call centres for promoting products and services have opted for working with Bangladesh’s novice call centres.

Now the industry presents a base to brighten its future prospects, even though its turnover in terms of forex earning is not that impressive.

“Some expertise now we’ve earned. We’ve ideas as to how a call centre should work, ” the Bacco executive pointed out.

Many a company have centralised their customer support functions at call centres, which contributed a lot to make this business popular.

However, efficient agents remain scarce, a main obstacle to the sectoral development. In the coming years, around 1,50,000 agents will be required to cope with the growing demand for call centres.

Mainly students from English medium schools and private universities work with such centres.

Rumana Hossain, an agent of ATN call centre, thinks the profession is not bad at all. “Our working environment is nice. So we do not feel bad during day or night time.”

From a social perspective, the second year student of BRAC University said, it is a new idea in Bangladesh. She also pointed to the fact that she faced a volley of questions from fellow students.

“But when someone gets to know responsibilities of the job, they also become interested.”

Mosharaf, who is also managing director of Windmill Advertising Ltd, said the local market is worth about Tk 500 crore.

Usually telecoms, medical institutions, insurance companies and banks provide different services through the domestic call centres.

Masrur Alam, director of Computer Source, demanded that the regulator allow providing domestic and international call centres services at the same premises with the same set up.

“We are busy with our international clients mainly at night because of the difference in time. But in the day time, our call centre becomes lazy as we have no work then,” he pointed out.

In this context he cited the example of India where both domestic and international operations are allowed from the same premises, which makes room for flourishing within a very short time.

The BASIS president brushes aside such a dearth. “I believe, one or two lakh agents are available in the market. Let them know that it is an opportunity.”

Zia Ahmed, chairman of BTRC, believes that the call centre industry is a promising sector to earn foreign currency.

“The plan to set up a call centre village is under consideration by the telecom ministry,” he told The Daily Star.

BD company to invest $4.895m in Karnaphuli EPZ

BD company to invest $4.895m in Karnaphuli EPZ
Business Report

Bangladeshi company M/s. Zentex Apparels Ltd will set up a Garments Manufacturing Industry in Karnaphuli Export Processing Zone.

The 100 per cent local owned company will invest US$ 4.895 million in setting up their unit and will produce garments items. The company will also create employment opportunity for 1,547 persons including 05 foreign nationals.

An agreement to this effect has been signed between the Bangladesh Export Processing Zones Authority (BEPZA) and the M/s. Zentex Apparels Ltd in BEPZA Complex in the city on Sunday.

Md. Moyjuddin Ahmed, Member (Investment Promotion) of BEPZA and Md. Nurul Alam, Chairman of M/s. Zentex Apparels Ltd signed the agreement on behalf of their respective organisations.

Brig General Jamil Ahmed Khan, ndc, psc, Executive Chairman, A K M Mahabubur Rahman, Member (Finance), Md. Shawkat Nabi, Secretary, A Z M Azizur Rahman, General Manager (Investment Promotion) and other officers of BEPZA were present at the signing ceremony.

Industrial policy soon with priorities to hi-tech, knowledge based industries

Industrial policy soon with priorities to hi-tech, knowledge based industries: Dilip

DHAKA,Bangladesh,Dec 28 (BSS) – Industries Minister Dilip Barua today said the government would soon announce the industrial policy giving priorities to hi-tech and knowledge based industrialization.

He said the present government under the dynamic and visionary leadership of Prime Minister Sheikh Hasina assumed office with the great responsibility of bringing out a positive change in all fields in society.

The minister said this while addressing as the chief guest the concluding session of the 8th International Mechanical
Engineering Conference and exposition of technology and engineering products here.

Department of the Mechanical Engineering of Bangladesh University of Engineering and Technology (BUET) organized the
conference with Chairman of the Department Professor Dr Dipak Kanti Das in the chair.

Vice Chancellor of BUET Professor Dr AMM Safiulla and Pro Vice- Chancellor Professor Dr M Habibur Rahman spoke as the guests of honor.

Dilip Barua said the main objective of the government is to improve the living condition of common people and build a poverty free, stable, democratic, peaceful and harmonious society.

“The government is committed to the nation to build up a knowledge-based society with a view to establishing an
industrialized Digital Bangladesh by 2021. For this, the government wants to ensure e-governance, e-management, e-commerce, e-learning as well as e-service in every sphere of the society,” he said.

By further strengthening the drive towards building Digital Bangladesh, Barua said the present government led by Prime
Minister Sheikh Hasina gave top priority to meet the UN declared Millenium Development Goals (MDGs).

“We are working for the development of software, hardware and human resources,” he said adding, “Human Resource Development (HRD), Human Resource Management (HRM), Innovation of sustainable technology, Technological Decentralization (TD) and Technology Transfer (TT) are undoubtedly significant areas where we need to improve a lot.”

The minister urged the BUET authority to strengthen collaboration and cooperation with the government in the fields of Technology Transfer, HRD and HRM and sought all out supports for sake of national interest.

“We are interested to work very closely with the private sector and so we welcome public private partnership and participation for rapid development in our industrial sector using the latest technology, machinery and equipment’s,” he said.

Dilip Barua said the government would provide equal opportunities to both foreign and local investors in the light of the present investment-friendly policies of the government.

The government policies effectively encourage foreign direct investment in Bangladesh with a view to creating jobs for the
vast unemployed youth force, increasing foreign exchange earnings, acquiring new and modern technology and management skills, accelerating the overall growth of the economy and accessing new markets, he added.

The minister called upon all to invest more and more in Bangladesh and to make greater contribution to the growth and development of the national economy. “The government is committed to protect the investment of foreign as well as local entrepreneurs,” he asserted.

Barua also said that the government is committed to develop the local industries to meet the domestic demand from own
productions. “To ensure rapid industrialization for job creation and poverty alleviation, it is a must to develop the engineering and technology sector,” he said.

Referring to the change in the attitude of international buyers, he said, “if we want to expand our export, we must read the psychology of global customers and their mindset.”

Bangladesh is keen to stimulate its economy to install it on the line of Newly Industrialized Economies (NIE) within a short time, Barua said.

With this in view, he said the government has already liberalized industrial and investment policies by reducing regulatory requirements and opening up areas like tax holiday, accelerated depreciation allowance, concessionary income tax and duty on imported machinery and avoidance of double taxation.

Country does not need food import this year

Country does not need food import this year
Says central bank governor
Unb, Dhaka

Bangladesh will not have to import food this year as the country’s farmers produced enough, in contrast to production shortfalls in the outer world, said Bangladesh Bank Governor Dr Atiur Rahman.

He noted that the food-exporting countries across the world stopped exporting grains as there was less production. “But our farmers produced enough food and we will not have to import rice.”

He was speaking at a loan-disbursement ceremony for the farmers at Digpait Shamsul Huq Degree College in Jamalpur district yesterday.

The governor also pointed out that the earnings from exports posted 18 percent growth in October, while India got negative growth.

“The young entrepreneurs deserve the credit for their venture,” he said.

Chaired by the Bangladesh Krishi Bank (BKB) Chairman Khandaker Ibrahim Khalid, the function was also attended by BKB Managing Director M Mokhtadir Hossain, Digpait Shamsul Huq Degree College Principal Abdul Hamid, and peasant representatives Abdul Aziz and AKM Mohsinuzzaman.

The central bank governor said that Bangladesh is the only country that attained 6 percent GDP growth during the recession period.

Dr Atiur, who has launched a new collateral-free lending scheme for the farmers, said the BKB would increase the loan amounts if the money is taken and repaid in stipulated time.

He observed that it was not the kindness of banks to provide money for the farmers. “Rather you (farmers) are showing kindness to the banks by taking loans from them as the banks are running their business by taking money from the government,” he told the gathering.

From the ceremony, the BKB distributed loans amounting to Tk 1.15 crore to 240 farmers of Digpait and Rashidpur unions.

Later, Atiur inaugurated a branch of Janata Bank at Nandina and attended a civic reception given by Jamalpur people at the district Shilpakala Academy auditorium.

E-governance project starts next month

E-governance project starts next month
Bss, Dhaka

The government has taken a three-year plan to bring all departments, agencies and associated organizations run by the ministries under e-governance, a state-of-the-art service delivery system.

Under the scheme, a central data centre (CDC) will be set up and be connected to offices of deputy commissioners (DCs), Upazila Nirbahi Officers (UNOs) in all 64 districts, according to the science and ICT ministry.

State Minister for Science and ICT Yeafesh Osman told the news agency that a project styled `Development of National ICT Infra-Network for Bangladesh Government ( has been taken up.

Osman said the Korean government agreed to provide Taka 273 crore as soft loan with 0.50pc interest rate for the project that will be implemented during 2010-12.

The project will have inter-connectivity in all ministries with a special focus on the e-governance system, the minister said and expressed his hope that the project would help make a `Digital Bangladesh’.

The main objective of the venture is to build a basic infrastructure to impart IT literacy to the officials and employees under all ministries resulting in developing a skilled manpower in Bangladesh.

Talking to the news agency, Executive Director of Bangladesh Computer Council (BCS), an organisation run under the science and ICT ministry, M Mahfuzur Rahman said they are expecting to take off the project next month as necessary preparations are now nearing completion.

He said district level ICT centre will be set up during 2010-11 and at upazila level in the period of 2011-12.

E-governance is an information and communication technology (ICT)-enabled service delivery system that rocked the governing systems in the world to a degree by achieving good governance.

Experts say the e-governance project will have people’s participation by ensuring transparency, shortened service delivery, poverty alleviation, curbing corruption and strengthening democratic practices.

Local firms seek to shore up foothold in tyre business

Local firms seek to shore up foothold in tyre business

A salesman arranges locally made tyres at a shop in Dhaka. Bangladesh is missing out on opportunities to tap the rising local demand for tyres in absence of large manufacturers here.Photo: STAR

Sajjadur Rahman

Local manufacturers are coming up to tap growing opportunities in tyre business that now depends heavily on imports.

Husain Tyre, which started production in 1996 with three-wheeler scooter tyres, makes more than 10 types, including light ones for small trucks and microbuses.

Gazi Group, a plastic product manufacturer, started producing automotive tyres three years ago. Now Meghna Group plans to enter the market soon.

“Initially, we will make motorcycle tyres by June next year. We have already started producing tubes for motorcycle tyres,” said Mizanur Rahman, chairman of Meghna Group.

Despite a growing use of automobiles here over the years, Bangladesh is missing out on opportunities to tap rising demand for tyres in the absence of large manufacturers.

On the other hand, Nepal and Sri Lanka, relatively small markets, produce tyres to meet their domestic demand.

According to Bangladesh Road Transport Authority, around 150 new motorised vehicles are added to city streets every weekday. A total of 2,18,000 new vehicles were registered in the last two and a half years.

Bangladesh spends Tk 1,000 crore to import up to 15 lakh tyres a year, according to importers, distributors and sellers.

Manufacturers, such as Husain and Gazi, are yet to pick pace and compete with giant Indian and Japanese tyre makers.

“The market is dependent on imports,” said Mohammad Muzahid, an executive committee member of the Tyre Merchants’ Association and an importer of Indian Good Year tyre.

Although there is no exact data on the market share of imported and locally produced tyres, Humayun Kabir Liton, office secretary of Tyre Merchants’ Association, said the use of local tyres is rising fast.

“Local tyres will be able to grab a 10 percent market share in the next couple of years,” said Liton, who has been in the business for nearly 15 years.

The tyre market has been growing fast, but local big companies did not make an entry to this sector as it requires large capital investments and consistent power supplies.

Years ago, two big names — Rahimafrooz and Nitol — moved to produce automotive tyres, but their plans did not carry through for high capital investment requirements and dependence on the import of raw materials.

“When we took an initiative to produce tyres locally, more than seven years ago, the market was not as big as it is now,” said Niaz Rahim, a director of Rahimafrooz Group.

“At the time, the investment cost was estimated at Tk 250 crore — now it will be no less than Tk 400 crore for the same project,” he added.

India’s JK Tyre also tried to set up a joint venture to make tyres in Bangladesh several years ago.

Importers and sellers found the scarcity of raw materials in the country as an obstacle to producing tyres in Bangladesh.

“Rubber, chemicals, carbon and yarn — all have to be imported,” said Humayun Kabir, another importer. “The poor supply of power also discourages investors.”

Bangladesh imports at least 60 percent of its tyre requirements from India, followed by China, Indonesia, Japan and Thailand, industry people said. Prices of tyres have also quadrupled in the past decade, riding on growing demand.

Niaz Rahim of Rahimafrooz did not rule out the possibility of a joint venture to manufacture tyres.

Zakir Husain, managing director of Husain Tyre, declined to comment on the country’s tyre market.