Monthly Archives: March 2010

Canadian company buys Shahriyar Fabric

Canadian company buys Shahriyar Fabric
Gildan wraps up deal for $15m
Refayet Ullah Mirdha

Canadian T-shirt giant Gildan Activewear Inc yesterday wrapped up the acquisition of Shahriyar Fabric Industries Ltd, choosing Bangladesh as a base for manufacturing in Asia.

Gildan, based in Montreal, has bought the Bangladeshi company for $15 million.

The acquirer will also assume the debt of Shahriyar Fabric Industries, an export-oriented apparel maker, said Shahriyar Hossain, managing director of the company.

Hossain said he sold the composite factory as he had a heavy financial burden to bear. The factory in Ashulia produces high-quality ring-spun T-shirts and has a capacity to produce 2.2 million dozen T-shirts a year.

“I cannot exactly say the total amount of the liabilities of the company that was established 13 years ago. All I can say is, the amount is huge,” Hossain said.

Moreover, the issues of gas and power, coupled with some personal problems, forced him to sell the factory, he told The Daily Star by phone. Shahriyar Fabric has 3,000 workers.

In October 2009, the company received an interest waiver worth Tk 8.72 crore for its “transaction reputation” with state-owned Sonali Bank, he claimed.

Hossain said the new owning company will not sack workers, and rather, it will upgrade the factory with modern facilities.

The 42-year-old entrepreneur said business was going well, but for some personal and financial problems, it was difficult to continue.

Gildan plans to increase the facility’s annual production capacity to 3.5 million dozen T-shirts to support the company’s international business growth strategy.

According to a report, Gildan CEO Glenn Chamandy told the annual shareholders’ meeting in early February that Gildan planned to build a low-cost high-quality manufacturing base in Asia, but excluded China as a potential location.

According to, the acquisition is the result of substantial analysis carried out by Gildan to identify a strategic location to begin the development over time of a potential major vertically-integrated manufacturing hub in Asia with an infrastructure and geographical location to position Gildan as a low-cost, high-quality producer to serve its target markets.


Higher GDP, low inflation on target

Higher GDP, low inflation on target
Rejaul Karim Byron

As investment rebounds, higher GDP growth and a low inflation rate for the next fiscal year is the target to be set by the government.

According to the preliminary projection, 6.7 percent growth in gross domestic product and 6.1 percent inflation on an average are targeted for FY 2010-11.

Meanwhile, development partners forecast the GDP growth for the current fiscal at not-over 5-5.5 percent, while the government expects such growth at 6 percent and inflation 6.5 percent.

The finance ministry officials said the resources committee meeting decided Sunday that the FY 2010-11 GDP and inflation growth rates would soon be set after a consultation with the central bank.

Pointing to a better investment scenario now, a high official hinted at a larger annual development programme for the fiscal to come. “Around Tk 40,000 crore is likely to be earmarked for ADP, while the size of the total budget will be around Tk 1,32,000 crore,” he said.

A bigger public expenditure would help grow GDP, the finance ministry official pointed out. He however linked the inflation control to low prices of petroleum and food on international market.

A Bangladesh Bank official is also upbeat on reaching the target of a higher GDP growth, pointing his finger at the rise in industrial credit and imports of capital machinery and raw materials.

Also, export orders of the main foreign exchange earner readymade garment are picking up.

BB statistics show that disbursement of industrial term loan increased by 41 percent to Tk 12,615 crore during the July-December period of this fiscal year.

Such loan disbursement marked a 7.5 percent negative growth in the same period a year earlier.

The higher inter-bank call money rate also points to the increasing investment demand. The average call money rate was 3.45 percent on March 16, up from around 1.0 percent in June last year.

Although investment rebounded, the inflation rate is on the rise. According to the Bangladesh Bureau of Statistics, inflation went up by 8.99 percent on point-to-point basis in January.

A BB official said if the local food production (including rice) is not hampered and the supply chain goes smooth, inflation could be contained at the targeted level.

He also listed some central bank measures, which include adoption of a cautious and accommodative monetary policy.

Deep-sea port construction to start Dec likely

Deep-sea port construction to start Dec likely

BSS, Dhaka

The construction of much-awaited deep-sea port will begin at Sonadia of Cox’s Bazar district in November-December this year.

The shipping ministry has taken the initiative to present the proposal on complete design and work area of the deep-sea port project in the next meeting of the cabinet.

Shipping Secretary Abdul Mannan Hawlader told BSS yesterday that tenders would be invited for construction of the port after approval of the cabinet.

He said the deep-sea port project will include construction of infrastructures for the port and jetty, beck water, additional channels, export-import zones, system for communications with other ports, road, railway, power supply, gas connection, transit area, township and helipad.

This will require requisition of land and rehabilitation of the affected people.

Shipping Minister Shajahan Khan said the Sonadia deep-sea port would be a regional port. It will expand Bangladesh’s trade with China, Myanmar, India, Nepal, Bhutan, Sri Lanka and Thailand.

During the recent visit to Beijing, Prime Minister Sheikh Hasina discussed with her Chinese counterpart on the construction of deep- sea port and got assurance of assistance.

The minister said the shipping ministry has taken initiatives to construct the deep-sea port soon.

He said about Taka 13,000 crore would be required to complete the first phase of the deep-sea port project. The government will give 30 percent of the fund while the rest would come from public-private partnership.

Shipping Ministry Joint Secretary Abdul Quddus said work on the first phase of construction would begin in 2010 and end in 2017.

He said expenditures for the second phase (2026-2035) has been estimated at Taka 26,000 crore.

He said the deep-sea port would be constructed on 22,000 hectares of land at Sonadia of Kutubjom and Hoyanak union of Moheshkhali. Five international and four general cargo jetties would be constructed in the first phase.

The joint secretary said currently no ship more than nine meter deep can anchor at the Chittagong port. But 14-16 meter deep ships would be able to anchor at the deep-sea port.

AK Ahmed, coordinator of Pacific International of Japan that conducted feasibility study of the deep-sea port, said the Chittagong port now handle 10 lakh tons containers.

After completion of the first phase, the deep-sea port would be able to handle 7.41 crore containers.

Diversify products to take scope of Canadian market Dipu tells exporters

Diversify products to take scope of Canadian market Dipu tells exporters


Foreign Minister Dr Dipu Moni yesterday urged Bangladeshi business community to diversify their product basket for full utilisation of trade facilities extended by Canada.

“Canada has granted access to 141 Bangladeshi products, almost all products, but we couldn’t take advantage of the scope,” Dipu said while addressing a meeting at a city hotel.

The High Commission of Canada and the Canadian Chamber in Bangladesh jointly organised the meeting on the achievement of a billion-dollar in ‘Annual two-way Trade between Canada and Bangladesh in 2009’.

The Foreign Minister expressed her satisfaction to know that Bangladesh-Canada trade stood at $1.4 billion (Canadian dollar) in the last year from 0.25B in just five years. Canadian export to Bangladesh was worth $626 million while Bangladesh exported goods worth $808 million in the last year.

“We want to strengthen our well established strong trade relations with Canada. The government would provide all possible assistance to the business community,” the foreign minister said.

Canadian High Commissioner Robert Mcdougall said Bangladesh has great untapped potentials to develop. Canada can also play a key role in helping Bangladesh build much needed infrastructure in years ahead including transportation systems, power generation and gas exploration projects.Mcdougall said there remain significant barriers to investment in Bangladesh. The barriers include poor infrastructure.

Sharing a similar opinion with Dipu Moni, he also emphasised the need for diversification of the country’s products and markets to gear up the export growth.

Canada Bangladesh Chamber of Commerce (CanCham) president Masud Rahman said Bangladesh had traditionally been the largest recipient of Canadian bilateral assistance.

The chamber will shortly organise ‘Showcase Canada Programme’ in order to further promote and facilitate trade between the two countries, he informed.

Dhaka-Istanbul direct flight soon

Dhaka-Istanbul direct flight soon
Unb, Dhaka

Turkish Airlines will start direct flight from Istanbul to Dhaka in two to three months, aiming at strengthening trade and commerce ties between the two countries.

The country manager of the Turkish Airlines will come to Dhaka within a week to finalise all formalities with the ministries concerned.

Outgoing Turkish Ambassador to Bangladesh Sakir Ozkan Torunlar communicated this to President Zillur Rahman during a farewell call at Bangabhaban yesterday.

The ambassador hoped that the direct flight would help expedite contacts between Turkish and Bangladeshi entrepreneurs to achieve the targeted $1 billion trade between the two countries this year.

Torunlar said Bangladeshi passengers travelling to Europe would also get benefit from the direct flight, as they will be able to use Turkish Airlines as transit passenger at a cheaper rate.

The direct flight would open Bangladesh’s connectivity with other regions of the world.

Zillur Rahman appreciated the outgoing ambassador for his endeavour to enhance the bilateral relation to a new height.

The President conveyed his gratitude to Turkish President Abdullah Gul for visiting Bangladesh in February last and appreciated his desire to increase bilateral trade up to $1 billion.

Zillur Rahman urged the Turkish entrepreneurs to relocate their industries, particularly the textiles, in Bangladesh taking advantage of the prevailing investment-friendly atmosphere.

He remembered his Istanbul visit in November last year to attend the COMCEC Summit of OIC, and thanked the Turkish government for extending warm hospitality during his stay in the country.

IIDFC-NSIC MoU signed to utilise Indian know-how in revamping SME sector

IIDFC-NSIC MoU signed to utilise Indian know-how in revamping SME sector

FE Report

Industrial and Infrastructure Develo- pment Finance Company (IIDFC) of Bangladesh and India’s National Small Industries Corporation (NSIC) Tuesday joined hands to utilise Indian experience and expertise in developing the country’s ailing small and medium enterprises.

The IIDFC and NSIC, a focal point of development of SMEs in India, signed a memorandum of understanding (MoU) at the company headquarters in the city. The deal is expected to pave the way for setting up of an IT village.

Under the agreement, NSIC will extend all cooperation, assistance and expertise to facilitate development of SME’s, especially in the engineering, electronics and other non-traditional sectors.

NSIC would also assist in replicating technical services centres for cluster of industries in Bangladesh.

The signing of the MoU will put the country one step ahead towards achieving the channel investment of Tk 240 billion by banks and non-bank financial institutions through cluster approach for SME growth and development, IIDFC officials said.

IIDFC chairman Motiul Islam chaired the ceremony while Dr Mashiur Rahman, economic adviser to the Prime Minister, Atiur Rahman, governor of Bangladesh Bank and H P Kumar, chairman of NSIC, spoke.

Atiur Rahman said, “It would be depressing if we compare NSIC to Bangladesh Small and Cottage Industries Corporation (BSCIC) as India has developed a lot in the sector. We have to cross the hurdle and move forward.”

He said the country is now fixing the institutional framework needed for the development of SMEs. “We have already set up an SME Foundation and adopted loan policies and programmes. But we have to act fast as we cannot afford to wait any longer.”

The governor said the central bank is playing a proxy role in flourishing SMEs. “Our SMEs can do far better if we can give them financial and technological facilities. Bangladesh Bank is also encouraging banks to prepare linkage programmes.”

He said the borrowing cost has gone up because the country does not have any entrepreneur rating.

Mashiur Rahman said the SME sector is crucial for the country’s economic advancement, as it adds value and employment. “Large investment involves more risks. Conversely, the small and medium entrepreneurs invest within their limits.”

He said the MoU between IIDFC and NSIC would be the first venture between India and Bangladesh since the two countries signed a joint communiqué in January this year.

Mr Kumar said lack of information is a key barrier to the development of SMEs. “Non-banking financial institutions can act as a bridge between banks and micro and small entrepreneurs for the development of the sector as banks need good customers and customers need financing.”

Motiul Islam said one of the limitations for the expansion of SME sector to its optimum level and to exploit its full potentials is lack of knowledge.

“Sectors such as light engineering, auto components, electrical and electronics lack viable project profiles, trained manpower and marketing skills,” he said.

India’s SME sector accounts for about 40 per cent of its industrial output.

Mr Islam said introduction of Bangladesh Bank’s refinancing scheme for SMEs at 5.0 per cent interest had given a new impetus for growth of the sector in Bangladesh.

“Development of SME must be diversified and new areas should be identified,” he said adding that a tie up with NSIC would be useful for implanting Indian experience to Bangladesh.

He said Bangladesh has to develop the concept of cluster approach for SME growth.

Officials said under the agreement incubation centres would be set up to figure out suitable locations for SMEs.

“Bangladesh’s micro and small entrepreneurs manufacture products, but they do not know where and how to market the produce. This will be crucial if they go for large scale production for exports,” said IIDFC Managing Director Md Asaduzzaman Khan.

“The agreement will enhance information sharing, marketing and technology transfer. This will pave the way for setting up of an IT village in the country,” he said.

Bonds, derivatives, online trading set for DSE

Bonds, derivatives, online trading set for DSE
Massive expansion could mean millions for local firms
Zakia Tazin

The DSE announced bold expansion plans on Tuesday that could greatly increase its products and scope, and attract billions into Bangladesh’s cash-starved companies.

In a ground-breaking announcement, the newly-elected The Dhaka Stock Exchange (DSE) president committed that online trading, bond trading, a derivatives market and equity trading will be introduced by September. The DSE will be in line with international standards, said Shakil Rizvi on Tueaday, setting a three-year timeframe.

The president said an expanded DSE would greatly enhance the prestige and capital of the exchange, adding that he expects stocks to remain high for the foreseeable future.

The president added that he was pleased with the finance minister’s assurance that shares of state owned companies would be floated soon, which investors hope will end the market dominance of market leaders like GP.

The announcement elicited rare praise from market observers, who have been critical of recent regulatory moves. Professor Mojib Uddin Ahmed said: “Definitely introducing the derivative markets is positive.” But he cautioned that market regulators need to catch up with the DSE’s expanding size and scope.

“The markets require a strong structure in terms of physical facilities, regulations and trading facilities. Those structural changes are essential before introducing such sensitive securities.”

The DSE said that the country’s crumbling power sector could attract funds through the exchange, saying that the DSE is ready to provide TK 20 billion in capital.
Professor Mojib Uddin Ahmed told The Independent that that the president’s projections sound reasonable.

“I personally believe that over 60 per cent of the development plans of the government can be easily funded by the capital market.”

Former DSE President Rokibur Rahman also agreed, saying the state collected over Tk 20 billion against Tk 3.5 million.

He was skeptical about the bourse’s bold expansion, saying that Dhaka is not ready to become a mature market. Renowned economist Abu Ahmed also applauded the announcement that internet trading would be introduced.

He cautioned that the derivatives market will need time to mature, and added that bank interest rates will need to drop if the bond market is to thrive.

The market’s volume has increased greatly over the past year, with turnover exceeding TK 17 billion, mover then 300 per cent over the previous year. The index went up by more than thousand points.

B/O accounts stood at 220,000, 12 thousands of which was only 140,000 in 2009.  Market capitalization to GDP stood 38.38 per cent, which was 18 only per cent.

The number of electronic, versus demit or paper shares stands at 99.13 per cent.