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Bangladesh’s apparel industry future bright, says WB
Kazi Azizul Islam
After elimination of the quota system in 2005, the recent economic recession is reshaping the global apparel supply chain and importers’ procurement strategies, which has had a considerable impact on Bangladesh, said the World Bank Bangladesh’s garment industry has some strengths and many weaknesses, pointed out the World Bank’s just published study titled, ‘Global Apparel Value Chain, Trade and the Crisis: Challenges and Opportunities for Developing Countries’.
The World Bank’s researchers say that the country’s future is full of potential due to enhanced availability of accessory products such as local yarns and packaging materials, and importers now think Bangladesh to be a package supplier.
One of the strengths of Bangladesh’s apparel industry is low cost, especially the local firms’ willingness to keep margins low. After China and Turkey, Bangladesh is now the world’s third largest apparel exporting country and entrepreneurs here invest in new technology to improve productivity and to reinforce relationships with buyers, they said.
The cost of labour is one of the key factors for Bangladesh’s success — the researchers found that the average wage per hour of garment factory workers in Bangladesh is only 31 US cents. The per hour wage is $1.66 in China, 56 cents in Pakistan, 51 cents in India, 44 cents in Indonesia and 36 cents in Vietnam.
They also pointed out that terminal handling and customs dealings have improved here considerably in recent times.
Apparently pointing to the growing number of spinning and denim fabric manufacturing units, the World Bank pointed out that there has been satisfactory growth in backward linkage textile industries here. It was also noted that some foreign investors were setting up fabric and fibre manufacturing units in Bangladesh.
The World Bank’s researchers pointed out that Bangladesh’s weakness was lack of good designers and related technology. Shortage of skilled workers and mid-level management people, workers’ unrest were pointed out as other drawbacks. Power outages, inefficient infrastructure, lack of industrial expertise and outdated social standards were also pointed out as the major disadvantages of Bangladesh’s garment industry.
In 2005 Bangladesh’s share, of both the EU and US markets, was around 3.5 per cent, but by the end of 2009 the share increased to around 5 per cent, said World Bank researchers.
‘China has been the big winner, although Bangladesh, India, and Vietnam have also continued to expand their roles in the [global apparel] industry,’ said the World Bank’s study. ‘Leading firms [major importers] now desire to work with fewer, larger, and more capable suppliers that are strategically located around the world.’
The researchers said that by the end of 2009 the economic recession that hit the apparel retail markets of all the advanced industrial countries sent ripples throughout the supply chain in developing economies as well.
‘A striking trend is that the largest low-cost apparel producers in the developing world, such as China, India, Bangladesh, and Vietnam, have actually managed to increase their export shares in major global markets,’ said the World Bank. ‘This may reflect a substitution effect of the economic recession, in which the lowest cost suppliers gain market share vis-à-vis more expensive rivals.’
Classifying the capability of Bangladesh’s industry, World Bank researchers said that at least Bangladesh’s knit apparel industry should be categorised now as OEM [Original Equipment Manufacturing]. The industry can now do Free on Board or package contracting business, it said.
Square plans to export insulin
Star Business Report
Square Pharmaceuticals Ltd plans to export insulin as it started producing and marketing the drug for the local market last month.
Ahmed Kamrul Alam, assistant general manager of the leading drug maker, said his company would serve diabetics with its new product — Ansulin — at a cost that is 22 percent less than that of the imported ones.
“We hope to keep the expensive drug within the reach of our patients,” he said.
The market size for insulin is over Tk 120 crore, of which around 80 percent are imported, according to industry insiders.
“Our unit will increase the share of local production by at least 10 percent, which will eventually reduce dependency on imported items,” said Alam.
Square holds a 20 percent share of the local market, and exports its medicines to more than 35 countries.
Square is the third company to produce insulin locally with Tk 92 crore in investment.
The company formally opened its insulin unit at Kaliakoir in Gazipur on April 28, and the factory has been built complying with the regulations of US Food and Drug Administration and European Medicines Agency.
The plant manufactures insulin products using highly purified recombinant human insulin crystals in its formulation with different dosage types for covering a full spectrum of short, intermediate and long acting insulin.
“We have imported machinery of Modular Aseptic Compact (monoblock) system, which ensures precise and sterile production using a consolidated filling platform, with zero tolerance for cross contamination in manufacturing,” Alam added.
At present, according to statistics of Diabetic Association of Bangladesh, around 6.5 million people in the country have diabetes.
6 IT villages to be set up in 6 divisions
DHAKA, Bangladesh, May 4 (BSS) – In line with the present government’s vision to build `Digital Bangladesh’, six IT villages will be set up in six divisions of the country, Executive Director of
Bangladesh Computer Council Mahfuzur Rahman told BSS today.
He said the Science and Information and Communication Technology Ministry had undertaken a project to set up a modern IT Village on 47 acres of land at Karail at Mohakhali in the capital and the project had been sent to the Planning Commission for approval.
“Later the Planning Commission took a decision to set up six more IT Villages along with the Karail project and gave directives to place a fresh project proposal by incorporating total cost of the projects,” Rahman said.
To build Digital Bangladesh, he said, the first phase work of the High-tech Park at Kaliakoir in Gazipur was completed last month. “Physical infrastructure of the park was built in an area of 231.685 acres spending Taka 26.86 crore,” he added.
Rahman said the Taka 17 crore second phase work of the park will begin in the next month and expressed the hope that the work of the project would be completed by 2012.
He said the High-tech Park Bill, 2010 has already been passed in the Jatiya Sangsad. “Under the act, rules and regulations are being formulated and the ministry is framing a policy on how the local and foreign investors will invest in the park and which facilities they will get,” he added.
State Minister for Science and ICT Architect Yafes Osman told BSS that the government is considering giving lease of the park to a foreign IT company by constituting a high-tech regulatory authority.
With the completion of the project, he hoped, developed services based on software and information technology could be provided at home and abroad.
Osman further said that the government has already taken steps to expand ICT facilities to establish e-governance across the country. “Under the plan, all ministries, organizations and divisional, district and upazila offices as well as schools and colleges will be brought under the network connectivity within the shortest possible time,” he said.
Apparel exports flicker into life
Refayet Ullah Mirdha
Apparel exports grew 18.38 percent in March, compared to the same period a year ago, data from Export Promotion Bureau (EPB) shows.
Exports are breaking free from the negative trend with a rebound in apparel exports.
Overall exports in the July-March period declined only 0.8 percent from the same period last year.
The single month export for apparels in February was 8 percent.
“In March, the export of knitwear grew by 15 percent and woven items by 13 percent from the same period a year ago,” said Fazlul Hoque, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
The price hike of yarn in local and international markets will hurt growth of such exports although quick implementation of the government’s second stimulus package for the sector will help offset the crisis slightly, Hoque said.
The concern for Bangladesh is, knitwear exports out of Pakistan grew by 20 percent, and the figure was more than 15 percent in Vietnam as orders from China were diverted to different other countries, he added.
The EPB data shows exports in March 2009-10 were worth $1.52 billion, up from $1.28 billion in the same month last year, registering 2.28 percent growth.
In the first nine months of 2009-10, Bangladesh exported goods worth $11.541 billion, compared to $11.634 billion in the same period last fiscal year.
The single month export of apparels rose substantially but meeting targets may still not be possible. Knitwear exports were 3.64 percent behind the target and woven products fell 3.04 percent short of expectations in the July-March period, said Abdus Salam Murshedy, president of Bangladesh Garment Manufacturers and Exporters Association.
“The sudden price hike of raw cotton and yarn will definitely be a threat to achieving the target, as manufacturers will not be able to supply the garment items at cheaper rates to Europe and the US,” Murshedy said
He said the nagging power and gas situation affected the sector badly.
Govt gives high priority to N-power generation
FM tells IAEA director general
Foreign Minister Dipu Moni said the government has given high priority to nuclear power generation to resolve the energy crisis facing the country.
She said this during a meeting with Director General of International Atomic Energy Agency (IAEA) Yukiya Amano in New York on Monday, according to a message received here yesterday.
Dipu Moni was also due to make the country statement at the Non-Proliferation Treaty (NPT) Review Conference yesterday.
During the discussion with Amano, she reviewed the existing cooperation between Bangladesh and the IAEA, particularly with regard to the technical assistance projects.
She thanked the IAEA official for helping Bangladesh in capacity building to run its first-ever Rooppur Nuclear Power Plant.
They also discussed unanimous adoption of a resolution by Bangladesh parliament in support of the 2010 NPT Review Conference.
IAEA official Amano said he was impressed with the consensus Bangladesh enjoyed at the national level on disarmament and non-proliferation issues.
The foreign minister mentioned that Bangladesh would like to be represented in the IAEA Governing Board in the near future to play a greater role in global nuclear disarmament and non-proliferation.
She also urged Amano to ensure representation of Bangladesh in the senior management of IAEA.
Dipu Moni extended an invitation to the Amano for visiting Bangladesh, which he accepted, and said that he might visit Bangladesh in December 2010 or in January 2011.
In the evening, Dipu Moni attended a reception hosted by the Permanent Mission of Bangladesh to the United Nations in New York and introduced Bangladesh candidate to CEDAW (Committee on the Elimination of Discrimination against Women) elections, Ambassador Ismat Jahan, to the New York-based delegates of UN Member States.
She spoke about the commitment to and achievement of Bangladesh in women’s empowerment and sought support of CEDAW States Parties to the candidacy of Ambassador Ismat Jahan.
DESCO set to build 100mw power plant
State-owned Dhaka Electric Supply Company Ltd (DESCO) is set to build a 100-megawatt (mw) furnace oil-run power plant at Ashulia to ease the mounting electricity crisis across the country.
“We have already sent details of the proposed 100 mw power plant to the power ministry to install the plant as early as possible,” DESCO managing director Saleh Ahmed told the FE Monday.
The plant would be set up near the capital on government land to cater to the growing electricity needs, he said.
The power ministry last month asked DESCO to expedite the process to set up the much-needed power plant, DESCO official added.
If approved, the DESCO would be the country’s second state-owned power entity getting involved in electricity distribution and generation after the Bangladesh Power Development Board (BPDB).
“We would be able to set up the plant within months after getting go ahead from the government high-ups,” Saleh Ahmed said.
He said DESCO would arrange funding of its own to build the plant.
Currently DESCO is distributing electricity to the clients of Gulshan, Baridhara, Uttara, Baridhara, Mirpur, Kalyanpur, Tongi and Cantonment areas.
The company is also manufacturing pre-paid meters in its factory for the clients to ensure getting payments for electricity in advance and avoid pilferage.
DESCO is the country’s lone state-owned power entity being operational with hefty profits, while others are incurring huge losses every year.
It attained net profit worth Tk 1.60 billion in the previous fiscal year 2009-10.
The DESCO was formed in 1996 for electricity distribution in and around the capital.
It started its formal operation in September 1998 by acquiring the power distribution line along with 100 percent asset of Mirpur area from now defunct Dhaka Electric Supply Authority (DESA).
Later it increased its jurisdiction areas years after years.
7 labour wings to be opened at missions in six countries
More than Tk 10 crore sought for operation
The government will open seven more new labour wings at missions in six countries to provide more facilities to the Bangladeshi expatriate workers in those countries, official sources said.
The establishment ministry has approved a proposal of the ministry of expatriates’ welfare and overseas employment for opening the seven new labour wings which was also earlier approved by the cabinet about two months back.
The proposal is now waiting for the finance ministry’s approval as the expatriates’ welfare ministry has sought more than Tk 10 crore a year for the maintenance of those seven new labour wings.
Source in the expatriates’ welfare ministry said that countries where the labour wings are likely to be set up are Malaysia, Japan, Jordan, Italy, Sudan and Saudi Arabia.
Officials of the ministry said that the government would open another labour wing in Malaysia and two other labour wings would be opened in Bangladesh’s biggest labour market in Saudi Arabia’s Jeddah and Riyadh.
The officials also said that the yearly cost of operation of each labour wing would be between Tk. one and Tk one and a half crore.
The Bangladesh government has recently opened a labour wing in the war-ravaged Iraq.
Expatriates welfare ministry’s secretary Zafar Ahmed Khan told reporters on Tuesday that Bangladeshi workers would get legal assistance from the proposed labour wings in the six countries.
Zafar said though the expatriate Bangladeshis’ official remittance is some 12 percent of the gross domestic product, the government investment is very little for them.
He also said soon after approval of the proposal from the finance ministry, the labour wings would be set up.
At present, only 13 labour wings are operating in different countries across the world.
Last year, the amount of money sent by the migrants was $10.72 billion. It is estimated that almost the same amount comes through unofficial channels every year.
Currently, Bangladesh has about 65 lakh people working in some 100 countries across the world who are sending remittances.
Around 35,000 Bangla-deshi workers go abroad every year. Bangladesh exports a high percentage, 57 per cent, of unskilled workers. But there is a large number of skilled and semi-skilled Bangladeshis working abroad.
Bumper production of wheat in Thakurgaon
THAKURGAON,Bangladesh,May 4 (BSS)-A bumper production of wheat has brought smile on the faces of the farmers of Thakurgaon district.
Department Agriculture Extension (DAE) sources said this year the average production of wheat was 3.19 tons per hectare against the target of 2.30 tons fixed by the department. The total production in the district stood at 1,69,070 tons while the target was 1,21,900 tons, up by 47,170 tons.
DAE Deputy Director Daliluddin Ahmed told BSS that Thakurgaon is the best wheat growing area in Bangladesh. In this area winter exists for a long period. The soil and other conditions of Thakurgaon district are suitable for wheat production. Wheat is a cold loving plant.
Due to prolonged winter, favorable weather condition, easy availability of fertilizer and proper irrigation the bumper production of wheat was achieved this year, he said.
He said the farmers of Thakurgaon cultivated wheat on 53,000 hectares this year which was 4,500 hectares less than last year. But the production of the crop surpassed the last year’s yield.
Daliluddin said that this year wheat was cultivated on 15,000 hectares in Thakurgaon Sadar upazila, 10,500 hectares in Pirganj, 8,000 hectares in Ranisankail, 11,500 hectares in Baliadangi and 8,000 hectares in Haripur upazila.
Country’s 1st solar panel assembling plant opens
The first-ever solar panel assembling plant in the country was launched in Savar yesterday to make solar panels available on the local market at a competitive price.
Solar panels, assembled at the plant, are expected to hit the market in a month.
The plant set up by local company Electro Solar Power Ltd (ESPL) is capable of assembling solar panels with a production capacity of 10-megawatt electricity a year, said company officials.
Prime Minister’s Adviser on energy affairs Tawfiq-e-Elahi Chowdhury inaugurated the plant at Ashulia in Savar. Syed Manzur Elahi, former adviser to a caretaker government, was also present there.
“It’s a positive initiative. Such ventures will facilitate the country’s economic development,” said Tawfiq.
He said the ESPL’s initiative would support the government’s goal of meeting a part of the electricity demand through green energy.
The government aims to meet 5 percent of the country’s energy demand through green energy by 2015 and 10 percent by 2020.
The government decided to install solar systems in government buildings, he said.
“We hope that there will be no problem in marketing locally-assembled solar panels,” Tawfiq said.
ESPL, a sister concern of Electro Group, was established in 2009. The company will import solar cells and other accessories, and assemble them, said its officials.
The plant has the capacity to assemble solar charger, battery and other accessories for solar home systems.
Ansar Uddin, managing director of ESPL, said they hope that their initiative would help ease the ongoing power crisis a bit.
Bangladesh turns to Africa to offset Indian cotton ban
Commerce minister says govt to facilitate import from African nations
Bangladesh plans to make Africa its main import source for cotton after India slapped a ban on export of the textile raw material, sending prices of yarn sky-rocketing in local market, commerce minister Faruk Khan said Sunday.
Khan unveiled the plan at a seminar in the city where leading cotton growers from Sub-Saharan Africa made the case for importing their “cheap” but “high quality” cotton to offset the fallout of Indian ban.
“We will utilise the scope to import low-cost but high quality cotton from the African countries,” the commerce minister said at the opening ceremony of ‘Bangladesh Cotton Marketing and Textile Training Event’ at a city hotel.
Bangladesh Textile Mills Association (BTMA), International Trade Centre (ITC) and Bangladesh Cotton Association (BCA) organised the two-day international event. Representatives from several African nations are taking parting in the event.
His comments came as the prices of yarn, which is made of spinning cotton, doubled to 90 cents a pound in April, driven by increased global demand and a ban on cotton export by second largest producer India.
Bangladesh, which almost imports cent per cent of its cotton from overseas and some 15 per cent from India, has been hard hit by the price hike.
Local spinners were forced to raise their yarn prices to the global level, affecting the knitwear manufacturers – the main users of yarn – at a time when the global apparel market showed signs of turnaround after two years of recession.
The commerce minister admitted the country’s apparel factory owners are currently “under pressure” due to abnormal hike in yarn prices in the global market and hoped that import from Africa would ease the pressure.
“The demand for cotton in Bangladesh will also help the African exporters,” Mr Khan said adding that the international seminar would help match-make African exporters and Bangladeshi importers.
He said there are some problems in importing cotton from Africa. “Those problems will be solved through discussion. The government will extend all-possible assistance to this effect.”
The minister said Bangladeshi exporters could now consider investing in overseas textile sector. “In that case, African can be the best place for investment.”
BTMA president Abdul Hai Sarker said the Sub-Saharan countries can become the country’s main source for cotton. “The African producers can easily meet up Bangladesh’s demand for cotton.”
Bangladesh on an average consumes 4 million bales of cotton a year, whereas the Sub-Saharan nations are capable of producing around 200 to 300 million bales of the textile raw material per year.
Mr Sarker said the African exporters have to improve shipment schedule to capture Bangladesh’s cotton market. “A shipment from Uzbekistan now takes around 15 days to reach Bangladesh against four months from the African countries.”
“We have proposed them to establish a buffer stock in Bangladesh’s ports so that we can bring cotton within two to three days to our factories.”
“They are also actively considering our proposal to set up buffer stock in the places convenient for Bangladeshi importers,” the BTMA president said.
Bangladesh Knitwear Manufacturers and Exporters Association president Fazlul Huq, BCA president Mohamamd Ayub and ITC programme manager Matthias Knappe also spoke on the occasion.
Bangladesh-Japan to invest $1m in Comilla EPZ
DHAKA, Bangladesh, May 2 (BSS) – J B Networks Co. Limited, a Bangladesh- Japan joint-venture company, will invest 1 million US dollar in Comilla Export Processing (EPZ).
The company will set up a Tableware Manufacturing Industry in the Comilla EPZ.
The company will also create employment opportunity for 126 people.
An agreement to this effect was signed between the Bangladesh Export Processing Zones Authority and J B Networks Co. Limited in BEPZA Complex, Dhaka recently.
Md Moyjuddin Ahmed, Member (Investment Promotion) of BEPZA, and Kazi Iqbal Mustafiz, Managing Director of M/s. J B Networks Co. Limited, signed the agreement on behalf of their respective organizations.