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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 Power outages, inefficient infrastructure, lack of industrial expertise and outdated social standards were also pointed out as the major disadvantages of Bangladesh’s garment industry.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.