Monthly Archives: November 2010

Footwear sector awaits a boom

Footwear sector awaits a boom
Exports may exceed a billion dollars by 2013 if power is ensured

A file photo shows a customer looking at shoes at a city shop. Local shoe manufacturers, on the basis of both the current growth in shipments and the increased production capacity in factories under construction, claim that Bangladesh could have a billion dollar footwear export sector by 2013. — Focusbangla photo

Kazi Azizul Islam

Bangladesh could have a billion dollar footwear export sector by 2013, claim local shoe manufacturers on the basis of both the current growth in shipments and the increased production capacity in factories under construction.

If their assessment is correct, in a three-year period the level of exports can increase five-fold from the $205 million worth of shoes that were exported in the last fiscal year that ended in June 2010.

In the first four months of the current fiscal year there have been $98 million worth of exports, a 65 per cent increase from the same period last year.

Taking this rate of growth into account, shoe industry executives estimate that the current fiscal year’s footwear export is likely to cross $300 million.

Japan and Germany are now the biggest markets for Bangladeshi footwear but US buyers are increasingly showing interest in sourcing from Bangladesh.

Though in the next two years the existing factories are likely to export more shoes, it is the new capacity [expanded and new factories] that will come on stream from early 2011 that is expected to cause the huge spurt in growth.

The Export Processing Zones at present have 18 shoe and leather goods factories but there are at least seven large factories under construction, mostly owned by big manufacturers in the shoe world.

The factories under construction include Korean company Youngone’s footwear complex which is said to be the largest in Asia.

This year Youngone — which produces sportswear for Nike and other leading brands — estimates that it will export $56 million worth of footwear.

However, when the new factory is completed next year the company expects to increase exports to at least $250 million by the end of 2013, said its operation director, Sikdar Mesbahauddin Ahmed.

‘I think that revenue from the export of shoes could very will increase to $1 billion by 2013,’ he said.

The company started construction of its mega shoe complex in Chittagong six months back. The first part of the complex will go into production by the middle of next year, and the company’s executives said they would be able to manufacture about 30 million pairs of shoes by 2013.

In addition, Taiwanese shoe manufacturer Pau Chen, which employs about 4,00,000 workers in its factories in China and 50,000 in Vietnam, is also building a large manufacturing facility in Chittagong.

Australian manufacturer Bonbon Shoe, a supplier to Hugo Boss, and Xen Chen and Genford of Taiwan, are also building footwear factories in Bangladesh.

Apex-Adelchi also has a new factory that will soon start production.

With an annual turnover of about $100 million, the Bangladesh-Italy joint venture is now the largest exporter of footwear.

However, with a new joint venture factory, Blue Ocean Footwear, due to go into production by February 2011, Apex will get involved with a turnover of nearly $200 million of footwear export by 2013.

Syed Nasim Manzur, Apex-Adelchi’s managing director, told New Age that he also thought ‘a billion dollar footwear export industry is not unlikely by the 2013-14 fiscal year as indicated by the current growth in shipments and new production facilities that will be ready for production within the next couple of years’.

A top executive of a mid-sized new entrant into the sector, based on Adamji EPZ shoe factory, also told New Age, ‘We foresee a billion dollar shoe export sector in Bangladesh by the end of 2013.’

In addition to this, other shoe-makers are looking for land to build more factories.

‘More than a dozen global shoemakers are seeking plots for their shoe units in Bangladesh, but the lack of land is a problem,’ said a senior official of the Bangladesh Export Processing Zones Authority.

‘If we could have developed new EPZs with reserved plots for foreign shoe units, there could by now have been shoe exports worth a billion dollars,’ he added.

Tipu Sultan, the immediate past president of Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association, pointed out that the ‘China factor’ has boosted the potential of Bangladesh’s shoe exports in recent times.

‘The EU, USA and Japan are becoming worried over future supply from China as their own domestic markets are expanding quickly. Already, the Western importers are desperately looking for new sourcing destinations and Bangladesh is in the spotlight now,’ said an upbeat Tipu.

Tipu’s business is now processing and exporting finished leather but recently he started building a shoe factory with a capacity of producing 2,000 pairs a day, which could be raised to 10,000 pairs within the next couple of years or so.

However, whilst the forecast is good, it will not be entirely plain sailing for the sector.

Tipu told New Age that it was important that the government should arrange immediate relocation of the tannery estates from Hazaribagh so that the new shoe industries are not blamed for using leather from an environment-polluting industry.

Shortage of energy and infrastructure are also obstacles to growth. Apex-Adelchi’s Nasim Manzur said that ensuring power to the growing number of shoe factories and developing infrastructure for assisting the export supply chain should be a major concern of the government.


BASIS plans e-government institution

BASIS plans e-government institution

Bangladesh Association of Software and Information Services (BASIS) plans to establish a national level e-government research, planning and monitoring institution, zeroing in on e-governance as the main component for the development of the information & communication technology (ICT) sector in the country. According to BASIS sources, the institution will be modelled on India’s National Institute of Smart Government. The science, information and communication technology ministry, various development agencies and ICT associations have pledged support to the initiative, sources add.

Sources say that BASIS is now jointly working with Access to Information (A2I) programme, Prime Minister’s Office, to develop a framework for the activities of the institution.

According to sources, the institute would be a rendezvous for the ICT companies, through which they could work closely with the government policymakers. They would be given the task of popularising models and cases that would enable them to work as solution providers and service delivery partners, instead of as mere vendors.

BASIS sources say the different service models, including transaction fee-based service modules (software as service) and full service outsourcing models, will be popularised in a bid to ensure regular income generation for the member-companies of BASIS throughout the year.

BASIS senior vice-president Fahim Mashroor told The Independent that after the development of the framework, the association would establish a special cell to help its members bid for government projects.

“The cell will disseminate information about new government jobs, help the members to identify partner companies (resource sharing) and provide support for preparing tender submission documents” Mashroor said.

He said the cell would regularly check the status of ongoing jobs and, on request, co-ordinate with agencies for quick clearance of payment on the lines of the public private partnership (PPP) provision.

“The cell will also have a consulting wing that will help different government departments with software requirement specification (SRS) preparation,” he added.

According to science and ICT ministry officials, the institute would act as catalyse the ICT sector complementing the government’s effort in incorporating ICT in every field of its work.

“The government is arguably the biggest buyer of ICT hardware and service. It is also the biggest potential user of such services. By setting up the e-governance institution, the government will provide the much-needed boost to the ICT sector,” science and ICT ministry secretary Abdur Rab Hauladar said.

Harvest of flood tolerant paddies ends ushering new hope to increase rice production

Harvest of flood tolerant paddies ends ushering new hope to increase rice production

RANGPUR, Nov 30 (BSS) – Excellent harvest of the flood tolerant variety paddies after its large-scale farming and harvests in the country this season has ushered a new hope to increase rice production and food security under adverse climatic conditions.

Rice scientists and experts told BSS that the farmers got average yields rates of all four flood tolerant varieties of Swarna Sub 1 (BRRI dhan 51), BR 11 Sub 1 (BRRI dhan 52), IR 64 sub 1 and Sambamasuri in between 4.25 to 5.60 tonnes paddy per hectare.

After repeated successes in recent years, the government went to large-scale and commercial farming of these paddies and some 27,000 farmers cultivated the same in over 2,000 hectares land in 51 upazilas of 23 districts this season.

The farmers successfully cultivated these paddies with the assistances of the STRASA-IRRI (Stress Tolerant Rice for Poor Farmers in Africa & South Asia and International Rice Research Institute) Project.

Field Assistant of STRASA-IRRI Project Ahadat Hossain told that Bill & Melinda Gates Foundation (BMGF) have been providing financial assistances for expanded farming of these paddies to ensure global food security.

Bangladesh Country Manager of IRRI-STRASA Project Dr MA Bari said the flood- tolerant variety paddy plants sustain submergence of 10 to 17 days under floodwaters to give normal yields when traditional T-Aman plants cannot sustain longer submergence.

Farmers Ariful Islam Batul, Sirajul Islam, Ekramul Haque, Joynal Abedin and Rezaul Karim of village Najirdigar in Rangpur said they cultivated the flood tolerant variety paddies for the first time in their low-lying lands this season.

“We could not cultivate any paddy earlier in these lands in the pasts as those go under floodwaters of the river Ghaghot every year and we got excellent yields of all four flood tolerant entries in these lands this time,” they said.

Farmers Jiten Chandra, Manik Mian, Nuruzzaman, Shyamol Chandra, Rafikul, and Mohafell of Kurigram, Rangpur, Gaibandha and Nilphamari also cultivated these paddies after getting excellent yields last year even after longer submergence.

They opined for further expansion of farming these paddies in future to have additional rice productions from the country’s vast flood-prone areas and suggested for quicker dissemination of the technologies among the farmers.

Talking to BSS today, Dr MA Bari said that there are some 12 lakh hectare potential flood-prone low-lying lands in the country from where an additional 60-lakh tonnes paddy can be produced annually by large-scale farming of these paddies.

He termed the success as epoch-making to increase rice production by overcoming adverse impacts of climate changes and for future, suggested for better management’s to produce, preserve and distribute adequate seeds among the farmers.

Lotto inks licensing deal with Express Leather

Lotto inks licensing deal with Express Leather

Commerce Minister Faruk Khan, third from left, takes a look at a Lotto shoe during the Bangladesh debut of the Italian sportswear brand at Dhaka Sheraton Hotel yesterday. Express Leather Products Ltd will produce and sell Lotto shoes in Bangladesh.Photo: STAR

Star Business Report

Italian sportswear company Lotto has recently signed a ten-year licensing deal with local Express Leather Products Ltd in Dhaka.

The deal will allow Express to produce, distribute and retail Lotto-branded footwear, accessories in Bangladesh from January. Lotto also plans to give the same authority for apparel to the local company later.

Commerce Minister Faruk Khan, Italian Ambassador (designate) Giorgio Guglielmino and President of Bangladesh Garment Manufacturers and Exporters Association Abdus Salam Murshedy were present at the occasion.

The minister said it is a win-win situation for the country as Lotto spread its market here and the local partner can benefit from technology transfer.

“I hope Lotto will sponsor the local football and other sports team to develop the standard of games.”

“We consider Bangladesh and important emerging market with great potential in the Asian region,” said Luca Tomat, business unit director Asia Pacific of Lotto Sports Italia.

Tomat said Lotto started business in Bangladesh with a target of grow-ing at a rate of 22 percent in the Asia Pacific region.

Kazi Jamil Islam, managing direc-tor of Express Leather, said: “I’m confident that the relationship with Lotto will be fruitful.”

Kazi Salahuddin, president of Bang-ladesh Football Federation, also spoke.

Lotto Sports is headquartered in the shoe district of Montebelluna of Veneto region. It sells products to over 80 countries through independent sports-article stores, chain stores and 300 mono brand stores.

Polish firm to drill 8 onshore gas wells

Polish firm to drill 8 onshore gas wells
M Azizur Rahman

Polish oil and gas exploration company Krakow Ltd has won the contract to drill over half a dozen wells in the country’s state-owned onshore gas fields, officials said Monday.

“The Polish firm has been selected to develop and produce natural gas from at least eight gas wells in under-explored hydrocarbon-rich fields to boost output in the wake of the country’s acute energy crisis, “Petrobangla Chairman Dr Hussain Monsur told the FE.

After developing wells for gas production Krakow will hand over those to the state-owned companies.

There would be no sharing of the proceeds of gas sales with the foreign companies, he said.

But Krakow would be paid for its job from the state coffer, said the chief of the state-owned Petrobangla.

Krakow has been selected considering its technical and financial offers and its experiences in conducting hydrocarbon exploration activities, said the Petrobangla official.

Petrobangla in September 2009 had sought expression of interests for drilling in state-owned gas fields and Krakow has emerged as the winner out of the 25 global companies that had participated in the bid.

Krakow will develop the gas wells in several hydrocarbon-rich fields, owned by Petrobangla subsidiaries, Bangladesh Gas Fields Company Ltd (BGFCL) and Sylhet Gas Fields Company Ltd (SGFCL).

Currently both the BGFCL and the SGFCL have five gas operating fields each but their gas output is around 730 million cubic feet (mmcfd) and 165 mmcfd per day respectively.

Experts said the two fields they operate are gas-rich but under-explored.

“We expect that at least eight new wells would be developed in the gas fields owned by these two companies and each of the wells would produce gas of around 25 mmcfd,” said Petrobangla Chairman.

Krakow’s selection is, however, for the first time that Bangladesh is appointing any global firm to conduct drilling in state-operated gas fields.

The extraordinary move is taken due to a severe capacity constraint of the state-owned lone gas exploration and development company Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX), which has limited equipment and manpower and a very busy workload.

The move under ‘fast track’ programme was initiated in the wake of severe energy crunch in the country, as gas production now hovers around 1,960 mmcfd against the daily demand for around 2,500 mmcfd.

The country urgently needs new energy sources, and unless new gas fields are discovered, the supply of gas will start diminishing from 2011.

Petrobangla forecasts that the country’s current gas reserves will run out by 2014-2015 at current consumption rates.

At present, proven gas reserves are 6.0 trillion cubic feet (Tcf), while the probable reserves are 5.5 Tcf.

The gas supply shortfall has forced Petrobangla to suspend gas supplies to new industries. Industries are now maintaining holiday staggering to cope with the short supply of natural gas.

It also suspended the operation of several state-owned power plants due to gas crisis.

The country’s compressed natural gas (CNG) filling stations have also been maintaining six-hour halt in operation from 3 pm–9 pm every day.

Bangladesh gets high remittances despite recession

Bangladesh gets high remittances despite recession
Says World Migration Report 2010
Bss, Dhaka

Bangladesh, being one of the world’s leading manpower exporting countries, became the country with remarkably high remittances from its expatriates workers compared to other developing ones despite the global financial recession, said the World Migration Report-2010 (WMR) released yesterday.

The WMR-2010 titled ‘The Future of Migration: Building Capacities for Change’ said remittances to developing countries declined by six percent last year but some countries such as Bangladesh, Pakistan and the Philippines benefited from an increase in remittances between 2008 and 2009 during the recession period.

The International Organisation for Migration (IOM) released the report from Geneva and it will also be launched in Bangladesh soon after International Migrants Day-2010 to be observed on December 18, according to an IOM official from Switzerland.

Although hundreds of millions of dollars are spent each year to strengthen the ability of States to effectively manage migration, the WMR 2010 notes that responses to current and emerging migration challenges and opportunities are often short-term, piecemeal and fragmented.

“The risk of not putting in place policies and adequate resources to deal with migration is to lose a historic opportunity to take advantage of this global phenomenon,” said William Lacy Swing, director general of IOM.

“Given the unrelenting pace of migration, the window of opportunity for States to turn the negatives of migration into positives is rapidly shrinking,” Swing said.

The number of irregular migrants will continue to grow as labour supply in migrant origin countries exceeds demand in migrant receiving countries, it pointed out.

“Without significant investment in migration issues, there is no doubt that critical questions such as the human rights of migrants and their integration into host societies will become even more acute,” Swing added.

The WMR report observed that if the number of international migrants, estimated at 214 million in 2010, continues to grow at the same pace as during the last 20 years, it could reach 405 million by 2050.

New migration patterns are already in evidence as the emerging economies of Asia, Africa and Latin America are becoming ever more important countries of destination for labour migrants.

Investing and planning in the future of migration will help improve public perceptions of migrants, which have been particularly dented by the current economic downturn, he said.

The report identifies labour mobility, irregular migration, migration and development, integration, environmental change and migration governance as areas expected to undergo the greatest transformation in the coming years.

It also recommended for generating better data on irregular migration and labour markets, combating migrant smuggling and human trafficking and improving the ability of transit countries to assist irregular migrants.

The WMR-2010 called for the rigorous analysis of core capacities of countries to manage migration in order to assess their effectiveness and to identify gaps and priorities for the future.

There is a great potential for further labour migration of Bangladesh if it remains committed to providing its labour force with necessary skill development training and ensuring protection to the potential migrants at home and abroad, experts said.

Revenue up by 25pc in four months

Revenue up by 25pc in four months . Dhaka

Revenue collection in the first four month of the current fiscal year (2009-2010) was up by 25.74 per cent, in comparison to last year. Moreover, 109.26 per cent of the revenue target was achieved.

The figures were revealed in a National Board of Revenue press conference, by NBR chairman Nasiruddin Ahmed on Monday.

‘Revenue collections stood at Tk 212.3 billion against the target of Tk 194.3 billion in the first four months. We are hoping to exceed the target with our collections at the end of the year,’ he said.

The chairman pointed out that collections from the value added tax category saw the highest increase within the period, with Tk 81.2 billion against a target of 71.9 billion.

The growth was 31.8 per cent while the category’s achievement rate was 112.91 per cent.

Meanwhile, the growth in collections from income tax was 29.29 per cent.

A revenue of Tk 47.70 billion was collected in the form of income taxes against the target of Tk 43.19 billion. The rate of target achievement stood at 110.46 per cent.