Monthly Archives: January 2011

Summit strikes deals to finance three power projects

Summit strikes deals to finance three power projects
Star Business Report

Local Summit Group and US General Electric (GE) signed an agreement on Thursday with IDLC to receive $115 million from the World Bank’s Investment Promotion Facilitation Fund to implement two 341-megawatt power projects in Bibiyana.

On the same day, the two companies signed another deal with Janata Bank and Industrial and Infrastructure Development Finance Company (IIDFC) to raise Tk 1,500 crore through zero-coupon bonds. This fund will be pumped into the Meghnaghat dual fuel 335MW power project.

Summit was awarded the Bibiyana gas-fired projects and the Meghnaghat power project about four months back. The Bibiyana projects will need $560 million (Tk 3,920 crore) and Meghnaghat Tk 2,100 crore investment.

The Thursday’s deal ensures a large part of financing for these three power projects expected to begin production in early 2013 of the cheapest electricity costing less than Tk 2 per kilowatt hour.

Summit Group Chairman Muhammed Aziz Khan said Janata Bank and IIDFC would provide Summit with Tk 1,500 crore against a sanction of Tk 2,100 crore financing. The remaining Tk 600 crore is deducted as advance interest for the next four years.

“As infrastructure like this has long gestation periods, zero-coupon bonds enable companies to implement these projects with an optimised cash flow.”

The bonds carry a 5 percent discount and 12 percent convertible to the shares of Summit Meghnaghat Power Company at net asset value of the company.

Summit Power Ltd has recently become the lowest in yet two more power tenders, Syedpur 100MW power plant and Shantahar 50MW power plant. Reports say the prime minister signed the work award orders on January 21.

Solar energy use sees major growth

Solar energy use sees major growth

People enjoying TV powered by a Grameen Shakti Solar Power System. Source:

Mushir Ahmed

The country is making a big stride in the use of renewable energy with companies and charities doubling the number of solar-powered houses to nearly 800,000 last year.

Soft-credit by a government-owned financiers, stepped-up marketing and a longing for a better life by millions of rural poor are powering the growth of solar energy use, officials said Saturday.

Grameen Shakti (GS), a sister company of Grameen Bank, is leading the surge, aided by more than two dozen firms and non-government organisations, in what experts describe as a major private sector push in power sector.

With 50 per cent of the country’s households still remaining outside the power grid such firms have now unveiled an ambitious plan to bring 35 million people under the coverage of renewable energy by 2015.

“When the GS started 14 years back, I never imagined that a day would come when we can add 1,000 solar home system (SHS) a day,” said Ruhul Quddus who now heads Rural Services Foundation (RSF), a for-profit charity owned by Rahimafrooz.

Quddus was at the helm of GS when the firm sold only 228 SHSs in fiscal 1996-97. Last year 29 firms and charities sold 400,000 SHSs to take countrywide solar-powered homes to nearly 800,000.

“It took us 10 years to cross the 10,000 threshold. And now we are in a position to power a million households every year,” he said.

Emboldened by its recent success, the GS aims to cover five million households under solar power, making the renewable energy available to some 25 million people in the next five years and other firms and charities hope to power the rest 10 million.

Last year alone the GS powered some 200,600 households with solar system, taking its tally to half a million. The RSF sold more than 50,000 and Brac, Srizony, Ubomus, Hilful Fuzul and other charities, the rest 130,000.

Officials said a 5.0-8.0 per cent soft credit lent to the solar firms by state-owned renewable energy financier, IDCOL, sparked the growth four years back, making the SHS affordable to villages not connected to the national grid.

Development of a monthly payment package and 20-year product maturity and service period made the system financially attractive to poor and middle income clients.

It means a rural poor can now buy a basic 20-50 watt SHS just at the cost of his monthly kerosene or candle bill.

“A 50 watt SHS is most popular because it powers four lights and a black and white television set. And the cost is around Tk 25,000, which can be paid back in small installments in three years,” said Abser Kamal, chief executive officer of the GS.

Kamal said his company has set a target to double SHS clients to one million in 2011 — a feat it had earlier hoped to achieve by 2015.

“We also revised our long term plan following success in 2010. By 2015, we want to sell solar system to five million households. And we think it is achievable,” he said.

He said people in the coastal areas, migration-prone districts and wealthy villages in Chittagong and Sylhet were first to convert to solar power.

But now, the company has offices in every sub-district town in the country, employing 8,500 trained staff and it is planning to recruit thousands more.

RSF chief Quddus said his charity would add 100,000 new SHS this year and seek to expand aggressively in urban areas where an acute power crisis has forced the authorities to freeze connections to new apartment projects.

The firms have also unleashed new solar-powered thermal system, irrigation, mobile phone base stations and geysers in an effort to help boost growth.

Late last year, a group of entrepreneurs launched SolarEn Foundation to sell SHS mostly to the urban clients.

“We think SHS will have high growth in cities this year because power-starved realtors are keen to use solar power in almost all their new projects,” said SolarEn’s chief Monir Hossain.

“It is costly. But a lot of realtors don’t have any choice,” he added.

As part of its urban drive, Rahimafrooz Renewable Energy had set up solar system at the PM office and Bangladesh Bank last year and the GS brought 18 big clients including those in district and sub-district headquarters under its large-scale SHS programme.

A company does not get soft credit benefit from IDCOL if it sells solar system to grid areas especially in cities, but officials said declining cost of solar panel has made this form of alternative energy attractive to urban consumers.

RRE’s $5.0 million solar panel plant kicks off production this March, aimed at substituting import and cutting cost. Another group, Electro, has already launched a similar factory on a test-case basis.

“As far as we know, six more companies are on the pipeline to build solar panel manufacturing plant in Bangladesh this year,” said RRE programme manager Istiaq Ahmed.

The RRE also took its solar success to seven African countries, lighting up the streets of the dark continent, in the first such case of export in the Bangladesh’s history, he said.

“From batteries to panel to cable, the success of solar energy has opened up array of new opportunities in the country’s industrial sector,” Dipal C Barua, who headed GS for many years, had said earlier.

“It is poised to become a big driver of our growth,” he added.

Quality local goods can compete with any int’l brand

Quality local goods can compete with any int’l brand
Mashiur Rahaman

Dhaka, Jan 29: Bangladeshi manufacturers have gained expertise and cutting-edge technology to produce top quality products at a reasonable cost, which can challenge any international brand at home or abroad, a leading manufacturing company claimed. Fascination for foreign goods has reduced dramatically among general Bangladeshis, executive director of ACI Group, Syed Alamgir said.

“With quality assurance, goods manufactured by Bangladeshi companies have regained control over domestic consumer markets, expanding its reach abroad,” Alamgir said, adding, “Thanks to innovative production and aggressive marketing strategies, adopted by local companies.”

Citing examples of aerosol and antiseptic brands, manufactured by renowned brand ACI, Alamgir said that defeating international brands, insect repellant, ACI Aerosol, and antiseptic, Savlon, now enjoy 87 per cent and 75 per cent share of their respective markets.

“This is a challenge that most of our products have overcome,” he said, attributing the achievements to strict maintenance of quality, aggressive but systematic marketing policy and the goodwill of ACI Group.

Advanced Chemical Industries (ACI) Limited is one of the leading conglomerates in Bangladesh, with a multinational heritage. The company has a mission to achieve business excellence through quality by understanding, accepting, meeting and exceeding customer expectations, following International Standards on Quality Management System.

“The necessity of pure food in consumers’ mind, especially in the commodity food business, has pushed ACI to fill market demand by producing food products,” Alamgir said.

The company is engaged in manufacturing, marketing, and distribution food products and condiments under the brand names – PURE and FUN. Its portfolio covers practically basic spices, mixed spices, cereals, edible oil, snacks and confectionary categories.

“We are focusing on customer needs at home, and we also export our products to Australia, United Kingdom, Cyprus, Singapore, USA, UAE, Kuwait, Saudi Arabia, Bahrain, Qatar and many other countries,” he said.

Huge presence of Bangladeshi expatriates in these countries is boosting demands, while the reputation of ACI brands is playing a major role, he added.

“As part of our new export market exploration plan, we have recently entered the African continent, through South Africa,” he said adding that the initial response there was encouraging.

Syed Alamgir, popular in the international marketing arena for his pioneering ideology of ‘Halal Products’, obtained the prestigious MBA degree from IBA, in 1975, from the University of Dhaka. Among many successes, his proposition of ‘100% Halal Soap’ was highly applauded by the consumers at large and caught the attention by marketing guru Philip Kotler. In his latest edition of ‘Principle of Marketing – A South Asian Perspective’, he cited the example of Alamgir’s 100 % Halal Soap idea, in a case study.

Alamgir took charge of ACI Consumer Brands in January 1998, with only two brands and a very small team of 15 people. Today, ACI Consumer Brands has several renowned brands that are market leaders, with over 1,800 employees across the country.

Alamgir, later, gave much thought about diversification of portfolio and started to explore food items. ACI Salt was launched in 2005, which quickly took the market by storm and was awarded the ‘Best Food & Beverage Brand’ of 2008. The success of the salt product inspired a whole range of food items, which came into reality through the launch of ACI Pure Flour, ACI Pure Spice, Fun Snack Items, Pure Soya bean oil, sugar and lentils.

“Absence of quality products in the market and improved purchasing power is the driving force for ACI’s growth, and will continue its involvement in the production of non-traditional food and non-food items in coming years,” Alamgir said. ACI has proved if one can ensure quality in production, the consumer base becomes becomes virtually infinite – both at home and abroad, Alamgir asserted.

SME financing fair due February

Pockets of Change
SME financing fair due February

Md Fazlur Rahman

Bangladesh Bank and SME Foundation will organise a financing fair in Chittagong in February, to bridge the gap between entrepreneurs and lenders.

The two-day fair at the Engineers Institute in the port city is scheduled to be held on February 15-16. The fair is a part of the government’s attempts to extend the much-needed financial services to prospective small and medium entrepreneurs across the country.

The aim of the fair is to create awareness among entrepreneurs about small and medium enterprises (SME) financing products that are available in the market.

It will also facilitate financing through a display of loan products and procedures, and required documents for funding.

It will also support SMEs to prepare new, innovative and demand-driven projects; act as a platform for match-making between the SME entrepreneurs and financial institutions; offer spot advice and guidance to potential SMEs; and identify strategies to reduce procedural bottlenecks in delivering loans to the SMEs.

The fair, which will start at 10:30 am and be open until 8pm, will also feature seminars. Besides, banks will have to answer queries made by entrepreneurs, said an official of SME and Special Programmes Department of Bangladesh Bank.

The participating banks and financial institutions will also offer SME loans directly at the fair, he said. Each lender will lend to at least five entrepreneurs.

Fairs will also be organised at all divisional cities and major district towns, such as Bogra, Comilla and Mymensingh.

Belgium to invest $ 6.756m in DEPZ–6756m-in-depz.html

Belgium to invest $ 6.756m in DEPZ

DHAKA, Jan 27: Tigerco Limited, a Belgium origin company, will set up a high tech garment manufacturing industry in Dhaka Export Processing Zone (DEPZ), says a press release. This 100per cent foreign direct investment accounts $6.756 million in setting up their unit which will produce bullet-proof jacket, tent, and protective clothes and garments items.

The company will also create employment opportunity for 409 Bangladeshi nationals.

In this connection an agreement was signed between Bangladesh Export Processing Zones Authority and Tigerco Limited in BEPZA Complex, Dhaka recently.

Md. Moyjuddin Ahmed, member, Investment Promotion of BEPZA and Iqbal Hossain, managing director of Tigerco Limited signed the agreement on behalf of their respective organisations.

Major General A T M Shahidul lslam, ndu, psc, executive chairman, A.K.M Mahbubur Rahman, member, Finance, Md. Shawkat Nabi, secretary, A.Z.M. Azizur Rahman, general manager, Investment Promotion and other officials of BEPZA were present at the signing ceremony.

Dhaka, Colombo to sign six deals

Dhaka, Colombo to sign six deals
Diplomatic Correspondent

Bangladesh and Sri Lanka have decided to sign six agreements on investments, exports, exchange programmes, agriculture, fisheries and education to further intensify bilateral ties between the two countries.

The decision to sign the agreements was taken at the first-ever foreign secretary level consultation between Bangladesh and Sri Lanka held in Dhaka on Wednesday.

Bangladesh Foreign Secretary Mohamed Mijarul Quayes led the Bangladesh delegation while his counterpart Chrysantha Romesh Jayasinghe led the Sri Lanka delegation.

In a joint statement issued yesterday, both sides agreed to sign and implement the following agreements as early as possible:

Promotion and reciprocal protection of investment, deal between the Export Development Board of Sri Lanka and Export Promotion Bureau of Bangladesh, deal on cultural, educational and scientific exchange programmes, deal between Ministry of Fisheries and Aquatic Resources of Sri Lanka and the Ministry of Fisheries and Livestock of Bangladesh, deal between Bangladesh Agricultural Research Council and Sri Lanka Council for Agricultural Research Policy, and agreement between Tertiary and Vocational Education Commission of Sri Lanka and the Ministry of Education of Bangladesh.

The foreign secretaries agreed that early consultations would be held between the tax authorities in order to revise and attune the Agreement on the Avoidance of Double Taxation and Fiscal Evasion law 1988.

Diplomatic sources said the agreements are likely to be signed during the upcoming visit of Sri Lanka President Mahinda Rajapakse to Bangladesh, tentatively after March.

During the consultation, Mijarul Quayes sought support for Bangladesh’s candidature for the non-permanent membership of the UNSC for the period of 2016-17. The Sri Lankan side assured him of considering the request.

They also discussed cooperation in the various regional and multilateral forums including Saarc, Bimstec, IOR-ARC, UN, NAM and Commonwealth. Bangladesh appreciated Sri Lanka’s support to establish permanent secretariat of Bimstec in Dhaka.

The two sides agreed to establish a joint working group at director general level of the Ministries of Foreign Affairs to follow up on the decisions taken at various bilateral forums including the foreign secretary level consultations.

Both sides agreed to enhance bilateral trade and increase people to people contacts. They agreed to establish linkages between universities, educational institutions, museums and conduct youths and cultural delegations exchange.

Sri Lanka also agreed to explore Bangladesh’s proposal to train its nurses there. They also emphasised the need to share experiences in other identified areas of skills development.

The next round of foreign office consultations that is annual foreign secretary level consultations will be held in Colombo in 2012 at a mutually convenient time.

Jute contributes 4.68pc in export earnings

Jute contributes 4.68pc in export earnings

DHAKA JAN 27: Jute will regain its earlier glory as it is becoming popular globally, the speakers said today at the opening session of International Jute fair.   “Jute sector is contributing 4.68 per cent in export earning last fiscal year and two per cent increase during last two years,” said secretary of Textiles and Jute ministry Ashraful Moqbul, adding  “Though its contribution is not notable at present like the 1960’s but there is no scope to deny its contribution in national economy.”

He was speaking as the chief guest at the opening session of the fair jointly organised by International Jute Study Group (IJSG) and National Jute Board (NJB) of India with collaboration European Union (EU) at Bangabandhu International Conference Centre (BICC).

Among others, executive director of Jute Diversification Promotion Centre (JDPC) Khandaker Mokhlesur Rahman, secretary of NJB Atri Bhattacharya, first secretary of EU Andrew Barnard and secretary of IJSG Bhupendra Sigh addressed the session.

Jute will be one of the most important cash crop in coming days due to the automobile sector around the world are using jute products, Ashraful said.

He further said, jute is versatile fibre and environment friendly so its use increasing entirely which is good signs for the jute sector of the Bangladesh and India . Both India and Bangladesh will be benefited if joint initiate to promote the diversification of jute, secretary of Textiles and Jute added.

First secretary of EU Andrew Barnard said at least 40 million farmers of   Bangladesh would be benefited directly from this sector and it had a huge prosperity.
Bangladesh is producing quality jute products that can secure market in Europe countries, he said.

He also said that Bangladesh earned US $ 140 million from raw jute export and $ 47 million from jute products.

The fair will open form 9 am to 9 pm started from today (January 27) and continue till January 29.