Category Archives: Emerging Industries

Bangladesh to emerge as software exporter in global market

Bangladesh to emerge as software exporter in global market German entrepreneur says

Bss, Dhaka

Bangladesh will quickly emerge in the world market as a software exporting country as it has tremendous potentialities in the IT sector.

This observation came from Arndt Huesges, the newly appointed honorary consul general of Bangladesh in Germany, during an exclusive interview with the news agency here yesterday.

“Bangladesh will soon move in a dynamic speed in the international software markets as Prime Minister Sheikh Hasina is making very high professional fundamentals to develop the country’s IT sector,” said Huesges, also a promising entrepreneur.

Responding to a question, he said although some neighbouring nations of Bangladesh have already been in the international software market for a pretty long time, there is no reason for Dhaka to lag behind as the country is blessed with huge energetic human resources and other necessary ingredients to venture into this ever-flourishing trade.

“Without going abroad for job-hunting at huge costs, the young and promising boys and girls of Bangladesh will be able to earn huge foreign exchange by producing and exporting software sitting at their respective houses.”

They will only create necessary facilities to distribute the local products to international business centres, Huesges added.

“Our company has household software programmes through which we provide services in 12 different languages,” he said, claiming that no other company in Europe has such capabilities.

Huesges, also the top executive of Huesges Group, a leading trade and business company of Germany, is now in Bangladesh leading a four-member delegation to explore investment potentialities here and identify the sectors where German investors may come for joint- venture initiatives.

Other members of the visiting teams are: Huesges Group Managing Director Hasanat Mia, Director of Sales of Relexa Hotel Group Tim Zerr and Director of AKH Group Shamim Haque.

The honorary consul general said he will devote wholeheartedly in enhancing Bangladesh’s image among the German and other European trade leaders.

On their current mission in Bangladesh, Huesges said they will invest in IT, tourism, leasing company and efficient traffic management. “We like to open office and operate Huesges Group in Bangladesh.”

When asked, the top executive of the German company that has 250 installations in Germany and other European countries said initially they want to invest 50 to 70 million Euros in Bangladesh.

After IT, development of tourism that has huge prospect and potentialities will be the second priority of the group in Bangladesh. “Primarily we want to construct a five-star tourist resort at a convenient place,” he said, adding that for this purpose they have already visited Chittagong and sea beaches of Cox’s Bazar and Innani.

He categorically said that tourism could be developed in Bangladesh showing respect to the country’s religious and cultural heritage.

Pointing to the fact that Bangladesh is blessed with picturesque natural beauties, world’s largest natural sea beach, mangroves forest of Sundarbans, oldest replicas of human civilisation and many places of historical interests, he said these are the ingredients that attract the real tourists.

The honorary consul general informed said since his delegation’s arrival in Bangladesh on February 15, they called on Prime Minister Sheikh Hasina and Tourism Minister GM Quader.

They also met Minister for Expatriate Welfare and Overseas Employment Mosharraf Hossain, Commerce Minister Faruk Khan, Communications Minister Syed Abul Hossain, State Minister for Environment and Forest Dr Hasan Mahmud and senior officials.

“We believe through our joint efforts, cooperation and strategy for economic development, our existing ties can reach to a new height,” Huesges said.

The delegation will leave for Germany today with a hope to start their work in Bangladesh within six months.


Japan now ‘lucrative destination’ for Bangladesh garments

Japan now ‘lucrative destination’ for Bangladesh garments
Monira Munni

Japan proves to be a lucrative destination for Bangladesh’s garment as apparel exports to the Asian giant saw an extraordinary 148.0 per cent growth in the first half of the current fiscal year compared to the same period a year ago.

Bangladesh exported ready-made garments (RMG) worth $34.043 million during the July-December period of 2009-10 compared to $19.415 million of 2008-09.

The country earned $74.381 million in fiscal 2008-2009 and $28.035 million in fiscal 2007-08 from RMG export, according to Export Promotion Bureau (EPB) data.

Knitwear accounted for $ 28.090 million during the same period, up from $5.964 million a year before, the EPB data said.

The country made shipments of home textile worth $ 1.125 million during the July-December of the current fiscal year.

Japan has reduced its dependence on imports from China, which gave a boost to RMG exports out of Bangladesh further increasing their sourcing from Bangladesh, said manufacturers and exporters.

Abdus Salam Murshedy, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said growth in Bangladesh’s apparel exports to Japan has much potential to become sustainable as cost of garment production is lower here.

“The Japanese are coming to source more from Bangladesh in recent times while Bangladeshi exporters are actively trying to explore new markets,” he said.

Imported apparel market in Japan used to be dominated by China, but Japanese importers are now looking out for one more dependable source to reduce their reliance on China.

Industry experts said Bangladesh’s garment shipments to Japan started to swell in the middle of last year after the Japanese retail giant Uniqlo opened a sourcing office in Dhaka, prompting many other Japanese retailers to set their sights on Bangladesh.

“China factor” was playing a major role in swelling the growth of Bangladesh’s apparel exports to Japan.

Pointing out that the Japan market is more quality conscious than other markets, they said, “Japanese businessmen follow different ways of business and the Bangladeshi exporters should try to understand it.”

Mr Murshedy said Bangladesh is the top candidate for being next to China which has till now been the major apparel supplier to Japanese importers.

“The Japanese are now convinced that having decades of experience in supplying to the vast EU and US markets, Bangladesh’s apparel industry is now skilled enough to cater to customers in other regions,” he said.

“We are planning to organise a single country fair in Japan very soon displaying quality products to diversify the market,” BGMEA sources said. “We are hopeful that Japan will increase purchases from Bangladesh as the country reduced its dependence on China and Bangladesh is considered a strong competitor of China,” Fazlul Hoque, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) told the FE.

Mr Hoque led two high-powered delegations to Japan in the middle and end of last year in search of more orders.

“Japan is a ready market for us, as we produce high-quality products, which is a major criterion,” he said adding that the trend shows Bangladesh will be able to export apparel items worth a billion dollars in the next five years.

Uniqlo, one of the largest retail chains in Japan, started investing in Bangladesh, to purchase garment items with a plan to invest $ 70 million initially, Hoque said.

The report showed that Japanese importers procured $ 26.5 billion worth of apparels and accessories from overseas sources with China having the lion’s share of more than 80 per cent of shipments.

Vietnam, Indonesia, Myanmar and India are the next significant sources for Japanese apparel importers, but the growth of apparel imports from Bangladesh has been stunning, industry experts said.

IT industry set to take off on global market: industry people

IT industry set to take off on global market: industry people
Kazi Azizul Islam

Bangladesh’s software and information technology-enabled services industry is set to take off with some companies entering the world market and a significant portion of the local market getting readied, industry people said.

Industry output, however, remained insignificant in two decades and entrepreneurs said businesses were earning the capability to cater to clients at home and abroad.

‘The industry has come to a take-off stage now,’ said Safquat Haider, a director of the Bangladesh Association of Software and Information Services.

He also referred to BASIS Softexpo 2010, which ended on Sunday, where several dozen Bangladeshi technology enterprises put on display the latest versions of their programs and IT enabled services.

Many local software houses are now successfully developing world-standard financial solutions and business applications, Safquat said. ‘There are not many such cases, but local companies have talented people to develop GIS and advanced ERP solutions and telecommunications software.’

Anisur Rahman Khan, senior marketing manager at the Leads Corporation, said a significant portion of the local market was getting readied and enterprises had also matured to offer world-standard solutions.

At least four local banks are running their core operation with solutions developed by the Leads Corporation, said Anisur, who has been in software marketing for more than decade and a half.

He said banking software developed in Bangladesh had a hard time fighting the software developed abroad, especially in India, although local solutions were cheaper, Anisur said. ‘Bankers now have understood that local solutions are dependable.’

Bangladesh’s software and ITES export amounted to only $33 million or Tk 230 core in 2009. The domestic software market was estimated worth less than Tk 500 crore. Local solutions account for less than a half of the market.

Mannujan Nargis, director at the Rave Systems, said internet telephony or IP solutions such as switching, billing, byte server operation and mobile VoiP dialers developed in Bangladesh were selling well on the world market.

She said her organization had a presence on the European market and dominance on the Middle-East market with several IP operation management solutions.

‘One of our solutions is fighting a solution of global majors like Fringe of Israel,’ said Nargis, who sees operation of her company’s office in Singapore.

Mashuk Rahman, managing director of the Skynet Digital Private Limited, told New Age about half a dozen Bangladeshi companies were catering to overseas clients of advanced image editing services.

Skynet’s image editing service called PixArt Studios employ 45 Bangladeshi digital artists who work with critical Photoshop tools for colour correction, soft layer masking, and image etching and stitching.

‘It is just arty manipulations on photos which have tens of millions of dollar worth global market,’ Mashuk said. ‘India and the Philippines earns tens of million of dollars by sourcing image editing services to clients abroad.’

Annisul Huq, president of the Federation of Bangladesh Chambers of Commerce and Industry, feels Bangladesh’s software industry was warming up to take off.

‘Many global importers are still unaware that software and solutions are developed in Bangladesh,’ Annisul said, adding that this is a major barrier for Bangladesh’s significant presence on the European market worth several billion dollars.

Annisul owns a software development house, employing some 80 engineers, which serves foreign clients with enterprise resource planning and solutions.

‘The government should spend on local software and the Intellectual Property Rights Act should be implemented,’ he said.

He also said the government should invite globally renowned software companies to set up production facilities in Bangladesh.

Homegrown software cos eye domestic IT market

Homegrown software cos eye domestic IT market
Mehdi Musharraf Bhuiyan

An emerging domestic economy and the ever expanding business activities are rapidly turning the country’s growing IT market a lucrative one for its homegrown software companies, industry insiders said this week.

These are resulting in a major shift in the focus of the local IT companies which are increasingly looking to cash in on the growing IT needs of the country’s rapidly digitising public and private ventures, the insiders said as the biggest exposition of homegrown software called BASIS SoftExpo concluded in the city Sunday.

“For years, our priority has been to capture the international market for IT outsourcing,” said Anisur Rahman Khan, marketing manager of Leads Corporation Limited, a leading software company in Bangladesh. “And that is not only for gaining better turnover in foreign currencies for our local software ventures but also because the local business houses preferred foreign software vendors to the local ones for the lack of business confidence.”

“But now the scenario has changed. In contrary to what it was like five years back, the local software farms are now proved to be capable of providing equal services if not better than their more renowned overseas counterparts while providing that instantly from the doorstep,” he added.

“No more you have to give a call to Bangalore or Singapore and then sit helplessly for the whole day if your company’s IT vendor is just a few kilometres away and ready to serve you within half an hour.”

Observers also opined that the recent government focus on bringing ICT to the rural doorsteps and revamping the local IT infrastructure have also lured the local software companies to shift their eyes on various e-government projects and domestic ICT schemes.

What’s more, it is not only the homegrown software companies who are on the look out for local clients, but also the foreign IT ventures that are growingly focusing on the country’s burgeoning IT market.

Notably, there is a significant presence of Indian software companies in this year’s BASIS SoftExpo, a decade-long annual software fair which is now aiming to be a major IT event in the region within a few years.

“The country’s booming capital market, financial sector as well as its burgeoning corporate infrastructure would require huge IT build up in the coming years which are now up for grab for the foreign and local software companies alike,” said Enamul Haque of Tally, an Indian software company which has presence in 92 countries of the world.

One major attraction of the fair was some wonderful innovative IT projects showcased by young students from various universities of the country.

While millions of the country’s capital city get clogged in traffic jam for hours each day, hardly do they know that there is virtually a digital solution in their hand called “Smart Traffic Signal” invented by some young computer engineering students which got displayed at the BASIS fair.

Similarly, these young bunches of IT whiz kids have also showcased a Robotic Hand, an Intelligent Unmanned Vehicle, a Motion Detector and Follower and a Line Following Robot – all invented at their university laboratories.

“Bangladesh has got numerous IT talents – there are instances of Bangladeshi students coming out first among 1.7 million international students in worldwide computer science exams. But it is time for capacity building for using such talents in the local arena,” said a notable Bangladesh-born IT specialist who is now working abroad.

Bangladesh’s burgeoning software industry, now estimated to worth Tk 10 billion, is set to grow to almost Tk 50 billion within the next three to four years”.

Pharma companies brace for new phase

Pharma companies brace for new phase
Analysts suggest innovations as patent looms on generic drugs

Sayeda Akter

Bangladeshi pharmaceutical companies should prepare to maintain growth in local sales and exports and remain competitive in the post-2016 period, when patents will be imposed on all generic drugs, analysts suggest.

Upgrading product quality is one area the companies should focus on, they said. Other suggestions include capacity building in research and engineering and the setting-up of an active pharmaceutical ingredients (API) park to help local companies face the challenge.

Capacity building means innovations, strengthening reverse engineering, training local people and upgrading technology. An API park will help produce raw materials locally and innovate ingredients as well.

The word ‘generic’ is used to describe a product, particularly a drug, which does not have a trademark. For example, ‘paracetamol’ is a chemical ingredient that is found in many branded painkillers and is often sold as a generic medicine in its own right.

In 2001, under the trade-related aspects of intellectual property rights (TRIPS), the World Trade Organisation allowed developing and poor nations to produce generic drugs until 2016 without compulsory licences or paying the patent holders.

According to TRIPS, the least-developed country members of WTO will not have to apply for copyrights for a period of 10 years from the date of application, so they will be able to create a viable technological base for public health.

With that, the WTO trade rules have allowed developing and poor countries — mostly without own drugs industry — to issue a compulsory licence to a third country, such as India or Brazil, to produce cheap generic drugs and to import these to address a public health crisis.

Mustafizur Rahman, executive director of Center for Policy Dialogue (CPD), thinks Bangladesh is yet to enjoy the full benefits of the deal.

“As a least developed country (LDC), we must make use of the opportunity to make lifesaving drugs without paying for patents or licensing. Our local pharmaceutical plants are of international standards and we have better infrastructure, which made it easy for us to benefit from the WTO deal.

“The government needs to take policy measures to safeguard the increasing pharmaceutical industry,” Rahman said. “Initially, the government should set up an API park to enhance capacity with advanced research facility.”

“Least developed countries have sought an extension of the deadline from 2016 to 2021. We have to aggressively negotiate on this point to extend the deadline by five more years,” Rahman said.

Dr Zafrullah Chowdhury, a trustee of Gonoshasthaya Kendra, echoed Rahman. He said the government should encourage investment in raw materials production to face intense price competition in the coming days on locally-manufactured products.

“The first effect of the post-2016 era will be the cost of patents, which will increase raw material prices, and eventually the prices of locally manufactured products,” Chowdhury said.

“At present, most large local pharmaceuticals have to depend on imported raw materials. So it is high time the government encouraged investment in raw material production,” he said. “Otherwise, the present growth in local sales and exports may not sustain.”

There are 250 small, medium and large local and multinational pharmaceuticals operating in Bangladesh, while only seven are producing raw materials.

Currently, the local pharmaceutical market is worth around Tk 7,000 crore. Around 80 percent of total raw materials are imported mainly from China, said industry insiders.

However, local manufacturers are optimistic about maintaining present growth in the post-2016 period.

Mizanur Rahman Sinha, managing director of Acme Laboratories, said the rising prices of medicines will not have a harsh impact on the local consumption of lifesaving products.

“We are ready to embrace the challenge that is likely to hit many Third World pharmaceutical manufacturers. As a method of caution, we are constantly upgrading the quality of our manufacturing plants and products.”

“The quality of our products is far better than any other LDC and most major companies have obtained MHRA (UK) and FDA (US) certification for their products. So I do not think medicine consumption will drop overnight,” added the Acme boss.

Mohammad Mostafa Hassan, general manager of Eskayef Bangladesh Ltd, said huge investment is required to produce raw materials.

“We are optimistic that advanced technological bases to produce new molecules are likely to be developed locally by 2013-14, when investment in the sector will increase manifold,” he said. “We plan to invest in raw material production by that time.”

However, Nazmul Hasan, member of the parliamentary standing committee on health ministry, thinks the time limit should extended, as developing and poor countries are yet to optimally benefit from the deal.

“Most developing and poor countries are yet not enjoying the benefits of the WTO deal. At the same time, WTO still could not finalise the list of patented products,” he said. “We need more time to safeguard the sector, and the timeline should be extended up to 2021.”

Acknowledging poor government preparations in this regard, he said the government is set to handover the API to local pharmaceuticals by the end of this year, which will accelerate capacity building.

Local software gaining foothold

Local software gaining foothold

Softexpo 2010 kicks off

Md Hasan

Local IT (information technology) innovations have gained a sound footing, as the market prefers domestic products to foreign peers in different service areas now.

The top adaptors of local software solutions include banks, leasing companies, corporate houses, government bodies, NGOs, brokerage houses, merchant banks, life insurance companies, and customs houses.

Businesses say the improvement in such solutions in line with a global standard and low prices have encouraged them to lean towards the local ones over the last few years.

According to software developers, the cost of such local ones vary between Tk 1 crore and Tk 3 crore, while foreign software costs Tk 30-40 crore.

Meanwhile, the foreign software adaptors point to some problems. The non-availability of after-sales-services and even shortage of trouble-shooters are the two they identified.

“Once upon a time, I used to prefer foreign solutions. But the time is over. Local software solutions are equally capable to provide core banking solutions,” said SM Mainuddin Chowdhury, senior executive vice president of Southeast Bank.

Chowdhury is very happy with his bank’s core software solutions, provided by Leads Corporate Ltd, a leading maker of local software, which also had been able to grab a global market share despite financial crisis worldwide.

The industry as a whole still lags behind in research and development areas. But product diversification has been identified as most important development in the last few years, as evidenced in the items on display at the Softexpo 2010 that kicked off yesterday in Dhaka.

Bangladesh Association of Software and Information Services, or BASIS is organising the 5-day fair.

“We’re developing our products everyday in line with market demand,” said Fariha Rahman, business development officer of Technohaven Company Ltd.

Besides developing banking software, complete billing solution of Titas Gas Company is one of the big solutions provided by Technohaven.

Leads Corporation Limited has also come up with massively providing merchant banking solutions. More than 20 merchant banks are now using its solutions.

“We’re competing with the foreign solutions,” said A S M Nurun Nabi, assistant manager (marketing) of Leads Corporation, adding that the company will soon go for a joint venture with a Danish firm, Leads Capevo, to provide solutions for that country.

The banking sector that needs solutions is now in more focus from the local software developers.

DataSoft, a core banking solutions provider, will also enter into a joint venture with a Swiss firm, according to Ahmed Hussain Mahboob Uddin, business development manager of the company.

The credit for automation of Chittagong and Dhaka customs houses goes to DataSoft.

The industry exported $32.91 million worth of IT based services to different countries, registering a less than one percent of the global market share.

A World Bank’s study reveals Bangladesh can fetch $500 million from IT-enabled services by 2014.

BASIS chief Habibullah N Karim expressed his high hope that the domestic market size could be Tk 2,000 crore, although the present turnover is only Tk 400 crore.

He said out of the Tk 400 crore market, local software markers have less than 50 percent market share, failing to compete with foreign companies, as maximum private and even government institutions still sometimes prefer expensive foreign made software solutions.

Shipbuilding shows signs of pick-up

Shipbuilding shows signs of pick-up

A vessel built by Western Marine Shipyard in Chittagong is up for delivery. Photo: Western Marine

Sohel Parvez

Two local firms gear up to resume the construction of shipyards expecting foreign orders for vessels, as demand has showed signs of a pick-up with recovery from the global recession.

Khan Brothers Shipbuilding Ltd and Narayanganj Shilpbuilders Ltd stalled work to establish shipyards after the global financial crisis depressed global demand for new ships.

“We have already started construction. We had slowed work mainly to bypass fallout from the recession,” said Tofayel Kabir Khan, managing director of Khan Brothers Shipbuilding Ltd, a concern of Khan Brothers Group.

He also blamed the suspension of construction partly on difficulty in obtaining bank loans. The shipyard is being built on the bank of Meghna at Gazaria, Munshiganj, at an estimated cost of Tk 100 crore.

“The deadlock in receiving loans appears to be easing as some banks are coming out and extending loans to shipbuilding. Now we hope to get a loan to establish the shipyard by year-end.”

Khan Brothers, which plans to develop the shipyard on about 50 acres, began building shipyards to build vessels in early 2008, inspired by global demand for vessels at around 10,000 units by 2012.

Small and medium vessels account for about 55 percent of the projected 10,000 ships, insiders said.

According to shipyard operators, Bangladeshi shipyards can tap global demand with small and medium-sized ships, as traditional shipbuilding nations, such as China and Korea, focus on large ships.

With a long maritime history and a favourable geographical location, Bangladesh enjoys various advantages, such as cheap labour, a presence of nearly 100,000 skilled and semiskilled workers and industry-related educational and training institutes.

Two leading local shipmakers — Ananda Shipyard and Slipways Ltd and Western Marine Shipyard Ltd — have bagged orders to make over 40 small vessels of about $600 million, mainly from European buyers.

“We are going to be the third shipyard capable of making global standard vessels for foreign buyers by the end of the year,” said Khan.

Khan Brothers expects to develop its capacity to deliver four ships a year.

Ferdousar Rahman, senior general manager of Khan Brothers, said the shipyard would have the capacity to make vessels up to 15,000 DWT (dead weight tonnage).

“But we will be able to make ships between 3,000-10,000 DWT as well,” said Rahman, also a naval architect from BUET.

Shah Abdul Latif, managing director of Narayanganj Shipbuilders Ltd, said the company had been quiet during the financial crisis.

“It appears that fallout from the recession on the global shipbuilding market is easing. Now we can resume work,” he said. “We will seek bank loans soon to complete the project.”

The official of Narayanganj Shipbuilders, which plans to set up the shipyard off the Meghna River near Gazaria, Munishiganj, said the company is receiving queries from oversees.

“We are optimistic about beginning civil construction from next month.”

Sakhawat Hossain, managing director of Western Marine Shipyard Ltd, also said the company is on an expansion mode to take advantage of recovery in global demand for new ships.

“The market has started picking up. We expect a rise in orders for new vessels by the end of this year.”