Category Archives: Industrial/Manufacturing and Export Processing Zones

Singapore keen to relocate factories in Bangladesh: HC

http://www1.bssnews.net/newsDetails.php?cat=0&id=254065&date=2012-06-03

Singapore keen to relocate factories in Bangladesh: HC

CHITTAGONG,June 3 (BSS) – Singaporean High Commissioner to Bangladesh Chan Heng Wing today said Chittagong could be a suitable destination for Singaporean investors.

Singaporean investors are now reluctant to continue industrial augmentation in China due to soaring of labour cost, Wing said.

So, he said, the investors are now looking for relocating their factories in Bangladesh.

Wing was exchanging views with leaders of Chittagong Chamber of Commerce and Industries (CCCI) on its Chamber premises here.

He also laid emphasis on infrastructural development, supply chain management and creating skilled human resources for attracting huge foreign investment.

Lawmaker MA Latif, CCCI president Murshed Murad Ibrahim, Senior Vice-President Mahbubul Alam, directors — Mahfuzul Hoque Shah and Mohammad Shahin Alam – and consuls of Singapore Darryl Lau and Derek Chua were present on the occasion, among others.

Speaking on the occasion, Murshed Murad Ibrahim favoured development of Bangladesh’s industry sector through Singaporean expertise.

He also stressed the need for making Singapore Visa procedure easier for businessmen.

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Dressed to impress

http://www.thedailystar.net/newDesign/news-details.php?nid=227850

Dressed to impress

The readymade garments sector is vital for Bangladesh's regional commerce, which will increase by more than 9 percent annually through to 2016. Photo: HSBC

Noel Quinn

When I tell people in Hong Kong, London or New York that Bangladesh is a land of untapped business opportunities, there are usually some who’ll raise their eyebrows in incredulity or admiration. For those who haven’t visited in person, it’s a country they only know from media headlines as a place of natural calamities and social pressures as the population expands.

Fortunately, I’m finding that the sceptics and uninformed are increasingly in the minority. As the global business community focuses its attention on Asia, there’s mounting interest in Bangladesh for its skilled workforce, its thriving economy and the impressive export industry it’s built in just over 40 years.

While acknowledging that Bangladesh still has much to do to realise the government’s long-term vision, I believe the prospects here are quite bright. So does HSBC Commercial Banking, which handles over 8 percent of the country’s international trade, and which recently showed Bangladesh to be the Asia-Pacific’s second fastest-growing trade partner after Vietnam. In fact, our research indicates that Bangladesh’s regional commerce will increase by more than 9 percent annually through to 2016.

Our confidence stems from what we see on the ground, in the cities and in the export processing zones, and from our expectations that Asia will increasingly sit at the heart of the global economy. Bangladesh now ranks higher than India, Indonesia and the Philippines in the World Bank’s ‘Doing Business’ report, and it has nurtured companies producing goods for household brands including Levis, Nike, Raleigh and Sony.

Some have suggested that Bangladesh could become like Mexico, which has established itself as a low-cost manufacturing hub for its enormous neighbour to the north. In some ways the analogy is insufficient in that Bangladesh borders India and is also close to China – two economies HSBC thinks will become the world’s third-largest and largest respectively by 2050. In other ways, the analogy exaggerates because by 2050, even after a seven-fold increase, we expect China’s income per capita will only be 32 percent of that in the US.

What we know today is that Bangladesh is a competitive place to do business when benchmarked against its emerging market peers. It has clear cost advantages, and a committed young workforce that’s keen to learn. With an increasing number of international companies relying on Bangladesh for the timely delivery of quality garments, the country has a medium-term opportunity to win manufacturing investment in this vital export sector. With economic austerity in the West making consumers there more cost-conscious, companies here have an opportunity to promote sales of affordable clothing while investing to rise up the value chain.

The challenge, of course, is that Bangladeshis want to increase their earning power. They want economic diversification that will bring new job opportunities while reducing the nation’s reliance on apparel and expatriate remittances. This will require effort to build the infrastructure businesses need to capitalise on Bangladesh’s location, and it will require effort to attract new industries and the skills transfer that comes with them.

Though the garment industry is likely to provide the backbone of the economy for some time to come, it’s encouraging to see that companies making goods as diverse as camera lenses, shoes, mobile phone components and car parts have chosen to set up plants in the EPZs. Local entrepreneurs and investors from Canada to Taiwan are starting to recognise Bangladesh’s potential as a location for light engineering, shipbuilding, agro-processing, pharmaceuticals and ICT. Samsung’s recent opening of a research and development centre in Dhaka is a good case in point.

Like many local businesspeople, HSBC is watching with great interest as the governments of India and Bangladesh negotiate greater access to each other’s road, rail, sea and air transport networks. For India, a deal will improve domestic links to its north-eastern states. For Bangladesh, it could help the country become a regional centre for trade and manufacturing, a gateway to the sea for Nepal and Bhutan, and the hub of a trans-Asia highway connecting India to China and South-East Asia.

Looking eastwards, Bangladesh is positioning itself to boost trade with China as China rebalances its economy from exports to sustainable domestic demand. Last year, HSBC helped a customer in the Dhaka EPZ to buy yarn from China in Chinese Renminbi. This deal was another sign of things to come, as Bangladeshi firms seek to cement relationships with Chinese partners, cut transaction costs and hedge foreign exchange risk in what is set to be the next global currency.

Clearly, I have to be balanced in my conversations with overseas companies. Bangladesh must ensure power supplies and communications networks are robust, for example, and it must recognise the competitive strengths of neighbours such as Vietnam, Cambodia and Pakistan.

As I also tell them, however, it’s clear to me that there are few people who can match Bangladeshis for their resilience in the face of a challenge. If this country continues to reinforce its links with the developed world, while deepening relationships in the emerging markets, it has every reason to demand attention in biggest corporate boardrooms.

Noel Quinn is the head of commercial banking for HSBC Asia-Pacific and group general manager for HSBC Holdings.

BEPZA: EPZs of Bangladesh the ideal place for the investors

http://www.brecorder.com/supplements/88/1169170/

BEPZA: EPZs of Bangladesh the ideal place for the investors
March 26, 2012
MAJOR GENERAL A T M SHAHIDUL ISLAM

Socio-economic development is essential in order to reduce poverty in developing countries and to improve people’s living standards.

Investment plays an important role in the socio-economic development of a country.

The contribution of Foreign Direct Investment (FDI) is very significant especially in the underdeveloped and developing countries.

Private sector provides bulk of employment and contributes to poverty alleviation.

Government of Bangladesh attaches great importance to the role of foreign investment in accelerating the pace of industrial development in Bangladesh.

With this objective in view, the government promulgated Bangladesh Export Processing Zones Authority Act with the mandate to attract investment in the EPZs of Bangladesh.

This EPZ Act provides for the legal, institutional and incentive framework for the EPZ program and the Bangladesh Export Processing Zones Authority as the agency has been charged with the responsibility of administering the program to achieve economic objectives on behalf of the government.

EPZs are designed to further integrate Bangladesh into the global supply chain and attract export-oriented investments in the zones, thus achieving its economic objectives of job creation, diversification and expansion of exports, increasing productive investments, technology transfer and creation of backward linkages between the zones and the domestic economy.

Chittagong EPZ is the first Zone established by BEPZA.

The Chittagong EPZ is the pioneer for investors which gradually turned Bangladesh as a “New Horizon for investment”.

Observing its astounding success, Dhaka EPZ came into operation in the year 1993.

Afterwards 6(six) new EPZs namely Mongla, Comilla, Ishwardi, Uttara (Nilphamari), Adamjee & Karnaphuli have been set up and these EPZs have already started operation.

Recently The Financial Times, a London based FDI magazine, has ranked Chittagong Export Processing Zone (CEPZ) as the 3rd Best Cost Competitive Zone in the world and the 4th in the Best Economic Potential for 2010-11.

(FDI Magazine of The Financial Times, London, June-July, 2010 issue).

MODE OF INVESTMENT

BEPZA pursues an open door policy in regards to foreign or local investment in its EPZs.

It attracts investment in three categories, ie

Type – A – Investment with 100% foreign ownership,

Type-B- Joint venture between Bangladeshi and foreign investors

Type-C -100% Bangladeshi ownership.

INVESTMENT CLIMATE IN THE EPZS

(1) Geo-regional location

The comparative advantages of the EPZ in Bangladesh are it’s homogenously, large number of potential human resources, competitive wage level, and its ‘geo-regional location’.

Bangladesh is situated in close proximity to the Bay of Bengal, which has given the country with an easy access to the world through sea-way and also by air in terms of import and export.

As a result, the foreign investors are always keen to take those strategic advantages.

(2) Human Resources

The main attraction of investment in Bangladesh is the most inexpensive, productive, abundant and easily trainable workforce.

Today Bangladesh has a growing number of managers, engineers, technicians and skilled labour force.

The minimum wage of the workers in the EPZs is one of the lowest in Asia.

Changing economic and political conditions in the Asian region are prompting many international investors to reassess their investment strategies and plan for relocating their investments in Bangladesh.

Those changes are producing higher opportunities for Bangladesh to attract higher levels of FDI.

China, Thailand, Sri Lanka, Cambodia, Philippines and even Vietnam, Indonesia & Malaysia are experiencing wages increase and rising production costs that are making them more expensive resulting the EPZs of Bangladesh have become a new field and place for foreign investment.

(3) One Window Service

BEPZA has been providing “ONE WINDOW SERVICE’ to its investors.

Operational and documentation procedures have been framed to make them easy and simple with minimum formalities.

Investors need only to deal with BEPZA for all of their investment and operational requirements.

BEPZA assists the investors with everything like import, export, and subcontract permits etc.

Apart from that, by providing on-site services such as customs clearance, logistics, international couriers, and offshore banking facilities, BEPZA provides its investors with the chance to further simplify business processes, resulting in a reduction in lead time.

BEPZA also provides same-day services to the investors.

(4) Protection of Foreign investment:

Foreign investors enjoying multiple protections in BEPZA.

The Foreign Private Investment (Promotion and Protection) Act secures all foreign investment in Bangladesh.

As a member of OPIC’s (Overseas Private Investment Corporation, USA) insurance and finance programmes operable in Bangladesh as well as in the EPZs.

Bangladesh is a member of Multilateral Investment Guarantee Agency (MIGA) which provides safeguards and security under international law.

The International Centre for the Settlement of Investment Dispute (ICSID) also provides an additional means of remedy, whilst copyright interests are protected through World Intellectual Property Organization (WIPO).

The World Bank has ranked Bangladesh 20th out of 187 nations for investors’ protection, making it as the best in South Asian Region.

(Doing Business, 2010).

(5)Flexibility:

BEPZA offers investment opportunities in convertible foreign currencies, providing investors with the flexibility of repatriating of both profit and capital.

The investors also enjoy GSP facility in EU countries, USA, Australia, Japan, Norway and duty and quota free access to Canada.

(6) Infrastructure Facilities:

BEPZA provides infrastructure facilities for the investors.

BEPZA provides fully serviced plots and standard factory buildings for setting up manufacturing industry.

Investor can use these plots under a 30 years lease which is renewable.

Apart from these plots, an investor may also take lease of Standard Factory Building (SFB) owned by BEPZA.

All the utility connections such as electricity, water, internet & telecommunication are readily connected in the enterprises of the EPZs.

BEPZA has also allowed setting up of hi-tech infrastructure facilities like Central Effluent Treatment Plant, Water Treatment Plant, Inland Container Deport (ICD), Internet service, Power Generation Plant as service oriented industries in the EPZs.

(7) Support Facilities:

BEPZA has allowed setting up of support service business facilities for the investors such as local and foreign banks, Off Shore Banking Units (OBU), insurance companies, C & F agents, freight forwarder and courier service in the EPZs.

Other administrative facilities, such as Customs Office, Police Station, BEPZA’s Security, Fire Station, Public Transport, Medical centers etc are available in the EPZs.

(8) Fiscal and Non fiscal Incentives:

The fiscal incentives include:

— 10 years tax holiday for the Industries established before 1st January, 2012 and Industries to set up after 31st December, 2011 tax holiday period will be:

Tax exemption period Rate of tax exemption

First 02 years (1st and 2nd Year) 100% Next 02 years (3rd and 4th Year) 50% Next 01 years (5th Year) 25%

— Income tax exemption of salaries of foreign technician for three years (For the projects approved before March 22, 2009).

— Duty free import of machinery, equipment, construction materials.

— Duty free import of raw materials

— Duty free export of finished goods.

— Relief from double taxation.

— Exemption from dividend tax for tax holiday period.

— Duty free import of two/three duty free vehicles for A & B type industries subject to certain conditions (For the projects approved before March 22, 2009).

— Full repatriation of profit, capital & establishment.

The non-fiscal incentives include:

— Investment protected under the Foreign Private Investment (Promotion and Protection) Act.

— BEPZA is a signatory of MIGA (Multilateral Investment Guarantee Agency) and ICSID (International Centre for Settlement of Investment Dispute)

— BEPZA is a Member of WIPO (World Intellectual Property Organization) and OPIC (Overseas Private Investment Corporation)

— 100% foreign ownership permissible.

— Enjoy GSP benefits in EU countries, Japan, Australia, USA, Canada, Norway etc.

— No ceiling on foreign investment.

— Foreign currency loan from abroad under direct automatic route (OBU facilities).

— Non-resident Foreign Currency Deposit (NFCD) allowed for ‘A’ type industries.

— Operation of FC account by ‘B’ and ‘C’ type industries allowed.

— Resident ship / Citizenship granted for foreign investors.

— 100% backward linkage raw materials, accessories are allowed to sell to export oriented industries inside and outside EPZs.

— Taking and offering subcontracting are allowed both inside and outside EPZ.

— 10% sale of finished products except garments.

— 10% sale of defective finished goods.

— 10% sale of surplus raw materials

Support Service Facilities include:

— Work permits issued by BEPZA.

— IP & EP issued within the same day.

— No UD (Utilization Declaration), IRC (Import Registration Certificate), ERC (Export Registration Certificate) & renewal of bond license required

— Customs clearance at factory site.

— Intra / inter zone sub-contracting & transfer of goods allowed.

— Easily available and trainable workforce.

Copyright Business Recorder, 2012

Govt to lease out lands to private firms

http://www.thedailystar.net/newDesign/news-details.php?nid=227757

Govt to lease out lands to private firms
Entrepreneurs will build 257 industrial units on unused lands of state enterprises
Rejaul Karim Byron

The government will allow private entrepreneurs to build 257 industrial units on lands owned but unused by state companies.

The cabinet committee on economic affairs yesterday approved a proposal of the Privatisation Commission — the first such move in Bangladesh.

The government will lease out the public lands to the private entrepreneurs initially for 35 years.

Mashiur Rahman, economic affairs adviser to the prime minister, will lead an 11-member committee to deal with the issue.

The committee will mark out unused lands of different state-owned enterprises and commercial institutions.

The committee will submit its recommendations to the cabinet committee in two months.

The committee members include the executive chairman of the Board of Investment, chairman of the Privatisation Commission, governor of Bangladesh Bank, Prime Minister’s principal secretary, and secretaries of Finance Division, textile and jute ministry, commerce ministry and industries ministry.

The Privatisation Commission has already conducted a survey on 39 state enterprises that have 1,288 acres as surplus lands.

If the government parcels out five acres of land to one industrial unit, about 257 new industrial units can be set up on 1,288 acres, the commission said in its proposal.

The new industrial units will see more than Tk 5,000 crore in investment in the next two years if the average investment per unit is Tk 20 crore, the commission said.

If each industrial unit creates employment for 200 persons, a total of 50,000 jobs may be generated, the commission estimated.

The commission also said, if the proposal is implemented, scope for more industrialisation will be created without affecting the existing state enterprises.

The government may also increase revenue collection without losing its lands.

The commission said gas, power and other infrastructures may be given to the new industrial units on the basis of lease or sub-lease from the existing government enterprises without creating new infrastructures.

Meanwhile, the cabinet committee on purchase gave a go-ahead to another proposal for purchasing 20,500 laptops at a total cost of around Tk 109.32 crore.

The laptops will be used in opening multi-media classrooms in 20,500 educational institutions at secondary and higher secondary levels. Each of the laptops will be purchased at Tk 48,527 from state-owned enterprise Telephone Shilpa Sangstha. The laptops will carry a three-year warranty.

Besides, the purchase committee approved a proposal for procuring 50,000 tonnes of wheat. An Indian trader, LMJ International Ltd, will supply wheat at $303.90 a tonne.

Industrial projects go full steam ahead

http://www.theindependentbd.com/business/finance/88560-industrial-projects-go-full-steam-ahead.html

Industrial projects go full steam ahead
Author / Source : Jasim Uddin Khan

Dhaka, Jan 6: The government has woken up, after three years of its tenure, to the bleak investment scenario and is taking steps to implement Tk 1600 crore worth of projects involving five specialised industrial zones and four BSCIC estates, by 2014. In 2011, the overall flow of investment (as percentage of GDP) came down to a standstill, compared to the first two years of the government, due mainly to shortage of industrial plots, liquidity crisis and inadequacy of gas and power, sources said.

The large specialised industrial projects including the Tk 550-crore Savar Leather Industry Park, Tk 235-crore Munshiganj Active Pharmaceuticals Industrial Park, Tk 200-crore Automobile Park at Amin Bazar, Tk 400-crore Sirajganj Specialized Industrial Zone and the Tk-150 crore Mirershari Special Economic Zone had long been facing manifold problems including legal tangle, availability of funds, land acquisition and complex bureaucracy. All the projects have got the Cabinet nod.

Industries minister Dilip Barua on Wednesday told The Independent that the government was set to launch all the mentioned industrial projects between 2013 and 2014. He hoped that the ongoing industrial projects would accommodate over 2,500 entrepreneurs with projected employment for five lakh people.

The government has projected a major investment boom that is slated to see the investment-to-GDP ratio rise by over six percentage points by 2014-15.

Barua said work order for the much-awaited Savar Leather Industry Park would be issued within the next couple of months after completing a legal process. He said land acquisition, earth filling, construction, training and loan disbursement for the project had already been completed.

The minister hoped that construction of the industrial park for manufacturing pharmaceutical ingredients at Munshigonj would be completed this year.

The Active Pharmaceutical Ingredients (API) Park project will reduce dependency on imported raw materials for this industry from next year.

The project faced a land acquisition problem and now the government has asked the implementing agency, Bangladesh Small and Cottage Industries Corporation (BSCIC). to complete the construction work by this year itself. The proposed readymade garment (RMG) industrial park worth Tk 438 crore is set to be completed by 2013.

The minister said both the BEPZA and BSCIC had received applications seeking 350 industrial plots which the RMG Park could honour.

The BSCIC is putting up an automobile estate at Amin Bazar in the capital aiming to rehabilitate the automobile engineering workshops, which are scattered all over Dhaka, in a healthy and safe environment.

The industrial estate will have 187 plots of different sizes under the project and after establishment it will create employment opportunities for 20,000 people directly and for many more indirectly, the minister said.

Besides the BSCIC is constructing the largest ever industrial park in Sirajgonj worth Tk 400 crore to boost industrialisation and invigorate the rural economy. There will be 801 industrial plots and, of them, 570 will be reserved for private industrial entrepreneurs.

The project, covering 400 acres at Saidabad and Kalia Haripur in the district town, also received the go-ahead from the economic council, he added.

The Tk 384-crore project, which will have around 801 industrial plots, is expected to be completed by mid-2014. A total of 570 export-oriented, import-substitute and domestic mills and factories will be set up in the industrial park, officials said.

Another industrial plot is coming up at Mirsarai on 25 acres. According to the profile of the project which will be implemented by this year, the town will have 186 industrial plots where 125 small and medium units could be set up.

Once implemented, the project would create 6,000 direct jobs apart from several thousand indirect ones, the minister said.

Besides land acquisition for Gopalganj, Comilla, Kustia and Rangpur industrial estates under BSCIC is going on and is expected to be completed by 2013.

Chinese cos to invest $ 5.048m in Uttara EPZ

http://www.newstoday.com.bd/index.php?option=details&news_id=48210&date=2011-12-28

Chinese cos to invest $ 5.048m in Uttara EPZ

Sayed Nurul Islam, member (investment promotion) of BEPZA and Chan Chi Wai, director of Trillion Gold Limited and Million Gold Limited exchanging documents after signing an agreement on behalf of their respective sides in the city recently.

News Report

Trillion Gold Limited and Million Gold Limited, two Chinese companies, will jointly set up a eyelashes, beard and wig manufacturing industry in the Uttara Export Processing Zone (EPZ).

This fully foreign owned company will invest about 5.048 million US Dollar in total in setting up their unit and will manufacture all kinds of eyelashes, beard and wig item.

The companies will also create employment opportunity for 226 Bangladeshi nationals.

An agreement to this effect was signed between the Bangladesh Export Processing Zones Authority (BEPZA) and Trillion Gold Limited and Million Gold Limited in BEPZA Complex in the city recently.

Sayed Nurul Islam, member (investment promotion) of BEPZA and Chan Chi Wai, director of Trillion Gold Limited and Million Gold Limited signed the agreement on behalf of their respective organisations.

Major General ATM Shahidul Islam, ndu, psc, executive chairman, A.Z.M. Azizur Rahman, general manager (investment promotion), Mahmud Hasan, general manager (public relations) and other officials of BEPZA were present at the signing ceremony.

Intraco to assemble Ambassador car

http://www.theindependentbd.com/business/others/86249-intraco-to-assemble-ambassador-car.html

Intraco to assemble Ambassador car
Author / Source : Jasim Uddin Khan

Dhaka, Dec 23: Intraco group, the leading CNG conversion company in the country will assemble India’s Hindustan Motors’ iconic Ambassador car. The company management last week talked with Hindustan Motors India and advanced into an ‘in principal agreement’ in this connection.

Intraco group, the owning company of Agrabad Hotel, Chittagong is constructing a factory at Savar aiming to assemble 200 Ambassador Car per month in Bangladesh within next two years. “Initially, we will be importing the Ambassador car to Bangladesh as a complete built unit (CBU), which has already started on a trial basis. When the volume attains a certain number, we will also bring as completely knocked down (CKD). We have entered into an in-principle understanding with Hindhustan Motors India,” Riyadh Ali, Managing Director of Intraco Group said. He said the aim is to use Ambassador cars as taxicabs for Dhaka’s road.

Once widely popular for both personal and institutional use, the Ambassador lost its popularity, despite India becoming a hot spot for global car makers. The car’s diesel engines (1.5 litre and 2.0 litre) are yet to attain BS-IV emission norms, made mandatory in 13 major cities from April 2010. In 2010-11, HM sold 10,097 vehicles, compared to 11,003 in 2009-10. Sales of the Ambassador dropped to about 6,600 last year, compared to a little over 8,000 in the previous year. It has since further declined, with sales so far being only half of the previous year.

The company is working on a new-look Ambassador, with changes in both exterior and interior design, to attract the younger generation. The vehicle, which the company believes will help it stay relevant in the present market, is likely to be unveiled next year.

Intraco group started business from residential hotel to Real Estate, Shipping Lines, Cold Storage, Yarn & Dying has achieved around 150% growth from its 18 sister concerns.