Bangladesh Economy: News & Updates

[CaPtAiN_pLaNeT]

Bangladesh to produce cars by 2012


Bangladesh will manufacture and sell luxurious cars locally by 2012, Industries Minister Dilip Barua announced it yesterday.

Addressing a press conference at his office he said that state owned Progati Industries Limited will produce 'sedan car' by 2012 while it will start assembling Pajero Sports Jeep by 2011.

He said by manufacturing locally the Progati Industries Limited will be able to bring down car price to half of that of the international price.

To this regard, Dilip Barua noted that the Pragoti Industries Limited (PIL) would be turned into a full fledged automobiles manufacturing company.

The Industries Ministry on July 8 signed an agreement with the Mitsubishi Motors Corporation in Japan to assemble Mitsubishi Pajero Sports Jeep for five years.

According to the agreement, Pragoti Industries will assemble and market Pajero Sports Jeep by June, 2011. Locally assembled jeep will be sold about Tk 60 lakh, which is now selling at Tk 1.20 crore in the international markets.

Barua said that assembling of Pajero jeep on trial basis would be started by January, 2011 while the full fledged production will start in June of the same year.

The Industries Minister hoped that the beginning of assemble and manufacturing of cars is a door step to develop a full fledged automobile industry in the country. "It will help meet the local car demand." Barua said that at the preliminary stage the state owned company will use batteries of local company Rahimafrooz Bangladesh Limited and produce some parts to assemble the sports jeep, the minister mentioned.

He also mentioned that Progati got purchase order of 420 cars for Upazila Chairmen and 208 for UNOs. Of them, 208 cars for UNOs and 260 cars for Upazila Chairmen had already been provided.

He urged the entrepreneurs to build up backward linkage industries of the car to make its price a competitive and reasonable, and reduce dependency on import parts.

Industries Ministry secretary Dewan Zakir Hossain and the Chairman of Bangladesh Steel & Engineering Corporation (BSEC) Muhammad Abu Hafiz were also present in the programme.

BSEC chairman Muhammad Abu Hafiz said people think government institution give more loss than profit. Opposing the thinking, he presented a statistics of profit of the BSEC as they profit Tk 72 crore this year.

He also mentioned that this year they gave Tk 337 crore to the government exchequer as revenue.

Since its inception in 1966, Pragoti has assembled and marketed more than 50,000 vehicles such as cars, Jeeps, Buses, Trucks, Pickup, Ambulance, Tractors etc. of multiple models by importing CKD(Complete Knocked Down ) kits.

The New Nation - Internet Edition

But still I believe 60 lac for pajero and 13 lac for sedan is too high for ordinary bangladeshi peoples. If at least the price of sedan can be reduced to 6/7 lac than it will be a great deal and many bd people will be able to afford those cars.

I think pragati group is still charging high as their production cost should be much less than outside. Regarding half price than the international version .... it is due to importing tax... is not it? Then what facility bangladeshi peoples are getting while producing this cars locally.... if low labour cost is not reflected in the selling price of the pajero and sedan.

 

[CaPtAiN_pLaNeT]

Purchase body approves Chinese co for 2 peakers

Business

Staff Correspondent

The cabinet committee on purchase on Thursday approved a Power Division proposal for awarding a Chinese company contracts worth about Tk 631 crore to install two 50MW furnace oil-fired peaking power plants.
The committee, headed by the finance minister, Abul Maal Abdul Muhith, approved the proposal for the award of the turn-key contracts to the Gong Feng Electric Corporation of China to set up the plants at Santahar in Bogra and Katakhali in Rajshahi.
The Power Development Board, which selected the Chinese company in the second bidding for the plants, will award a Tk 319.94 crore contract for the Santahar plant and a Tk 311.86 crore contract for the Katakhali plant.
The committee earlier approved the power board’s selection of a consortium of Energypac in the first bidding. The consortium was selected by the power board to set up the Santahar plant at a cost of Tk 368.11 crore and the Katakhali plant at a cost of at Tk 350 crore.
But the company later refused to take the contracts.
As the power plants will be fired by furnace oil, the generation cost of the plants will be higher and the government will need either to give the power board subsidy for selling the electricity to consumers or to increase the electricity price.
Thursday’s meeting of the purchase committee also approved the procurement of 50,000 tonnes of wheat at a cost of Tk 85.303 crore from a local importer and 50,000 more tonnes from another importer at a cost of Tk 73.90 crore.
It also approved the procurement of 20,000 tonnes of boiled rice at a cost of Tk 97.70 crore.

 

[CaPtAiN_pLaNeT]

I think for 2 50 MW peaking power plant 631 cror taka is really high.... can any one tell me why it is so... even when chinise companies are building it... n what is the spaciality of the peaking power plant... will we get any benifit of reducing operation cost or anything like that??

 

[TopCat]

I think for 2 50 MW peaking power plant 631 cror taka is really high.... can any one tell me why it is so... even when chinise companies are building it... n what is the spaciality of the peaking power plant... will we get any benifit of reducing operation cost or anything like that??

Does not matter as Govt is not paying for it. Govt will only pay for the power the buy from that company. Peaking plant will supply power only on peak hour or on demand. They will seat idle on off peak hour when we dont need any electricity.

 

[CaPtAiN_pLaNeT]

Does not matter as Govt is not paying for it. Govt will only pay for the power the buy from that company. Peaking plant will supply power only on peak hour or on demand. They will seat idle on off peak hour when we dont need any electricity.

When bangladesh has such a huge power crisis ... do you think that it will ever seat idle?? Bangladesh is producing only around 4500 MW power, whereas india is producing 150 K MW and pakistan is producing 18500 MW. If governmant is not paying for the construction of this company then who is paying for it???

 

[CaPtAiN_pLaNeT]

Steelmaker up for expansion as demand rises

Thursday, 22 July 2010 20:59

Steelmaker up for expansion as demand rises

Steelmaker up for expansion as demand rises



Sayeda Akter

BSRM Steels Ltd is set to expand its production capacity to meet growing local demand.

The company's capacity to make steel will be raised to five lakh tonnes a year from its present capacity of 3.56 lakh tonnes.

"The main reason behind the plan to go for expansion is the increasing demand for 500-grade rods in the local market. It will increase further when the government starts construction works by early 2011," said Ashiqur Rahman, the financial analyst of the company.

The company is likely to start expansion work in August on hopes of completing it by year-end, he said.

"We have completed almost all the primary groundwork, including finalising the cost of the new venture," he said.

"We plan to set up new rolling machines at our present plant to increase the production capacity by an addition 1.5 lakh tonnes annually," he said, adding that the machinery will be imported from Italy.

Initially, BSRM, the country's only 500-grade steel rod maker, plans to invest Tk 53 crore to expand the capacity at its present factory in Nasirabad, Chittagong.

Of the total cost, Agrani Bank will finance Tk 32 crore, and the company itself will finance the rest, Rahman said.

Currently, the local demand for steel rod stands at 25 lakh tonnes a year in a market of around Tk 12,000 crore, estimates industry insiders.

Five such companies produce rods and meet more than 95 percent of local demand.

Meanwhile, BSRM, the market leader in iron and steel manufacturing in Bangladesh, was placed in the A category, rising from the Z category, in the stock exchange on June 15, as the company gave 15 percent stock dividend to shareholders for 2009.

The company recorded profits worth Tk 57 crore in 2009, while annual turnover stood at Tk 1584.35 crore, said Rahman.

"We were able to enjoy profits last year because of price stability in both the local and international markets, and higher production," said the BSRM official.

"We had to work really hard to overcome the Tk 189 crore loss we incurred in 2008. The main reason behind the loss was the price of raw materials, mainly billets, which was much higher in the international market, compared to the local prices set by the caretaker government," he said.

Rahman said BSRM Steels, a concern of Bangladesh Steel Re-Rolling Mills Group of Companies, also has plans to export 500-grade rods to regional countries.

"But the entire plan depends on government approval. If the government okays it tomorrow, we can start immediately," he said.

The BSRM Group of Companies started its operations in 1952 in Chittagong, and BSRM Steels Ltd started commercial operations in April 2008.

BSRM Steels was listed on the capital market in January 2009.

sayeda@thedailystar.net

 

[CaPtAiN_pLaNeT]

Rupali, Khan Brothers sign deal

Thursday, 22 July 2010 20:59

Rupali, Khan Brothers sign deal

Rupali, Khan Brothers sign deal
Star Business Report

Khan Brothers Shipbuilding has signed a Tk 31.25 crore loan agreement with Rupali Bank to finance the shipbuilder's capacity building.

The money will help the shipbuilder construct its shipyard off Meghna river at a cost of Tk 71.80 crore on 100 acres.

The deal was signed between Rupali Bank Managing Director M Farid Uddin and Khan Brothers Group Managing Director Tofayel Kabir Khan at Dhaka Sheraton Hotel on Wednesday.

Bangladesh Bank Governor Atiur Rahman was present as chief guest.

Khan Brothers will make ships of 3,000 to 15,000 DWT (deadweight tonnage) capacity from its shipyard by processing 7,000 tonnes of steel.

The shipbuilder expects to earn around Tk 315.77 crore a year from ship exports, Rahman said.

The central bank chief added that Bangladeshi financial institutions should increase its negotiation skills to reduce the fees and commissions charged by its foreign counterparts for financial services, as the country has a good credit rating.

The sector will contribute to the national exchequer at a rate of nearly 3-4 percent of GDP by 2015, he added.

Industry people identify financing costs as the major obstacle for the sector, as the interest rate in the field is around 12-13 percent.

The central bank chief mentioned that Bangladesh Bank would create a special fund for the shipbuilding industry.

 

[CaPtAiN_pLaNeT]

Govt to upgrade Mongla port

Thursday, 22 July 2010 20:56

Govt to upgrade Mongla port

Govt to upgrade Mongla port
Unb, Bagerhat

Mongla port will be upgraded to international standard soon.

The government took the initiative to boost the country's economic growth, particularly in the south-western region.

An agreement to this effect has already been signed between the port authorities and David Wignal Associate, a Singapore-based consultancy for maritime industry.

Mongla Port Authority Chairman Commodore M Faruk said the consultancy firm is now carrying out feasibility study on the Tk 21,000 crore project.

The project works include construction of international standard jetty, a power generation plant, a water treatment plant, industrial park and container terminal.

As per the agreement, the project is scheduled to be complete within 2030.

---------- Post added at 10:57 PM ---------- Previous post was at 10:56 PM ----------

But 2030, do not you think it is a very long time for a project like this?

 

[bd_4_ever]

But still I believe 60 lac for pajero and 13 lac for sedan is too high for ordinary bangladeshi peoples. If at least the price of sedan can be reduced to 6/7 lac than it will be a great deal and many bd people will be able to afford those cars.

I think pragati group is still charging high as their production cost should be much less than outside. Regarding half price than the international version .... it is due to importing tax... is not it? Then what facility bangladeshi peoples are getting while producing this cars locally.... if low labour cost is not reflected in the selling price of the pajero and sedan.

Well, when a company is to start new production....it cannot provide cars at the cheapest price just for the reason that people cannot afford it....a term in economics says about 'optimum level of production', it is the lowest point a firm can ever reach that minimizes the cost of production to the maximum....it cannot be lower then that....hence, to reach that level a company need to keep producing and earn economies of scale along with profits....and in the meanwhile as you near that point, your cost of production tends to go down and therefore your price....

The import tax of raw material and labor are just two proportions of the total cost of production....they alone cannot account for the price of the product....other important factors such as heating/lighting, administrative cost, wages/salaries, transportation cost, maintenance are there too....and as i said, in future these cost will go down if company goes on well....have to wait and see....

I am quite sure 6/7 lakhs taka Sedan will come along too in 5-6 years time, given Pragoti performs well....and 13 lakhs for Sedan and 60 lakhs for Pajero, for the time being, is not a bad deal either....a normal middle class family can afford Sedan easily through savings and part payment or loan system....and Pajero will anyway be purchased by well-off families....


Cheers!!!

 

[bd_4_ever]

Govt to upgrade Mongla port

[/COLOR]But 2030, do not you think it is a very long time for a project like this?

Yes, agreed....i cannot precisely state the reasons simply because i dont know....but it could be that the work is being done at phases so that the normal duties of the port is not hampered while the development project is underway....

Look at the deep-sea port we will be building....experts say it will take 2015 to finish part part and around 2035 for the whole project (if i recall properly)....


Cheers!!!

 

[TopCat]

When bangladesh has such a huge power crisis ... do you think that it will ever seat idle?? Bangladesh is producing only around 4500 MW power, whereas india is producing 150 K MW and pakistan is producing 18500 MW. If governmant is not paying for the construction of this company then who is paying for it???

This is a private venture. The company itself will pay for it and sell the power to PDB.
I cant tell about the peak demand and the exact location of the plant by the time it comes into operation. Peaking contracts are in favor of PDB as PDB is not bound to pay for the idle time if it ever happens.

 

[bd_4_ever]

'Visit Bangladesh 2011’ targets to attract one million tourists


The government has targeted to attract one million tourists next year by implementing an aggressive tourism promotional campaign-'Visit Banglaesh-2011'.

"We are taking huge preparation for conducting promotional campaign at home and abroad next year targeting those foreign tourists, who are looking for new destinations of making holidays," Civil Aviation and Tourism Minister G M Quader told BSS on Thursday.

At present on an average four lakh foreign travelers visit Bangladesh in a year. The government has chosen the year 2011 to observe tourism year as one of the mega events of the earth - cricket world cup - will be hosted in the country this year, he said. "Initially, we have set a target of receiving one million foreign tourists during the tourism year 2011 and expecting more than two million afterwards," he said.

The Minister said Parjatan Corporation, the national tourism facilitating body, has already chalked out lots of events for round the year blending with traditional, cultural, tribal and religious festivals, he said. The year-long programme which will initially cost Taka 150 crore also includes staging of road shows and Bangladesh week in different countries as well as inviting foreign renowned international travel writers and journalists to visit Bangladesh. The promotional campaign for the tourist year would be conducted as public private partnership. "We are looking for private organizations for holding international standard events as well as conducting overseas promotional campaign," he added.

He said the tourism ministry has already selected more than 750 places as tourist spots and taken initiatives to develop infrastructure facilities there with the help of local government division. The ministry is actively considering for building some special tourist zones only for the foreigners with foreign investment, the minister added. The country has lots of tourist tempting treasures in terms of both natural beauty, culture, heritage and archeological aspects, he said, adding but "we have never conducted such huge international promotional campaign to attract travelers." "We have to spread the message among the foreigners that Bangladesh is enriched with many resources attractive to travelers," Quader said. Detailing the government's plan to boost up tourism sector, the Minister said the government has already formulated a national tourism policy and enacted two laws styled 'Bangladesh Reserved Areas for Tourism and Special Tourism Zones Act-2010' and 'Bangladesh Parjatan Board Act-2010'. The policy and the two laws will help us to establish a world standard planned and eco-friendly tourism in the country which could be served as one of the major foreign exchange earning sources of the country, he said.

Sources with the ministry said revenue earning from the sector was Taka 449.38 crore in 2005, Taka 553.6 crore in 2006, Taka 526.51 crore in 2007, Taka 612.45 crore in 2008 and Taka 573.79 crore in 2009.

The New Nation - Internet Edition

 

[Admal Keyani]

That is fantastic news.....looks like Bangladesh is getting strong day by day. A million tourists is a great milestone, keep up the good work.

 

[CaPtAiN_pLaNeT]

80pc power demand of country can be met using renewable energy: Expert

UNB, Dhaka

Around 80 per cent of the country's demand of electricity could be addressed by using renewable energy including solar and wind power systems, according to an expert.
"Germany and the Latin American countries including Cuba are now planning to generate 80 percent of their power by setting up renewable energy systems and we should consider these methods to address our ongoing power crisis," said Dr Sajed Kamal, a scientist and teacher of Brandeis University, Massachusetts in USA.
He was speaking at a seminar, titled 'Solar Energy Resource: Bangladesh's Un-utilizing Energy Storehouse', at Dhaka Reporters Unity (DRU) in the city on Friday.
Bangladesh Poribesh Andolan (BAPA) organized the seminar, which was chaired by former adviser of the caretaker government and BAPA vice-president Advocate Sultana Kamal.
Prof Dr Saiful Haque and Prof MM Akash of Dhaka University, and Engr Dr Khursedul Islam also spoke at the seminar.
Addressing the seminar as keynote speaker, Dr Sajed Kamal in a power point presentation displayed the technology used by the western countries for generating power from renewable sources. He said the entire world is now giving attention to generate power from renewable sources. "It is high time for us to make immediate plans to generate power from renewable sources."
He added: "Bangladesh has a great potential. We've huge solar and wind energy, but we never consider using these sources of energy to address our power demand."
Mentioning the reason for global warming, Dr Sajed Kamal said the global temperature has been rising gradually due to the use fossil energy all over the world.

http://www.thebangladeshtoday.com/back%20page.htm

 

[bd_4_ever]

Bangladesh to open more exchange houses in USA


The central bank has taken special measures to allow operation of more exchange houses in the United States in the backdrop of downward trend of remittance inflow from the world's biggest economy.

The flow of remittances witnessed a significant fall from the USA in the fiscal year that ended on June 30 following the global meltdown, officials said Saturday.

The inflow of remittance from the USA decreased by 7.83 per cent and stood at US$1.451 billion in 2009-10 (FY10) from $1.575 billion in the previous fiscal year, according to the central bank statistics.

"We expect that the inflow of remittances from the USA would increase in the current fiscal year as special measures have been taken by the central bank," a senior official of the Bangladesh Bank (BB) told the FE.

He also said the central bank has already issued licences to three private commercial banks (PCBs) for setting up exchange houses in the USA to expedite the flow of remittances from that country.

Three PCBs, which have already received permissions from the central bank, are the EXIM Bank Ltd, Standard Bank Ltd and Shahjalal Islami Bank Ltd.

"We're now working to set up our exchange house in the USA," a senior official of the Standard Bank told the FE, adding that the new exchange house is expected to be opened after the Eid-ul-Fitr festival, due in mid-September.

The two other PCBs are also working to establish their exchange houses in the USA within a couple of months, officials of the PCBs said, adding that they have already completed most of the formalities in this connection.

"We're now securitising four more PCBs' applications seeking permission to set up exchange houses in the USA," the BB official said without elaborating.

Local banks have also been allowed to sign drawing arrangement deals with selective money transfer companies to facilitate the flow of remittances from the USA, the central bank official added.

Saudi Arabia topped the list of major sources of remittance for Bangladesh with a total of $3.427 billion in FY 10, the BB's data showed.

"The flow of inward remittances from the Middle-East countries is still at a satisfactory level despite the global meltdown," another BB official said.

The United Arab Emirates, the USA, Qatar, Oman, Bahrain, Kuwait, the United Kingdom, Japan, Germany, Australia, Malaysia, Singapore and South Korea are among the other top sources of remittance.

Remittances sent by Bangladeshis working abroad reached a record amount of $10.987 billion in FY10, marking a 13.40 per cent growth over the last fiscal year.

Bangladesh to open more exchange houses in USA