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Bangladesh on course to be self-reliant in smartphone manufacturing
TELECOM
Abbas Uddin Noyon & Shahadat Hossain Chowdhury
29 November, 2020, 12:00 pm
Last modified: 29 November, 2020, 01:03 pm
tbsnews.net
Almost all big brands have set up manufacturing and assembling units in Bangladesh over the past few years
With a drastic fall in smartphone imports and a substantial rise in spare parts and accessories imports in the last three years, Bangladesh is on the way to achieve self-sufficiency in smartphone manufacturing, industry players say.
According to Bangladesh Mobile Phone Importers Association (BMPIA), until October this year, 9.5 lakh smartphones were imported, down from 81.68 lakh in 2017. In 2019, 24 lakh smartphones were imported.
On the other hand, spare parts imports through the customs increased from Tk101 crore in the fiscal year 2017-18 to over Tk419 crore in the fiscal year 2019-20, Chattogram Custom House figures show.
Chattogram Custom House Commissioner M Fakhrul Alam tells The Business Standard like the past few years, mobile parts and accessories imports increased in the current fiscal year as well while phone imports plummeted.
Mobile accessories worth Tk24 crore in FY19 and Tk38 crore in FY20 were imported through Chattogram customs. Besides, in FY20, a large amount of batteries, including coils worth Tk29 crore, were imported through the customs.
Industry insiders say almost all big brands have set up phone manufacturing and assembling units in Bangladesh over the past few years due to tax holiday and VAT exemption on local production as well as tariff imposed on handset imports to reduce import dependency.
Manufacturers say 10 brands, including Samsung, Symphony, Itel, Techno, Oppo, Vivo, Realme, Walton and Winster, now have factories in Bangladesh. They are manufacturing and assembling phones that meet 75% of the local demand whereas imported phones dominated the market a few years ago.
Bangladesh Mobile Phone Business Association (BMBA) President Mohammad Nizam Uddin Jitu says most of the companies have set up factories in Bangladesh due to the tax structure of the government.
"As phones are assembled here, all brands are now importing parts and accessories instead of devices. Direct importers are also facing some obstacles due to the Covid-19 pandemic."
According to BMPIA, Bangladesh has an annual demand for 3.5 crore new handsets. Of them, 90 lakh are smartphones and 2.6 crore are feature phones.
At present, factories in Bangladesh are supplying more than 75 lakh phones. However, a large volume of feature phones is still imported.
BMPIA Joint General Secretary Mohammed Mesbah Uddin, also the chief marketing officer of Fair Group which manufactures Samsung phones in Bangladesh, says Samsung, which sells about 10 lakh smartphones a year in Bangladeshi market, is assembling 94% of its products at its Narsingdi factory.
He tells The Business Standard smartphone imports decreased by more than 50% in a year due to the increase in manufacturing in the country.
Bangladesh will be self-sufficient in smartphone manufacturing within the next two years, says Mesbah.
"When we reach that stage, we do not need to import phones anymore. Instead, Bangladesh will be able to earn foreign currency by exporting smartphones within two years."
Mesbah says the mobile phone sector, which once was dependent on imports, needs to be given more opportunities to set up new factories. "Then it will become export-oriented.
Tax and VAT on internet use and phone manufacturing should be reduced further. It will help earn foreign currency and increase employment as well."
Uday Hakim, executive director of the country's largest mobile phone manufacturer Walton Digi-Tech Industries, says his company stopped importing handsets since it started manufacturing them in 2018.
At present, the Walton factory has the capacity to produce eight lakh smartphones and 20 lakh feature phones per month, he says.
Walton sold 12.01 lakh smartphones and 41.76 lakh feature phones in 2019. In addition to producing handsets, Walton also manufactures mobile accessories, such as parts, chargers, batteries, earphones, printed circuit boards, and USB cables.
Walton recently produced 10 lakh chargers, six lakh batteries and six lakh earphones, Hakim adds.
Bangladesh Mobile Phone Manufacturing Association former secretary Rezwanul Haque tells The Business Standard policy supports spur growth of industries in all countries and the Bangladesh government has also given the same facility.
The change in Bangladesh began in 2017-18, he says.
"The government first introduced a tax policy for local assemblers in 2017-18 and it was revised in 2018-19 and 2019-20 budgets.
"Currently, there is a 57% tax on smartphone imports, and 32% on basic and feature phones. On the other hand, taxes for locally assembled and manufactured handsets are 18% and 13% respectively," he adds.
Dewan Kanon, chief executive officer of Solar Electro Bangladesh Limited, importer and distributor of Xiaomi phones in Bangladesh, tells The Business Standard the country has about 50% more demand for mobile phones than what is currently manufactured.
"People are leaving feature phones and increasingly buying smartphones. As a result, there is a big potential for phone manufacturers in Bangladesh. More government patronage is needed in this regard."
TELECOM
Abbas Uddin Noyon & Shahadat Hossain Chowdhury
29 November, 2020, 12:00 pm
Last modified: 29 November, 2020, 01:03 pm
Bangladesh on course to be self-reliant in smartphone manufacturing
Almost all big brands have set up manufacturing and assembling units in Bangladesh over the past few years
Almost all big brands have set up manufacturing and assembling units in Bangladesh over the past few years
With a drastic fall in smartphone imports and a substantial rise in spare parts and accessories imports in the last three years, Bangladesh is on the way to achieve self-sufficiency in smartphone manufacturing, industry players say.
According to Bangladesh Mobile Phone Importers Association (BMPIA), until October this year, 9.5 lakh smartphones were imported, down from 81.68 lakh in 2017. In 2019, 24 lakh smartphones were imported.
On the other hand, spare parts imports through the customs increased from Tk101 crore in the fiscal year 2017-18 to over Tk419 crore in the fiscal year 2019-20, Chattogram Custom House figures show.
Chattogram Custom House Commissioner M Fakhrul Alam tells The Business Standard like the past few years, mobile parts and accessories imports increased in the current fiscal year as well while phone imports plummeted.
Mobile accessories worth Tk24 crore in FY19 and Tk38 crore in FY20 were imported through Chattogram customs. Besides, in FY20, a large amount of batteries, including coils worth Tk29 crore, were imported through the customs.
Industry insiders say almost all big brands have set up phone manufacturing and assembling units in Bangladesh over the past few years due to tax holiday and VAT exemption on local production as well as tariff imposed on handset imports to reduce import dependency.
Manufacturers say 10 brands, including Samsung, Symphony, Itel, Techno, Oppo, Vivo, Realme, Walton and Winster, now have factories in Bangladesh. They are manufacturing and assembling phones that meet 75% of the local demand whereas imported phones dominated the market a few years ago.
Bangladesh Mobile Phone Business Association (BMBA) President Mohammad Nizam Uddin Jitu says most of the companies have set up factories in Bangladesh due to the tax structure of the government.
"As phones are assembled here, all brands are now importing parts and accessories instead of devices. Direct importers are also facing some obstacles due to the Covid-19 pandemic."
According to BMPIA, Bangladesh has an annual demand for 3.5 crore new handsets. Of them, 90 lakh are smartphones and 2.6 crore are feature phones.
At present, factories in Bangladesh are supplying more than 75 lakh phones. However, a large volume of feature phones is still imported.
BMPIA Joint General Secretary Mohammed Mesbah Uddin, also the chief marketing officer of Fair Group which manufactures Samsung phones in Bangladesh, says Samsung, which sells about 10 lakh smartphones a year in Bangladeshi market, is assembling 94% of its products at its Narsingdi factory.
He tells The Business Standard smartphone imports decreased by more than 50% in a year due to the increase in manufacturing in the country.
Bangladesh will be self-sufficient in smartphone manufacturing within the next two years, says Mesbah.
"When we reach that stage, we do not need to import phones anymore. Instead, Bangladesh will be able to earn foreign currency by exporting smartphones within two years."
Mesbah says the mobile phone sector, which once was dependent on imports, needs to be given more opportunities to set up new factories. "Then it will become export-oriented.
Tax and VAT on internet use and phone manufacturing should be reduced further. It will help earn foreign currency and increase employment as well."
Uday Hakim, executive director of the country's largest mobile phone manufacturer Walton Digi-Tech Industries, says his company stopped importing handsets since it started manufacturing them in 2018.
At present, the Walton factory has the capacity to produce eight lakh smartphones and 20 lakh feature phones per month, he says.
Walton sold 12.01 lakh smartphones and 41.76 lakh feature phones in 2019. In addition to producing handsets, Walton also manufactures mobile accessories, such as parts, chargers, batteries, earphones, printed circuit boards, and USB cables.
Walton recently produced 10 lakh chargers, six lakh batteries and six lakh earphones, Hakim adds.
Bangladesh Mobile Phone Manufacturing Association former secretary Rezwanul Haque tells The Business Standard policy supports spur growth of industries in all countries and the Bangladesh government has also given the same facility.
The change in Bangladesh began in 2017-18, he says.
"The government first introduced a tax policy for local assemblers in 2017-18 and it was revised in 2018-19 and 2019-20 budgets.
"Currently, there is a 57% tax on smartphone imports, and 32% on basic and feature phones. On the other hand, taxes for locally assembled and manufactured handsets are 18% and 13% respectively," he adds.
Dewan Kanon, chief executive officer of Solar Electro Bangladesh Limited, importer and distributor of Xiaomi phones in Bangladesh, tells The Business Standard the country has about 50% more demand for mobile phones than what is currently manufactured.
"People are leaving feature phones and increasingly buying smartphones. As a result, there is a big potential for phone manufacturers in Bangladesh. More government patronage is needed in this regard."
