Japanese firms mull ‘shifting’ production from China to Bangladesh

[Black_cats]

Japanese firms mull ‘shifting’ production from China to Bangladesh

Bangladesh Sangbad Sangstha . Dhaka | Published: 22:01, Mar 07,2020

https://www.newagebd.net/article/10...-shifting-production-from-china-to-bangladesh

The Japan Bangladesh Chamber of Commerce and Industry on Saturday observed that some Japanese companies were considering shifting of production from China to other countries, including Bangladesh.

The joint-chamber made the observation at the 10th Networking Gathering of JBCCI, hosted by Conveyor Logistics Limited, at Lakeshore Hotel in the capital, said a press release.

Japanese ambassador to Bangladesh Naoki Ito attended the programme as the chief guest while JBCCI president Yuji Ando spoke on the occasion. Ito said that Japanese companies were showing interest in investing in Bangladesh to expand their businesses.

‘Currently, 310 Japanese companies are operating in Bangladesh. The number will increase if the issues with bureaucracy and taxation policies become smoother and government officials become more cooperative towards foreign investors,’ he added.

He believed that the years 2020-2024 were very important for Bangladesh as mega projects, like Metro Rail, Padma Bridge and Matarbari deep-sea port, will be completed during the time.

Ando said that some Japanese companies were considering shifting of production from China to other countries, including Bangladesh.

‘Logistics is one of the most important issues. That’s because the supply chain is based on good logistic networks. Coronavirus is the biggest concern in the world now and it is having huge impact on the global supply chain. We can understand that transportation and logistics are the key factors for realising international businesses,’ he said.

He said that Bangladesh had to prepare for improving the logistic environment, rules and regulations for the next five years.

‘In this regard, we need the support from all members to urge the government to remove the bottlenecks in the logistic sector,’ he added.

JBCCI treasurer Hideaki and secretary general Tareq Rafi Bhuiyan were present, among others, on the occasion.

 

[bafxet]

Japanese firms mull ‘shifting’ production from China to Bangladesh

Bangladesh Sangbad Sangstha . Dhaka | Published: 22:01, Mar 07,2020

https://www.newagebd.net/article/10...-shifting-production-from-china-to-bangladesh

The Japan Bangladesh Chamber of Commerce and Industry on Saturday observed that some Japanese companies were considering shifting of production from China to other countries, including Bangladesh.

The joint-chamber made the observation at the 10th Networking Gathering of JBCCI, hosted by Conveyor Logistics Limited, at Lakeshore Hotel in the capital, said a press release.

Japanese ambassador to Bangladesh Naoki Ito attended the programme as the chief guest while JBCCI president Yuji Ando spoke on the occasion. Ito said that Japanese companies were showing interest in investing in Bangladesh to expand their businesses.

‘Currently, 310 Japanese companies are operating in Bangladesh. The number will increase if the issues with bureaucracy and taxation policies become smoother and government officials become more cooperative towards foreign investors,’ he added.

He believed that the years 2020-2024 were very important for Bangladesh as mega projects, like Metro Rail, Padma Bridge and Matarbari deep-sea port, will be completed during the time.

Ando said that some Japanese companies were considering shifting of production from China to other countries, including Bangladesh.

‘Logistics is one of the most important issues. That’s because the supply chain is based on good logistic networks. Coronavirus is the biggest concern in the world now and it is having huge impact on the global supply chain. We can understand that transportation and logistics are the key factors for realising international businesses,’ he said.

He said that Bangladesh had to prepare for improving the logistic environment, rules and regulations for the next five years.

‘In this regard, we need the support from all members to urge the government to remove the bottlenecks in the logistic sector,’ he added.

JBCCI treasurer Hideaki and secretary general Tareq Rafi Bhuiyan were present, among others, on the occasion.

There consideration is a big thing let alone moving

 

[beijingwalker]

Toyota planning $1.84 billion Chinese electric car factory
1 March 2020 AT 18:26
Toyota has plans to increase its electric vehicle production capacity by constructing a ¥8.5 billion (AU$1.84 billion) electric car plant in China.

According to a report from Reuters, the plant – which should see a production output of 200,000 ‘new energy vehicles’ yearly – is set to be built in the Tianjin municipality in collaboration with Toyota’s local partner, FAW Group.

FAW Group is a Chinese state-owned carmaker that has entered into joint ventures with Audi, General Motors and Volkswagen to produce their models for Chinese markets.

The new factory will produce plug-in hybrid, full-electric and fuel-cell system vehicles.

FAW Toyota is already responsible for producing models including the Avalon, Corolla, Crown, IZOA and Vios in Tianjin.

Toyota is also part of a joint venture with Chinese carmaker GAC, which produces a hybrid Levin (Corolla).

Toyota’s investment in the plant follows last week’s announcement that the Japanese marque has invested AU$607 million in a Chinese-backed autonomous driving startup.

https://www.caradvice.com.au/831879/toyota-electric-car-factory-china/

 

[Bilal9]

Toyota planning $1.84 billion Chinese electric car factory
1 March 2020 AT 18:26
Toyota has plans to increase its electric vehicle production capacity by constructing a ¥8.5 billion (AU$1.84 billion) electric car plant in China.

According to a report from Reuters, the plant – which should see a production output of 200,000 ‘new energy vehicles’ yearly – is set to be built in the Tianjin municipality in collaboration with Toyota’s local partner, FAW Group.

FAW Group is a Chinese state-owned carmaker that has entered into joint ventures with Audi, General Motors and Volkswagen to produce their models for Chinese markets.

The new factory will produce plug-in hybrid, full-electric and fuel-cell system vehicles.

FAW Toyota is already responsible for producing models including the Avalon, Corolla, Crown, IZOA and Vios in Tianjin.

Toyota is also part of a joint venture with Chinese carmaker GAC, which produces a hybrid Levin (Corolla).

Toyota’s investment in the plant follows last week’s announcement that the Japanese marque has invested AU$607 million in a Chinese-backed autonomous driving startup.

https://www.caradvice.com.au/831879/toyota-electric-car-factory-china/

No one is positing that high grade industry like Auto manufacturing or transportation related items (Railways and other heavy industrial manufacturing) will move from China to Bangladesh.

We neither have the local demand, nor is it the right stage of industrial development for auto assembly or heavy industrial exports.

Plus we are acutely aware of what happened to India (loss of local demand plus auto industry shrinkage of around 35% last year) which devastated their industrial development. Forget 'Make in India' for a while.

However low grade stuff like electronics, car parts, light engineering stuff, light metal working industry IS RIPE FOR A MOVE from China to places like Bangladesh. These labor cost sensitive industries have a large part of the margin in labor cost component.

Plus logistics in Bangladesh is no worse than any low wage economy like Vietnam or Cambodia.

China's Labor cost is already higher than a lot of saturated ASEAN economies like for example Thailand and Malaysia. For countries like Japan - it is a simple decision.

Labor cost in Bangladesh is less than one third that of China and about one-half that of India, even for low grade assembly labor. I've been involved in this sector for a while now...look at where Bangladesh is compared to similar low wage economies.

 

[beijingwalker]

No one is positing that high grade industry like Auto manufacturing will move from China to Bangladesh.

However low grade stuff like electronics, car parts, light engineering stuff, light metal working industry IS RIPE FOR A MOVE.

China's Labor cost is already higher than a lot of saturated ASEAN economies like for example Thailand and Malaysia.

Labor cost in Bangladesh is less than one third that of China and about one-half that of India, even for low grade assembly labor. I've been involved in this sector for a while now...look at where Bangladesh is compared to similar low wage economies.

Labor cost is just a part of the total cost of a product, other factors are equally sinificant, products made in China are still much cheaper than those made in India, even labor cost in China is much higher.

U.N. says Chinese parts shortage caused $50 billion fall in February's global exports
E.U., U.S. and Japan hit the hardest downstream
Asked whether manufacturers might shift to diversify suppliers, Nicita said: "In the short term, no. Because it takes a while to identify new suppliers. In the long term, probably yes."

China has built a huge logistics transport network including ports, shipping lanes and airplanes to move its goods, he said.

https://www.autoblog.com/2020/03/06/china-parts-shortage-global-exports-fall/

 

[Bilal9]

Labor cost is just a part of the total cost of a product, other factors are equally sinificant, products made in China are still much cheap than those made in India, even labor cost in China is much higher.

Cheaper cost in China is a combined effect of deliberate devaluation of the Yuan to encourage exports plus efficiency of logistics and internal raw material sourcing (obviating the need for back-to-back L/C's and associated delays). Both of which India can never claim. So Indian products will always cost more than Chinese products. Indian economy is and will be a protectionist self-feeding economy. Their efficiency in exports is not high and their industrialists do not see a huge future in it.

Logistics infrastructure for exports in Bangladesh (I can personally claim) is a bit better than India and partially modeled after China, though maybe not as efficient - yet. India has its own issues such as intra-state red tape which costs them weeks to carry goods to their ports.

Larger Export processing zones (SEZ's) in Bangladesh are all located across coastal areas and within a few miles of the large ports. The SEZ's were deliberately planned that way to drive down transport delay and costs.

 

[mmr]

Toyota planning $1.84 billion Chinese electric car factory
1 March 2020 AT 18:26
Toyota has plans to increase its electric vehicle production capacity by constructing a ¥8.5 billion (AU$1.84 billion) electric car plant in China.

According to a report from Reuters, the plant – which should see a production output of 200,000 ‘new energy vehicles’ yearly – is set to be built in the Tianjin municipality in collaboration with Toyota’s local partner, FAW Group.

FAW Group is a Chinese state-owned carmaker that has entered into joint ventures with Audi, General Motors and Volkswagen to produce their models for Chinese markets.

The new factory will produce plug-in hybrid, full-electric and fuel-cell system vehicles.

FAW Toyota is already responsible for producing models including the Avalon, Corolla, Crown, IZOA and Vios in Tianjin.

Toyota is also part of a joint venture with Chinese carmaker GAC, which produces a hybrid Levin (Corolla).

Toyota’s investment in the plant follows last week’s announcement that the Japanese marque has invested AU$607 million in a Chinese-backed autonomous driving startup.

https://www.caradvice.com.au/831879/toyota-electric-car-factory-china/

No one believes western annoying media. They keep bla bla for so many years that china is doomed. Reality is there are no alternatives so weather western countries like it or not china will remain manufacturing power house.

About Bangladesh what we are getting is industries that are low value manufacturing from china. And it wont change suddenly.

 

[beijingwalker]

No one believes western annoying media. They keep bla bla for so many years that china is doomed. Reality is there are no alternatives so weather western countries like it or not china will remain manufacturing power house.

About Bangladesh what we are getting is industries that are low value manufacturing from china. And it wont change suddenly.

I m pretty sure that we will help you more than Japan to achieve your goal

China top investor with $1.03 billion

Bangladesh received a record $3.61 billion last year as Foreign Direct Investment (FDI), up by 67.94% more than in 2017, thanks to various steps the government has taken to attract new investments.

While China became the leading investor in the country with $1.03 billion, the United States, traditionally the top investor, dropped to fourth with only $174 million in FDI for 2018 in Bangladesh.

The Netherlands invested the second largest amount of $692 million, and the United Kingdom was the third highest at $371 million.

Disclosing the data at a press briefing on Thursday, Bangladesh Investment Development Authority (BIDA) Executive Chairman, Kazi M Aminul Islam, also said that Bangladesh received $2.15 billion as FDI in 2017.

“It’s a record,” he said, referring to the $3.61 billion received as FDI last year.

He said the power sector alone had attracted investments worth $1.01 billion, where China contributed $834 million, followed by $730 million in the food sector, and $430 million in the textile sector.

Regarding the downtrend of US FDI in Bangladesh, Aminul said: “The US government has cut tax rates for businesses in the US, and that has encouraged them to invest in their own country.”

The government of Bangladesh over the past few years has taken various initiatives, such as policy reforms, removing infrastructural deficiencies and creating a positive business environment to encourage more investment, and that has paid off.

https://www.dhakatribune.com/business/2019/05/09/fdi-rises-by-67-in-2018

 

[mmr]

I m pretty sure that we will help you more than Japan to achieve your goal

China top investor with $1.03 billion

Bangladesh received a record $3.61 billion last year as Foreign Direct Investment (FDI), up by 67.94% more than in 2017, thanks to various steps the government has taken to attract new investments.

While China became the leading investor in the country with $1.03 billion, the United States, traditionally the top investor, dropped to fourth with only $174 million in FDI for 2018 in Bangladesh.

The Netherlands invested the second largest amount of $692 million, and the United Kingdom was the third highest at $371 million.

Disclosing the data at a press briefing on Thursday, Bangladesh Investment Development Authority (BIDA) Executive Chairman, Kazi M Aminul Islam, also said that Bangladesh received $2.15 billion as FDI in 2017.

“It’s a record,” he said, referring to the $3.61 billion received as FDI last year.

He said the power sector alone had attracted investments worth $1.01 billion, where China contributed $834 million, followed by $730 million in the food sector, and $430 million in the textile sector.

Regarding the downtrend of US FDI in Bangladesh, Aminul said: “The US government has cut tax rates for businesses in the US, and that has encouraged them to invest in their own country.”

The government of Bangladesh over the past few years has taken various initiatives, such as policy reforms, removing infrastructural deficiencies and creating a positive business environment to encourage more investment, and that has paid off.

https://www.dhakatribune.com/business/2019/05/09/fdi-rises-by-67-in-2018

Not surprise. This will keep keep going up over the years.

 

[UKBengali]

No one is positing that high grade industry like Auto manufacturing or transportation related items (Railways and other heavy industrial manufacturing) will move from China to Bangladesh.

We neither have the local demand, nor is it the right stage of industrial development for auto assembly or heavy industrial exports.

Plus we are acutely aware of what happened to India (loss of local demand plus auto industry shrinkage of around 35% last year) which devastated their industrial development. Forget 'Make in India' for a while.

However low grade stuff like electronics, car parts, light engineering stuff, light metal working industry IS RIPE FOR A MOVE from China to places like Bangladesh. These labor cost sensitive industries have a large part of the margin in labor cost component.

Plus logistics in Bangladesh is no worse than any low wage economy like Vietnam or Cambodia.

China's Labor cost is already higher than a lot of saturated ASEAN economies like for example Thailand and Malaysia. For countries like Japan - it is a simple decision.

Labor cost in Bangladesh is less than one third that of China and about one-half that of India, even for low grade assembly labor. I've been involved in this sector for a while now...look at where Bangladesh is compared to similar low wage economies.

Bhai, good post but I think you are putting information that portrays BD as being a dirt-cheap sweatshop.

BD does not technically have a minimum wage across all sectors but it is now 95 US dollars a month in garments.
Agricultural workers earn 7 US dollars a day which is more than in lots of parts of India.

BD is not competing with India on labour costs but on infrastructure, skills and political stability now.

The days of BD being a dirt-cheap sweatshop are long gone.

 

[Bilal9]

Bhai, good post but I think you are putting information that portrays BD as being a dirt-cheap sweatshop.

BD does not technically have a minimum wage across all sectors but it is now 95 US dollars a month in garments.
Agricultural workers earn 7 US dollars a day which is more than in lots of parts of India.

BD is not competing with India on labour costs but on infrastructure, skills and political stability now.

The days of BD being a dirt-cheap sweatshop are long gone.

You are right. I may be back-dating some things and portraying Bangladesh as a sweatshop. Which was not my intent - but it did end up sounding that way.

Labor cost is one of the main factors in production and export of electronics, car parts, light engineering stuff, light metal working industry which has so far been overlooked in attracting FDI by local govt. outfits like BEPZA and BIDA. Our labor cost for producing these has indeed gone up, but so has that of other countries. So we are in a competitive spot.

We need to move beyond export and clothes and shoes, and the logical next step is assembly and export of electronics (TV's/aircons/cellphones/other electronics assembly) and light engineering items (motorcycles, bicycles, car parts, DIY hand tools such as hammers/socket-sets/wrenches, manual tool-sets like saws/pliers, electric drills/grinders, Aluminum/steel cookware, small engine driven implements like generators etc.).

These two sectors were the driving force for China's development beyond clothes/shoes and the demand for these are un-ending and ever-increasing. Quality is a factor for these sectors, but demand for lower cost is also highly critical. People in first world countries like the US/Canada/UK/EU are looking for the 'next China' at another lower cost-level and we need to ensure that we train our workforce properly to take on that role which China will be abandoning at some point soon.

The other identified Bangladesh export-thrust-sectors such as IT backoffice support, software development, shipbuilding, pharma and ceramics are also important - but their demand fluctuates and it will be a tougher slog uphill because you have regional competition from other countries who have been at this game longer (China is again the 800 pound Gorilla in these sectors as well, except in IT/Pharma which is where India is leading still).