Made in Bangladesh

[damiendehorn]

RMG (both knit and weave) still has growth potential from the current $25bn to around $50bn by 2022, after which we will need to look at increasing the vaue added element including building our own brands. I expect the real growth areas to be leather (footwear, accessories, furniture etc) and white goods. At the rate our exports are growing 8%-9% GDP growth should be easily do-able.

 

[Bilal9]

The Picard Company: in Bangladesh to Stay, by Marianne Scholte

The increasing shift of manufacturing jobs from Europe and North America to developing countries since the 1970s has been an extremely painful transition and has been roundly condemned. Well-paying jobs were destroyed in the West, and production was moved to factories in developing countries, often with low wages and poor social compliance. However, the Picard Company has shown that hardheaded price calculations can go hand in hand with socially responsible business practices.


Saiful Islam inspects the kindergarten at Picard Bangladesh.

Saiful Islam, the Managing Director of Picard Bangladesh Ltd., likes to tell the story of the day that ‘child labour’ was discovered at his leather goods factory in Savar, outside the capital city of Dhaka. It was one day early in 2012, just as he was returning from lunch. He spotted a photographer outside the perimeter taking pictures of children playing in the yard and immediately understood what was up.

He approached the photographer and said, ‘You are looking for child labour? Let me take you inside and show you.’ The alarmed photographer tried to back away, anticipating that he might be roughed up, but Islam reassured the frightened man that he was in no danger and escorted him to the factory’s kindergarten. The photographer dutifully filmed the after-school care for 40-50 children and all-day childcare for 32 children, but of course the pictures were never shown on television. Evidence of a Bangladeshi entrepreneur doing something right doesn’t fit the story line we have come to expect.

Picard Bangladesh, however, has been defying convention wisdom about the exploitative nature of overseas production since it was established in 1997. Picard Bangladesh is a joint venture between Saiful Islam, who before then had been working in his family’s readymade garment business in Bangladesh, and the Picard Company in Obertshausen, Germany, which sells its high quality leather bags across Europe and Asia.

Unlike most leather goods firms, the Picard Company was not interested in simply sourcing bags overseas; the company had been both manufacturer and retailer since Martin Picard started the family business with his sons, Edmund and Alois in 1928. By the end of the 1960s, the company had four factories in Germany with over 1000 workers.

But, as Thomas Picard, the Director of Picard Germany, explains, ‘Then the big buyers – Neckermann, Karstadt, Kaufhof, Horton and Hertie – went to South America, Korea, Taiwan, Hong Kong, and began to buy there. Our production had no chance against this competition. We tried, but it was hopeless. In 1976 we opened our first overseas production facility in Tunisia. We simply moved what we had in our Spessart factory to Tunisia – with a German manager and everything. And we worked there just like we had always worked here.’

The next expansion was to China, in 1982. And then in 1995, Thomas Picard started looking for a partner in Bangladesh. Picard: ‘It was clear to me already in 1995 that China would close down at some point. It got too expensive and too complicated – too many requirements, too many demands.’ A mutual acquaintance, Franz Bauer from the Offenbach University of Art and Design, who conducted leather bag design and production training in Bangladesh, brought the two men together.


Amrita Islam’s husband, Ibnul Wara, has also been deeply involved in efforts to open up new markets for Picard Bangladesh. Wara runs Austan, a tannery in the Dhaka Export Processing Zone in Savar, which the family bought five years ago. Austan manufactures about 300,000 square feet of processed leather a month, 50% of which goes to Picard Bangladesh.

However, both Amrita Islam and Ibnul Wara are concerned with far more than just expanding the family business. They want the Bangladesh leather sector to seize the present opportunity to dramatically increase the value addition of their leather exports by moving away from the export of leather crusts towards more manufacture and export of leather goods.

As Wara explains, ‘Our leather sector is growing at an astonishing rate. We recently reached the one billion dollar mark…if we address environmental and social compliance, we can easily turn this into a five billion dollar sector. But will depend to a considerable degree on government policies. The sector needs urgently to deal with the huge chemical and environmental issues all along the supply chain.’

The Dhaka Export Processing Zone, where Austan is located, has a central effluent treatment plant and stringent environmental standards. However most of the tanneries are located in Hazaribagh, where they work under notoriously toxic conditions. The government plans to relocate the tanneries to a new site in Savar with a central effluent treatment plant. Although this discussion has been going on for 15 years, Wara believes this is actually, finally happening.

But beyond that, as Wara points out, policy changes are also required: ‘At this point, Bangladesh is exporting a major part of our leather in the form of crusts to Korea, to Italy, etc. However, if Bangladesh leather goods continue to grow…the tanneries must be encouraged to sell more to the local manufacturers – or we will be forced to buy the same raw material from overseas at a higher price. It is a matter of the export incentives – the government pays the tanneries a certain percentage of the value of the crusts when they export…the export incentives need to be adjusted.’

While Amrita Islam and Wara are focused on tapping the development potential of Bangladesh’s leather sector, Saiful Islam remains focused on taking care of workers and addressing their needs. As he says, ‘…from day one, Picard insisted that we had to take care of the people…we had a good understanding about compliance from the beginning. For the last 18 years we have not had a single case in the labor court…We have a lot of loyalty; we have a number of people who have been here for the last 18 years! We offer social protection programs: life insurance, a health policy, a provident fund and the gratuity – after you work here for five years, you get a one-month bonus every year, in other words, 13 months of wages every year. That is a big deal.'



At present, Islam is searching for ways to address the critical shortage of housing for workers and the corresponding exorbitant rents. As he explains, ‘ I am really unhappy about the fact that 50% of their earnings go for rent and every year after our workers get a pay raise, the rent is increased. And I am really unhappy that there is no proposal coming from the side of the entrepreneurs. They are always demanding that the government provide the dormitories. But the government does not have much money. Why haven’t we formed a public-private partnership to address this problem in the industrial hub in Savar and Gazipur? …if there is no participation from the private sector, we are only taking and not giving anything back.’

Islam has been talking to landlords and inspecting dormitories and has come up with a plan. Picard Bangladesh will sign a contract with a landlord, insisting on certain basic standards including electricity and drinking water 24 hours a day, a good sanitation system, a good kitchen, etc. The contract will run for five years, with no rent increase for 2.5 years, when a 10% increase will be permitted. The pilot project will be implemented at the new factory.
Is all this exploitation? Picard is in Bangladesh because of the low wages. As Thomas Picard says, ‘[Bangladesh] is chaotic, but that is also what makes it viable...It is a developing country and – one has to say this honestly – this is why production prices are low.’

So, how does Picard respond if someone accuses him of moving jobs abroad to produce under exploitative conditions?
Picard: ‘There are two aspects: one is the shift of production overseas and the loss of jobs in Germany. In that case, there is a very simple answer: If we had not done this, we would no longer exist. The 200 people in Germany working for us now would not have jobs with us. Moving abroad was a life saver for the company.’

‘The second aspect is that of “exploitation” abroad. We pay wages that are appropriate in the country. So no one can say that we exploit the country. In fact, we are actually taking the country forward. We gave them our knowhow for free. We weren’t paid anything for that. The people who are trained in our factory can open a business or work in another factory. We have good technicians who are wooed away by other firms offering more money – three times as much. This is the normal development and will surely increase…The country is dynamic…The people are getting more education. Employment opportunities are increasing. The country will continue to develop.’

In addition to his involvement with Picard Bangladesh, Thomas Picard also supports the BGS School in Tangail, Bangladesh – a boarding school for poor young men and women between 16 and 18 who are not able to continue their education but want to learn a trade. Picard and his brother bought all new machines for the workshops, and they continue to finance the school’s operations.


Picard: ‘After a number of years in Bangladesh, we earned some money and I was looking for ways to use those profits for the country.’ Or as Amrita puts it, ‘[the Picard family] want to do good…If you want to do good, you will end up benefiting the lives of the people you touch.’

RMG (both knit and weave) still has growth potential from the current $25bn to around $50bn by 2022, after which we will need to look at increasing the vaue added element including building our own brands. I expect the real growth areas to be leather (footwear, accessories, furniture etc) and white goods. At the rate our exports are growing 8%-9% GDP growth should be easily do-able.

I have to agree.

Non-leather Athletic Footwear sector is already huge due to the Korean/Chinese investor factories (like Indonesia and Vietnam). Leather exports including leather shoes exceeded one billion in exports last year. I had predicted long ago that footwear would be the next garments sector in Bangladesh because it uses the same production methods until you glue and slap on the sole....

Footwear export (all varieties including athletic) compares favorably to long term players like Indonesia which is the largest source...there's plenty of room to grow as half of the planned SEZ's haven't started yet. Indonesia doubled their shoe exports in just five years and those five were 'eventful' and disruptive to say the least....

Indonesian Footwear/Shoe Exports 2010-2015:

Year--------Shoe Exports -------- YoY Growth
2015--------$4.7 billion---------------+7%
2014--------$4.4 billion---------------+13%
2013--------$3.9 billion---------------+11%
2012--------$3.5 billion---------------+6%
2011--------$3.3 billion---------------+32%
2010--------$2.5 billion---------------N/A

Source: Indonesian Trade Ministry

 

[Bilal9]

Young Optics BD makes DV/projector lens assemblies as well as other lens/mirror products.

 

[Indos]

Non-leather Athletic Footwear sector is already huge due to the Korean/Chinese investor factories (like Indonesia and Vietnam). Leather exports including leather shoes exceeded one billion in exports last year. I had predicted long ago that footwear would be the next garments sector in Bangladesh because it uses the same production methods until you glue and slap on the sole....

Footwear export (all varieties including athletic) compares favorably to long term players like Indonesia which is the largest source...there's plenty of room to grow as half of the planned SEZ's haven't started yet. Indonesia doubled their shoe exports in just five years and those five were 'eventful' and disruptive to say the least....

Many Taiwanese and Korean factories have moved to Vietnam actually. Nope, I dont think that foreign investor from China ever invested in our shoes industry. China investment is actually new in Indonesia. Most big shoes factories are owned by Indonesians, they just get contract from foreign shoe company and use their design. And almost all, if not all, small shoes factories are own by Indonesian.

 

[BDforever]

@Bilal9 (specially) and others will like it

 

[Bilal9]

Many Taiwanese and Korean factories have moved to Vietnam actually. Nope, I dont think that foreign investor from China ever invested in our shoes industry. China investment is actually new in Indonesia. Most big shoes factories are owned by Indonesians, they just get contract from foreign shoe company and use their design. And almost all, if not all, small shoes factories are own by Indonesian.

This is good to know, however I should clarify that shoes are always made in individual batches of 20,000 to 100,000 pairs (or even larger). Each batch has individual design and features. Very rarely do shoe factories keep making shoes of one standard design indefinitely. Unless it's something as popular as a converse high top.

Sample Design is often developed by subcontractor called a buying house (just like in Garments). The larger buying houses are located in Hong Kong and Korea for shoes and garments, usually.

@Bilal9 (specially) and others will like it

Yesss - me likes.....

 

[Bilal9]

Diversified conglomerate aims to take Bangladesh to the world

Shayan F. Rahman, Director of the Beximco Group

Like Bangladesh itself, the growth of the Beximco Group has been rapid and unprecedented. With a presence in more than 45 countries, the company is charged with being one of the country’s most important ambassadors internationally.

Founded in the 1970s by two brothers, Ahmed Sohail Fasiur Rahman and Salman Fazlur Rahman, Beximco Group is the largest employer in the private sector in Bangladesh. Employing over 48,000 people worldwide, it has evolved from a modest commodities trading company to a heavily diversified conglomerate with operations in sectors as diverse as textiles, real estate development, media, ceramics, pharmaceuticals, and energy. The company operates both domestically and internationally, and combined, the industries it works in account for nearly 75% of Bangladesh’s GDP.

The country produces 99% of its domestic health requirements, in addition to now stepping up its exports. Reflecting the growth of the sector and indeed the nation, the expansion of the Beximco Group has also been rapid and unprecedented. It is now the largest exporter of pharmaceuticals in the nation, and has a global presence in more than 45 countries.

In addition to manufacturing and selling generic pharmaceutical formulation products, active pharmaceutical ingredients (API), and intravenous fluids, it began exporting to the EU market in 2013, where its ophthalmic products are especially notable. Latanoprost and Timol are two drugs used to reduce the pressure inside the eye for people with open-angle glaucoma or intraocular hypertension, and are already available in Germany, Austria, and other parts of the EU. The Beximco Group’s budget-friendly generic alternatives have been a welcome addition to governments seeking to reduce healthcare costs without compromising on quality.

FDA approval
Beximco Pharmaceuticals and its facilities are already also accredited for export by the regulatory authorities of Australia, Canada, Taiwan, and Brazil, and as of June 2015, the company can boast of having tapped into another major international market. Following the successful inspection of its oral solid dosage facility in its production center at Tongi, the Beximco Group became the first Bangladeshi company to be approved by the U.S. Food and Drug Administration.

This achievement will pave the way for the export of medicines to the U.S. market, which is famous for its exacting standards and regulations.

Among the drugs Beximco Pharma will export are its generic version of the wonder drug, Sofosbuvir, which is made by Gilead Sciences Inc. and known for its effectiveness at treating hepatitis C (it has a 90% cure rate), as well as its hefty price tag. The Beximco Pharma version – which is prescription only – costs nearly half the price per tablet, making it the cheapest treatment for hepatitis C in the world. For an idea of the market potential of this drug, it is worth noting that an estimated 170-185 million people around the globe are chronically infected with the hepatitis C virus.

According to Salman F. Rahman, the Vice Chairman of the Beximco Group and one of its co-founders, the company’s decision to move into the pharmaceutical manufacturing business was its first major milestone, although in retrospect, this move aligns perfectly with the company’s mantra of ‘Taking Bangladesh to the World.’ He explains that previously, the company’s motto was ‘Diversity is Our Strength’. While this is certainly an idea that continues to ring true through the highly diversified portfolio of industries that the Beximco Group is present in, it is clear that the company is developing an increasingly global agenda.

“This is really the right time for people to come into Bangladesh and look at it as a country where you have a very positive approach to international investment”

Shayan f. rahman, Director of the Beximco Group
Bangladesh’s ambassador abroad
“My brother and I started the Beximco Group, but now we have a family of 65,000 people,” says Mr. Rahman. Although he asserts that the company’s success is the product of everyone’s contributions and reports that he feels proud and satisfied by what the company has achieved, he admits that one large challenge remains: “Before we can sell our company, we have to sell Bangladesh,” he says.

Salman F. Rahman’s son and Director of the Beximco Group, Shayan F. Rahman, echoes his sentiments. “We feel that when you look at Bangladesh from abroad, there are a lot of negatives that surface,” he says. “Our tagline means that the Beximco Group really wants to be the company that takes Bangladesh to the outside world and brings out all the positives that the country has to offer. There are positive stories to be told.”

The Beximco Group’s success at taking its brand abroad is certainly one positive story that bodes well for other Bangladeshi brands eyeing mature international markets, which would be well-served to consider, as Shayan F. Rahman suggests, many of the “positives” that Bangladesh has to offer.

Geographically, Bangladesh’s enviable location at the midpoint between India and China favorably positions it to become the heart of future trade in the region.

Energy developments
Well aware that developing power infrastructure will be a key component in supporting Bangladesh’s future growth potential, the Beximco Group has also ventured into the energy sector through the formation of two companies – Beximco Group Petroleum Limited and Beximco Group Power Company Limited.

Established in 2009, the former is committed to ensuring Bangladesh’s energy security by locally processing fuels. It is currently exploring opportunities to play a crucial role in liquid fuel supply, and has acquired the land and equipment necessary to bring the petroleum business in Bangladesh to a new level.

In parallel, with demand for electricity rising rapidly, the Beximco Group Power Company is on the path to establishing a 540MW coal-fired power plant that will be the first commercial power plant in the country. Built with state-of-the-art technology and environmentally friendly design, it will pave the way for using imported coal for power generation in Bangladesh.

The right time for investors is now
More broadly speaking, in terms of balance sheets, Bangladesh has not been a disappointment. The country’s economy has grown by an average of 6% over the past decade, and government institutions remain very open to receiving and facilitating investments from abroad. “This is really the right time for people to come into Bangladesh and look at it as a country where you have a very positive approach to international investment,” says Shayan F. Rahman. “Most multinational companies that have come into Bangladesh have done tremendously well.”

Added value in garments
As for the Beximco Group itself, it is clear that its nimble response to market changes and its enterprising can-do spirit are the catalysts of its continued success. As explained by Salman F. Rahman, when the company‘s management first moved into the garment manufacturing industry, they quickly realized that the value in garments was extremely low because the entire manufacturing process relied on imports – everything from fabric to buttons, thread, and even packaging had to be imported.

It was a very popular space that many companies decided to move into, but essentially, the only contributions they could make involved cutting material and sewing or assembling it, which represented a very low value addition, since it was basically only labor cost. It was then that the Beximco Group decided to make a start on a backward linkage. They set up a modern yarn spinning unit, and then branched out into weaving and fabric manufacturing before setting up an entire vertically integrated textile operation that freed them from an otherwise debilitating reliance on imports.

Other companies in the sector began to follow suit, and today, the value addition has increased to between 50%-60%, since everything can be produced in Bangladesh, including fabrics, buttons, and all the accessory bells and whistles. The country still relies on the occasional import of material, but Shayan F. Rahman says they are more or less self-sufficient when it comes to denim and yarn – two staples of the industry.

As for the Beximco Group itself, it is clear that its nimble response to market changes and enterprising, can-do spirit are the catalysts of its success.


Taking Bangladesh to the world
In addition to using these materials to make clothing, the Beximco Group also supplies yarn to the world’s premier carpet and rug manufacturers in Europe and the United States.

It also produces twine, which it exports to manufacturers of tatami mats and other floor coverings used in gardening and for household purposes.

To date, the Beximco Group has also partnered with some of the world’s most prestigious design institutes to develop the in-house design capabilities of its textiles division. Collaborating with the Fashion Institute of Technology, Parsons, and the London School of Fashion, it has tapped a pool of talented designers and has served the likes of fashion giants such as American Eagle, Calvin Klein, H&M, Macy’s, and Zara.

Operating under its own label, Yellow, the Beximco Group also sells clothes through its proprietary outlets. Aimed at younger audiences, Yellow is a design-driven brand that aims to “celebrate creative and original thinking to highlight a lighthearted and optimistic view of life through a superior quality product,” according its website. It captures a modern interpretation of relaxed, comfortable fashion that stems from the Beximco Group’s pioneering legacy and openness to discovery.

Beximco became the first Bangladeshi company to be approved by the U.S. Food and Drug Administration. This achievement will pave the way for the export of medicines to the U.S. market.

Pioneering corporate culture
Another factor that has contributed to the success of the Beximco Group is its unique corporate culture. While it is especially common in Bangladesh to reserve important positions of family-run businesses for relatives, Salman F. Rahman explains that he and his brother relied heavily on professionals when expanding their business, and were among the first companies to delegate positions of authority to non-family members. “You cannot control everything within the family, because after time this will limit your growth,” he explains. “If you want to really grow, you have to depend on professionals, and that is what we did.”

With demand for electricity rising rapidly, the Beximco Group Power Company is building a 540MW state-of-the-art coal-fired power plant that will be the first commercial power plant in the country and will pave the way for using imported coal for power generation.

The Vice Chairman is particularly proud of the results of a recent survey, which revealed that more than 50% of the hardware and software companies currently operating in Bangladesh are run by chief executives and other ex-employees of the Beximco Group. Likewise, approximately 40% of the managing directors of all the banks in Bangladesh also passed through the Beximco Group pipeline. “We have created entrepreneurs that have left us and then succeeded on their own,” he says proudly, hinting at another key characteristic that differentiates the Beximco Group from its business peers: not fearing the competition.

The pillar behind the Beximco Group’s relentless innovation and proliferation into radically different industries is the unwavering belief that the more competition there is, the more productive the Beximco Group must be as a company. It is this philosophy that drives the company forward and keeps the management optimistic. Instead of viewing former employees who venture out on their own as turncoats or traitors, Salman F. Rahman sees this as a sign that the country is moving ahead, and that people want to take risks and bring greatness to the country for which they have fought so hard. Ultimately, he also sees it as proof that even beyond Bangladeshi borders, local companies will begin to have an impact.

Once again ahead of the curve, the Beximco Group already has plans to move some of its manufacturing units outside of Bangladesh and more aggressively market its products in the foreign countries where it begins to manufacture.

Nonetheless, true to their ethos, the brothers hope they are not the only Bangladeshi company exploring new frontiers.

“In Bangladesh we were told that we would never succeed and that our entire country was a basket case,” says Salman F. Rahman. “Although there still remain many challenges to our success, we know that you cannot succeed only on your own – you have to have others succeeding with you.”

He emphasizes that success also needs to be collective success – it cannot be individual, because when only individuals succeed, a country has not succeeded. In order for the latter to happen, you need hundreds of companies like the Beximco Group to constitute success for Bangladesh – a reality which Salman F. Rahman hints is closer than one might expect.

“My biggest satisfaction is that we have set an example and now we have so many companies following us,” he says. “Today, I firmly believe that the private sector in Bangladesh is vibrant and confident, and that we have a lot to give.”

 

[Bilal9]

Spreading the message of economic growth

Hon. Mr. Hasanul Haq Inu

Minister of Information

Hon. Minister of Information Mr. Hasanul Haq Inu discussed the progress made in the last six years with regards to Vision 2021 and Millennium Development Goals.

As the Minister of Information you have the responsibility of disseminating information with regards to economic growth. What is the main message in terms of growth in Bangladesh?

Over the past six years there has been a clear departure from the days of the military rule in terms of economic policy. The current government has an economic policy that is socially linked. We are integrating social need with market forces and entrepreneurship. In the past social needs were overlooked, we are now addressing questions, important questions. Should we invest in primary and secondary schools? Should the government invest to equip all the secondary schools of the country, almost 31,000 secondary schools, with computer labs? Should we invest in the development of an information and communication centre? Should we invest in developing community health clinics, around 13,000 at the grass root level, for primary health care such as vaccinations and maternal health? We are answering those questions now.

Bangladesh has made a concerted effort to diversify its economy beyond RMG, how is Bangladesh progressing with regards to this?

In the past economic development has revolved around agriculture, specifically rice production. However now we are diversifying and Bangladesh is now in the top six fish producing nations of the world. Over the past five years banks have financed 39,231 female entrepreneurs in small-scale industries. Now there has been greater diversification of the economy. We have a domestic market of 160 million people; the strength is that if you take care of the 160 million people, many industries will be able to grow. Over the past five years, the ship building industry has developed, the pharmaceutical industry has developed, production of leather goods has increased and the jute industry has been revived after a 20 year decline. The government has started charting out a path for the diversification of the economy; for the arrival of the poultry industry, the fish industry, and sea fishing. Diversification of the economy is very important, and we have to o what is best for the nation, for example many advised us against subsidies, many said no, but our Prime Minister said yes, we subsidise and that is why we now have 350 million tonnes of rice production.

The Bangladesh government has been very active in terms of social investment or social spending, would you say that Bangladesh is a good example of a present government that is intervening and investing the future of its people against the orthodox theory that a government should not intervene and that it should be left to a free market.

In a developing economy we inherit a social divide, we inherit the economic past and we think that investment in the social sector by the government is essential in reducing the social divide. By investing in health care, education, micro credit development, small and medium enterprises and the housing sector, we think we are investing in the future. Of the 8 parameters of the Millennium Development Goals (MDGs), Bangladesh has almost fulfilled seven. Bangladesh has already achieved the goal of reducing the maternal mortality rate, it has achieved another goal by reducing the child mortality rate, the goal of gender balance in primary schools of 50-50 male/female has been achieved up to secondary level but there is still an imbalance in years 11 and 12, girls make up 40% of the class and boys 60%. Poverty has been reduced down and we have achieved the target set by the United Nations. The goal of providing safe drinking water across of the country is about to be achieved and the target to provide safe and proper sanitation across the country has almost been achieved. Bangladesh has been cited internationally as being the first country to have crossed the target before 2015. Bangladesh is now looking post MDG and helping to formulate a post MDG agenda at an international level.

Ban Ki-moon has applauded your prime minister and has said that Bangladesh is a model to follow for other developing nations; do you think that the international community understands what Bangladesh is all about or that there are misconceptions about the country?

In spite of the global economic climate, natural disasters and a volatile political situation, Bangladesh has had a growth rate of beyond 6% in the last few years. Demographics are very important, as 60% of the population of Bangladesh is 30 years old or younger. Youth is the strength of Bangladesh. Bangladesh is investing in the youth by educating them and giving them skills so they can take care of the domestic market. We also have an expatriate working community in the world of almost 10 million, so we are now concentrating on the domestic economy. We have rediscovered the role of the government in the specific ideals of policy interventions and financial interventions where the social need is to be incorporated into the planning process. So the Bangladesh government in its 5 and 10 year plans is discussing the social need and how to incorporate it.

There are public universities and colleges but the majority of the 21,000 secondary schools are private. There are around 20 teachers in each secondary school and they all get a salary from the government, and the government is also building infrastructure, case by case, which are free of cost. Of the 80,000 primary schools there are more than 100,000 teachers who have been enlisted into the government salary over the past three years. More than 26,000 primary schools have been selected and those teachers get salary from the government also. Many of the primary schools are run by the private sector although they use the same curriculum, so when students are preparing for exams there is equality. There are certain universities, which are privately run, and they have their own curriculum and their own examinations. But at the primary level and secondary level they are following a government curriculum. 310 million books have been dispatched to students which is one of the greatest achievements by the present government, school tuition and books are free up to the 10th grade. A policy change by this government, has confirmed that the government has decided to enlist change in the social sector, human resource development sector, the health sector. The social sector has been developed and we are giving money to widows and every expectant mother is given financial support so they can have better nutrition, those who are very poor are given rice packets. These huge changes in the social sector have been occurring over the past 6 years. These changes have helped people to graduate from poverty. A majority, 95%, of microcredit receivers are women, more than 10 million. These women work have to work often because they are widows and they do not own land so they are given microcredit. We find that the women mostly invest this money in small business, small productive things and the results are very good and this is how you reduce the poverty.

So now we are researching what other ways will be effective in reducing poverty, there are poor people whose condition is neither declining nor improving so there is a government organisation which has come out with a program called microcredit plus. The people receive little bit more money, and they profit more from it; they can return the profit, reinvest and save more. The government has also come up with a program; one house, one farm they are given a cow and some money that they are expected to save. In obosella sub district almost 5,000 families are getting this allowance, and they are also getting advice on how to invest properly, which is encouraged and monitored by the government. We are now forcing government banks to invest in the microcredit programs; the government is intervening and taking note of the social need. The government has also been looking at different ways to diversify the economy and the government is investing in fisheries and poultry and subsequently Bangladesh is listed fourth in the world in terms of fish production.

During the global recession of 2008, many believed that the economy would be ruined, but it survived. The reason that the country did not do badly economically is because Europeans and Americans still needed to import. One of the biggest industries of Bangladesh is clothing and although America and Europe did not buy as much, they still bought. Food, pharmaceuticals and textiles are the three primary industries of the world. During the recession period, we diversified and started exporting not only to Europe and America but to other countries even other developing economies such as India, China, Brazil and Africa. So diversification of exports was important and we entered an open market and started producing for other nations such as pharmaceuticals for the UK.

So much progress has been made in the last 6 years, but 2021 is fast approaching. Is vision 2021 achievable?

If you look at the recent parameters and the investment trend we have achieved the vision 2021 goal. What is the vision 2021? Firstly in 2021 poverty should be eradicated, I think that by 2021 we can achieve that one, it’s almost achievable. It has been almost 6 years, the current level is 25% and I think we could drastically reduce it so it will be at 10%.

Another component is Digital Bangladesh, and this means that we can become a supplier for training in the ICT world market. We are now making a master plan, how to train boys and girls with ICT knowledge so they are able to work in an international market. Our connectivity in terms of transport is also improving, we have decided to build a deep-sea port, and the first phase will be completed before 2021. Then the big ships will be docking here, this will be the second largest deep-sea port after Singapore in this region. This will increase connectivity in the region, as it will open up the landlocked area in the north with India, Bhutan, Nepal and Myanmar and become the gateway for the region including Southern China. This port will be particularly important economically as it will mean that boats from beyond Singapore to Pakistan will be able dock at this new port. Bangladesh has also decided to build excellent universities on the North Eastern border of Bangladesh so that Dhaka will be the cultural and academic centre of the north Eastern part of India. A bridge on the Padma River will also be completed before 2021, which will increase connectivity in the south and north. These two bridges and a deep-sea port will have a very positive impact on developing infrastructure and the economy. Another port is also being redeveloped and will be expanded and will be the gateway to North Eastern India. By 2025 Bangladesh will be the 22nd largest economy in the world. Our strength is our people. In terms of tourism, we are trying to project Bangladesh as the heart of Bengali people and the Bengali culture. There are 350 million Bengali speaking people who live outside our borders, there are 160 million in Bangladesh, 100 million living in West Bengal and other states of India and others living across the world. My ministry is going to take care so that the 350 million people living outside of Bangladesh will feel welcome coming to Dhaka for the Bengali New Year, which is going to be the heart of tourism, a major tourist event like the Chinese New Year.

 

[Bilal9]

Bangladesh equivalent of the 'USCG Sentinel Class Fast Response Cutters' are progressing nicely at DEWBN.

 

[Bilal9]

DIVING FOR PEARLS
Shipbuilding industry in Bangladesh has huge potential to contribute to economic growth

Bangladesh was once known as one of the largest ship graveyards of the world. Every year, dozens of aging container vessels would head towards the country's southern coast to breathe their last before being broken into pieces. National and international news media, documentaries, photographs and numerous campaigns addressed the socio-environment and human rights issues related to the ship breaking industry of the country.

With time, Bangladesh's economy began to be largely associated with this industry. In recent times, however, Bangladesh has been able to break out of this gloomy identity that defined its economy. In the last six years, we have emerged as a successful ship building nation which exports small and medium-sized ships to the highly competitive European market.

In Bangladesh, ship-building has been a century-old practice and of course, one of the earliest industries developed in Bengal that expanded over the oceans from the Indian sea to the Persian Gulf. Just like old times, since 2008, Bangladeshi yards have been manufacturing and exporting ferries, cargo vessels, and multi-purpose ocean liners, worth more than $500 million. The vessels were built for countries like Denmark, Germany and Finland.

Currently, Chittagong is playing a crucial role in shipbuilding. The shore of the River Karnaphuli has become home to new ships that will soon ply the sea. According to the European traveler Caesar Frederick, during the middle of the 15th century, Chittagong was the center of building ocean-going vessels. At that time many countries of Asia and Europe would regularly buy ships built in Chittagong. It has been said that Ibn-e-Batuta went back in a wooden ship built in a dock located at Sonargaon, Dhaka. In the 17th century AD, a fleet of ships of the Sultan of Turkey was built in Chittagong. During the first half of the 19th Century, the shipyards in Chittagong built ships that could carry up to 1000 DWT (dead-weight tonnage).

This glorious past had faded away with time but has thankfully once again been revived with the initiative of a few businessmen in the country. It is a small beginning when compared to giant shipbuilding economies such as China, Japan and South Korea. But industry leaders say that Bangladesh will continue to grow because it has several advantages over its rivals. Bangladesh has over 200 shipbuilding yards of various sizes, most of them serving the domestic market. There are at least a dozen very large International-standard yards capable of building ships up to fifteen thousand DWT level.

“We have plenty of skilled manpower and our labor cost is cheaper than many other countries. On average, ship owners can save at least 20 percent of their production cost if they choose to build their ships in Bangladesh,” says Sakhawat Hossain, managing director of Western Marine Shipyard in Chittagong.

But despite the industry's strengths and promise for the future, it is also facing some external headwinds. The economic crisis in the Eurozone has had an impact on the shipbuilding industry of Bangladesh. “We have 17 shipbuilding purchases, worth more than 200 million Euros, listed in our order book. But as our European buyers were not being able to borrow money from banks, our business was also being affected. However, times have changed, and fortunately, we are receiving more and more orders from Europe,” says Sakhawat Hossain.

With the Bangladeshi economy growing at about 7 percent a year, new, smaller ships and cargo carriers are needed to transport goods and other raw materials from the Chittagong port to different parts of the country. Thus, the domestic market has helped the shipbuilding industry to overcome the global recession. However, with powerful economies like Germany, the Netherlands, Norway, and others gradually coming out of recession, local shipbuilders are finally eyeing good prospects for the revival of the industry.

The ship-building sector has the potential to expand Bangladesh exports, enabling entrepreneurs to expect a notable slice of the $400-billion global shipbuilding business. The most significant consequence is fetching foreign currency while also generating employment opportunities within the country.

Sakhawat Hossain says, “Shipbuilding is a labor-intensive industry. Bangladeshi laborers are magnitudes of scale cheaper than Chinese, Korean and Japanese laborers.” According to the World Shipbuilding Statistics, at present nearly 90 percent of the ships are made by China, Korea and Japan. He believes that since Bangladesh is not capable of making very large (over 50,000 DWT) ships, it will have to target small and medium size shipbuilding, which has a yearly market of around $200 billion.

The pundits of this industry are hopeful that since the global economy is on an upswing, the shipbuilding industry too can latch on to this growth. Experts contend that as more than 50 percent of the world's ships are over 20 years old and need to be replaced, Bangladesh can have a significant role to play in ensuring their replacement. Moreover, since the shipbuilding giants, Japan, South Korea and China are busy building big, specialized and hi-tech ships, the shipbuilding industry of Bangladesh can be expected to construct smaller or medium-sized vessels.

"Globally, this small and medium-sized ship market is worth around $200 billion. If Bangladesh can get even 1 percent of this market, then it would amount to $2 billion in revenues," says Dr M Rafiqul Islam of the Department of Naval Architecture and Marine Engineering at the Bangladesh University of Engineering and Technology (BUET).

Ananda Shipyard and Slipways, another shipbuilding company, is currently handling work orders worth Tk 800 Crores received in the past one year. "Most foreign buyers are once again displaying interest to resume their orders," says Islam, adding that Ananda is not taking fresh orders from foreign companies as its shipyard has no free space.

As the shipbuilding industry requires huge capital, Bangladeshi shipbuilders need such financing and that is a major disadvantage for Bangladeshi shipbuilders. Bangladeshi shipbuilders can get loans at an interest rate of 15 to 16 percent whereas their Chinese counterparts can acquire loans at an average of 6 percent interest rate.

“The interest rate should be less than 10 percent for this sector to grow. Also, the government should implement an Export Development Fund (EDF) to help this sector with low cost funds as they have done for the garment sector,” says Rafiqul Islam. He further believes that the shipbuilding industry is a growing market as can be witnessed by the growth of the export of ships by 7.35 percent to Tk 481 crore in the fiscal year of 2013-14. The industry, thus, needs assistance from the government to contribute more in the country's economy.

The main strengths of the Bangladeshi shipbuilding industry is its long history of maritime activity, the presence of geographical advantage, a low-cost shipbuilding workforce and industry-related educational and training institutes. Significant government focus for granting loans can increase the private initiatives to set up new industries that will contribute to the country's economic growth.

 

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Bangladesh Attracts Funding for Shipbuilding

According to observers of the industry, funding will tremendously increase if the Bangladesh ruling authorities act with more foresight and strong desire in assisting the process of getting rid of obstacles on local constructors of ships. In the words of the EU Ambassador in Dhaka, the European Union is searching for investments in the shipbuilding industry of Bangladesh. In addition, German shipping companies have directed their attention towards purchasing more ships produced in Bangladeshi shipyards.

According to a Dhaka Tribune report, Bangladeshi entrepreneurs have committed money to bettering equipment and evolving expertise to improve the capacity of the nation to construct contemporary and advanced ships. Bangladesh is in need of manufacturing branches that appear like this and increase their size at the same time. Thus the country will enable the appearance of different sectors and the broadening of the scope of the economy as a whole.


The government has to use more effectively the mechanisms that is has at hand to invigorate the nation’s industry constructing ships. The newspaper proceeds with the suggestion that in order for the sector to expand its capacity, additional efforts must be committed. These have to include for example increasing both the shipyards’ anchorage space and land.

Bangladesh is a territory with many rivers and thus a lot of ships that are locally constructed travel regularly in its internal waters. Currently, Bangladesh is exploring the small ocean-faring vessels’ market-of vessels smaller than 25,000 DWT. The international market for such vessels is currently evaluated to be $ 400 billion yearly.

However, some evaluations decrease the number to only $200 billion. Most important international shipyards are able to serve75% of the total demand. If Bangladesh could produce 4% market share of the extra demand, which amounts to $100 billion (or 1/4th of $ 400 billion), it could accumulate $4 billion yearly. Now Bangladesh possesses more than 200 shipbuilding companies, predominantly established in Barisal, Khulna, Dhaka, Chittagong and Narayanganj.


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Couple of videos showing informal style ship-building. This one is a luxury cruise launch (river vessel) commissioned as 'Crystal Cruise'. This is the local shipbuilding style as compared to the shipbuilding practices for Export markets as shown above. This is a personal opinion that as far as design and construction, this vessel compares very favorably with those in use in Europe for luxury river cruises.

 

[Bilal9]

The next horizon on agro-exports from Bangladesh seems to be strawberries. Although both India and Pakistan are medium level strawberry exporters at say upto 10,000 tons per annum each, Bangladesh is slowly gearing up to be as significant a player in this field.

In Bangladesh Barind region areas such as Kushtia, Pabna, Rajshahi and Bogra areas have seen clusters of strawberry cultivation. With landed cost of strawberries in export markets of UAE at US$5.50 per kg and at retail prices of US$8-9 per kg, strawberries are definitely a profitable export. Organic strawberries are even more expensive. But corporate farming is not in vogue yet locally for this crop.

Like recent efforts in Pakistan (Gilgit-Baltistan area) and established production in India (Panchgani/Mahabaleshwar), export of improved California strawberry varieties will fetch higher prices.

Another expensive export fruit is Dragon Fruit which has many health benefits including being a natural antidote for Diabetes sufferers. Initially started in Savar outside Dhaka, cultivation of this fruit is also spreading rapidly across Bangladesh. Imported fruit sold for Tk. 600 per kg but local product is Tk. 400 per kg.

 

[Bilal9]

Sinobangla Industries Limited (SBIL) is a leading plastic packaging manufacturer in Bangladesh with a diverse product portfolio. Founded in 1996 as China- Bangladesh joint venture, the company produces and exports a complete range of polypropylene woven sacks and value added FIBCs. (Flexible Intermediate Bulk Containers).

 

[Bilal9]

Step Shoe Last - Plastic Shoe Last (Forma) Manufacturer

 

[Bilal9]