Proposed KEZ set to get licence, will host heavy industries like car and steel manufacturing plants

[Black_cats]

Proposed KEZ set to get licence
Saif Uddin | Published: February 12, 2019 10:37:15

- Economic Zone/ Illustration

The proposed Kishoreganj Economic Zone (KEZ), a venture of Nitol Niloy Group, is set to obtain licence from the authorities concerned, officials related with the development have said.

The zone would be established on 91.63 acres of land in Pakundia Upazilla, next to Bhairab-Kishoreganj highway, they added. It received the pre-qualification licence from the BEZA in July 2017.

"The KEZ is now getting prepared to receive the final nod," Executive Chairman of Bangladesh Economic Zones Authority (BEZA) Paban Chowdhury told the FE.

He said the zone will host heavy industries like car and steel manufacturing plants by Indian multinational conglomerate TATA.

"This is another testimony of congenial investment atmosphere in the country which continues to attract more and more foreign businesses," said Mr Chowdhury, a secretary of the government.

When the KEZ would start operations in full swing, it would supply different types of products manufactured at the KEZ at more reasonable prices in the local market, he said.

"India-based TATA through a joint venture with us will manufacture vehicles, including double cabin pick up," said an executive at the Nitol Niloy Group.

He said the machinery for the proposed plant already reached the project site while TATA Steel, India selected land in the KEZ to start the construction work soon.

The zone will have all the required facilities such as water treatment plant, effluent treatment plant and fire extinguishing system.

It will accommodate industrial facilities for manufacturing businesses like automobiles, steel, apparel, leather goods, agro processing, and Information Communication Technology (ICT), aimed at exporting products after meeting the local demand.

With the beginning of commercial operations, the KEZ will create direct and indirect employment for around 25,000 people in five years. Some factories in the KEZ, comprised of 26 industrial plots, are expected to go for production by the end of this year.

The zone - 170-km from Dhaka, 307-km from the Chittagong sea port and 40-km from Ashuganj river port - is connected with Gachihata Station of Bhairab-Kishoreganj railway link through its own line.

The utilities like gas, electricity and water are already available with the project.

The feasibility report along with the master plan of the zone prepared by PricewaterhouseCoopers (PwC) has been duly accepted by the BEZA, which is attached with the Prime Minister's Office (PMO).

The BEZA is developing 100 economic zones to support achieving the country's economic goal through planned industrialisation and fetching foreign investment.

Besides the state-owned EZs, private organisations are also developing different EZs. So far 19 private companies received pre-qualification licences for developing the EZs and eight of them have already been awarded with the final licences.

The Nitol Niloy Group will be the ninth private agencies to get the final licence for developing the KEZ.

saif.febd@gmail.com

http://thefinancialexpress.com.bd/economy/bangladesh/proposed-kez-set-to-get-licence-1549946235

 

[bluesky]

I have a feeling that things have started to move a little. A country's progress takes quite a long time. Manufacturing plants accompany progress. With Indian and other investments Kishoreganj will be at the forefront, hopefully.

 

[UKBengali]

More evidence of BD economic progress.

 

[Michael Corleone]

Should also encourage japanese giants businesses alongside... or TATA will grow to dominate the regions automobile industry... keep everything in balance is what i suggest

 

[Nilgiri]

Should also encourage japanese giants businesses alongside

Make it worth their while then. Start buying more than 20k (mostly refurbished) cars a year in BD. You certainly aren't going to be exporting anything soon.....too much capacity has been set up regionally in India for that....which will NOT be shifting.

You lot seem to thinks its just as easy as "encouraging" rich foreigners to do something in your country. Start buying (i.e proving your demand) and put your money where your mouth is. As long as you do not do that (and worse keep corrupt govt which does zilch in reforms) and prefer "BRAC/BBS" "social development" to deflect from that conversation, it will just be what space capacity Tata can afford to give you guys on the side for your internal demand. No one else is bothered or interested in that....till you make it worth their time and money.

 

[bluesky]

Should also encourage japanese giants businesses alongside... or TATA will grow to dominate the regions automobile industry... keep everything in balance is what i suggest

A man can take the horse to the pond. But, the horse itself has to drink water. It is quite improbable that any Japanese car manufacturer will build a factory in BD where even with only 420,000 cars/vehicles the roads are clogged. All, at least most, are used cars.

Japanese manufacturers produce and sell 9.1 million units of all types of vehicles every year in their country. They have a few plants in the USA and some other countries where there is a market. But, I doubt that BD, a tiny country without a functional road system and being very poor, will ever attract investment by a Japanese car manufacturer.

By the way, how about reducing the taxes to encourage the import of Japanese used vehicles? If the number goes big like 200,000 cars a year it may encourage a smaller Japanese car company to re-think about BD. But, is it necessary? Any foreign investment should be welcomed. TATA trucks are very good for our broken roads. It can carry a huge load.

 

[Nilgiri]

But, I doubt that BD, a tiny country without a functional road system and being very poor, will ever attract Japanese investment.

"Ever" is kind of extreme. Bangladesh simply needs to reform and bulk up and reform and broaden its true economy instead of dumping inflation into GDP per capita courtesy of single RMG + cheap manpower export route.

Once you do that, you can even bypass the internal combustion vehicle industry and go straight to EV in say 2030- onwards time frame. But 2020 to 2030 you need some actual growth where it counts....and that needs govt to not be so obsessive over micro-control of labour and investment....and also needs their corruption to decrease (as we saw with the stock market collapse that wiped out a good extra potential of 50 - 100 billion dollars in todays level of market cap...that Bangladesh could have certainly been leveraging today to grow better instead of going for more foreign loans to make up for low FDI)

 

[bluesky]

"Ever" is kind of extreme. Bangladesh simply needs to reform and bulk up and reform and broaden its true economy instead of dumping inflation into GDP per capita courtesy of single RMG + cheap manpower export route.

Yes, ever is extreme because no one really knows the future. But, consider that there has been investments by Toyota in Pakistan, Suzuki in India and Nissan in Burma. These companies have yet to reach their potentiality. I do not think they will go for BD when their cars can be exported from these destinations.

You have put many 'if's which will be difficult for a country like BD to achieve where the self-centered people are not serious to wipe their dirty floor spread with corruption, mismanagement, and non-system. Today, there are some superficial works going on but these do not show the prospect of a well-administered country in the future.

 

[GeraltofRivia]

It is interesting that Bangladesh has such a low number of vehicles ownership. The ownership per capita is only a friction of that of India and Pakistan (like 25%) despite the GDP per capita numbers are roughly the same. Pakistan and Indian vehicles figures are more inline with expected number of vehicles at this level of GDP per capita. It doesn’t seem to give a lot support to what was discussed extensively in other threads that Bangladesh overtakes Pakistan.

Nevertheless, it means there is a lot potential to grow in vehicles ownership in Bangladesh in the coming decades.

 

[Black_cats]

It is interesting that Bangladesh has such a low number of vehicles ownership. The ownership per capita is only a friction of that of India and Pakistan (like 25%) despite the GDP per capita numbers are roughly the same. Pakistan and Indian vehicles figures are more inline with expected number of vehicles at this level of GDP per capita. It doesn’t seem to give a lot support to what was discussed extensively in other threads that Bangladesh overtakes Pakistan.

Nevertheless, it means there is a lot potential to grow in vehicles ownership in Bangladesh in the coming decades.

Car price is 3-4 time expensive in Bangladesh compared to Pakistan. Bangladeshi government discourage car ownership due to traffic congestion. It has nothing to do with GDP.

 

[bluesky]

Nevertheless, it means there is a lot potential to grow in vehicles ownership in Bangladesh in the coming decades.

Vehicle ownership depends not only on the per capita GDP but also on the length of roads in the country and the necessity of the people. A small country with an insufficient length of roads cannot support individually owned cars but is good for mass transit like metro trains and a systematic bus transit within the big cities. Dhaka even lacks space for parking in the apartment blocks and houses. There are no underground parking facilities for car parking.

For other areas buses, trains, auto rickshaws, motorcycles are supposed to suffice for the next few decades. India and Pakistan are very big countries with less population density. So, roads there can be enlarged year after year. In the case of BD, however, things may change gradually once the metro rail and expressway are put into place. This will cause a reduction in the number of three-wheelers and Rickshaws that will result in fewer congestions on the roads.

Could it be another twenty years to happen? Twenty years may be too short considering the govt people think about and work for the country. They behave as if they are the Feudal Lords.

 

[Michael Corleone]

Japanese manufacturers produce and sell 9.1 million units of all types of vehicles every year in their country. They have a few plants in the USA and some other countries where there is a market. But, I doubt that BD, a tiny country without a functional road system and being very poor, will ever attract investment by a Japanese car manufacturer.

i was not focusing on the local markets.... if they decide to open up a large assembling plant where parts come from india/ thailand etc... and assembled here... these cars could be sold in the whole of sub continent for cheap

 

[Aung Zaya]

i was not focusing on the local markets.... if they decide to open up a large assembling plant where parts come from india/ thailand etc... and assembled here... these cars could be sold in the whole of sub continent for cheap

they wont. the main attraction for assembling plants is the size of local market. They wont come unless the local demend is stong enough to use up their products. They will consider as an extra reward to export excess units to foreign countries. coz every countries can offer what BD offer for plants something like tax exemption. for instance , I dont what BD can offer. Myanmar give exemption in many area for vehicle assemblers while raising tax for importer.
Now Myanmar already hosted more than 13 vehicles assembling plants in their SEZ including Nissan , Suzuki , Ford , Hyundai , KIA , Daewoo etc. Myanmar ,used to be a top market for used cars and imported more than 500k uesd cars within 5 years, now encouraging in local production and import also dropped ( only few thousand as of 2018 ). So all BD need to do is to make some changes in policies and open for the local market.

 

[Nilgiri]

i was not focusing on the local markets.... if they decide to open up a large assembling plant where parts come from india/ thailand etc... and assembled here... these cars could be sold in the whole of sub continent for cheap

Sorry your workers are too untrained and too unproductive to make it worthwhile (export based automotive only...starting from ZERO). The logistics integration (for trade of this nature) with Indian market is improving, but still quite bad. You have little money left for the capital investment needed (which needs buffer from sound bedrock of auto part industry in first place). It would just be too expensive all around.

Get your govt to actually work on and implement reforms (and target an actual appropriate future window like 2025 or 2030 onwards) rather than blabbing BBS crap all day...or the newest thing they have named after bangabandhu or SHW....and then pushing only RMG as be all end all....so they can control and dictate the labour pool much easier.

Also look up what the labour cost differential makes %-wise to the final pricepoint of something like a vehicle. It is not a huge dominant factor that would override all these other things that Bangladesh is lacking and quite strangely not interested in improving.

You have to put money where your mouth is and grow your organic market demand as first step. You have to pay some to get some....its really that simple.

they wont. the main attraction for assembling plants is the size of local market. They wont come unless the local demend is stong enough to use up their products. They will consider as an extra reward to export excess units to foreign countries. coz every countries can offer what BD offer for plants something like tax exemption. for instance , I dont what BD can offer. Myanmar give exemption in many area for vehicle assemblers while raising tax for importer.
Now Myanmar already hosted more than 13 vehicles assembling plants in their SEZ including Nissan , Suzuki , Ford , Hyundai , KIA , Daewoo etc. Myanmar ,used to be a top market for used cars and imported more than 500k uesd cars within 5 years, now encouraging in local production and import also dropped ( only few thousand as of 2018 ). So all BD need to do is to make some changes in policies and open for the local market.

Yup exactly!

 

[fallstuff]

they wont. the main attraction for assembling plants is the size of local market. They wont come unless the local demend is stong enough to use up their products. They will consider as an extra reward to export excess units to foreign countries. coz every countries can offer what BD offer for plants something like tax exemption. for instance , I dont what BD can offer. Myanmar give exemption in many area for vehicle assemblers while raising tax for importer.
Now Myanmar already hosted more than 13 vehicles assembling plants in their SEZ including Nissan , Suzuki , Ford , Hyundai , KIA , Daewoo etc. Myanmar ,used to be a top market for used cars and imported more than 500k uesd cars within 5 years, now encouraging in local production and import also dropped ( only few thousand as of 2018 ). So all BD need to do is to make some changes in policies and open for the local market.

I was getting the impression new car sales in Burma is in the 100s of thousands. In reality it is just a few thousands.

I think the Bangladesh Govt should not lower taxes on cars yet as the roads in Dhaka are beyond over crowded. Hopefully all the new projects will ease the traffic situation.