Month: September 2016

Light Engineering Industrial Sector

light-engineering2Light Engineering Industrial Sector

The burgeoning domestic market and the prospect of significant cost reductions for companies sourcing components and finished goods for international markets makes Bangladesh a compelling choice for investors.

Light Engineering Sector of Bangladesh:

The Light Engineering Sector (LES) that draws the least attention of the policymakers has emerged as a potential cost cutting sector by producing at least 50 percent substitutes of imported items in the country. This important sub-sector is now providing critical support to industrial, agricultural and construction sectors by manufacturing a wide range of spare parts, castings, moulds and dices, oil and gas pipeline fittings and light machinery, as well as repairing those. Sector players claim that electrical goods like switch, socket, light shed, channel, cables and electrical fans, generator, which are manufactured by the LES are now meeting 48% to 52% of the country’s demands, which was earlier met through import. Export growth was estimated at 30%. The light engineering sector as ‘the mother of all sectors,’ because it provides backup support to cement, paper, jute, textile, sugar, food processing, railway, shipping, garments capital machineries by repairing and maintaining those. A recent study conducted by International Finance Corporation (IFC) in partnership with UK Department for International Development and Norwegian government shows that LES has in its employment 6,00,000 people involved in 50,000 micro enterprises and 10,000 Small and Medium Enterprises. Another study conducted by Bangladesh University of Engineering and Technology however, estimates that LES comprises of around 40,000 enterprises employing around 8,00,000 people.

Industry Situation

The light engineering industry in Bangladesh continues to grow each year. This labor-intensive sector produces a diverse range of items, including import substitute machinery spares, plant machineries, small tools, toys, consumer items and paper products for the domestic market. Most of these enterprises are located in and around Dhaka metropolis. Entrepreneurs from China, Japan and Korea have taken advantage of Bangladesh’s cheap and easily trainable labor and its infrastructure facilities to manufacture products for the export market.

leather Footwear Industry

leather-3

leather Footwear Industry

Bangladesh is set to emerge as the next manufacturing hub for the global footwear industry. The cheap labor is prompting top manufacturers to relocate their factories in the country. The good news is that a number of foreign investors as well as buyers have already shown interest in Bangladesh’s leather and footwear sector.

Recently, the president of the Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association (BFLLGFEA) informed all concerned that three large investors in the footwear sector from Taiwan would set up footwear factories in the Dhaka and Chittagong Exporting zones. The buyers from EU, as well as other very highly developed industrial nations like Japan have reportedly been showing importance in Bangladeshi leather products. All these developments look promising for the local footwear industry.

 The Export Processing Zones at present have 18 shoe and leather goods factories but there are at least seven large factories under construction, mostly owned by big manufacturers in the shoe world. The factories under construction include Korean company Young one’s footwear complex which is said to be the largest in Asia. The company started construction of its mega shoe complex in Chittagong six months back. The first part of the complex will go into production by the middle of next year, and the company’s executives said they would be able to manufacture about 30 million pairs of shoes by 2013.

 In addition, Taiwanese shoe manufacturer Pau Chen, which employs about 4,00,000 workers in its factories in China and 50,000 in Vietnam, is also building a large manufacturing facility in Chittagong. Australian manufacturer Bonbon Shoe, a supplier to Hugo Boss, and Xen Chen and Genford of Taiwan., are also building footwear factories in Bangladesh. Apex-Adeichi also has a new factory that will soon start production. With an annual turnover of about $100 million, the Bangladesh-Italy joint venture is now the largest exporter of footwear. However, with a new joint venture factory, Blue Ocean Footwear, due to go into production by February 2011, Apex will get involved with a turnover of nearly $200 million of footwear export by 2013.

Growth rate

The local footwear industry is experiencing an annual growth rate of 21 percent, according to a spokesman from another apex organization, Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh (LGFMEAB). However, to continue the trend, the present level of growth has not only to be attained; it also has to be taken to a still higher level, if Bangladesh is to match the success of its immediate competitor, Vietnam.

According to a newly released statistics from the Export Promotion Bureau of Bangladesh, footwear exports from the country grew from US$61 million in the period of July-November 2007 to $85 million in the same period of 2008, recording a growth of 39 percent. In the first four months of the 2010 fiscal year there has been $98 million worth of exports, a 65 per cent increase from the same period last year. Taking this rate of growth into account, shoe industry executives estimate that the current fiscal year’s footwear export is likely to cross $300 million. Though in the next two years the existing factories are likely to export more shoes, it is the new capacity that will come on stream from early 2011 that is expected to cause the huge spurt in growth.

Growth in exports is due to the low production cost in Bangladesh compared to its neighboring countries: China, India and Vietnam, who also have a very well entrenched leather and footwear export industry. Orders which earlier used to be given to China or India are now being handed out to footwear manufacturers in Bangladesh because they are able to produce low-priced but quality shoes, which have now found its way in to key markets in EU and Japan.

This growth in footwear exports has come as a blessing in disguise at a time when leather exports have fallen by a massive 18 percent in the period under review. Experts attribute the growth in footwear exports, thanks to machineries imported from Italy that is trusted for its quality output. In recessionary trends, high-priced products tend to register a negative growth, as consumers tend to shy away from them in preference for value for money items. In this scenario, it is a golden opportunity for the leather and footwear sector to increase its global market share.

Import Substitute Products

import-substitute

Import Substitute Products

  • Automobile spares
  • Railway engine & rail line spares,
  • Bicycle & cycle rickshaw,
  • Iron chain,
  • Machine tools,
  • Jute & textile machines and spares,
  • Chemical industry machines and spares,
  • Sugar and food industry machines & spares,
  • Engineering & metal industry machines and spares,
  • Marine and ship industry spares,
  • Agricultural machines, accessories and spares,
  • Plastic and related product machines and spares,
  • Electrical goods and accessories, etc

Garments Textiles Industry

garments

COMPARATIVE STATEMENT ON EXPORT OF

RMG AND TOTAL EXPORT

OF BANGLADESH

YEAR EXPORT OF RMG
(IN MILLION US$)
TOTAL EXPORT OF BANGLADESH
(IN MILLION US$)
% OF RMG’S TO TOTAL EXPORT
2009-10 12496.72 16204.65 77.12
2010-11 17914.46 22924.38 78.15
2011-12 19089.69 24287.66 78.60
2012-13 21515.73 27027.36 79.61
2013-14 24491.88 30186.62 81.13
2014-15 25491.40 31208.94 81.68
2015-16 28094.17 34241.82 82.05
Data Source Export Promotion Bureau  Compiled by BGMEA

 

MAIN APPAREL ITEMS EXPORTED FROM BANGLADESH

(VALUE IN MN. US$)

YEAR SHIRTS TROUSERS JACKETS T-SHIRT SWEATER
2009-2010 993.41 3035.35 1350.43 3145.52 1795.39
2010-2011 1566.42 4164.16 1887.50 4696.57 2488.19
2011-2012 1733.54 4686.39 2231.16 4713.11 2340.34
2012-2013 1972.89 5185.48 2634.28 5143.22 2620.73
2013-2014 2173.73 5690.78 2973.16 5863.81 2932.94
2014-2015 2271.43 5697.83 3183.17 6064.13 2829.16
2015-2016 2317.09 6319.00 3774.08 6118.53 3182.47

Data Source Export Promotion Bureau  Compiled by BGMEA

Garments & Textiles

From spinning to weaving, from knitwear to leisurewear and high street fashions, the textiles and clothing industry is Bangladesh’s biggest export earner with value of over $ 16 bn of exports in 2009-10. Our factories design and produce for the world’s leading brands and retailers. This rapidly growing sector of the Bangladeshi economy offers a unique competitive edge that supports profitable expansion into new strategic markets.

Sector Highlights

  • Cost and quality of products that are produced on time, reliably and very competitively with a highly skilled labor force.
  • A unique regional location for expansion into key Eastern and other markets.
  • Favored trading status with the EU and the USA.
  • Clusters of companies providing a local supplier base with real depth in skilled labor, training and technical development facilities.

The growing demand for yarn in the local market, comparatively low cost of doing business, lucrative incentive packages and a favorable investment policy regime are important reasons for investment in this sustainable sector.

RMG and Backward Linkages

The phenomenal growth in the ready made garment (RMG) sector in the last decade created many new factories and employment opportunities. Having enjoyed more than 70% of total investments in the manufacturing sector during the first half of the 1990s, RMG and knitwear now account for about 4,825 factories and a workforce of 3.1 m -80% of which are women. This sector now employs over 50% of the industrial workforce and accounts for 79% of the total export earnings of the country. The growing trend in the textile and the garments sector means that Bangladesh is perfectly positioned to appeal to foreign investors.

Investment Opportunities and Government Support

Enormous investment opportunities exist in this sector. In the RMG industry demand for fabric significantly exceeds local supply and so is currently being met by imports. Backward linkage is a significant trading opportunity and is supported by a government backed incentive: 15% cash subsidy of the fabric cost to exporters sourcing fabrics locally.

Additionally the government has created a highly favorable policy framework for investment in these sectors offering investors the following choices:

  • Establishment of new textile/RMG mill in the private sector
  • Joint ventures with the existing textile/RMG mill
  • Acquisition of public sector textile mills that are being privatised
  • Indirect investment through financial services and/or leasing

The most beneficial public policy of introducing back to back LC* and bonded warehouse facilities provide a tremendous impetus to the export scenario in Bangladesh.

Spinning

The government is committed to fostering a strong spinning sector within the economy to support the robust textile and garment industry that has developed. The government is therefore supporting spinners by providing lower tariffs for machinery spares and raw materials, cash incentives, reduced tax rate, and low-cost funding etc.

Bangladesh food beverage industry

food products2

Food and beverage industry

Food industry is a rapidly growing sector in Bangladesh, employing a significant portion of the labor force in the country. Between 2004 and 2010, the food processing industry in Bangladesh grew at an average 7.7 percent per annum. Bangladesh Bureau of Statistics, in its 25006 Economic Census, reported that there were approximately 246 medium-sized food processing industries employing 19 percent of the industrial manufacturing workforce in Bangladesh or 8 percent of the total manufacturing labor force. The food industry employs 2.45 percent of the country’s total labor force and its share in the GDP was 2.01 percent in 2010. There are also numerous small scale factories and domestic units engaged in food processing throughout the country. According to some industry analysts, the food processing sector in Bangladesh is a 4.5 billion US Dollar industry. In 2010, Bangladesh exported over $700 million worth of processed food and beverages, over 60 percent of them were shrimp and fish products.

Food processing in Bangladesh has traditionally been small scale, with domestic or family business using common processing knowledge for the conservation and handling of raw agricultural commodities to make them usable as food and feed. Although commercial scale food processing using modern technology especially for wheat and rice milling, mustard seed crushing and very limited bread and cookie manufacturing appeared during the 1960s, the growth of this sector did not gain momentum in terms of operational scale and quality until the 1980s. Recently the defining characteristics of the industry has been the processing of increasingly diverse products to meet the changing demands of the Bangladesh population. The major food processing sub-sectors in Bangladesh include dairy, edible oil, sugar, rice, wheat, fruit and vegetable, tea, poultry/beaf, pulses and spices and fish processing industries. Induced by the vigorous growth of the diverse middle class population of Bangladesh and the growing demands for additional consumption, the food processing sector is set to witness further hefty expansion in the coming years.

Auto Bricks Industry

tunnel kiln

Bangladesh has started making bricks using new technology, which cuts carbon emission almost by half and creates scope for earning huge foreign currencies.
Entrepreneurs and financiers said Bangladesh will be able to sell per tonne of saved carbon at $15 after June 2010.

The new technology being used by Diamond Auto and the likes is Hybrid Hoffman Kiln (HHK) technology imported from China.
A single kiln that runs on HHK technology will produce 15 million bricks and cut carbon emission by 5,000 tonnes a year. A double unit kiln will produce 30 million bricks and cut carbon dioxide (CO2) emission by 10,000 tonnes every year.
Industrial and Infrastructure Development Finance Company Ltd (IIDFC) has so far funded four brick manufacturing units including Diamond Auto Bricks under the technology.
Bangladesh has about 6,000 authorised brickfields and numerous illegal ones.
IIFDC Project Officer Shaymal Barman told The Daily Star that the brickfields in Bangladesh emit around 875 lakh tonnes of CO2 every year.
Barman said HHK kilns will reduce carbon emission almost by half.
Most of the works at Diamond Auto are done without human intervention. Coal and clay are mixed automatically and then poured into a machine. In every piece of brick about 2-3 percent coal is mixed. Bricks are prepared automatically and taken to a silo, and smoke of the kiln, which others use for burning bricks, is used for drying the raw bricks.
Owner of the brickfield M Zaydul Abedin said: “The smoke produced in my kiln is being trapped and used for drying raw bricks. So less CO2 is emitted.”
The strength of the bricks produced in this field is more than double than that of the traditional bricks, and the price is also competitive, said Abedin.

AUTOMATIC BRICK MANUFACTURING PLANT with following technologies:

  • Hybrid Hoffman Kiln

 

  • Tunnel Kiln

Agro-based Industry

agro-photoAgro-Based Industry List of Bangladesh:

 

  1. Fruit based processed food manufacturing industries (Jam, Jelly, Juice, Pickles, Syrup, Sauce, etc.)
  2. Fruit (Tomato, Mango, Guava, Sugarcane, Jack fruit, Litchi, Pineapple, Coconut, etc.), vegetables, and lentils processing industries.
  3. Bread, biscuit, vermicelli, chanachur, noodles, etc.production industries.
  4. Production of flour, maida, and semolina.
  5. Processing of mushrooms and spirulina.
  6. Starch, glucose, dextrose, and other starch products manufacturing industries.
  7. Milk processing industries (milk pasteurization, powdered milk, ice cream, condensed milk, sweets, cheese, ghee, butter, chocolate, curd, etc.)
  8. Potato-based food manufacturing industries (potato chips, potato flakes, starch etc.)
  9. Spices manufacturing industries.
  10. Edible oil refining and hydrogenation industries.
  11. Salt processing industries.
  12. Processing and freezing of prawns and other fishes.
  13. Herbal and vestige medicine producing industries.
  14. Unani, Ayurvedic and Homeopathic medicine producing industries.
  15. Manufacturing industries of feed for duck, chickens, livestock and fish.
  16. Seed processing and preservation.
  17. Jute goods (thread, fabric, bag, carpet, sandal shoes etc.) producing industries.
  18. Silk fabrics and clothing manufacturing industries.
  19. Agro-based product processing machinery manufacturing industries.
  20. Rice, puffed rice, beaten rice, popped rice etc. processing industries.
  21. Aromatic rice processing industries.
  22. Tea processing industries.
  23. Coconut oil producing industries (if copra collected from local coconuts is used).
  24. Rubber tape and lakkha processing industries.
  25. Cold storage (processing and preservation of edible and seed potatoes, fruits, vegetables etc. produced by farmers).
  26. Preparation of furniture made of wood, bamboo and cane (except cottage industries).
  27. Flower preservation and exporting enterprises.
  28. Meat processing industries.
  29. Production of organic and mixed fertilizer and guti urea etc.
  30. Production of bio-pesticide and neem pesticide.
  31. Bee-keeping and honey collecting enterprises.
  32. Rubber-based goods producing industries.
  33. Manufacturing of particle board.
  34. Mustard oil manufacturing industries (if local mustard is used)
  35. Production of bio-gas and electricity(produced from paddy shell, poultry and cattle wastes).
  36. Edible oil (rice bran) manufacturing industries.
  37. Poultry and dairy farming industries.

Sample Project Profile

Profile 1

 

 

This Post is under construction and will be developed very soon by  RIMEX International. Its professional authors  prepare Bankable Project Profile to set up any manufacturing industry either it is small or medium even large. The specialized thinkers prepare financial report of the Project Profile which shall ensure viability test report of any financial institutes. The Report will consist of elaborate technical information in association with civil, electrical, mechanical engineering explanation. The precise marketing data with the latest survey of the targeted territory will be focused in the Project Profile for Bank Loan in Bangladesh or any places of the world.