The government-led and the International Labour Organisation-sponsored readymade garment factory inspection programme is unlikely to be completed by April 30 deadline due to non-cooperation of some factory owners and inconsistency in information including factory locations and contact numbers. As per the announcement of the ILO, the inspection of the readymade garment factories under National Tripartite Plan of Action was supposed to end by April 30. According to officials concerned, the ILO has so far inspected 850 garment factories with 500 units still remaining as inspection teams failed to reach the units due to incorrect contact details. ILO officials on Wednesday held a meeting with the Bangladesh Garment Manufacturers and Exporters Association and sought intervention from the trade body so that factory owners give schedule for inspections. In the meeting the ILO officials said that it would not be possible to complete the inspections within April 30 as their inspection teams failed to reach more than five hundred factories due to incorrect information and unwillingness of factory owners. An official of the ILO on Saturday told New Age that the three initiatives — Alliance for Bangladesh Worker Safety, Accord on Fire and Building Safety in Bangladesh and the government-ILO­ –– set targets to complete inspections in 3,508 export-oriented garment factories but the number was fluctuating. Although the Alliance, the North American retailers group, and Accord, the platform of EU buyers, have completed its initial inspections, the ILO has been facing some problems like inconsistency in information including factory locations and contact numbers and non-cooperation of the owners, he said. Under the circumstances, the ILO is now considering to set a deferred deadline on June 30 to complete the inspections, the officials said. Recently, the ILO informed the government that they found incorrect contact information of 666 factories on the list provided by the Bangladesh Garment Manufacturers and Exporters Association and the Bangladesh Knitwear Manufacturers and Exporters Association. It also alleged that the authorities of at least 62 factories on the list were not cooperating in conducting safety inspections in the units. A BGMEA official said following an intervention from the trade body out of 62, more than 20 factories have already conducted safety inspections in their units. ‘Now we are working on the list of the factories that provided incorrect contact information and we hope that most of the factories will come under the inspection within a short time,’ he said. After the Rana Plaza building collapse that killed more than 1,100 people, mostly garment workers, in April 2013, the EU retailers formed Accord while the North American retailers formed Alliance and both the initiatives launched inspection programmes in the RMG factories from where their members procure products. The government in association with the ILO announced a separate inspection programme for rest of the garment factories which were not on the lists of Alliance and Accord and were mainly engaged in subcontracting. The Accord and Alliance completed their primary safety assessments in their listed factories over 1,900 in number.

Source: https://newagebd.net/110964/complete-govt-ilo-factory-inspections-unlikely-by-apr-30/#sthash.2CJI2fBA.dpuf

Seeking more Japanese investment, prime minister Sheikh Hasina on Saturday said her government will ensure all facilities for the investment by Japanese entrepreneurs. “We need more investment from Japan …we’re ready to provide all sorts of facilities for the smooth investment by Japanese entrepreneurs,” she said, reports UNB. The prime minister said this when outgoing Japanese ambassador in Dhaka Shiro Sadoshima met her at her official residence Ganabhaban. She also sought more financial assistance from Japan for the overall development of the country. PM’s press secretary AKM Shameem Chowdhuri briefed reporters after the meeting. The prime minister hoped that Bangladesh would get more assistance from Japan to attain its economic goal and it will be able to reach its development goal with that assistance. Sheikh Hasina said her government has allotted two economic zones for the Japanese investors and wants the Japanese investors to avail of the opportunity. She thanked the ambassador for his all-out cooperation and active role in strengthening the bilateral cooperation between the two countries saying that the ties between Dhaka and Tokyo reached a new height during his tenure. The prime minister also praised her Japanese counterpart Shinzo Abe’s leadership and thanked him for his continued support to Bangladesh, mentioning that Japan is the trusted friend of Bangladesh and a largest development partner. She thanked the Japanese government and its people. The outgoing Japanese envoy also thanked the prime minister and her government for their all-out support during his stay in Bangladesh, and lauded the dynamic and strategic leadership of Sheikh Hasina that helped Bangladesh attain its present development status. Mr Sadoshima said he is impressed observing closely Sheikh Hasina’s praiseworthy leadership and the way she solved many problems in the country. The envoy expressed his strong optimism that Bangladesh would certainly achieve its desired goal under the leadership of Sheikh Hasina. About the potentials of Japanese market for Bangladeshi products, he said Bangladesh could largely expand its market there for mutual benefits. While talking about Japanese businessmen in Bangladesh, Mr Sadoshima said the Japanese traders are happy as they are getting all kinds of cooperation from the government of Bangladesh in doing business. PM’s adviser Dr Gowher Rizvi and principal secretary Md Abul Kalam Azad were present.

Two Indian northeastern states-Tripura and Meghalaya-are looking to Bangladesh for exporting excess power produced there, and have sought their central government’s support to make this happen. Presenting Tripura’s case, their state power minister Manik Dey said at a two-day power ministers’ conference that began on Thursday that since Bangladesh was interested in purchasing 100 MW of power from the 726.6 MW Palatana power project, it was now up to New Delhi to approve it, reports The Indian Express. “The government may allow Tripura State Electricity Corporation Ltd, a state government undertaking, to sell 100 MW power to Bangladesh. Construction of transmission line has been already undertaken and is expected to be ready by December this year,”  Mr Dey said, pleading for issue of necessary direction by New Delhi to immediately start commercial activities, reports UNB. Tripura’s 726.6 MW Palatana gas-based power project belongs to ONGC Tripura Power Company Ltd, a joint venture of ONGC, IL&FS and the government of Tripura. While Indian president Pranab Mukherjee inaugurated the first unit of 335 MW production in June 2013, prime minister Narendra Modi inaugurated the second unit in December last year. Meanwhile, the Meghalaya government has also moved the central government to permit it to export to Bangladesh excess power produced in the state. While Meghalaya is looking for an opportunity to maximise its power generation, especially during the monsoon period, Bangladesh was a country with high demand for power, Meghalaya power minister Clement R Marak said at the power ministers’ conference. The minister said development of hydropower projects in Meghalaya was not encouraging because despite generation far exceeding the state’s demand during the monsoon period, the same cannot be transmitted out of the region because of evacuation problems. “This results in spillage of water meant for power generation, whereas neighbouring Bangladesh is in need of power,” he said. Bangladesh has been raising objections to construction of power projects on rivers in Meghalaya that flow out to that country. “There’re four such projects in Meghalaya with a total installed capacity of 1,190 MW for which MoUs have been signed with independent power producers. Once the Centre permits export of power to Bangladesh, the neighbouring country may agree to the construction of the power projects since these will also benefit that country,”  Mr Marak said.

China, the largest apparel exporter worldwide, is becoming a major destination for Bangladeshi garment items due to duty benefits offered by the Asian economic giant and a rising middle-class there.Garment exports to China, the second largest Asian apparel market for Bangladesh after Japan, accelerated 73.48 percent year-on-year to $241.37 million in fiscal 2013-14, according to the Export Promotion Bureau.The earnings were $136.5 million in July-December this fiscal year, with 24 percent growth year-on-year.After garments, Bangladesh’s jute and jute goods and leather and leather products are also becoming popular in China, fetching $100 million and $60 million, respectively, in fiscal 2013-14.“Our garment exports to China will cross $1 billion in three to four years,” said Syed Sadek Ahmed, managing director to Space Sweater.Space Sweater that started exporting sweater to China in 2013 ships $1 million worth of products a year, Ahmed said, adding that he plans to sell other garment products as well. Due to rising production cost, Chinese businesses are moving away from producing low-end garments, which has created an opportunity for Bangladesh, he said.Overall exports to China have also been on the rise: $746.19 million came in 2013-14, with a whopping 63 percent rise year-on-year. In July-March, total exports to China were worth $579.13 million.Because of the duty benefits and low production cost in Bangladesh, Chinese consumers can save up to 15 percent if their garments are bought from Bangladesh.In July 2010, China offered a zero-duty benefit for exports of 4,721 types of Bangladeshi products, of which the majority are garments.Exporters said they enjoy an added advantage in the Chinese market as 90 percent of the garments they ship to China without paying any duty include T-shirts, jeans, sweaters and casual trousers, and Bangladesh has an edge over its competitors for these products.Bangladeshi garment items enter China in three ways — by international retailers such as H&M and Walmart, by Chinese manufacturers operating in Bangladesh, and by Chinese retailers and brands, exporters said.China is losing its share in the global apparel business due to its higher production cost, including labour wage, a lack of skilled workforce and a shift of its manufacturing base towards technological products.The average wage for Chinese garment workers is around $500 per month, while the amount is between $70 and $100 in Bangladesh.This is why Chinese businesses source garments from countries like Bangladesh and Vietnam.The apparel market size in China is $300 billion a year, of which more than $150 billion is export-oriented, according to China National Garment Association.China has a population of 1.3 billion, most of whom fall in the middle-income bracket and rely on low-end clothing.“We have a big opportunity in the Chinese market,” said Shahidullah Azim, vice-president of Bangladesh Garment Manufacturers and Exporters Association, the garment exporters’ platform.We are trying to remove the barriers to exports to China,” Azim said.The balance of bilateral trade between the two countries is heavily in favour of China due to higher imports by Bangladesh.In fiscal 2012-13, Bangladesh imported goods worth $6.32 billion from China, against $6.44 billion in the previous year, according to the commerce ministry.Before the duty benefits were offered, Bangladesh’s main export items to China were jute, jute goods, fish and frozen fish, leather and leather goods, Azim said.ndia is another major Asian market that is becoming lucrative for Bangladeshi apparel exporters.Garment exports to India have also been rising, though at a slower pace than those to China, since the neighbour allowed zero-duty benefits for Bangladeshi garment items in November 2012.In fiscal 2013-14, Bangladesh exported apparel items worth $96.26 million to India, with a 21.86 percent rise year-on-year.

Source: https://www.thedailystar.net/business/export/china-next-big-garment-export-destination-76877

Export-oriented business sectors, except RMG, have urged the National Board of Revenue (NBR) to fix tax at source for all export sectors at 0.30% like the RMG sector. They also demanded withdrawal of 5% tax on cash incentive provided by the government to boost exports. In the current fiscal year, the government lowered tax at source to 0.30% from 0.80% for the apparel sector, following demand by the RMG leaders in the wake of political unrest. The leaders of business association made the appeal at a pre-budget discussion with NBR Chairman Md Nojibur Rahman at his office yesterday.  “Frozen foods are 100% agro-based products having no relation with import, but the sector people have to pay 0.60% tax at source over export value, while the country’s ready-made garment sector pays 0.30% tax at source on export, said Bangladesh Frozen Foods Association President Amzad Hossain. “That is why we should unite and urge the government to treat all equally,” he said.  Due to hartal and blockade, production in the frozen food industries suffers due to lack of raw materials, Amzad said, stressing policy support to recover losses. He also urged the government to withdraw the ceiling on shrimp export and to set the incentive on realised prices.  Bangladesh Textile Mills Association (BTMA) President Tapan Choudhury urged the government to allow duty-free import of Busbar Trunking System like the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).  Tax at source contributes a little to the revenue and that is why it should be withdrawn, said Shahidul Islam, director of FBCCI, and also former president of Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA).  BPGMEA also urged the government to lower import tax to 2% from existing 5%.  The country’s Terry Towel sector’s export is facing trouble due to unhealthy competition, said Shadat Hossain, director of Bangladesh Terry Towel and Linen Manufacturers and Exporters Association. To help the sector come out of trouble, he urged the government to withdraw tax on incentives and local Letter of Credit and to lower tax to 10% instead of existing 15% on export earnings. “Small and medium business people are exporting jute goods, but last year the NBR through a Statutory Regulatory Order (SRO) increased licence fee to Tk15,000 from Tk11,000, and added 15% VAT to the licence fee, which discourages businessmen, said S Ahmed Majumdar, president of Bangladesh Jute Goods Association claimed.   He added that the number of entrepreneurs came down to 300 from 500. Ahmed demanded cash incentives and tax-free export facilities as it is a 100 locally-based industry.  Leader of Jute Mills Association urged the government to withdraw tax at source and cash incentives.    Responding to the call for incentives by the business community, NBR Member Farid Uddin Ahmed said incentive is a matter that Bangladesh Bank (BB) and the Commerce Ministry deal with.  “We can consider the source tax issue and would try to revise it to give cushion to the business community.”  Replying to a query about import-related disputes, NBR chairman urged the business community to resolve the disputes through Alternative Dispute resolution (ADR). “We are working on bridging relationship with the business people and to provide them with all-out cooperation to do business.”

The now multi-billion dollar readymade garment industry is currently passing through a critical juncture, as conspiracies both at home and abroad are being hatched in the sector. The overall performance of apparel exports in the last year compared to previous years has not been that different. The growth rate has been around 9% over the previous year, which is slightly lower than the past five years’ average of around 12%. This drop can be attributed to several factors likes the cancellation of the US generalised system of preferences (GSP), the Rana Plaza tragedy, political instability, the energy crisis, and discriminatory treatment by some major global buyers and various propaganda about factory diseases. Bangladesh’s apparel exports have been concentrated to two major destinations — the EU and North America. The share of our apparel export to markets other than EU and North America was 6.88% during the 2008-09 fiscal year, which had increased to 14.71% in 2013-14. From June 2013, the US suspended Bangladesh’s trade benefits under the GSP program that made Bangladeshi (barring RMG) products ineligible for duty-free treatment. Now is the time to diversify our export destinations, and the oil-established Middle Eastern countries can be a future destination for us. This diversification of export destinations, with growing exports, is a healthy sign. Over the last five years, there has been a significant rise in exports to Japan, China, India, South Korea, South Africa, Russia, Brazil, Mexico, and Chile. The simplification of GSP rules of origin by the EU, Japan, Norway, Switzerland, and duty-free and preferential market access by India, China, Korea, and Malaysia are all positive signs for us. In April 2012, the world’s leading strategy consulting firm McKinsey & Co released a study titled “Bangladesh’s ready-made garments landscape: The challenge of growth.” McKinse forecasted that the Bangladesh apparel sector could reach $30bn by 2015 and $50bn by 2021. Unfortunately, Bangladeshi entrepreneurs cannot export to Middle Eastern countries for the lack of necessary steps or lobbying and advocacy. The region has the possibility of netting us $20bn in the export of RMG commodities. Bangladesh has carried out exports worth $847m, according to Kuwait Bangladesh Chamber of Commerce and Industry (KBCCI). It is, however, important that necessary steps be taken by diplomats, missionaries, and the export promotion bureau (EPB) in those countries. That will make sure that RMG exports will increase dramatically in the year of 2021, as estimated by entrepreneurs of this sector. In addition to RMG exports having huge opportunities, other sectors like the export of labour force, pharmaceutical products, handicrafts, tannery commodities, and the export of various types of produce which can be pursued in Middle Eastern countries. Kuwait can become a central point in this region, according to the president of KBCCI. The secretary of KBCCI estimated that because of a lack of marketing, we have not been able to enhance export growth in the Middle East — but our government bodies should take the necessary measures in each of the individual countries. It was also noted that presently the lion’s share of RMG goods come by way of China, Turkey, the US, and EU. If direct negotiations with Middle Eastern business authorities can be ensured, only then can we expect to see any benefits. KBCCI is going to organise a trade fair on April 23 in Kuwait, hopefully Bangladeshi entrepreneurs and the government will be able to increase advocacy and lobbying to boost exports. All entrepreneurs should be involved in the discussion. One of the vice presidents of BGMEA has stated that it will only be possible to reach our 2021 financial goals if the necessary facilities are made available by the government. In fact, it would help ensure that we reach two goals at the same time: The RMG vision, and our aspired status of becoming a middle-income country by 2021. Apart from China, other countries and regions such as Japan, Russia, India, Australia, New Zealand, Canada, Korea, Turkey, Southeast Asia, Central and South America, as well as the Middle East have enormous potential to be future destinations for the RMG exports of Bangladesh. In the meantime, Bangladesh must continue to work on improving infrastructure, ensuring power and eco-compliance, and maintaining a world-class working environment by building eco-friendly RMG factories, according to United States Green Building Council (USGBC). However, there are some long-term challenges to the growth of the RMG sector. Infrastructure and governance, compliance issues, supplier performance, workforce supply, raw materials, and economic and political stability being some of the bigger hurdles. Bangladesh also needs to gradually diversify its export products to include other industries, where it can be competitive in the long-run. We are optimistic that the new wave of opportunities and the growth momentum will energise the apparel industry to add new success stories in the coming years — opportunities that clearly mark the RMG vision for 2021.

We do not underestimate the damage done to the economy by blockades and violent political disputes. The opportunity costs suffered by the RMG sector through buyers postponing visits and falls in orders are incalculable. It is still possible, however, to see considerable potential for the country’s leading export industry to continue to grow and provide valuable manufacturing jobs. Despite disruption and increased transport security costs, export earnings from the ready-made garment sector saw 8.4% growth to $2.08bn for the month of March compared to the same period last year. Figures from the Export Promotion Bureau indicate that RMG exports grew by over 3% for the July-March period. These figures are some way short of the growth needed for the sector to achieve its target of $50bn exports by 2021. What matters though is that, in spite of all the difficulty faced, the sector has still been able to increase export sales. Efforts to nurture new export markets are playing their part in helping the sector prove resilient. Likewise, the efforts being made by mutli-stakeholder safety initiatives and the government to improve safety conditions and productivity, are helping keep major brands committed to procuring garments from Bangladesh. Given our low labour costs and the trend of increasing outsourcing from China, there is no reason why the sector cannot get back on track and improve its competitiveness against other nations. An end to political unrest is imperative to boost confidence among buyers to keep orders flowing and secure the funds needed for future growth.

The new industrial zone will be set up on the unused land belonging to different ministries including the Industries Ministry The Industries Ministry is planning to set up a new industrial zone in the country’s northwest region, along with forming an authority that would work for ensuring better coordination and development of the existing industries. A source at the ministry said the proposed name of the new authority would be Bangladesh Industrial Development Authority (BIDA). Seeking anonymity, the official said the new authority would improve coordination among different government agencies and state-owned industries to prevent labour unrest, collapse of factories, fires, and unwanted incidents. Last week, an inter-ministerial meeting was held at the Prime Minister’s Office, presided by the premier’s Principal Secretary Abdul Kalam Azad, to discuss the arguments behind setting up another industrial zone in the country. Asked about the issue, Industries Secretary Mosharraf Hossain Bhuiyan told the Dhaka Tribune: “The proposal is now in an initial stage and it [zone] will be set up after a new law is enacted.” The proposal reportedly recommends that a variety of industries including agricultural services are set up in the new zone. The new zone would also have import and export industries, while the industries that are on the brink of being shut down would also be placed in the zone after they are modernised and new technology is introduced to ensure maximum production, according to the proposal. The new industrial zone will be set up on the unused land belonging to different ministries including the Industries Ministry, the proposal further recommends.