Yarn Price Hike-RMG export growth under threat

For the first time in the country, 69 industrial units in Dhaka and Chittagong export processing zones (EPZ) have introduced workers' associations on the basis of referendums by workers.At the same time, workers of 22 industrial units have voted for not having any trade union body for themselves for yet another year.

The referendums on having workers' associations were held from January to the middle of this month. There are 124 more "eligible" industrial units in these two EPZs which will have to hold their referendums by 2010 as per a decision of Bangladesh Export Processing Zones Authority (Bepza) on the basis of a 2004 act on allowing trade union activities. Sources said there are 6,000 garment and textiles related factories outside the EPZs that employ over two million workers and only 122 of them have trade unions.

Although referendums are supposed to be held without any external influence and spontaneously by the workers, Bepza is putting pressure on the industry owners to hold them as soon as possible.

Sources added that an American labour group that has been pushing hard for implementing trade union rights at the EPZs has mounted pressure on the government to have the associations as soon as possible.

However, some of the investors are concerned by such pressure as they believe that introduction of workers' associations should be gradual.

GB/ March 23, 2008
Status: Manufacturing

Yarn Price Hike-RMG export growth under threat

The apparels export growth is now under threat on persistent yarn price hike in the local market, according to industry insiders.

“We beat China, Pakistan and India in terms of growth in exports of apparel items. But we might not maintain this growth trend if the prices of yarn in the local market go up further. We will just lose our competitiveness in the international market,” said BKMEA (Bangladesh Knitwear Manufacturers and Exporters Association) President Fazlul Hoque, urging the local yarn manufacturers to the item's price at tolerable level.

Yarn producers say they have no choice, blaming the rise in the prices of yarn on the cost of cotton, the raw material. They pointed to the fact that the cotton price increased to US$ 87cents per pound from $78 cents per pound in December and $60 cents a pound in September in 2007.

The '30 count' variety of yarn is now selling at a price ranging from US$ 2.90-$3.0 per kg compared with its rates at $2.75-$2.80 per kg last December 2007.

The '20 count', which is popularly known as 'open-end yarn,' is now selling at $2.35-$2.40 per kg compared with its previous rates at $1.90-$2.0 per kg, knitwear producers said.

The industry people said 40-count variety of yarn is selling at $3.85-$3.90 per kg compared with its previous rates at $3.40-$3.45 per kg.

Yarn producers said the price of 30-count variety of yarn was sold at $ 2.40 per kg in January last year, which reached around $ 2.45 in July. It increased to $2.50 in August and the rate continued upwards in September, manufacturers said.

Meanwhile, the Ministry of Textile and Jute on March 16 in a meeting said the yarn prices in the local market increased due mainly to the monopoly a section of unscrupulous traders enjoy.

GB/March 18,2008

Medicine company Novartis again top exporter

Novartis (Bangladesh) Limited has once again become the highest pharmaceutical exporter of the country with its global Sandoz brand products.

The company exported US$ 15 million medicines in 2007, which is 44 percent of the total pharmaceutical exports from Bangladesh. In 2007, total pharmaceutical exports from Bangladesh were approximately $35 million.

Novartis (Bangladesh) Country President Ashfaq-ur-Rahman said Sandoz products have become popular in many countries, helping the company expand its export basket.

He also said his company started the process of export in 1995.

Novartis is exporting to countries such as Germany, France, Spain, Austria, Scandinavian countries, Latin America and Asia Pacific.

The overall export of the company as well as the country fell in 2007. In 2006, the export earning of the company was $21.4 million.

Novartis Group companies, headquarter in Basel, Switzerkand, employ more than 100,000 people and operate in over 140 countries around the world.

China likes to invest in textile sector

The Chinese are interested  to invest in Bangladesh textile sector, according to the head of a visiting business delegation from China.

“The Chinese entrepreneurs feel encouraged to invest their money in the textile sector here as Bangladesh enjoys facilities like GSP in Europe and has cheap labour force,” Cao Xin Yu, the vice president of China Chamber of Commerce for Import and Export of Textile, told some local entrepreneurs on March 12 at a meeting organized by Bangladesh Textile Mills Association (BTMA) at its office in Dhaka.

During the meeting, the visiting team, however, sought government policy support and BTMA's cooperation to translate such an investment plan into reality.

According to the industry insiders, Bangladesh exported RMG products worth $9 billion in the 2006-07 fiscal, of which $4.5 billion was spent for importing fabrics mainly from China.

During the meeting, the Sino-Bangla widening trade gap issue also came up for discussion.

The Chinese team leader pointed out that such a gap might be minimized to some extent as the export of locally made fabrics to China is on the rise.

GB/March 13,2008

The Foreign investors oppose trade unions in factories

Foreign investors in and around Chittagong Export Processing Zone (CEPZ) have warned that the introduction of trade unions at factory level will hold back further investment in the port city.

Foreign investors in the area from Japan, Korea, Malaysia and Thailand also warned that the move could disrupt production in existing enterprises.

However, workers' representatives said the introduction of unions would help safeguard workers' rights.

In the CEPZ, 87 industrial units have so far formed workers' associations and the rest are in the process to do so.

“In true sense, trade union has no problem but in Bangladeshi style it is dangerous. We do not want to see the legacy of the trade unionism in our plants,” said Yasufumi Matsuo, executive director of Op-Seed Co. (BD) Ltd, an electronics and electrical goods manufacturing company.

Ashish Chakraborty, assistant general manager and company secretary of Mamiya-OP that makes golf shafts, said they are apprehensive about the aftermaths of introducing workers' welfare association.

Sho Sui Lim, general manager of a zipper manufacturing plant outside the CEPZ, said they were instructed to form workers' welfare association.

“The government should ensure that no external elements will be able to spread anger among the workers in the name of their rights in future. We fear the workers' unions will be used to destabilize factories in Chittagong,” Lim said.

However, Zaheda Aktar, a leader of a newly formed workers' association of a factory, said such associations will help safeguard the workers' rights.

GB/March 10,2008

England’s RMG dyeing company chooses Bangladesh for investment

An UK-based garment dyeing company abandoned its plans to relocate a plant to China, instead building it in Bangladesh, attracted by the lower costs and well developed garment industry.

Stevensons shifted the plant from the UK to Bhaluka in Mymensingh, following an invitation from the SQ Group, a leading sweater manufacturer in Bangladesh.

The new joint venture, SQ Stevensons Chroma Limited, established on a 34,000 square feet area in SQ Group's Supply Chain City in Mymensingh, will go into commercial production on March 5 with a capacity to dye 6 million pieces of knitwear per year.
 
Stevensons convinced the UK company that Bangladesh is going to continue to be a garment producing country with low costs and  they also found the investment environment friendly with many mature garment units.

GB/March 9,2008

$30m investment and 8000 new jobs at Adamjee EPZ by RMG factory

Kwun Tong Apparels, a Hong Kong-based woven apparel factory operating in Adamjee Export Processing Zone, is to invest US$30 million this year creating 8000 new jobs.

"We are going to set up two more production units as we are receiving a huge number of orders from international buyers," Chief Executive Officer of the company Adil Patel said on March 5.

At present, Kwun Tong Apparels, which went into production in March 2006 with an initial investment of $20 million, employ 2000 workers, said Patel.

Kwun Tong Apparels is a concern of Must Garment Corporation Limited of Hong Kong that has also another concern, Lenny Fashions Limited, in Dhaka Export Processing Zone.

Chief Executive Officer also said western buyers are interested to buy products from his company since his factory ensures social compliance.

He said currently his company serves lunches, medical facilities and transport facilities to workers free of costs.

The minimum wage for the workers of the factory has been fixed at $30 as per the rules of the EPZ regulatory body Bangladesh Export Processing Zones Authority (Bepza).

"We are ready to do whatever we need to improve our production," said Patel at his garment office.He added that inefficiency of mid-level management and 'vested quarters' were behind the recent labor unrest in the country.

GB/March 7,2008

New markets for Exporters

Bangladeshi entrepreneurs have been exploring new export markets and they have exported $6.2 million worth goods in 21 new countries in the first quarter of the current fiscal year.

According to Export Promotion Bureau, exports in these 21 countries were 'zero' in the corresponding period of the last fiscal year.

Of these countries, 13 are African, four former Russian Federation, two Asians, one European and one South American.

Goods, which were exported, are frozen food, woven, knitwear, leather, raw jute, jute goods and chemical products were exported in these countries during July-September of fiscal 2007-08.

The countries are: Angola, Belize, Benin, Cambodia, Cote D Ivory, Gambia, Iceland, Ivory Coast, Kyrgyzstan, Laos, Lithonia, Macao, Namibia, Niger, Reunion, Senegal, Tajikistan, Tanzania, Tokelau Islands, Tunisia and Uzbekistan.

A leading woven exporter identified two major reasons entrepreneurs' efforts to look for new destinations and location of stores of big chain shops in different countries for the diversified markets.

“We're looking for new export markets and everyday we're getting responses from different countries around the world and more and more orders are coming from African and former Soviet Union countries,” as said by Anwar-ul-Alam Chowdhury, president of Bangladesh Garment Manufacturers and Exporters Association.

Government data shows Bangladesh's total exports were $12.1 billion in the last fiscal year ended on June 30 2007. Of which, about 76 percent was earned by apparel items.

Of these exports, majority goes to some specific countries that include the US and the European countries.

Analysts often said Bangladesh is in a vulnerable position as its export markets are very limited, but entrepreneurs have proved their potentials that they were able to tap new export markets.

GB/March 7,2008

OUR PRIDE BIBI RUSSEL

Bibi Russel started an institute namely "Bibi Productions" on 13 July, 1995 to change the condition of the workers of the fine arts.

By Moniruzzaman Moni

SEWING is an old tradition of Bangla. The handicrafts sewed by the efficient handicraft designers have charmed the people of the world for centuries. Mus-line, Jamdani, Reshom, Khadi and cotton have taken an honourable position in the world of culture. However, it is very difficult for the handicrafts of Bangladesh to enter in the global market. The reasons are the competition of machine made clothes, lack of money, scarcity of modern data and technology, problem of communication and some other ob­stacles. As a result, the skilled sewers have to change their oc­cupations.

Bibi Russel started an institute namely "Bibi Productions" on 13 July, 1995 to change the condition of the workers of the fine arts. Her main aim was to create safe opportunities for employ­ments of the sewers of Bangladesh. Bibi Russel is an outstand­ing model who does any work from her heart. She works for the improvement of her own land, Bangladesh. She has brought the golden opportunities for the loom workers by using their skill and merit to build an economic freedom and to achieve a pros­perous future. Bibi says it as 'utilizing culture and creative power to remove poverty'. She also says, "I want to find out the way to remove poverty which is ignored by the world. My work is not a grant or generosity. I want to show the whole world with proud the skill of those who works with me".

Although Bibi Russel was born in an aristocratic family of Bangladesh, she spent most of her time in the villages. She wants to bring out the strong colors and features of the handi­crafts of the village in the world market. She has earned fame in Britain for her interest in hand made clothes. She was the first woman of Bangladesh who studied at the 'London College of Fashion' in 1972. In 1975 she had exhibited her model collec­tions in her graduation show. After that she got proposals form the famous designers of the world. Thus she started her journey in the field of international fashion. She has made the fashion industry of the world attractive by working with fashion near about 20 years.

Bibi Russel thought to return her homeland on the nine­teenth decade. She made her dream, to establish handicraft in Dhaka, come true which she dreamed at her childhood. Bibi Russel, the perfect humanist, struggles to remove the sorrows of the street children. Bibi Russel said , "our world is depending on the hands of our next generation. They are the future leaders whether they are poor and nee­dy". She added that she had taken a deci­sion to make them self-independent by teaching them. She has assured 56 chil­dren's school life in her project. Now she is working to spread the market of handi­craft and other clothes in home and abroad. 'Fashion for development' and 'positive Bangladesh' are two slogans of her fashion house. She arranged fashion show for more than thousand of people in Europe which was supported by UNESCO. She arranged a fashion show for handicrafts namely 'Banglar Tanti' in Paris in 1996 which is the head quarter of UNESCO. All of her big shows were supported by UNESCO. The queen of Spain was present as chief guest in her second fashion show named 'Colors of Bangladesh'. She uses dusts such as co­conut fiber, jute, wood, water hyacinths and palm leaves for her works. Such popularity of Bibi Russel made her the chief guest of a fashion show held at Hyzania in Bos­nia which was joint­ly sponsored by UNESCO, UNHCR, and the world BANK, held in December 1997. She was also voted the "Woman of the year" by Elle in 1997. In September1998. with the support of UNESCO and the British Fashion Council, Bibi put on her third show in London, "Stars of Ban­gladesh" where her Royal highness grand Duchess Maria Teresa of Luxemburg and Mrs.Clare short, member of the British parliament, were guests of honor. The same year also brought her fame and glo­ry at the Spanish designs collection in Madrid, where she exhibited her collec­tion made of hand-woven textiles.

The following year, on May 13, 1999, the Fashion Space Gallery in London dis­played an exhibition on Bibi Russel's work. The exhibition was held on the oc­casion of her receiving the "Honorary Fellow ship" of the London institute as recognition for her out standing contri­bution to the field of fabric and design. UNESCO conferred upon her the title de­signer for development, "UNESCO spe­cial envoy" on October 4, 1999.
Her work was recognized in her na­tive country Bangladesh, where she earned several awards. On January 28, 2000, the local television channel-I pro­moted her 12-part epic mini-series enti­tled "Bibir Swapna" [Bibi's Dream], The

north of Bangladesh (Rangpur) was once famous for the hand-woven Satranji, which have been around since the 13th century. Bibi strives to revive this dying craft and gives the crafts people back their almost forgotten heritage.

For her efforts in promoting not only the weavers of Bangladesh but also wea­vers all over the world, the special Envoy title was replaced with the title of "Artist for peace" by UNESCO on 27th Novem­ber, 2001, focusing more on the special mission fulfilled. In 2003 Bibi created her first ever costume designs for the film "Dwitiya Paksha" [The Second In­nings] produced by the film diversions of the government of India. She played an eminent role in presenting the "Image of Asia" which was held in Denmark. 2004 has been a year of added dimen­sion, as Bibi was incited to attend forum Barcelona-2004. In July, in this universal forum of cultures, Bibi Russel spoke at Micro-credit Forum. In the same month, she participated in the first ever fashion week in Bangladesh. The fashion

When people see my collections, I want them to understand and appreciate all the work and effort that have gone in to them. -BIBI RASEL

alli­ance was formed to provide a platform for designers and fashion house of the country with the aim of promoting Ban­gladeshi fashion worldwide. United Na­tions Association of Spain awarded Bibi the prestigious peace prize 2004, for her efforts to fight against poverty in Bangla­desh and her deep involvement in devel­oping aims while promoting a creative link between cultures and between mod­ernity and tradition. 2005 began wonder­fully for Bibi as she traveled to Arosa, Switzerland to attend the world spirit fo­rum and then into Germany to show her spring/summer 2005 collection at IGE-DO. In March, she traveled to Karachi on an official incitation to have her first show ever in Pakistan.
In April, Bibi was invited to the inter­national Men's fashion fair in Bangalore where she closed the three day event in triumph as she showed her first exclu­sive line for men. Soon after returning from Bangalore, Bibi started preparing for a fund-raising event in Kolkata, or­ganized by a group that works for the un­der privileged children and senior citi­zen. Within a month Bibi Russel was back to Kolkata, this time launching a new TV program for a prominent chan­nel. The program is titled as "Fashion for Development" and is based on fashion and how we can use it to contribute to the development of our socio-economic status. She also presented a talk show with STV, US titled "Positive Bangla­desh". Bibi Russel is now more involved in working in the countries of Asia. She has worked to revive Kota Doria and Khadi Rajasthan in India. She feels that she has much to contribute to the people in this region. In May 2006, Bibi aliened the 31st UNESCO International Theater Institute (ITI) World Congress, held in Manila, as a special guest invited by the Philippines government. Bibi produc­tions launched the fashion for develop­ment initiative. It seeks to blend the cre­ativity of the local artisans with that of Bibi's professional design and fashion back ground to secure market outlets for the artisans and there by preserve and revive the weaving heritage of Bangla­desh.

GB/March 1, 2008

Construction industry is on big trouble  further hike in MS rod prices

The construction industry will face a ruin on any further hike in the price of iron rod, an important construction material, as apartment prices have already gone beyond the reach of common buyers, a seminar in Dhaka was told recently.

International media reports say manufacturers and miners would raise the price of iron ore, the raw material of MS (mild steel) rod, by 65 per cent from April 1.

Bangladesh meets 75 per cent of the domestic demand for 25-30 lakh tonnes of steel and iron products through import, while the rest 25 per cent comes from the local ship breaking industry, according to industry insiders.

"Generally developers take advance order for apartments on an agreed price and handover those to the buyers in a span of one or two years. But we fear we will be forced to either resettle apartment prices or cancel orders because of the skyrocketing prices of MS rod, sand and bricks,” Tanveerul Haque Probal, general secretary of REHAB (Real Estate and Housing Association of Bangladesh), told the seminar, moderated by Dr Qazi Kholiquzzaman, president of Bangladesh Economic Association.

Media Foundation for Trade and Development organized it at the National Press Club. Besides different stakeholders of the sector, Mahbub Jamil, chief adviser's special assistant for industries, civil aviation and tourism, and Mohammad Abdul Majid, NBR (National Board of Revenue) chairman, spoke at the seminar.

The REHAB secretary anticipated a setback for the country's construction industry, 15 per cent of which is shared by 361 REHAB members and the remaining 85 per cent by government, individuals and other developers.

Meanwhile, a set of recommendations to overcome the possible crisis were put forward by the speakers at the function, which included government's immediate initiative to formulate a steel sector policy, rationalization of tariff structure and devaluation of dollar against the local currency.

Local market sources said 60-grade MS rod is now selling at Tk 63,000-64,000 a tonne and 40-grade rod Tk 58,000-59,000 a tonne.

The prices of MS rod have soared because ship breakers have recently raised the prices of iron ore, as said by Masudul Alam Masud, general secretary of the Bangladesh Re-rolling Mills Association, at the seminar.

Masud said in January 2006 the price of ship scrap was Tk29,000 a tonne, which increased to Tk 46,000 a tonne.

Terming the tariff structure 'irrational', he said, “The ship breakers give Tk 1,000 as tax against a tonne of scrap, while we have to pay around Tk 3,800 against the import of a tonne of scrap.”

Denying the ship breakers' role in the hike in scrap prices, PHP Group Chairman Sufi Mizanur Rahman said, "The supply of ships have decreased as well as the cost of old ships have increased recently, which led to such a price hike.”

Borhan Ahmed, the CAB (Consumer Association of Bangladesh) president, pointed to the fact that construction work on as many as 138 schools has been stopped due to unreasonable price spiral of construction materials.

Shamsul Kamrain, president of Bangladesh Contractors Association, demanded of the government to form a commission for monitoring the local market of construction materials to contain the price hike. 

The NBR chairman urged the steel sector people to set up a working committee and to place some concrete proposals on taxes before the board.

GB/27th February, 2008

Steel producers warn about big price jump

Major steel producers in the country on February 24 warned of steep hike in prices after global miners and manufacturers have reportedly agreed to a 65 per cent increase in iron ore rate from April 1.

The Financial Times of London last week reported that the global steel makers and iron ore producers have agreed to the latest increase in prices, the steepest since a 71.5 per cent jump in 2005.

Bangladeshi manufacturers who mostly produce mild steel (MS) rod and corrugated iron (CI) sheet by importing billet, scraps and scrap ships said the increase in iron prices would result in another round of steep price hike of their products.

Currently, the prices of high quality 60-grade rod in the local market are ranging between Tk 63,000 and Tk 64,000 while the prices of low quality 40-grade rod are ranging between Tk 58,000 and Tk 59,000 each tonne at retail level.

The prices of the MS Steel already rose by 22 per cent in January, affecting the construction activities, which have started to pick up after a sharp decline in early 2007.

In February it shot up by 5.0 to 6.0 per cent. Producers said the latest global deal would drive the domestic price of steel by at least a double digit rate.

According to Alihussain Akberali, managing director of the country's largest MS rod manufacturers, Bangladesh Steel Re-rolling Mills (BSRM), local importers have already faced difficulties to buy scrap ships from international market. According to him, scrap prices have jumped up by around 120 dollars per tonnes since January,2008.

On February 15, the US-based price of shredded scraps ranged between US$380 and $390 each tonne, while the prices of low quality HMS-I at $ 325 and $335 each tonne and the busheling variety between $ 395 -$405 per tonne.

The price of billet in the international market is now ranging between $660 and $670. On Friday, billet price in the Indian market stood around $710 each tonne including customs and freight.

Bangladeshi millers mainly uses shredded and HMS-I scraps to meet the growing demand for MS rod, a key component in building construction.

According to the Chittagong port, on an average steel makers import 2780 Twenty-foot Equivalent Units (TEU) containers a month, which has been steadily rising in the recent time.

Sheikh Masudul Alam, general secretary of Bangladesh Re-rolling Mills Association (BRMA) said price hike of scraps and billet has already slowed down their production.

Bangladesh has an annual demand for 2.5 million tonnes of MS rod with the construction sector constituting 10 per cent of the country's $70 billion dollar economy, growing around nine per cent a year in the last six years.

GB/25th February, 2008

Textile Industry seeks zero tariff for raw materials for non-cotton fabrics

Zero tariff on importing raw materials for manufacturing non-cotton textile items, such as sweater and others, can help flourish the industry, which ultimately will meet the local demand, observed industry insiders. They said now Bangladesh is to import almost all non-cotton items it needs per annum, let alone exploring its export market.

The investment in setting up factories to produce such items has been very slow on some discouraging tax measures by the government. In the 2007-08, 10 percent duty and 15 percent VAT (value added tax) on import of raw materials, including polyester staple fibre, viscose staple fibre, acrylic staple fibre and pet-chips, were imposed. Such import was tax-free previously.

Sources in the knit sector said more than 50 percent items are now produced by yarn made from non-cotton items like petrochemical and cellular items as those are considered environmentally hazard-free.

The Chairman of the Prime Group of Industries M A Awal while talking to a leading English Daily newspaper said that at present Bangladesh produces around 10 percent of the total textile production from non-cotton items and it is possible to add more value to production of non-cotton items compared with those of cotton items, if zero tariff facility restored.

The owner of Purbani Synthetic Spinning Mills Abdul Hai Sarker, also the president of Bangladesh Textile Mills Association, said some four factories have already shifted their production to other than non-cotton items due to the latest budgetary move. He said that every year the local woven and knit manufacturers import finished non-cotton items, used mainly to produce sweater worth US$200 million.

GB/22nd  February, 2007

RMG sectors see no threat from China

China might not be a threat for Bangladeshi RMG (ready-made garment) market in global competition following the withdrawal of safeguard measures against China from EU and US markets since the country has a strong competitiveness, exporters told a seminar in Dhaka on February 20.

Both EU and US set safeguard measures on China from early months of 2005 after the elimination of quota-free regime in December 31, 2004. Such measures against China was withdrawn from EU market since January 1, 2008 and from the US market it will be withdrawn January 1, 2009.

Bangladesh has also a strong competitiveness in the global RMG market as the country has been producing unique basic items and the industry has been thriving at a good pace, the exporters said.

Kihak Sung, chairman and CEO of Youngone Corporation, a Korea based multi-national company operating in Bangladesh, said a psycho phobia with regard to China factor in RMG export should not grip Bangladesh. Youngone has 150 retail shops in China.

The company chief said, “China will be an importing country rather than an exporting country after the withdrawal of the safeguard measures.”

Bangladesh Enterprise Institute (BEI) organized the seminar on 'The future of the RMG and textile sector: Making Bangladesh more competitive' at its office.

Chaired by BEI President Farooq Sobhan, the seminar was participated by BGMEA President Anwar-Ul-Alam Chowdhury Parvez, BKMEA President Fazlul Hoque, BTMA President Abdul Hai Sarker and UCEP (Under-privileged Children's Education Programme) Executive Director Brigadier General Aftab Uddin Ahmed. The Textile and Jute Secretary Abdur Rashid Sarker also attended the seminar as special guest.

An expert Fazlul Hoque on the seminar said normalcy in the country's political situation is a pre-condition for strong competition in RMG exports. “Really the sky is the limit for Bangladeshi knit sub-sector, as the export of knit items has been maintaining a good growth over the last few years even in the face of different challenges like phase-out of the MFA,” He added. He is hopeful of doubling the export of RMG products, if the government supports the local manufacturers. He said four new knit factories add to the old ones a month on an average, which is really encouraging for the sector.

The exporters, after all, see reduction in bank interest rate, product diversification and improvement in productivity in factories as the key factors for the sector's strong competitiveness.

GB/21st February, 2008

Garments show good signs, exports grow 4.4pc

The country's exports projected over 4.42 per cent growth in the first half of the current fiscal year as garments showed further signs of recovery after first quarter's negative growth, commerce ministry officials said on February 18.

The country exported manufacturing goods including garments worth US$6.5 billion in July-December of 2007-08 fiscal, nearly $275 million higher than the figure of the same period last fiscal.

The positive growth in exports was due to recovery of garments exports, which recorded negative growth in the first quarter, officials said.However, officials did not disclose the amount of garments exported in the first half of the fiscal.

In the first quarter, spanning from July to September, export earnings fell 5.37 per cent than the same time last fiscal, due largely to sharp fall of garments export.

Garments occupied more than 76 per cent of the country's $12.18 billion export trade last fiscal year ending June 2007.

Commerce secretary Feroz Ahmed said he is still not aware of the final export figure, but said there have been some very good signs of export recovery in the recent months.
He said the export of knitwear garments has picked up since October after some 'ordinary performance' in the first quarter. The exports of woven garments have also recovered in November and December, he added.

The top trade official said the number Generalized System of Preference (GSP) certificates issued in January this year was higher than that issued in December last year, indicating a surge in exports in the third quarter.

"We issued 14,000 GSP certificates in January, against 12,000 in December, 2007," Khalilur Rahman, director general of Export Promotion Bureau (EPB), said, when asked.

The six months export figure was, however, around $760 million less than the government's export target of $7.25 billion for July-December period.

The government set an ambitious export target of $14.50 billion in the current 2007-08 fiscal, which is an increase of 19.07 per cent than the export performance of the previous fiscal.

A leading exporter Shahidul Haque Mukul, owner of Adams Apparel said the country's garment exports would get further momentum in the coming months, as most of the big manufacturers have received huge orders.

The owners of the companies are optimistic that the apparel sector will show its best performance at end of this fiscal.

GB/19th February, 2008

Serious Threat to Garment Sectors!
Other country’s RMG exporters using Bangladesh’s name to enter US market

The Chinese-origin apparel items have been shipped to the United States, tagged with 'made in Bangladesh' label, to avoid being barred from the world's largest market, the US customs said.  The US Customs and Border Protection Authority (CBP) informed Bangladesh about the malpractice after it identified "a number of such cases in which goods originating in China were claimed to be of Bangladeshi origin."

The CBP has seized apparel valued at close to $1.0 million claimed to be of Bangladeshi origin From October 2007 to February 01, but actually originating in China," as US Customs said.

"Six more shipment, valued at $500,000, have been identified as not having originated in Bangladesh, and CBP is in the process of requesting their redelivery and pursuing penalties against the US importers," CPB added. A CBP team would now visit the country later next month to investigate whether the Chinese exporters are using Bangladeshi exporters name to avoid quota restrictions on their items.

The United States have imposed caps on Chinese apparel exports worth billions of dollars in 2005, immediately after withdrawal of the multi-fibre arrangement in garments trade.

Under the caps, the world's largest apparel exporter China can only increase its exports to the United States, the world's largest market, by 7.5 per cent year-on-year until 2009.

"It is possible that legitimate Bangladeshi manufacturers names are being used to circumvent quota restraints from China when a Bangladesh origin claim is made," the CBP said.

Bangladesh embassy in the Washington D.C has forwarded the letter, expressing  deep concern over the flawed practice and requested the authorities here to organize the visit by the CPB team.

"The CPB would like to work with Bangladeshi authorities to determine whether the manufacturers claimed to have produced the goods actually exist, and if they do, whether those manufacturers are capable of producing the goods as claimed," CBP textile division director Janet Labuda wrote in the letter.

The CBP will also explore the increase in importations from Bangladesh of commodities that would be subject to quota if they had been produced in China.

Kazi Md Shamsul Alam, Bangladesh ambassador to US, has requested the authorities and the trade bodies to cooperate the CBP team, saying it would remove negative perception about the country's export.

The president of garments manufacturers association, AnwarUl Alam Chowdhury Parvez, said they were taking the issue 'seriously'. He said that the government should take serious action if local manufacturers are found to have helped the Chinese exporters using Bangladesh's name.

"This is the first time, the US has expressed its concern over the issue. We have to seriously look into the abuse of the GSP facility that we enjoy in the US market." BGMEA president said:

President of knitwear manufacturers association rejected any involvement of Bangladeshi exporters in the malpractice and he hope that the US team's visit to country's textile industries will help resolve the issue.

GB/17th February

Privatization of jute mills

The government on February 12 sent back the proposals for handing over management of two state-owned jute mills- Peoples Jute Mills and Qaumi Jute Mills, to private operators on lease basis.  The advisory committee on economic affairs headed by the finance adviser turned down the proposals because of some procedural bottlenecks in the initiative.

Earlier, the Bangladesh Jute Mills Corporation (BJMC) invited tenders to lease out seven jute mills out of its 18 mills. But it found only two tenders eligible for awarding them the operational responsibilities.

"We received the proposal of Tk 6.13 crore annual fee for Peoples Jute Mills and Tk 4.81 crore for Qaumi Jute Mills from two local firms," said Md. Atharul Islam, the BJMC chairman.

He said the corporation also invited re-tender for handing over the other five jute mills to private operators.
                       
Explaining about the lease program, the chairman said the private operators will pay the amount on a monthly installment basis by which the government will pay its liabilities.

"The private operators will not take any liabilities of the industries," the chairman said.

The BJMC chairman also said primarily the tenure of the lease agreements will be five years, which might be renewed subject to successful performance of the leasees.

The leased out mills will be owned by the government and the BJMC will set a small office to all the mills under lease program to regularly monitor their performance.

As per terms of the lease contract, the private operators will not be allowed to retrench any workers and officers of the mills in operation, but the operators will have the option to appoint workers or officers of their choice in the mills that have already been closed.

The present caretaker government decided in October 2007  to continue operation of the seven state-owned jute mills, four of which are in operation, by leasing out those.

The mills under the project are Qaumi Jute Mills Ltd, Karnaphuli Jute Mills Ltd, MM Jute Mills Ltd, RR Jute Mills Ltd, Furat Karnafuli Carpet Factory, Peoples Jute Mills Ltd, Aleem Jute Mills Ltd and Baghdad-Dhaka Carpet Factory Ltd. Among those MM Jute Mills Ltd, RR. Jute Mills Ltd, Aleem Jute Mills Ltd and Baghdad-Dhaka Carpet Factory Ltd are now in operation.

The BJMC, which has 18 jute mills, plans to privatize its loss-making jute mills and retrench its 14,000 workers. The retrenchment process has already been completed, according to the corporation.

GB/13th February, 2008

Zero tolerance to non-compliant RMG factories

The government will show zero tolerance towards the persistent non-compliant factory owners as said by Commerce Adviser Hossain Zillur Rahman on February 12 in a move to a firm stand on resolving labor unrest in the ready made garments (RMG) sector.

The rate of fully social compliant factories declined to 51 percent in January from 56 percent in December 2007, Zillur told reporters after a meeting with different stakeholders of the RMG sector at his Secretariat office.

Records suggest the rate of fully compliant factories was 56 percent in December, 47 percent in September and 42 percent in June last. There are as many as 5000 RMG industrial units across the country.

The commerce ministry reviews the progress of social compliance in RMG units in every three months in order to take measures for resolving disputes.

According to an official of the ministry, at present 28 percent RMG units belong to the persistent non-compliant category.

Responding to a query, the commerce adviser said on receipt of recommendations from the probe body on labor unrest headed by Commerce Secretary Feroz Ahmed, the government will move to take actions against the non-compliant factory owners.

This probe committee is supposed to submit its report within the next two weeks, Zillur said.

The adviser also said the training for mid-level management of the fourth batch finished recently and the training for the fifth batch will begin from today.

The Ministry of Labour and Employment has been conducting such training for the officers of mid-level management of the RMG units to reduce labor unrest in the sector.

The commerce adviser urged the owners to make the participatory committee functional in their factories to minimize the labor unrest.

GB/13th February, 2008

RMG owners want to halt violence, BBS survey was denied by workers

RMG (Ready Made Garments) workers have demanded increase in their minimum wage and protection of trade union rights, while owners asked for a halt to the culture of violence in order to resolve the current unrest in the sector. At a seminar in Dhaka on February 11, the two sides also laid emphasis on a collective effort to say goodbye to labor unrest.

The workers from different garment factories said most of the owners are unwilling to pay the minimum wage and even they do not pay regularly, which frustrate them and cause unrest. BGMEA and BKMEA leaders, however, denied the complaint.

Meanwhile, a garment worker in the country earns Tk 3888 a month on average, a countrywide government wage survey said recently made amid angry protests from the unions who say the figure is 'manufactured'.

According to the survey carried out by the Bangladesh Bureau of Statistics (BBS), eight types of laborers working in garment sector receive monthly wage between Tk 2609 and Tk 6391.

The payment is based on normal working hours and does not include over-time and other benefits.

For the first time, the BBS conducted the survey titled Wage Survey 2007.

It includes garment among 35 others sectors, including banking and insurance, transport, foods and beverages, textile, leather, pharmaceutical, aviation, plastic and construction.

Air transport workers are getting the highest average monthly wage of Tk 8064 among top ten sectors. Banking and insurance sector employees are in the second position having monthly average wage of Tk 7254.

Water, gas and water supply labourers are getting monthly average wage of Tk 6271 and Railway workers Tk 6247.

Cement industry labourers are getting Tk 4844, Chinese restaurant workers Tk 4452, construction workers Tk 4292, basic metal labourers Tk 4277, road transport workers Tk 4219 and glass and ceramic production workers Tk 4120.

The lowest paid sectors are bidi/tobacco workers. They get an average wage of Tk 2215, private education (primary and pre primary school teachers, peon guard, clerk and aya) Tk 2400 and rice/wheat/spices machine workers Tk 2712.

GB/12th February, 2008

A native company is going to invest $ 2.5 million at  Uttara EPZ

Diaz Spinning and Knitting Mills Ltd, a f Bangladeshi company is going to set up a sweater manufacturing industry in the Uttara Export Processing Zone. The company will invest nearly US$ 2.503 million and will produce various types of sweaters.

The enterprises will create employment for 523 nationals and 2 foreign nationals. An agreement to this effect was signed between the Bangladesh Export Processing Zones Authority and the Diaz Spinning & Knitting Mills at BEPZA Complex in the Dhaka city recently.

General Manager (Investment Promotion) of BEPZA AZM Azizur Rahman and Managing Director of Diaz Spinning and Knitting Mills Micky Diaz signed the lease agreement on behalf of their respective organizations.

GB/7th February, 2008

Government initiative to train RMG sectors to counter labor unrest

The government has set up special training sessions on workers rights for garment factory managers in an attempt to counter the labor unrest that has threatened the success of the country's main export earner.

The sessions organized by the Ministry of Labour and Employment are aimed at middle level managers whose failure to deal professionally with disputes at factory level is seen by the government as one of the major reasons behind poor labor relations.

Three sessions have already been held with groups of around 30 managers in each. The government aims to involve two-to-three key middle managers from each of the country's more than 4000 factories.

"We found that mistreatment of the workers and wrong handling of issues by the mid level managers is one of the main reasons behind recent labor unrest," said Aminul Islam, deputy secretary to the Ministry of Labor and Employment. "We are trying to make the managers aware of the workers' humanitarian needs, of the need for regular payment, payment of overtime, other allowances and leave etc," Aminul added.

Julfiqar Haider, senior assistant secretary to the Ministry of Labor and Manpower Employment, said: "We found that when any crisis erupted at a readymade garments factory the workers never blamed the owners, they blamed the mid level management. Identifying this, we are trying to convince the mid level management to act properly."

Taoufiq Elahi, the production manager of Nasrin Garments Industries located at Mirpur, attended one of the sessions. He said managers are aware of workers' rights, but it is sometimes difficult to act accordingly under enormous pressure to meet production deadlines.

Ohidul Islam, another factory manager who participated in the session, said: "The consultation will help us to improve the overall managerial capacity as well as reduce the chances of disputes with workers,"

Jamshed Rahman, Chief Inspector of Department of Inspection of Factories and Other Establishments (in Charge) said a recent survey by the department identified at least 145 garment manufacturers that have not implemented the Tk1662 minimum wage, while 262 factories do not pay regular salaries to workers.

"The inspection shows why there is still so much unrest in the garment factories. When hundreds of factories fail to pay regular salaries to thousands of their workers, it's quite natural that there will be agitation in the apparel units," Jamshed added

BGMEA President Anwarul Alam Parvez supported the government initiative saying that it could be one of the tools used to keep the industry free from labor unrest.

However, he also alleged that the unrest was part of an international conspiracy to destabilize the industry.

GB/6th February, 2008

Big Pharma Moving More Work Offshore : Bangladesh can get  benefit

It wasn't long ago that Merck (MRK - Cramer's Take - Stockpickr - Rating), Pfizer
(PFE - Cramer's Take - Stockpickr - Rating) and other drug giants made it clear that
they preferred developing drugs in their own labs, in their own plants and in their
own backyards.

"This was an extremely profitable sector and a classically vertically integrated
business," says David Finegold, dean of the School of Management and Labor Relations
at Rutgers. "The model was working very well."

However, the old model doesn't work as well now due to pressures from generics, the
rising costs of creating new drugs and difficulty in producing drugs with tremendous
revenue, Finegold adds.

As a result, as drug makers try to cut expenses and get a bigger bang for their R&D
dollars, they're farming out more responsibility to independent companies and
seeking to do more business overseas.

Although it is doubtful Big Pharma will match the scope of outsourcing seen in the
shoe or apparel industries, it's clear they can reduce the costs of capital and
labor by hiring others to do an increasing share of the manufacturing.

"Other than pilot plants, I don't see them [the drug makers] doing any building of
new plants," Finegold says.

In early December, Bristol-Myers Squibb (BMY - Cramer's Take - Stockpickr - Rating)
said it will consider outsourcing as part of a cost-cutting plan that includes
firing 10% of its workforce and closing or selling perhaps half of its 27
manufacturing plants.

Just weeks before, Pfizer executives told analysts at a meeting in Hong Kong that
the company expects to double the outsourcing of its manufacturing -- to 30% from
15% -- but it didn't offer a timetable. Pfizer had 93 plants at the end of 2003, and
it expects to have 48 by the end of this year.

Also late last year, GlaxoSmithKline (GSK - Cramer's Take - Stockpickr - Rating)
said it expects to increase outsourcing while continuing to reduce the number of
plants. It had 108 in 2000 and 80 in 2006. Glaxo also wants more manufacturing of
active pharmaceutical ingredients done by other companies, a percentage that grew to
41% last year from 9% in 2001.

Cutting costs via outsourcing and "offshoring" -- moving operations outside the U.S.
but still keeping them under Big Pharmas' auspices -- isn't a new strategy, but it
is an increasingly popular one, Finegold says. The push started in the mid-1990s as
companies tried to reduce R&D expenses ranging from preclinical testing to human
clinical trials.

The Tufts University Center for Drug Development predicted in 2006 that as much as
65% of clinical trials regulated by the Food and Drug Administration "for top
pharmaceutical companies will be conducted abroad" within a few years.

A poll early last year by the publication Contract Pharma found that 31% of big
drugmakers had planned to raise outsourcing spending by 10% from 2006. Another 39%
expected to raise such spending by less than 10%.

And a recent report by Wachovia Capital Markets says "approximately 25%" of drug
development is now outsourced by big and small drugmakers. "This figure could
increase to 35% to 40% over the next three to five years."

Wachovia analyst Chad Fugere notes that during a fourth-quarter 2006 conference call
with analysts, Merck executives said 30% of drug development would be outsourced. A
few months later, Novartis (NVS - Cramer's Take - Stockpickr - Rating) said
outsourcing played a role in cutting $700 million between 2006 and 2007.

Fugere also cited Glaxo remarks indicating that it was outsourcing "up to 40% of its
clinical trial work," saving "roughly 80%" on each test.

All of these comments "suggest a higher degree of outsourcing in the future [for
companies] that have historically done much of their own development work," Fugere
says in a November report to clients.

To illustrate how companies can save money by conducting R&D overseas, Tufts Center
researchers cite an analysis by Fast Track Systems, which provides clinical trial
software and services to drug and biotech companies.

Using 2006 data, Fast Track created an index in which the U.S. cost of clinical
trials is rated as 1.0. The cost in China is 0.52 and the cost in India was 0.56.
Among 10 countries surveyed, Russia was the cheapest at 0.40 and Germany was the
most expensive at 1.20.

India, for example, offers many Western-trained, English-speaking clinical
investigators, says Christopher-Paul Milne, associate director of the Tufts Center.
"China is beginning to realize that they are a lot cheaper [than many other
countries] , so they are raising their prices," he says.

Milne adds that outsourcing R&D to overseas firms or offshoring work makes
strategic, as well as economic, sense. "The Food and Drug Administration is more
willing to accept foreign clinical trials than it was 10 years ago," he says.
"Overseas data seems to have become more reliable."

Conducting clinical trials abroad gives drugmakers access to a larger pool of
patients, especially "treatment-naive" patients -- those who aren't taking
medications for diseases that are the subject of clinical trials. "The goal in
clinical trials is to control as many factors as possible," Milne says.

Companies also gain access to more people, enabling them to conduct more complex
analyses to meet regulators' standards. But drugmakers must be vigilant, making sure
foreign-clinical trials use patients who voluntarily participate, Milne says.

And if you're trying to expand your market, says Finegold of Rutgers, it certainly
helps to conduct clinical trials, or even build an R&D facility, in countries viewed
as significant sales growth targets.

"If you want to serve the needs in the Asian market," he says, "you want to have a
lab in that region."

GB/3rd February, 2008

Construction material  prices soar beyond limit

The Prices of Mild steel(MS) rod, a vital construction material, increased by around Tk 15,500 per ton within the last five weeks as a section of manufacturers are allegedly stockpiling the material to make the prices soar, developers claimed.

The prices of other construction materials such as cement and brick also went up by 10 percent and 20 percent respectively within the period, making the real estate sector vulnerable to collapse. The sector has already  been witnessing a dull business as apartment sales plunged by 60 per cent over the last one year. On the other hand, prices of key construction materials have also gone up significantly, creating a negative impact on the country's construction sector as a whole.

“If the situation remains unchanged, all types of construction works will come to a standstill,” said Tanveerul Haque Probal, general secretary of Real Estate and Housing Association of Bangladesh (REHAB), at a press conference in Dhaka on January 30. REHAB President Mukarram Husain Khan, among others, was present at the press conference.

The general secretary also said  that the price of 60-grade MS rod reached Tk 63,000 a ton in the January  from the December month’s price of Tk 47,500 and  added that there is no rationale behind such price hike within a short period of time.

Due to the market manipulation, the REHAB leaders urged the government to allow them to import MS rod and cement by reducing the duty rates. They also hinted prices of flats will go up further in line with the price hike of construction materials.

Meanwhile, an MS rod manufacturer said price of melting scrap, a raw material for producing MS rod, shot up by $100 to $ 150 per ton in the last three months in international market, resulting in increased production cost in the country. He also attributed the rising price of MS rod to the government's decision of increasing import duty on melting scrap from five percent to 10 percent in the current budget.

Meanwhile, Cement prices marked a fresh rise of nearly 20 per cent or up to Tk 55 per bag just due to low supply from manufacturers. Increased costs of imported cement clinker have forced local cement grinders to hike cement prices by around 30 per cent in two months. Rising costs of cement and other building materials have added to the housing cost, and homebuilders have already announced a Tk 500 increase in flat selling price per square feet.

A spokesman of the Bangladesh Cement Manufacturers Association, claimed that import cost of clinker went up abnormally in recent weeks, putting local cement makers in trouble as they rely solely on imported clinker to run their production. Due to low availability of clinker carrying ships, cost of importing clinker has increased to $58 per ton in end-May from $46 in early April in 2007. Many cement manufacturers are reportedly avoiding bulk imports of clinker to limit their foreign currency transactions.

The manufacturers want government will take immediate steps to survive the construction industry.

GB/2nd February, 2008

The largest private ICD to be started by May,2008

The major apparel producer, KDS Group, has started building the country’s largest private inland container dept(ICD) at Sitakund as said by the company on January 11.
The Chittagong based move, exporters say, it will help ease congestion at the Chittagong port.

The KDS Group with an annual turnover of over US$ 300 million is setting up the Tk. 1.0 billion ICD on 45.77 acres of land. The company officials noted that the logistics facility would be equipped to handle 13,400 TEUs(Twenty feet equivalent unit) with earn marking 5300 TEUs and 8,100 TEUs’ of export cargo and import cargo respectively. Currently, 12 private ICDs are operating at the Chittagong port.

The president of the Bangladesh Garment Manufacturers and Exporters Association(BGMEA) Anwar-ul Alam has welcomed the initiative by saying that it is critically important to enhance the capacity of the country’s largest sea port that handles more than 90 percent of the total annual foreign trade estimated at US$30 billion.

GB/Jan 12, 2008

Adamjee Jute Mills equipment to set up 18 jute mills in Northern districts

Some of the local youths have established new mini jute mills in the northern districts especially at Bogra, Rangpur and Sirajganj. They have set up 18 Jute mills after purchasing equipment through auction from the closed Adamjee jute mills and importing some machinery from India.

All these mini jute mills set up within the 2-3 years period and they are now exporting their product in aboard fulfilling the needs of the local markets. The small mini jute industries created opportunities for employing 3,000 people. The farmers of some northern districts are now eagerly cultivating jute for the jute mills.

The jute mills are selling mainly the environment friendly jute bags and they are exporting mostly in India. While the government owned jute mills are in loss sectors,   this kind of initiative is very positive for the country to level up the ruined Jute sectors in Bangladesh.

High tech machines can double the RMG industry

The Ready Made Garment (RMG) Industry can double in size if high tech machines are used. It is also needed our workers to become familiar with using high tech machines. Then the amount we produce and its quality would be better. The president of Bangladesh Garment Manufacturer and Exporters Association (BGMEA), Mr. Anwar-ul Alam Chowdhury Parvez made the comments in the inaugural function of the four day 7th Garments Machinery and Accessories Fair at Bangladesh-China Friendship Conference Center in Dhaka on January 12.

Ready Made Garment (RMG) account for 75 percent of Bangladesh’s exports with the country in the third largest RMG exporter to European Union (EU) and United States of America (USA). At present China is the largest RMG exporter.

The speakers at the inauguration said Bangladesh had the potential to take the number one position in the near future if it took advantage of the efficiency gains made possible by high tech machinery.

13 January, 2008

Knitwear is going to be a No. 1 export item

The knitwear is emerging as No. 1 expert item overtaking the woven products. In the first four months of the 2007-08 fiscal year, the knitwear exceeded woven good wit export of US$ 1.6 billion.

In 2006-07 fiscal year woven worth $4.54 billion and knit worth $4.39 billion was exported registering a growth of 14.05 percent and 19.30 percent respectively compare to previous years.

In knitwear Bangladesh is now competing with countries such as Turkey, rather than China, an in doing so is able to exploit its advantage to lower labor costs.

The large scale investments over the past decade as well as vibrant yearn and dyeing industry in the country are behind the success of the knitwear products.

03 Janurary, 2008