Revised river transit fees

River transit fees to be fixed next month

In the next inter-ministerial meeting, Bangladesh will submit the proposal to India for the river transit fees to a maximum of Tk 382 or US $2.9 per tonne. This had a minimum of Tk 282 per tonne, the structure was drafted in another such meeting last month, while the entire fee structure will be finalized in an upcoming secretarial meeting. 

The structure of the fee will be segregated to three components:

Denim

Bangladesh: a rising star in denim sector

Event organizers are facing good amount of stress-load to find accommodation to house the participants of the denim expo in Dhaka next month. Too many international retailers have been showing interest to showcase their offerings in the 3rd edition of the Denim Expo, due to be held in Bashundhara International Convention City in November. 41 Retailers, designers and fabric makers will all come together to to produce a good show of their products. 27 are from abroad, from countries such as China, India, Pakistan, the US, Turkey, Singapore, Thailand, South Korea, Japan and Germany, most of whom was not aware of Bangladesh's Denim potential some time ago.

Middle and Affluent Class (MAC)

Affluent consumers on the rise: study

Bangladesh has been reported to be ahead of some of its neighbors in generating more middle-income and affluent consumers recently. This is welcomingly sensitive to the prospective consumer product companies. The Boston Consulting Group reported that Bangladesh is adding 2 million people to the Middle and Affluent Class (MAC) every year which can triple from the present number of 12 million to 34 million people in 2025. Consumer product companies thus may home in on the 10.5% annual growth of Bangladeshi MAC, ahead of the growth of Indonesia, Myanmar and Thailand. Currently, Bangladesh only has 7% of 160 million people in the MAC, far behind Vietnam and Indonesia, despite having higher growth numbers.

Trudging State Banks

State banks pass hard times as loan growth stalls

After the recent concern over the performance of State owned banks, it seems that this type is still facing similar waves of hurdles. The Advance-to-deposit ratio (ADR), indicating how much loaned out to the amount deposited, is down to below 52% for Agrani, BASIC, Janata, Rupali, BDBL, and Sonali banks. These State owned banks, thus cannot hope to earn as they expected. All of the other banking types have higher ADR. 39 Commercial banks had over 76% ADR, 9 foreign banks had close to 60% and Islami banks had over 80% as of August 87.

Headlines Oct 18 - Oct 21

Last week, the blog tried to present to you the current news about niche sectors of the economy, covered in the media. The status and business environment of particular sectors were the highlight and can be found below.

Oct 18  :  Tourism in Durga Puja Tourism hopeful about revival in Durga Puja
Oct 19  :  Cement makers regroup  Big upcoming projects inspire cement industry
Oct 20  :  Leather and Jute Strength of the leather sector; India, reconsider Jute
Oct 21  :  Cold Storage and Cake retail Cold storage chain investment; Cake industry
 

Cold Storage and Cake retail

Processed food makers investing more in cold chain networks

Golden Harvest Agro Industries, is setting up cold chain networks worth US $50 million in the country, with the help of USAID. With this huge investment plan, local companies like Pran, Brac, Aftab, Kazi Farms, Bengal meat and others are following suit. 

Few industries before have invested in cold chain network. Refrigerators, refrigerated vehicles, chilling centers and storage facilities are needed for the investment-intensive cold chain development, all of which Bangladesh imports. Absence of storage facilities waste as much as 30% of total produce in Bangladesh.

Leather and Jute

Leather sector's exports cross $1b for second year

Leather sector seems to be the only consistent sector in the economy among all the political and economic issues. Becoming the second largest sector in the economy, it amounted to US $1.13bn in 2014-15 similar to US $1.12bn in 2013-14. Consistency however, was still not enough to align perfectly with economic targets $1.4bn this fiscal year. Next fiscal of 2015-16, targets have been set at $1.21bn.

Bangladeshi leather exports have been doing well with India, Nepal, Australia and particularly Japan, for its duty-free policies. Exporters have considered our economy to maintain closer relations with Japan, so that this advantage remains despite many Asian countries signing free trade deals with them. Bangladesh exports 30% of leather produced to Japan. Of the total global leather exports, Bangladesh contributes 0.5%, worth of $215bn.

Cement makers regroup

Cement makers eye a turnaround

Cement manufacturing sector grew at a a meager 11% in 2012-13 and to only single digits in 2013-14, down from its peak of 31% in 2009-10. Sluggish demand from political unrest in 2013 and 2015 affected this sector, but cement makers are anticipating a turnaround next year.

Big infrastructure projects, the Padma bridge, an elevated expressway, metro rail, a few flyovers, a tunnel in Chittagong and seaports are part of the economies plan. These projects are expected to make a turnaround for the cement manufacturers, with a possible growth of 20-25% in the coming 5 years.

Tourism in Durga Puja

Hoteliers expect influx of tourists during Durga Puja

A new week and a new day for everyone, and already many have been looking forward to the upcoming Durga Puja festival; along with its associated holiday. This time, the holiday has been turned longer coupled with the weekend, as it fell on a Thursday. Considering such a vacationing opportunity people have already started their bookings in tourist regions. The biggest religious festival for Benglai Hindus and the second biggest festival nationally after the Eids, tourist places like Coxs Bazar, Rangamati, Bandarban, Sundarban, etc have already received hotel bookings from the holiday-makers to enjoy with their friends and family. 

Many West Bengal tourists are also applying for visa to celebrate with family in Bangladesh. As much as a thousand visa applications per day have been lodged in the Deputy High Commission of Bangladesh in Kolkata. 

Headlines Oct 11 - Oct 16

Last weeks headlines are about the larger prospects of the business environment in the country. Rather than covering niche sectors, they highlight some prospects and developments of the overall business in the economy.

Oct 11 :  Global consumer brand prospects    Multinational take interest in Bangladesh
Oct 12 :  Bangladesh progress on anti-money laundering   Anti Money laundering steps
Oct 13 :  Female participation in the country  Women integrated in national workforce
Oct 14 :  Power: its current status  Investing in Power promises stable returns and growth
Oct 15 :  Emerging IT  The prospective IT sector

Emerging IT

IT: the next bright spot

Since the laydown of the foundation for "Digital Bangladesh 2021" in 2008, Bangladesh has attracted electronic giants and business consulting brands to Bangladesh, ranked satisfactorily amongst outsourcing countries and managed competitive freelance work above some top fully IT-enabled economies. The figures for IT in Bangladesh stand at US$ 600 million total value, including 1500 firms and 40 offshore development centers. Samsung has setup research and development center in Dhaka; Bangladesh has been ranked 26th out of 50 outsourcing destinations; and it is ahead of China, Canada and UK in terms of freelance work.

Power: its current status

Power: the safest bet

The power sector of Bangladesh is at a crossroads between tough challenges and great opportunities. The government's aim to generate triple-plus current installed power capacity is part of its many ambitions. Requiring US $55bn to reach 38,700 MW of energy will provide opportune investors to enjoy steady returns for the coming 15-20 years.

The targeted energy production will mostly be attempted from coal sources as the natural gas option is swiftly being exhausted. The 2010 Master Plan was dependent on coal amounting to 19,6500 MW, but are investing recently on imported coal for power plant setup. Projects upto 500 MW can be managed locally, but larger ones of around 1300 MW needs foreign sponsorship.

Female participation in the country

Women workforce growing fast

World Bank president recently claimed that Bangladesh is doing well to integrate women in the workforce. He also used this situation as a stand alone example to focus the importance of growth of women workers for economic development. Continuing unhindered, Bangladesh can add the total female workforce to 82% through the next decade, which will accumulate to an extra 1.8% of GDP.

Bangladesh progress on anti-money laundering

APG satisfied over move to stem terrorist financing

An eight member team of the Asia Pacific Group (APG) has expressed satisfaction on the recent preventative steps taken by the government to combat financing military and terrorism. In a meeting with the national coordination committee the team leader expressed its appreciation at the anti-money laundering and overturning terrorism financing. With a good rating from APG, Bangladesh may enjoy increase in foreign loan and grant, decline in expenditure on trade and better image of the country towards the Financial Action Task Force (FATF) on Money Laundering. This will be in a mutual evaluation with the APG.

Headlines, Oct 4 - Oct 8

The first week of October covered a range of business sectors of the country. The headings and short descriptions are listed below.

Oct 4 :  Of tax and taxpayers Expected NBR survey and Tax Fair Stats
Oct 5 :  Metro Rail developments MRT-6 Metrorail expansion prospects
Oct 6 :  Tourism in terror Tourism sectors woes
Oct 7 :  SDGs and national integration SDGs in national priority
Oct 8 :  Helping Micro-SMEs of former enclaves Micro aid to enclave SMEs
 

Global consumer brand prospects

Global consumer goods brands increase their presence in Bangladesh

Global consumers are becoming more interested in Bangladesh, streamlining with the emerging confidence of urban consumers. Holding established positions are global brands like Nestle, Modelez International, Del Monte Philips,VLCC, etc. Toshiba and Panasonic are planning to independently operate, without partnership with local marketers. SC Johnson and Son last year already acquired top brand product line ACI Aresol, insect sprays, air fresheners and toilet cleaners.Philips Electronics are the recent company to expand their product lines

Helping Micro-SMEs of former enclaves

Banks asked to lend MSMEs of former enclaves

The Bangladesh Bank has asserted that banks should be lending to the former enclaves, which are now a part of Bangladesh. Lending to those Micro-SMEs can be done in group based format, which currently exist as a mode in banking and non-banking financial institutions. Cottage, micro and medium entrepreneurs who are new Bangladeshi citizens of the enclaves are to be included in group based Micro-SME lending.

SDGs and national integration

Integration of SDGs into national planning stressed 

Center for Policy and Dialogue recently stressed the integration of the Social Development Goals (SDGs) in the national planning process and institutional mechanism. This would be one of the five challenges, the others being inclusion in the financial and non-financial resources, institutional mechanism for implementation, monitoring data and lastly participation and accountability.

Tourism in terror

Tourism takes a blow from killings of foreigners 

It was expected that the end of political unrest in Bangladesh will be able to revive the hard-hit tourism sector, which saw dwindling business from December 2013, two years ago. After political situation returned to cool after early 2015, tourist operators were expecting good business in the coming peak season from October to March. A different set of unrest however, emerged in the form of two international nationals’ murders which have been rumored to be the work of the Islamic State (IS). Linked or otherwise, in the

Metro Rail developments

Expansion of metro rail line planned

A 20 km Metro-Rail line which has already been planned connecting Motijheel to Uttara, will be extended to EPZ at Savar from Uttara and to Kamlapur Railway Station from MotiJheel. The expansion was suggested as their is city expansion occurring in the north-western region owing to industrial development. The initial Mass Rapid Transit line-6 (MRT-6) was planned to be completed by the end of 2019, whereas the expansion is set upon completion for 2035. The expanded network is going to stretch along 41 km, stated the Executive Director of Dhaka Transport Coordination Authority (DTCA). The Dhaka Mass Rapid Transit Development (DMRTD) Project is a joint one with Japan (JICA), which will share with Bangladesh the technical and financial assistance.

Of tax and taxpayers

NBR plans door-to-door drive to hunt potential taxpayers 

The NBR has designed a drive to bring in 320,000 tax payers under the net by the conclusion of this fiscal year. A special survey will be launched this month which constitutes the heart of the drive. The "NBR Survey-2015", will attempt to discover 20,000 more taxpayers from each of the 29 tax zonal offices. This survey will be conducted by the field offices in teams, three times a week. Respective zones will receive a list of new taxpayers each month from those teams. NBR team has also put on their agenda to

Headlines, Sept 20 - Sept 22

Welcome to our blog once again. Center for Enterprise and Society regularly provides up-to-date business, society and enterprise development news around the economy, to cater to your informational needs. Hopefully your presence was with us and will continue to be felt in the days to come. 

To a new week and a new start for everyone after the Eid holidays, here are few of the headlines from just before we all went for the break.

Sept 22 :   Mobile Financial Services in need MFS struggling against cash payments
Sept 21 :   A more sustainable country  MDGs developments, Poverty reduction by 2030
Sept 20 :   Headlines, Sept 13 - Sept 17