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Port tariffs may be reduced

Source: thefinancialexpress-bd.com

The government may reduce port tariffs on some specific categories following request from the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) to this effect.

The government earlier formed a committee for this purpose. The committee, comprising representatives of different ministries, departments, port authorities and business bodies has submitted its report along with its recommendations to the ministry of finance.

The designated committee after visiting Chittagong port and reviewing port charges in neighbouring countries has suggested reduction in port charges initially for a one-year period, a deputy secretary of the shipping ministry on condition of anonymity told the FE.

BGMEA requested the government to reduce the port tariffs that were increased by the immediate past caretaker government.

The committee has recommended reduction of per tonne unstuffing charge to Tk 200 from the present rate of Tk 300. In 1982 the charge was Tk 92.

Per tonne wharf rate for the first seven days is now Tk 9.84. The committee recommended it to be Tk 6.56. In 1982 the rate was Tk 2.46.

For the subsequent seven days per tonne wharf rate is now Tk 24.60. The committee recommended it to be Tk 16.40. The rate was Tk 6.15 in 1982.

The hoisting charge will also be reduced as per the rates of unstuffing charges. The committee recommended giving 15 per cent rebate on the lift-on and lift-off charges.

For the first seven days the storage charge on FCL container is now around Tk 432. The committee recommended reducing the rate to Tk 288. It was Tk 100 in 1982.

The other rates considered to be reduced are extra movement charge, and terminal handling charge.

“We want immediate implementation of the recommendations made by the committee in the interest of the country’s export and business,” Abdus Salam Murshedey, president of BGMEA, told the FE Friday.

Representatives of the shipping ministry, FBCCI, Chittagong Metropolitan Chamber (CMC), Shippers’ Council, Chittagong Port Authortiy, Mangla Port Authority, ministries of finance and commerce and NBR are in the committee.

Garment sector needs more skilled workers

source :theindependentbd.com

The growing demand for skilled manpower in the country’s readymade garment sector has not been met owing to shortage of training institutes. This in turn is adversely affecting exports.

Talking to The Independent, garment entrepreneurs said that around 30 per cent of the sector’s total production capacity is still unutilised because of inadequate skilled manpower. The sector has a 3.5 million strong workforce, 80 per cent of them women, while the annual demand for new workers is about 50,000. The garment sector has a huge potential to grow in the days to come, but it is necessary to establish adequate infrastructure for creating skilled manpower to support the growth.
Shafiul Islam Mohiuddin, newly elected president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), underscored the need for a three-tier periodic plan – short, mid and long-term – to address the crisis of skilled manpower.
“As a short-term measure, we can use the infrastructures of the TTCs (Technical Training Centres) across the country to provide short courses on various aspects of the garment trade. But we need the government’s approval for that,” he said. He also noted twin benefits of using the TTC infrastructures to provide training – creating opportunities for the rural young population, especially those from poverty-stricken families who are unable to
continue with their studies, to get a job.
On the other hand, the garment sector would benefit by having a trained workforce that will gradually turn into skilled manpower.
He said increase in skilled manpower would help cut down foreign currency payments for hiring skilled manpower from abroad. “Currently, about 17,000 skilled workers from different countries are employed in the country’s garment sector,” he pointed out.
As a mid-term plan, the government could allow private sector entrepreneurs to invest in training infrastructure under special amenities, including quick licence and incentives to cover the training expenditures, he said, adding that the private sector training infrastructure is very poor now.
Mohiuddin said the long-term plan is to think now for introducing full-term academic courses in garments in different universities. He said the BGMEA has initiated the process to turn the BGMEA Institute of Fashion and Technology into a complete university so that a large number of students could benefit.
The garment sector is the fastest growing export-oriented sector that employs the largest work force and earns billions of foreign currency for the country, he said. “Driven by the government’s support, apparel exports grew by over 42 per cent in the July-December period in 2010 in comparison to the same period of the previous year despite the global crisis.”
“The sector would generate employment for eight to 10 lakh people over the next few years and it would not be difficult to raise the export income to USD 30 billion in the next three years,” he said.
The worker-owner relationship has improved significantly by implementing the new wage structure that ensured Tk. 3,000 minimum monthly pay for an entry-level worker after a three-month apprenticeship on Tk. 2,500 a month.
“A skilled worker could claim higher salary and the owners would pay them for their own interests,” he said.
The president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Selim Osman, said: “We need expansion of the industry to exploit the growth potential in apparel exports. And obviously we need more manpower in the days ahead”. Osman said there are huge opportunities for growth of backward linkage industries of both the knit and woven sectors that would create auxiliary employment for hundreds of thousands.
He said the auxiliary industries such as embroidery, printing, level production and washing plants are also inadequate to support the growth in export of the apparel and textile in the coming years.
According to EPB statistics, knitwear exports fetched USD 4,311.92 million in July-December 2010, registering a 43.39 per cent growth over the same period of the previous FY, while woven garment export earnings totalled USD 3,636.57 million with a record growth of 40.79 per cent.

BGMEA protests order to shut factories

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) yesterday protested against government orders to shut down factories during the cricket World Cup matches, saying the move will badly affect the country’s economy.

Factory owners have been instructed to close for six hours every evening until the final match on April 2 so that power cuts do not affect enthusiastic cricket fans watching the games on television.

“We have told the factories about the government decision and asked them to shut their plants in the peak evening hours,” said Manjur Rahman, head of state-owned Dhaka Electric Supply Company.

The order has enraged the country’s 5,000 garment exporters.

The BGMEA in a letter to the prime minister said the shutdowns threatened the country’s business image.

“We have said the order to shut factories has already started affecting the garment factories. We won’t be able to ship our products in time if the order is not scrapped immediately,” said BGMEA President Abdus Salam Murshedy.

“All the companies have been booked with export orders. If they can’t export the orders in time, it will obviously anger the buyers. Our reputation as a top garment exporter will be seriously dented,” he told AFP.

Apparel export is the backbone of economy of the country, accounting for 80 percent of all the country’s exports. The factories employ more than three million workers, mostly women.

“The whole economy will be affected because of this anti-industry step. We are great cricket fans, but that does not mean that we shall shut factories just to watch World Cup matches,” Murshedy said.

Bangladesh is struggling to tackle a major power crisis with regular outages.

The government took similar step during the football World Cup in 2010 as power blackouts during key matches saw tens of thousands of people stage violent protests, vandalising power offices and damaging cars.

Along with India and Sri Lanka, the country is a co-host of the cricket World Cup, which started in Dhaka on February 19.

On Friday night fans across the country erupted in celebration after Bangladesh beat Ireland in a nail-biting match.

source: thedailystar.net

Bangladesh registers 40pc hike in apparel exports

The country has registered a 40 per cent hike in its apparel exports in the last six months, with increased exports to India and new markets wrested from global leader China. With many importers switching from China, Bangladesh has new destinations such as Japan, South Africa, Canada, Australia, New Zealand and some Latin American countries, government officials and exporters said.

Readymade garments and knitwear exports are Bangladesh’s highest export earners. The total exports were $12.19 billion against the $10.27 billion target. The annual export target has been set at $18.5 billion for fiscal 2010-11.
The sector, however, is plagued by poor wages and working conditions that have frequently provoked workers to take to the streets. With manufacturers exerting pressures on the government for more concessions, a wage increase that the government oversaw last year is yet to be fully enforced.

The exports are set to rise in coming months, as manufacturers have already bagged bigger orders than before. ‘The garment exports will increase thanks to the EU’s relaxed rules of origin under the generalised system of preferences,’ said Jalal Ahmed, vice-chairman of state-owned Export Promotion Bureau.

‘The trend indicates that our garment export will grow even higher. Besides, we have developed quality high-end products for some new export destinations such as Japan,’ Ahmed said.

source : theindependentbd.com

Investment rebounds

After a prolonged slowdown in demand, import of capital machinery and industrial raw materials has bounced back strongly in the current fiscal year, reflecting a bright prospect for the country’s manufacturing sector.

A jump in export orders for readymade garments (RMG) and the demand for equipment to set up power plants have fuelled the import splurge, according to bankers and industrialists.

Bangladesh Bank statistics show the letters of credit (LCs) settled for capital machinery import were worth $975 million during the first half of the current fiscal year, up by 35 percent from $722 million for the same period a year ago.

The import of industrial raw materials grew by 45.61 percent to $5.84 billion during the period under review, compared to $4 billion in the same period of the pervious year.

But the demand (LC opening) for machinery and raw materials was much higher than the rate of settlement. During the July-December period of the current fiscal year, the LCs opened for capital machinery import were up by over 85 percent to $1.6 billion from $864 million in the previous year.

“Entrepreneurs now hope for better business, as they think the global financial crisis is over,” Anis A Khan, managing director and CEO of Mutual Trust Bank, said, reasoning out the increase in the flow of investments into machinery and raw materials.

According to Khan, imports of power plant equipment and raw materials for the garment factories are fuelling the spending.

“Lots of investments are taking place in the garment and spinning factories to cope with the rising export orders,” said Shahjahan Bhuiyan, managing director of United Commercial Bank.

Bhuiyan said investments are also directed to the spinning sector that provides the much-needed fabrics to the RMG producers.

Both the bankers said the existing factories, which have gas and electricity, either of the national grid or captive, are investing for expansion.

The manufacturing sector has been witnessing a declining trend since early 2007 when an army-backed caretaker government took over the power. Many businessmen were in hide at that time. When an elected government assumed the power in 2009, the energy crisis came to the front as a major barrier to the growth of the sector. Still, gas and electricity connection is kept off.

Mahmud Hasan Khan, managing director of Rising Group that produces readymade garments to spinning, said the export orders are on the rise.

“We’ve are receiving 10-20 percent more orders this year than the last year,” he said.

Spinning mills, which are on expansion, must have surplus gas, according to Khan, a former vice president of Bangladesh Garment Manufacturers and Exporters’ Association.

Bangladesh’s overall imports grew by nearly 40 percent to $15 billion in the first half of the current fiscal year, mainly because of a jump in import of food grains (over 91 percent).

source: thedailystar.net