Business Report Wednesday

Bangladesh loses to India in apparel exports to EU markets Kazi Azizul Islam
Bangladesh has failed to maintain position of the third largest supplier of readymade garment to European Union markets as India grabbed the position with shipments of more apparel in the early months of current year. The industry leaders and trade analysts observed that Bangladesh failed to reap benefit of the EU buyers’ diversion from Chinese apparels and lost the position to India. The Indian apparel makers, who are advanced in direct marketing and design developing, took the benefit. According to the latest report of the European Commission on the January-April period this year, Bangladesh earned 1491 million euros from RMG export to the EU countries against India’s earning of 1,684 milliom euros. The EC reports also showed that during the period, India’s garment export to EU markets, in terms of value, had increased by more than 2.3 per cent while Bangladesh posted a growth of less than 1 per cent. In 2007, Bangladeshi exporters had earned 4.39 billion euros by exporting apparels to the EU markets while Indian exporters fetched 4.18 billion euros. Anwar Ul Alam Chowdhury Parvez, president of the Bangladesh Garment Manufacturers and Exporters Association, told New Age that Indian exporters grabbed more market share than Bangladesh, taking the advantage of the EU buyers’ reduced procurement bids from China.’ Fazlul Hoque, president of the Bangladesh Knitwear Manufacturers and Exporters Association, echoed the same, but he said exports of knitwear that constitutes a major portion of the Bangladesh’s garment export proceeds to EU were increasing. Both the leaders informed that Indian dressmakers’ capacity for supplying designed clothing and marketing efficiency helped them grab more market share in the EU. Mustafizur Rahman, executive director of the Centre for Policy Dialogue, agreed on the observations of the industry leaders. He said Indian exporters were capable more in direct marketing of their apparels while Bangladeshi exporters depend on buying houses, those eat up significant portion of their export proceeds. Besides enhancing capacity in marketing, Bangladeshi manufacturers now need to increase productivity and divert to more value-added products, offsetting rising costs of production. The renowned international trade analyst warned that duty-free market access to EU at present ensure competitiveness for Bangladeshi garments in EU market but such preferred market access is going to be narrowed in the coming years. At present apparels shopped from Bangladesh and other LDCs enjoy exemption of 12 per cent import duty there, Mustafiz said, predicting that after the end of WTO’s Doha round talks, EU’s import duty would be cut down to 5-7 per cent. ‘Such reduction in duty preference would erode compositeness of the exporters from Bangladesh and other LDCs and, on the other hand, will help Indian and other non-LDC suppliers,’ he warned. The EU report showed that China though retained its top position with 7.4 billion euro proceeds in the period, its growth rates decreased to about 1 per cent. Turkey the second the largest supplier faced more than 6 per cent decline in growth and earned 2.85 billion euros Bangladeshi exporters, who supply garment at world’s lowest prices, are still experiencing growth in their business in EU, but industry leaders apprehended that erratic supply of electricity and gas to industries might arrest their growth.
SEC penalises top officials of six cos Tk 30 lakh Dhaka stocks remain flat Staff Correspondent
The Securities and Exchange Commission has fined top executives of six companies total Tk 30 lakh for violating securities laws, official website of the Dhaka Stock Exchange reported on Tuesday. The regulatory body fined Raspit Data Management and Telecommunication’s chairman and managing director Md Abdur Razzak, and directors Md Ashraful Alam and Lt Col (retd) Serajul Islam Tk 1 lakh each. Rose Heaven Ball Pen’s managing director Shafiqur Rahman Chowdhury, and directors Nasima Ahmed, Maksuda Khatun, Matiur Rahman Chowdhury, Shafina Rahman Rupa and Mushfiqur Rahman Chowdhury were fined Tk 1 lakh each. The SEC penalised Excelsior Shoes’ managing director MA Kalam, directors Ruhul Ameen, KH Reza, and ZU Tarik, and nominated director Rehan Uddin, Tk 2 lakh each. Raspit Incorporation Bd’s chairman and managing director Abdur Razzak, and directors Ashraful Alam and Habibul Alam were fined Tk 1 lakh each. The commission fined Saleh Carpet Mills’ chairman Dilara Begum, managing director Shamim Ara Begum, and directors Rezaul Karim and Badrul Huq Tk 1 lakh each. Chictex Ltd’s chairman Jamal Uddin Ahmed, managing director Aminur Rasul, and directors Mashukur Rasul and Iftekhar Mahmud were fined Tk 1 lakh each. Dhaka stocks closed almost flat Tuesday as investors remained shaky amid the recent downtrend at the market, said a DSE stock broker. The DSE all share price index gained 3.64 points or 0.14 per cent to close at 2567.75 while its blue chips index, DSE20, advanced by 15.56 points or 0.61 per cent to close at 2571.95. The DSE general index, however, lost 0.55 points or 0.02 per cent to close at 2990.01. The DSE stock broker said bear run in recent weeks drove the investors to take a cautious move. Stock prices fell in the first two trading days of the week. Dhaka stocks ended last week downbeat as investors remained unnerved due to the SEC’s recent decision on closed-end mutual funds baring them to increase their sizes. Market lost steams also in previous two weeks due to selling pressure from investors frustrated with the DSE’s market cooling measures. Of the total 228 issues traded at the DSE on Tuesday, 104 posted gains, 112 declined and 12 remained unchanged. Turnover at the DSE increased to Tk 315.13 crore from the Monday’s Tk 255.04 crore. Trading of the shares of Pharmaco International Ltd remains halted from today as the Bangladesh Shilpa Rin Sangstha on Tuesday informed the bourses that it had sold all mortgaged properties of Pharmaco International to realise default loan, said a DSE official. On Tuesday, the BSRS informed that it had sold all mortgaged properties including land, building and machineries of Pharmaco International to realise the default loan, the official said.
KHM in bid to cut output cost, maximise profit Tapos Kanti Das . Khulna
The state-owned Khulna Hardboard Mill has started using non-wood raw materials to reduce production cost and increase profit. The industrial unit, set up on about 10 acres of land on the bank of the River Bhairab in the Khalishpur industrial area, went into commercial production in 1966. It suspended production on December 15, 2002 due to operational loss and resumed production on September 14, 2005 with fresh attempt to make it a profitable concern. Official sources said the mill was established eyeing woods of Sundari trees of the Sundarbans as its raw material. But supply of the Sundari woods had been suspended after the Sundarbans was declared as the ‘World Heritage Site’. The KHM, a unit of the Bangladesh Chemical Industries Corporation, has been running depending on supply of local woods as raw material, other than Sundari. Besides, the production in the mill sometimes remained suspended due to shortage of raw materials in the local markets, the mill officials said, adding that they had to find out alternative goods as raw materials in running the unit. They collected bagasse from the Mobarakganj Sugar Mill, saw-dust from different local sawmills and husk of paddy from local rice mills to use them as raw materials with various kinds of woods. The officials said they have been using 30 per cent non-wood raw materials, including 20-25 per cent bagasse, and 70 per cent of woods from the trees of mango, blackberry, Mehagini, Black Babla, Rain-tree, Tamarind etc. The officials said if they use 100 per cent wood as raw material, they need Tk 1080 for raw materials to produce 1000sqft hardboard. But, the industry could produce 1000sqft hardboard using 30 per cent non-wood raw materials with the cost of Tk 940 for raw materials, saving Tk 140. Besides, if they use 100 per cent wood as raw materials, they need Tk 3600 as electricity and fuel (furnace oil) cost to produce 1000sqft hardboard. But they could produce the same amount of hardboard using 30 per cent non-wood raw materials at the cost of Tk 3400, saving Tk 200. Before using the non-wood raw materials the mill could produce 34,000sqft hardboard per day on an average and after using the non-wood raw materials they can produce about 50,000sqft hardboard a day. Moreover, the non-wood raw materials are added to the secondary refining stage that saves about one hour as well as fuel, electricity and workers’ wage cost. Md Abdur Razzaque, managing director of Khulna Hardboard Mills Limited, told New Age they have been using 30 per cent non-wood raw materials from June 21 and are producing around 50,000sqft a day by spending less amount than earlier to produce per unit of hardboard. ‘In 2007-2008 fiscal year, our target was to produce 1.4 crore square feet hardboard and we produced 1.23 crore square feet, and in 2008-2009 fiscal year, we have the same target of producing 1.4 crore square feet, but we hope to produce more than the target,’ he added.
ADB calls for integration to manage regional risks Xinhua . Manila
The Asian Development Bank on Monday said deeper regional economic integration in Asia is vital to sustaining growth and managing risks in the region. In a new study, the ADB said while the economic integration is led by the market, Asian economies need to boost their ties through closer dialogue and policy coordination in order to take full advantage from increased regional interdependence. It said Asia now is less integrated in finance than in trade but financial markets are now larger, deeper, and more sophisticated than they were a decade ago when the Asia financial crisis struck and first shed light on the importance of regional economic integration. ‘Asian regionalism can be a stabilizing factor when shocks arise,’ the ADB said. ‘The region faces a challenging period ahead as global payment imbalances appear increasingly unsustainable as the financial turmoil unfolds and global economic slowdown deepens,’ it said. The regional bank said to foster financial stability and economic prosperity, Asian nations also need to improve regional macroeconomic surveillance and work toward the creation of new regional institutions such as an Asian Financial Stability Forum and an Asian Secretariat for Economic Cooperation. The challenge to Asian policy makers is to closely monitor global and regional developments, and to be ready to act together if region-wide responses are appropriate, the study said. It also said the region needs to cooperate to make development sustainable by protecting regional health and environment.
ISPs want IP telephony licence this month Staff correspondent
The internet service providers have demanded that the IP telephony license should be issued within this month for widening the scope for cheaper calls to and from Bangladesh. Leaders of the Internet Service Providers Association of Bangladesh at a press conference at the Dhaka Sheraton Hotel on Tuesday said, according to the International Long Distance Telecommunications Services Policy, the Bangladesh Telecommunication Regulatory Commission had issued almost all other licenses except for the IP Telephony license. The IP telephony is an internet service involving web-surfing or sending of e-mail, which can help common people get easy and high speed communication, the ISP leaders added. With the issuance of IP telephony license, the government can ensure the highest use of bandwidth and more sustainable web service and business, and it can help create chances for the software companies to get more businesses and for small and medium enterprises to establish call centers using the PABX line, they said. The speakers also urged the BTRC to give Wimax (broadband internet service) only to the ISPs, based on qualification. They said local ISPs or other investors could not compete at the Wimac license auction as the primary fee for the Wimax license was Tk 25 crore and it was feared to increase further through auction. The association’s president, MA Salam, said foreign companies would ultimately avail themselves of the license, which would be contrary to the ILDTS policy, and the huge license fee would eventually push up internet service fees. General secretary, Russell T Ahmed, said call centre industry could flourish if the government opened up the call center through internet instead of the IPLC connection. He said there would be no possibility of grey market or the illegal voice over internet protocol at the internet based call centre as the BTRC could closely monitor the service. ‘At present, the IPLC point to point connection system is increasing the infrastructure cost of call centre which is really not feasible for the growth of the call centre industry’, Russell added. The association leaders said there were about 500 ISP companies in the country of which 200 were licensed and the rest were running business with no license and providing no quality service. The association’s vice-president, Hasan Chowdhury, said these unreliable companies had no accountability to any government body nor did they give any revenue to the state. He called on the telecoms watchdog to bring these companies under a licensing system. Hasan said, ‘Because of this flawed policy, a competitive market could not be created although the BTRC had issued a license to a company for providing the IIG service.’
Malaysian PM lauds experience of Bangladeshi workforce Untied News of Bangladesh . Kuala Lumpur
Malaysian prime minister Abdullah Ahmad Badawi has appreciated the good working experience of Bangladeshi workforce, getting higher wages, but emphasised that they should be more respectful to the rules and regulations of the land. He made the remarks during a bilateral meeting with the chief adviser, Fakhruddin Ahmed, on the sidelines of the D-summit at Hotel Hilton, CA’ s press secretary Syed Fahim Munaim told reporters. Responding to the host PM, Fakhruddin said his government has already taken various steps to make Bangladeshi workforce skilled and conversant with the tricks of the trade. ‘Malaysian technical know-how and capital and Bangladeshi labour could make effective combination for a win-win situation for the two countries,’ the head of caretaker government said. Fakhruddin pointed out that now infrastructural development is important for Bangladesh and the government is giving priority to the task. The government is exploring ways of introducing mass transport system so that large numbers of people can move at a time and Malaysia can come and invest in this sector, he said. Apart from D-8 cooperation, he said, bilateral trade facilities can be enhanced. Communications linkage is also important for increasing people-to-people contact. He mentioned higher frequency of air services between Dhaka and Kula Lumpur. As the chief adviser said Bangladesh has taken a strong stand against terrorism, the Malaysian prime minister said, ‘None should compromise on terrorism.’ In this regard, Fakhruddin said in the last one and a half years, not a single bomb has been exploded nor a single bullet shot. Badawi remarked that Bangladesh is comparatively peaceful than India and Pakistan in these times of disquiet.
Power cuts turning investors off Indonesia Agence France-Presse . Jakarta
Foreign investors are shying aw