BGMEA ELECTION New panel protests attack on leaders

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BGMEA ELECTION

New panel protests attack on leaders

Star Business Report

Swadhinata Parishad, a candidate panel of the upcoming election of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), staged a protest yesterday alleging an attack on their leaders by supporters of other panels.

“Some people from the BGMEA attacked our leaders and officials while we were returning from the office of the election commission situated inside the BGMEA office at around 11:00am today (yesterday),” said Zahangir Alam, convener of Swadhinata Parishad.

“We want legal action against the attackers and we denounce this attack. We want the BGMEA declare the attackers persona non grata,” he said at a human chain the parishad formed in the city’s Karwan Bazar area around 3:30pm.

Yesterday was the last day for submission of the nomination paper for the biennial election of the garment makers’ platform which is scheduled to be held on April 6.

Alam said 19 out of his panel’s 26 candidates had submitted their nomination papers.

“We want the BGMEA election to be held. Anybody can come to power after the election. We will congratulate the elected representatives of the BGMEA,” he said. Siddiqur Rahman, the BGMEA president, said he was not aware of the attack on the election candidates as none had lodged any complaint with him yet.

Previously the BGMEA had over 6,000 members but now it had declined to 2,200 who have 3,200 active garment factories, Rahman told a group of reporters at his office in Dhaka yesterday.

This year, there are 1,596 valid voters in Dhaka region and 359 in Chattogram.

Two panels, including Forum and Sammilito Parishad, usually elect 35 directors through the BGMEA election. Later, the directors of the winning panels elect the presidents and directors for a two-year tenure.

Swadhinata Parishad is contesting for the first time.

The tenure of the current BGMEA board expired on September 22 in 2017. However, the board was able to convince the commerce ministry to extend its tenure several times.

14 banks see unusual rise in default loans

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14 banks see unusual rise in default loans

AKM Zamir Uddin

Default loans in 14 banks surged abnormally in 2018 — in a development that will weaken the country’s banking sector further.

Experts and bankers attributed the sector’s declining health to the poor lending practices and politically-influenced loans, calling on the government and the central bank to address the issue immediately.

The 14 banks are Janata, AB, Islami Bank Bangladesh, Modhumoti, National, NRB, NRB Global, Shahjalal Islami, Social Islami, South Bangla Agriculture and Commerce, Farmers (now Padma), Trust, Union, and Meghna.

Last year, Janata Bank accumulated the highest volume of default loans amounting to Tk 11,406 crore, taking the total to Tk 17,225 crore, according to data from the central bank.

The non-performing loans (NPLs) in the banking sector went up by a hefty 26.38 percent, or Tk 19,608 crore, last year and Janata Bank was solely responsible for 58 percent of the increase.

The central bank has discovered that the state lender had disbursed a large amount of loans to Crescent and AnonTex groups, violating rules. A major portion of the loans has recently turned bad, putting it in a precarious situation.

The Farmers Bank, one of the fourth-generation banks that got licence in 2013, also faced a sudden rise in the delinquent loans as it earlier disbursed loans breaching rules.

The NPLs in the bank, which has recently been renamed as Padma Bank to sweep up its image crisis, rose 340 percent year-on-year to Tk 3,184 crore last year.

Md Ehsan Khasru, managing director of the bank, said the lender had not disbursed any loan last year; rather it put its efforts to recover the NPLs.

“The previous management and the board of directors are liable for the rise in the default loans in the bank. The default loans will come down this year because of our ongoing recovery programme,” he said.

The default loans at Trust Bank surged 164.50 percent year-on-year to Tk 1,529 crore last year.

Faruq Mainuddin Ahmed, managing director of the bank, said some of its borrowers had earlier obtained stay orders from the High Court so that they were not categorised as defaulters.

But the court vacated the orders last year, fuelling the bank’s classified loans sharply, he claimed.

National Bank, a first-generation bank, saw an increase of 37 percent in default loans to Tk 2,210 crore last year.

ASM Bulbul, additional managing director of the bank, said that the lender had put the accounts of unscrupulous borrowers into the default zone as part of its strategy.

“The policy will help the bank put pressure on the borrowers and compel them to repay the loans,” he said.

In terms of percentage, Modhumoti Bank, a fourth-generation lender, faced the highest NPLs. Classified loans in the bank rose 555 percent year-on-year to Tk 58 crore last year.

Default loans at Meghna Bank, also a fourth-generation lender, stood at Tk 172 crore in 2018 in contrast to Tk 93 crore a year ago.

Adil Islam, managing director of Meghna Bank, however, said the NPLs in his bank were relatively lower than those of many other banks. “Yet, we have formed a number of recovery units to retrieve the classified loans,” he said.

The banks with higher defaulted loans have been in crisis to run operation, management and monitoring, said Salehuddin Ahmed, a former governor of the Bangladesh Bank.

Some banks, including Janata have breached credit discipline grossly while disbursing loans, which was not expected at all, he said.

The central bank is yet to take any remarkable measure to restore the corporate governance in the banking sector. As a result, the crisis has prolonged, Ahmed said.

AB Mirza Azizul Islam, a former finance adviser to a caretaker government, said both the state and private lenders had been distressed by the political influence.

Political connection with the management and board of directors should be delinked in order to ensure the sound financial health of the banks, he said.

The NPLs in the banking sector stood at Tk 93,911 crore last year, up from Tk 74,303 crore a year ago.

London remains top destination for European tech funding

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London remains top destination for European tech funding

Reuters, London

London remained the top destination in Europe for technology investment in 2018, with nearly double the amount being plowed into companies in the British capital than nearest rival Berlin, data showed on Wednesday.

Technology companies in London attracted 1.8 billion pounds ($2.3 billion) in venture capital funding, 72 percent of the total 2.5 billion pounds raised by UK tech businesses, according to data from funding database PitchBook on behalf of the Mayor of London.

Eileen Burbidge, a partner at venture capital firm Passion Capital, said London was the leading hub for financial technology thanks to its position as one of the world’s biggest financial centers, while its universities helped to create companies offering artificial intelligence (AI).

“We get a lot of calls and inquiries from investors in the US and Asia looking for fintech opportunities,” she told Reuters. “In fintech, AI and a few other sectors such as life sciences and robotics, London genuinely leads the world.”

London’s tech sector and its mayor, Sadiq Khan, have warned that Britain’s departure from the European Union could damage its appeal. However, Burbidge said there was no sign of this happening yet, beyond companies asking many more questions when looking to hire from abroad.

The data from PitchBook showed that both Berlin and Paris gained ground against London in the race for funds across Europe, and that London failed to match the record levels it attracted in 2017, but the gap still remained significant.

Berlin attracted 937 million pounds of investment in 2018, almost double the previous year’s total, while 797 million pounds went to tech groups in Paris as President Emmanuel Macron stepped up his promotion of the country.

In Britain as a whole, investment in AI rose 47 percent to 736 million pounds while 1.2 billion pounds went into the booming fintech sector and companies such as digital banks Revolut and Monzo.

Total venture capital funding in European tech slipped slightly in 2018, with 10.44 billion pounds raised, against 10.47 billion pounds in 2017.

Bangladesh biggest textile machinery market for China

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Bangladesh biggest textile machinery market for China

Four-day expo begins in Dhaka

Refayet Ullah Mirdha

Bangladesh will continue to grow as a major textile machinery market as local textile millers are expanding business riding on higher demand for garment items from international consumers, industry people said yesterday.

Local fabrics makers, textile millers, spinners and garment manufacturers spend a few billions of dollars every year to buy machinery.

“Bangladesh is the biggest machinery market for Chinese textile and garment machine manufacturers,” said Chen Ji, secretary general of the China Sewing Machinery Association.

Ji said Chinese sewing machinery manufacturers exported equipment worth more than $1 billion to Bangladesh every year.

“The textile and garment business will continue to grow in Bangladesh over the next many years as the demand is increasing every year both in the international and local markets,” Ji told The Daily Star at the 16th Dhaka International Textile & Garment Machinery Exhibition 2019, also known as DTG 2019. The Bangladesh Textile Mills Association (BTMA) and Yorkers Trade & Marketing Services Co. Ltd, Hong Kong jointly organised the four-day exhibition at the International Convention City Bashundhara in Dhaka. This is the largest textile machinery exhibition in Southeast Asia, the organisers said.

This year 1,200 exhibitors from 37 countries are showcasing latest machinery in the textile and garment sectors at 1,650 booths set up at the venue. Last year, 1,100 exhibitors from 36 countries took part.

Judy Wang, president of Yorkers Trade & Marketing Services Co., said every year the number of participants was increasing as renowned textile and garment manufacturing companies in the world wanted to sell their goods in Bangladesh.

Local spinners can meet 80 percent of the demand of the knitwear sector, while only 35 -40 percent of the woven sectors’ demand can be met by local suppliers, she said.

“So, there is room for further big investment in the woven sector where local entrepreneurs will need to install machinery worth of billions of US dollars,” she said.

Wang said the DTG was a very good platform to invite international buyers targeting the woven sector, which has immense potential to grow.

BTMA President Mohammad Ali Khokon, in his inaugural speech, said buyers of textile and apparel products now recognised Bangladesh as one of their major sourcing destinations.

“Textile machinery manufacturers value Bangladesh as the centre of textile and clothing machinery business hub,” he said.

Shafiul Islam Mohiuddin, president of the Federation of Bangladesh Chambers of Commerce and Industry, urged the government to continue policy support and political stability.

“We need predictable and consistent policies. We want to know what the price of energy would be in the next 10 years. We do not want any erratic policy in the financial sector.”

Create more jobs for youths

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Create more jobs for youths

President asks businessmen as DITF kicks off
Bss, Dhaka
—————-

President M Abdul Hamid yesterday urged the business community to come forward to create more job opportunities for the country’s youths.

“Thousands of meritorious youths come out successful every year with higher studies…it is urgent to create job opportunities for them and you have to come forward in this regard,” he said.

The president was addressing the opening session of a 24th Dhaka International Trade Fair (DITF-2019) at Sher-e-Bangla Nagar in the afternoon. Stressing on the need for setting up new industries and factories in the country to utilise the comparative facilities and explore its potentials, the president said, “This will help enhance employment generation and investment”.

He further called upon both the local and foreign investors to explore the potentials of Blue Economy as the government’s marine-based economic activities have opened a new horizon of progress.

Abdul Hamid underscored the need for attaining expertise to expand trade and commerce, creating new markets and diversifying the country’s export baskets.

“You have to take pragmatic steps to produce quality goods along with enhancing productivity, branding products, and making those more attractive,” he said. The president also urged business leaders to take necessary steps to increase export of jute and agro products, including frozen shrimp, mango and potato.

He said Bangladesh exported 750 items of products to 202 countries during fiscal 2017-18 while the export volume reached at $41 million.

Abdul Hamid hoped that the DITF would play an important role in implementing the multi-faceted economic plans, which would help accelerate the country’s development.

Later, the president inaugurated the month-long DITF-2019 and visited several stalls and pavilions there.

The Ministry of Commerce and Export Promotion Bureau (EPB) jointly organised the trade fair, which will remain open for all from 10:00am to 10:00pm every day.

A total of 550 stalls and pavilions, including 60 premium pavilions, 38 premium mini pavilions, 20 reserved pavilions for women, 26 foreign pavilions, 18 general pavilions and 22 food stalls, will be set up in the fair venue.

Different business entities from India, Bhutan, Pakistan, China, the United States, the United Kingdom, Nepal, Australia, Germany, Hong Kong, Thailand, Vietnam, the Maldives, Mauritius, Russia, Iran and Swaziland are participating in the fair.

Commerce Minister Tipu Munshi, Commerce Secretary Md Mofizul Islam, Federation of Bangladesh Chambers of Commerce and Industry President Md Shafiul Islam Mohiuddin, Export Promotion Bureau Vice-Chairman Bijoy Bhattacharjee, business leaders, secretaries concerned to the president and senior civil and military officials were, among others, present.

‘Chinese loan won’t be debt trap for BD’

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‘Chinese loan won’t be debt trap for BD’

Five loan deals, three MoUs to be signed during PM’s visit to China, Foreign Minister A Momen tells media

 

Chinese loan will not be a debt trap for Bangladesh as the country examines the feasibility of the loan project cautiously, foreign minister Dr AK Abdul Momen said on Friday.

The minister made the remark when his attention was drawn to criticism that loans taken under the Chinese Belt and Road projects flung many South Asian countries into the debt trap.

He was briefing reporters about Prime Minister Sheikh Hasina’s upcoming visit to China at the foreign ministry.

He said due to this caution many loan agreements were dropped as those were not found feasible for Bangladesh, he added.

Hasina will start for the Chinese city of Dalian on July 1, by a special flight of Bangladesh Biman and will return home on July 5.

The foreign minister said that five loan agreements and three MoUs will be signed during the PM’s Beijing trip. These are: Framework agreement of “Expansion and Strengthening of Power System Network under DPDC Area, government concessional loan agreement on “Expansion and Strengthening of Power System Network under DPDC Area Project”, preferential buyer’s credit loan agreement of “Expansion and Strengthening of Power System Network under DPDC Area Project,” framework agreement on “Power Grid Network Strengthening Project under PGCB” project, and agreement on Economic and Technical Cooperation between the two governments.

The MoUs include the establishment of Investment Cooperation Working Group and its implementation plan on hydrological information sharing of Yalu Zhangbo /Brahmaputra River; and cultural exchange and tourism programme.

Responding to a question, the minister said the amount of the loans for which agreements will be signed during the visit is yet to be finalised.

Responding to another question, the minister said China maintains identical relations with Bangladesh and Myanmar and the perception that the Asian giant is biased toward Myanmar is not true. About the Chinese veto in the UN Security Council’s resolution against Myanmar, he said that there might be other reasons behind that.

The minister pointed out that China was eager to resolve the Rohingya crisis from the beginning and it wanted to settle the problem through bilateral discussions between Myanmar and Bangladesh.

The prime minister will attend the summer conference of the World Economic Forum, which will be held from July 1 to July 3 in Dalian city of China.

She will speak at the World Economic Forum on July 2 with the focus on ‘Future of Asia’ and Bangladesh’s socio-economic development.

From Dalian, she will go to Beijing on July 3 and on the same day she will attend a meeting organised by expatriate Bangladeshis in China, the FM said.

During the meeting, she will meet the Chinese President Xi Jinping on July 5.

The Prime Minister will meet the Chinese Prime Minister Li Keqiang twice-the first on July 4 and then on July 5, the minister mentioned.

The foreign minister said Rohingya issue will be key focus of the PM’s meeting with top Chinese officials.

mirmostafiz@yahoo.com

RMG exports to India can hit $2b in 2yrs

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RMG exports to India can hit $2b in 2yrs

Commerce minister says
 Star Business Report
January 28, 2019

Bangladesh has the capability to export $2 billion worth of apparel to India in the next two years on the back of its duty-free access to the market and rising demand for garment items at competitive prices, said Commerce Minister Tipu Munshi yesterday.

“Apparel export to India rose significantly in the last two years and we have the capability to export more,” he said, while expressing hope that the shipments will cross the $2 billion-mark over the next couple of years.

Munshi’s comments came at a press briefing after a meeting with Adarsh Swaika, the acting high commissioner of India in Bangladesh, at his office.

In fiscal 2017-18, garment exports to India more than doubled to $278.68 million, according to the data from the Export Promotion Bureau.

“I think there is no impediment to Bangladesh’s export to India,” Swaika said.

In 2011 India removed all duties on exports of Bangladeshi goods to India. “Since then we have not followed any restrictive pattern.”

On the widening gap in trade balance between the two countries, the diplomat said India’s export to Bangladesh is growing as the country mainly imports raw materials for export.

For instance, Bangladesh is a major importer of cotton and active pharmaceutical ingredients from India, he said.

Bangladesh imported goods worth $8.61 billion and exported goods worth $873.27 million in last fiscal year, according to data from the ministry of commerce.

Six more border haats would be opened soon to facilitate easy availability of goods for those living in the areas, Munshi said.

He, however, did not name the areas where the markets will be set up. Currently, four border haats are in operation.

The minister assured that he would hold talks with the Indian government to resolve the trade dispute at the Feni border haat as Bangladeshi traders have been complaining about impediments in sales of their goods in the market.

He also said both countries agreed to resume the activities of the century-old Chilahati land port in Nilphamari district to facilitate trade between the two countries.

He would also discuss the issue of imposing anti-dumping duty on Bangladeshi jute and jute goods by the Indian authority so that the long-pending dispute could be resolved amicably.

Swaika said a company would soon start developing the Indian special economic zone that the Bangladesh Economic Zones Authority awarded to Indian investors.

Two more zones will also be developed soon for Indian investors at Bheramara and Mirsarai.

Swaika said a river cruise between Bangladesh and India would begin from March this year to facilitate the movement of people. Riva Ganguly Das, the newly-appointed Indian high commissioner to Bangladesh, will arrive in the middle of next month.

$100m BIMSTEC dev fund on the cards

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$100m BIMSTEC dev fund on the cards

 FE Report |  October 11, 2018 00:00:00

The member states of regional trade bloc BIMSTEC are set to establish a fund for research, planning and financing development projects.

At the initial stage, officials have said, the fund styled ‘BIMSTEC Development Fund (BDF)’ will be worth $100 million.

The fund will be set up with voluntary contributions from the member states, they added.

The BIMSTEC (The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) comprises seven countries.

Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand joined hands with an express aim to boost economic cooperation for mutual gains.

According to officials, the BIMSTEC leaders in the fourth summit last August decided to form the fund.

They asked the relevant ministries and national agencies to explore possible ways for its establishment.

Foreign ministry in a recent letter to finance ministry sought necessary steps to contribute to the formation of the fund.

A concept note of the proposed fund mentioned that the BIMSTEC was established through the 1997 Bangkok Declaration.

It emphasised identification and implementation of specific cooperation in various sectors including trade, investment and industry, technology, human resource development, tourism, agriculture, energy, infrastructure and transportation sector.

However, financing the BIMSTEC activities still remains as a big challenge in the absence of required fund, the concept note said.

It further said that at the initial stage, the BIMSTEC’s reliance was on external funding to finance development projects.

The concept note said the reliance on external fund was gradually discouraged, but internal funding mechanism did not develop.

For lack of funding sources, the bloc could not initiate some essential studies like BIMSTEC master plan study of transport connectivity and grid interconnection study.

The BIMSTEC had to rely on Asian Development Bank for funds to carry out the study of transport connectivity.

However, there is no formal arrangement with the ADB for receiving its future technical assistance to carryout any such studies, the concept note said.

“The BIMSTEC centre/entities also could not be operationalised as the funding has remained an unresolved issue,” it stated.

As decided by the leaders, the fund will be utilised for research and planning, and financing projects, programmes and other activities of BIMSTEC centres and entities.

An expert group of officials from finance ministries, which handle international financing and banking, will be constituted to handle the fund.

A senior finance ministry official told the FE that they have received such a proposal for contribution to the BIMSTEC Development Fund.

The BIMSTEC states have some 1.5 billion people, or 22 per cent of the global population.

They have been able to sustain an average growth rate of 6.5 per cent in recent years.

The region has a gross domestic product (GDP) of $2.7 trillion.

Khulna-Mongla rail project under Indian LoC limping

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Khulna-Mongla rail project under Indian LoC limping

 Mir Mostafizur Rahaman

 

The slow implementation of the Khulna-Mongla rail connectivity project, one of the top priority schemes under the Indian Line of Credit (LoC), raises concern among the stakeholders.

The latest review of the Tk 38 billion (3800 cr) project by both Indian and Bangladesh side shows that only 19 per cent work of the project, which was scheduled to end by June this year, has been completed so far.

India is providing Tk 23 billion, or two-thirds of the cost, of the project.

The project was initiated in 2013 by Bangladesh Railway (BR) with funding from India under LoC. Bangladesh is also financing part of the cost.

Apparently, being worried about the slow pace of the project, which is believed to benefit both India and Bangladesh in transporting goods to and from Mongla port, the authorities asked the contractor to finish the work with utmost priority.

This project, when completed, is expected to be a major contributor to connectivity in the BBIN region. It, hopefully, would also boost business in the region that covers Bangladesh, India, Nepal and Bhutan through Mongla, the country’s second-largest seaport.

A relevant official committee has recently instructed the contractor, IRCON to complete Fultala to Aranghata (0 to 9 km of this project) section by December/2018 without any pre-condition.

The IRCON was also instructed to mobilise equipment and project personnel as per the existing contract, according to the minutes of the meeting of the committee, held recently in the ERD to review the LoC-funded projects.

The meeting also observed that the work progress of the Rupsha Bridge is relatively satisfactory.

However, a proposal to allocate more funds for a component of the project is lying with Bangladesh Railway.

“The cost of this project may increase by around US$ 70 million. The Project Director informed that US$ 10 million was re-allocated to the 2nd Bhairab and 2nd Titas project. Altogether, US$ 80 million additional fund may be required to complete this component of the project,” the review said.

The meeting decided that the proposal for cost hike for Rupsha bridge due to additional base grouting requirement will be processed by Project Director through proper channels.

It said there may be two cost hike proposals, of which the first proposal will be processed by Bangladesh Railway by October 2018 and the second proposal may be processed three months after processing of the first project.

The meeting also decided that Fultala to Aranghata (0 to 9 km) should be completed by December 2018 without any pre-condition.

The Indian representative in the meeting said the speedy implementation of the LoC projects was their highest priority.

Larsen and Toubro Limited got Tk 10.76 billion Rupsha railway bridge construction work and IRCON International Ltd. received Tk 11.49 billion work to construct embankment, track, all civil works, major and minor bridges and culverts.

There will be nine stations to connect Khulna and Mongla port.

Meanwhile, the cabinet committee on government purchase approved the appointment of another consultant for this project on Wednesday.

Japan’s Sojitz in $500m tie-up with Energypac

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Japan’s Sojitz in $500m tie-up with Energypac

It eyes investment in energy, infrastructure
Jagaran Chakma

Sojitz Corporation, one of the leading business groups in Japan, is keen to make massive investment in Bangladesh’s energy and infrastructure sectors and industrial park.

It has already teamed up with Energypac Power Generation Ltd, a local conglomerate, and is seeking to establish a port at the Mirsarai economic zone over 1,000 acres of land.

The joint venture would initially invest $500 million and it would go up to $2 billion phase by phase, Humayun Rashid, managing director of Energypac, told The Daily Star.

The corporation is set to sign a memorandum of understanding (MoU) with the Bangladesh Economic Zones Authority (Beza) on October 21 to start feasibility studies.

Md Harunur Rashid, executive member for investment and promotion of the Beza, said Sojitz Corporation has a long-term investment plan for Bangladesh.

Sojitz has placed a proposal seeking 1,000 acres of land to establish a service-oriented industrial park, including a port at the Mirsarai economic zone, he said.

He said development of energy, infrastructure and industrial park was the key targets of the company in Bangladesh at the moment.

Sojitz is also keen to develop businesses in various industries such as machinery, chemical, medical, renewable energy, coal, food and textiles, said the executive member.

“Sojitz’s investment will be a quality one and attract foreign direct investment.”

Humayun Rashid said basically, Sojitz’s plan is to establish an infrastructure project to provide services for handling bulk materials through constructing a port, where mother vessels will anchor.

The Chittagong Port can’t provide the service for bulk materials handling due to a lack of technology and required space. Sojitz will provide the service, easing the cost of doing business, he said.

The entrepreneur hopes to start the project implementation work within one and a half years after carrying out different feasibility studies.

Energypac and Sojitz Corporation have already signed an MoU to implement the project.

Sojitz has been working in Bangladesh since 1951 and was the contractor of a number of projects, including the Sonargaon hotel and an integrated steel plant in Chattogram.

In the same year, the corporation opened liaison offices in Dhaka and Chittagong but they were closed in 2004. On August 8, Sojitz, however, opened an office in Dhaka.

The new Dhaka office will focus on promoting projects in the energy and social infrastructure sectors, said Sojitz in a statement.