GP logs record profit

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GP logs record profit

January 29, 2019
Star Business Report

Grameenphone logged a record Tk 3,520 crore profit last year, its highest to date, driven by significant growth in voice and data revenue.

The profit is 28.47 percent higher than what the largest mobile phone operator in the country posted a year ago.

This led GP to recommend Tk 28 in dividend per share for the full 2018. The shareholders as of the record date of February 17, 2019 will be entitled to the final dividend, subject to the shareholders’ approval at the 22nd annual general meeting scheduled for April 23.

The operator said revenue grew 3.4 percent to Tk 13,280 crore in 2018. Data revenue grew 21 percent to Tk 2,550 crore and voice call revenue was up 6.6 percent. GP acquired 74 lakh new subscribers in the year, registering 11.3 percent growth and ended the year with 7.27 crore active users. It also added 59 lakh internet subscribers. Some 51 percent subscribers of the operator now use mobile data.

“Grameenphone delivered a strong business performance driven by excellent execution in the market with the launching of 4G in February and witnessed a healthy growth in voice and data revenue,” said Michael Patrick Foley, chief executive officer of GP, at a press conference at his office in Dhaka.

“We will continue to drive our proven strategic priorities with speed and agility while providing value to our customers, employees and shareholders.”

GP Chief Financial Officer Karl Erik Broten said, “With the growth potential of the market and our focus on operational efficiency, simplification, and driving value for our customers, we are optimistic in delivering profitable growth going forward.”

Last year, GP invested Tk 3,400 crore to modernise network for the 4G rollout, pay licence and tech-neutrality conversion fee, and acquire spectrum. It contributed Tk 8,420 crore to the national exchequer.

EPZ labour law gets final nod from cabinet

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EPZ labour law gets final nod from cabinet

January 29, 2019
Star Business Report.

The cabinet yesterday gave the final approval to amendments to the Bangladesh EPZ Labour Act, which relaxed the labour law for the export processing zones to ensure better rights for workers employed in factories housed inside the special industrial parks.

The draft law was approved in principle by the cabinet on December 3 last year.

After the cabinet meeting, Cabinet Secretary Md Shafiul Alam told reporters that the draft law got the final nod yesterday without any change.

The EPZ workers will now enjoy the freedom of association to realise their demands, according to the new amendments to the Bangladesh EPZ Labour Act.

Earlier, 30 percent workers’ consent was required to form a Workers’ Welfare Association (WWA) in a factory in the EPZ.

The requirement threshold has been lowered to 20 percent because of the pressure from international communities such as the EU, Canada, the International Labour Organisation and the US.

The names of the WWAs have not been changed; the existing WWAs will act like unions.

The amendment will allow the officials of the Department of Inspection for Factories and Establishments to inspect the factories housed inside the EPZs apart from the officials of Bangladesh Export Processing Zones Authority (Bepza).

Previously, only Bepza officials could inspect the factories. The amendment also allowed the workers to constitute federation of WWAs. The mandatory required consent of the workers for calling strikes and lockouts has also been lowered. Now, workers will be able to call strike or lockout with the consent of two-thirds of the workers instead of previous three-fourths. Workers will be able to write the constitutions of the WWAs in line with the main labour law.

The election of the executive committees of WWAs will be held within six months of the end of the tenure of a committee, down from one year previously.

If a worker goes into retirement at the age of 60 or he or she resigns, they will receive basic salary equivalent to 45 days for each year of service up from the existing 30 days.

If a worker completes 25 years on the job, he or she will enjoy full compensation benefit.

The amended law allowed formation of WWAs in new industrial units within three months of their operation.

Previously the workers had to go through 12 steps to form WWAs, which the amended law has reduced to only three steps so that they can enjoy the freedom of association and bargaining. The amended law guarantees job security to the elected leaders of WWAs in case of strikes and lockouts.

Factory owners have also given the go-ahead to form associations. As of fiscal 2017-18, eight EPZs employed 502,013 workers, invested $4.69 billion and exported goods worth $6.66 billion, according to data from Bepza.

The cabinet also approved in principle the draft of Bangladesh Flag Carrier Ships (Preservation) Act 2019.

In case of transporting any Bangladeshi goods, 50 percent of the export and import goods will have to be carried by Bangladeshi vessels, according to the draft.

The existing law requires 40 percent of the goods to be carried by the local vessels. The cabinet secretary said the act was amended to promote Bangladesh Shipping Corporation. However, if a Bangladeshi ship is not available, foreign ships can be used. But in that case, a waiver has to be taken from the government.

In the existing laws, no specific amount of fine has been prescribed for violation of any law. The draft law has called for fines of up to Tk 5 lakh.

Bangladesh to buy 300 buses from India

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Bangladesh to buy 300 buses from India

Star Business Report

Bangladesh will buy 300 double-decker buses from Indian motor vehicle maker Ashok Leyland under a line of credit (LoC) from New Delhi.

The cabinet committee on purchase yesterday approved a proposal for the purchase amounting to around Tk 239 crore, equivalent to $29 million.

A finance ministry official said the purchase was part of a $74.66 million project to bring in double-decker and single-decker A/C and non-A/C buses. Of the project cost, India was providing $55.83 million under a $2 billion LoC.

As per the LoC’s condition, Bangladesh Road Transport Corporation (BRTC) invited tenders in which only Indian companies could participate.

The finance ministry official also said while giving the approval, the committee wanted to know about the condition of the buses procured earlier by the BRTC.

It also wanted to know why the buses previously bought by the BRTC were not plying on the roads.

Another cabinet committee on economic affairs led by Finance Minister AMA Muhith decided to conduct an environmental study to prevent casualties from landslides.

The committee had previously directed the communications ministry to give a detailed report on the snapping of communications in Rangamati due to hill slides last year.

Later, the communications ministry formed a four-member committee which presented a report yesterday incorporating a 10-point recommendation. The decision to conduct the environmental study was taken on the basis of the report.

Accord’s extension now more difficult

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Accord’s extension now more difficult

The Accord’s bid to stay on in Bangladesh for three more years has become trickier after the High Court this week restrained the government for extending the inspection agency’s tenure because of a writ petition filed by Smart Jeans. The government has been restrained by a high court bench of Justice Syed Refaat Ahmed and Justice Md Salim. Were there no order, the EU-based inspection agency might have succeeded in securing the extension by lobbying with the ministries of commerce and labour and employment. Now, the court’s permission is needed for the extension to come through.

Since there is an injunction, the government will not be able to extend the tenure of the Accord beyond May 31, said Md Yousuf Ali, a lawyer of Smart Jeans. Mostafizur Rahman, chairman of Smart Jeans, had filed the writ petition against the Accord after the platform of more than 200 retailers, mostly based in Europe, terminated its business relationship with the Chittagong-based garment maker.

Smart Jeans is mostly a supplier to the members of the Alliance, another platform like the Accord but composed of 28 North American retailers. But, it supplies to signatories of the Accord from time to time.

There was an understanding between the Accord and the Alliance that they will accept the inspection certification of each other in case of common factories to avoid duplication.

Since Smart Jeans is largely a supplier to Alliance members, the platform’s inspectors examined the three factories owned by Rahman and suggested necessary remediation works. Rahman completed the remediation works and the Alliance engineers also gave their seal of approval.

Meanwhile, the Accord engineers also inspected the factories and found the corrective works to be unsatisfactory.

Based on their recommendation, the Accord signatories unilaterally terminated ties with Smart Jeans, prompting Rahman to take the platform to court.

Earlier on October 26 last year, the same bench of the court issued an order, asking why the unilateral decision of severing of the business ties of Smart Group with the Accord signatories will not be declared illegal. On the same day, the Accord said on its website that the government has already extended its tenure by three years.

After noticing the news of the extension on the Accord website, the court gave a supplementary rule on it and restrained the government until April 4 from extending the tenure of the Accord.

After the injunction was issued, Rahman was informed that the Accord members would be able to do business with Smart Jeans now.  Rob Wayss, executive director for the Bangladesh operations of the Accord, did not respond to requests for comments. The Accord on Fire and Building Safety in Bangladesh is a five-year independent, legally binding agreement signed on May 15, 2013 between more than 200 retailers and trade unions designed to build a safe garment industry in the country. It intends to stay on in the country for three years after its current agreement expires on May 31 mainly to monitor the trade union activities of garment workers. Commerce Minister Tofail Ahmed on several occasions said the government will extend the tenure of the Accord only by six months to help it take preparation to leave the country.

Although, there is an uncertainty in the formation of the second Accord, until yesterday nearly 140 global retailers and brands signed it, according to the IndustriALL, a global rights group.

Showcase Malaysia 2015@ Dhaka, Bangladesh

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Bangladesh-Malaysia Chamber of Commerce and Industry (BMCCI) has been working with a mission to foster strategic capabilities through Business Forums, Trade Fairs, Exchange of Business Delegation, etc.. escalating to trade and investment opportunities between Bangladesh and Malaysia.

BMCCI organised the first Bangladesh-Malaysia Business Forum in 2004 in Dhaka with a grand success.  BMCCI organized Malaysia Single Country Trade Fair, “Showcase Malaysia” in 2008, 2011 & 2013 in Dhaka respectively.  BMCCI also organised three “Showcase Bangladesh” in 2010, 2012 & 2014 in Kuala Lumpur.  Also, in 2012, a Seminar on “Business Opportunities in Bangladesh” and in 2014, two seminars, one on “Investment Opportunties in Bangladesh”: Emphasized on Econonic Zones and Public Private Partnerships (PPP)” and the other Seminar on “Investment Opportunities in Bangladesh: Infrastructure and other Potentials” was held in Kuala Lumpur.