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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

Second LNG terminal to start operations in March

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Second LNG terminal to start operations in March

Reuters, Singapore/Dhaka

January 17, 2019

Bangladesh’s second liquefied natural gas (LNG) terminal is expected to start operations in mid-March though domestic pipeline constraints mean it will be unable to fully supply gas demand to the country’s capital Dhaka.

Summit Corp, a subsidiary of Bangladesh’s Summit Holdings, and partner Mitsubishi Corp are expected to start operations at their floating storage and regasification unit (FSRU) off the country’s coast by the middle of March and ahead of schedule, a source familiar with the matter told Reuters on Tuesday.

A Summit Corp spokeswoman confirmed in an emailed response that the Summit LNG terminal is on schedule, but did not elaborate.

However, construction delays on a pipeline that will carry regasifed gas from the coastal city of Chattogram, near where the FSRU will be anchored, to Dhaka means that the vessel will not be fully utilised, the source said.

Until the pipeline is fully connected, the FSRU will handle about 300 million cubic feet per day (mmcfd) of gas which will be supplied to the Chattogram area, the source said. The ship can regasify up to 500 mmcfd of LNG, according to Summit’s website.

Once the pipeline is completed, state-owned energy company Petrobangla will be able to send up to 1,000 mmcfd from both the Summit FSRU and a vessel operated by US company Excelerate that started up in August, the source said.

“Our target is to complete all the connecting gas transmission pipelines by April,” Ali Al-Mamun, managing director of Gas Transmission Company Limited, a subsidiary of state-owned Petrobangla, told Reuters.

He added that the company has awarded a contract to Chinese oil and gas major CNOOC to build a 7-km (4.2 mile) pipeline that connects the Summit FSRU to the shore.

Other pipelines that will connect the offshore pipeline to the country’s main gas grid near the city of Bakhrabad are still being built, he said.

Summit LNG’s FSRU will anchor 6 km off the island of Moheshkhali in the Cox’s Bazar district of the Chattogram division, where it will regasify LNG procured by Petrobangla. The planned LNG import volume of the project is about 3.5 million tonnes a year, which will double the country’s LNG import capacity to 7.5 mmtpa once fully operational.

Bangladesh has scrapped plans to build additional floating LNG terminals in favour of land-based stations after the start-up of Excelerate’s vessel was delayed by several months due to technical problems and bad weather.

Govt to go for third submarine cable

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Govt to go for third submarine cable

Robi tests VoLTE service

Stat Business Report
January 17, 2019

The government has decided to connect Bangladesh with a third submarine cable to meet the demand for rapidly growing data consumption, Telecom and ICT Minister Mustafa Jabbar said yesterday.

“More and more new technologies are hitting the market, fuelling the growth of data consumption,” he said.

“We have decided in principle that we will go for a third submarine cable.”

The minister disclosed the plan while speaking at the trial run of Robi Axiata’s voice over long-term evolution (VoLTE) service at the second largest telecom operator’s office in Dhaka.

Industry insiders attributed the growth of internet bandwidth consumption—which now stands at 950 gigabits per second (Gbps), up from 550 Gbps a year ago—to the roll out of 4G services in the country.

“The growth rate is flying, so our total capacity will be exhausted within next year. So, it will not be possible for us to supply required bandwidth unless an alternative source of internet is developed,” the minister said.

Bangladesh wants to be a part of the initiative taken by a new consortium to lay an undersea cable within a short time from Singapore, he said.

Bangladesh got connected with the first undersea cable South East Asia–Middle East–Western Europe 4 (SEA-ME-WE 4) in 2006 and with the second one SEA-ME-WE 5 in 2017.

At the beginning of 2018, the government had asked state-run Bangladesh Submarine Cable Company Ltd (BSCCL) to take effort to establish connections with the third undersea link.

The company contacted with several consortiums and has come to know about the SEA-ME-WE-6 recently.

Another reason for looking for another submarine cable is that the first cable is nearing its 20-year lifespan, said an official of BSCCL.

“It is not possible to expand the capacity of the first undersea cable much and its maintenance cost is also increasing every year.” BSCCL had spent about Tk 500 crore for the first cable and earned more than what it spent.

The second cable cost the country Tk 660.64 crore and the Jeddah-based Islamic Development Bank lent $44 million for the project.  In the early 1990s, Bangladesh had rejected a proposal for free connection with the SEA-ME-WE-3.

ROBI tests VoLTE service

Robi conducted a non-commercial trial run of VoLTE technology, becoming the country’s first operator to complete preparation for the voice service on its 4G network.

At the event, the telecom minister made a phone call using the VoLTE network and talked with Md Jahurul Haque, acting chairman of the Bangladesh Telecommunication Regulatory Commission.

Mahtab Uddin Ahmed, chief executive officer and managing director of Robi, was also present.

Robi officials said VoLTE service would enable customers to make high definition voice calls with faster call setup time.

Mobile phone users can avail both voice and data services through VoLTE, which treats voice as just another application that rides on LTE data network.

Robi’s 4.5G subscribers will be able to enjoy superior voice quality as soon as the rest of the eco-system is ready to offer the VoLTE service on a commercial basis.

There will be no additional data charges for VoLTE and calls will be charged as per existing plan or pack benefits, Robi officials said.

Allocate special zone for plastic products makers

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Star Business Report

Plastic goods manufacturers yesterday demanded establishment of a special industrial zone so that they can relocate the unplanned plastic factories that are based in Old Dhaka.

At present, there are about 1,200 plastic factories in the oldest part of the capital, most of which are unauthorised, according to industry insiders.

“We have long been demanding a separate zone for us,” said Md Jashim Uddin, president of Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA).

“If we get a special industrial zone, it will give a huge boost and we will be able to capture around 3 percent global market share in future.”

He spoke while addressing the inaugural ceremony of the 15th International Plastic Fair 2019 jointly organised by the BPGMEA and Trade & Marketing Service Co Ltd at Radisson Blu Dhaka Water Garden.

The global market size of plastic goods is about $570 billion and Bangladesh has only 0.06 percent market share.

In 2017-18, Bangladesh exported plastic items worth $600.89 million, which was 1.4 percent of the country’s total export of $36.44 billion, according to the association.

In the previous fiscal year, plastic goods export was $607.15 million.

Some 480 companies from 19 countries are taking part in the four-day fair at International Convention City Bashundhara in Dhaka and displaying products at 780 stalls in 15 categories.

The major categories include packaging materials, plastic moulds, crockery, pharmaceuticals, households, toys, furniture, melamine, garment accessories and polypropylene woven bags.

Jashim Uddin also demanded formulation of a “standard packaging act” to safeguard the sector.

He urged the government to withdraw value-added tax on locally made toys to help flourish the segment as it is still at nascent stage.

Industries Minister Nurul Majid Mahmud Humayun assured the business community of solving the existing bottlenecks that the businesses face.

At the event, Salman F Rahman, private industry and investment adviser to the prime minister, pledged to take initiatives to establish the plastic industrial zone as soon as possible.

“I am committed to developing the backward linkage industry along with other sectors as the prime minister has given me the responsibility to work for the development of the private sector.”

He urged the plastics industry to put emphasis on recycling for reuse.

Rahman also vowed to improve the ease of doing business ranking of the country through creating a business-friendly atmosphere.

Shafiul Islam Mohiuddin, president of the Federation of Bangladesh Chambers of Commerce and Industry, emphasised the need for improvement of ease of doing business.

He called for allocating land to establish a plastic industrial zone.

Judy Wang, president of Yorkers Trade and Marketing Co Ltd, and Shamim Ahmed, co-chair of the fair, also spoke.

Motorbike market to race faster in 2019

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Motorbike market to race faster in 2019

Sohel Parvez and Ahsan Habib
January 20, 2019

The motorcycle market is set to be around 6 lakh units by the end of 2019 thanks to price cuts, increasing purchasing capacity and thrust for faster mobility.

“2018 was a good year for the sector but 2019 will be better,” said Hafizur Rahman Khan, chairman of Runner Automobiles, a pioneer in the field.

Although the exact sales data are not available, Subrata Ranjan Das, executive director of ACI Motors, which markets the Yamaha-branded two-wheelers, said about 4.80 lakh units of bikes were sold in 2018, posting 24 percent year-on-year growth.

The highest growth took place in the 150cc segment, followed by 110cc ones, he said, adding that the market would grow about 30 percent in 2019.

Overall, the market is expected to be close to 6 lakh units by the end of 2019, said Shah Muhammad Ashequr Rahman, head of finance and commercial of Bangladesh Honda Private Ltd (BHL), which opened its motorcycle plant in November last year.

The reason for the optimism is that motorcycles became more affordable thanks to local manufacturing by most of the brands.

The market began to expand fast from fiscal 2016-17, when the government slashed the supplementary duty by 25 percentage points to 20 percent on the import of the two-wheeler’s components to encourage domestic manufacturing.

The government also framed the National Motorcycle Industry Development Policy 2018 with a view to diversifying the country’s manufacturing and exports and creating jobs.

“The market will grow faster if the government support to the industry continues,” said Matiur Rahman, chairman and managing director of the Uttara Group of Companies, the assembler and distributor of Indian Bajaj motorbikes, the market leader in Bangladesh.

The annual market size would grow to 10 lakh units within three to four years, said Bijoy Kumer Mondal, chief financial officer and company secretary of HMCL Niloy Bangladesh, which manufactures the Hero-brand bikes.

“Penetration in the rural market has grown as people are switching from bicycles to motorbikes,” he added.

The industry is yet to reach full potential in the absence of structured retail finance from the banking sector, said Biplob Kumar Roy, chief executive of TVS Auto Bangladesh, the second-biggest player in terms of sales.

Adequate infrastructure and policy continuation by the government is necessary for the sector, he added.