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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.

Compensation may increase in Bangladesh labour law

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The file photo shows Bangladeshi volunteers evacuating an injured garment worker after an eight-storey building collapsed in Savar, on the outskirts of Dhaka on April 24, 2013. The government and representatives of factory owners and workers have reached a consensus on raising compensation for workplace death and injury in the labour law. — AFP photo

Compensation may increase in Bangladesh labour law

The government and representatives of factory owners and workers have reached a consensus on raising compensation for workplace death and injury in the labour law. ‘The members of the tripartite committee on preparing draft amendments to the labour law discussed the issue in most of the meetings held by the committee and agreed that the existing compensation amount is poor and it should be increased,’ one of the members of the tripartite committee told New Age on Sunday. He said that the issue was also discussed in a committee meeting held on Sunday at the Labour Department office in the capital but the amount of the compensation was yet to be settled due to an absence of proper representatives of factory owners in the meeting.
Labour leaders in the meeting discussed the convention of International Labour Organisation related to compensation and proposed an amount.

Meeting sources, however, declined to make the proposed amount public. ‘We are hopeful that the compensation amount would be increased in the labour law but it would not be in line with the ILO standard,’ another member of the tripartite committee said. As per the Bangladesh Labour Act, the amount of compensation is Tk 1 lakh in case of death and Tk 1.25 lakh In case of permanent disablement.According to the meeting sources, to address the concerns of the ILO, the government wants to prepare a draft amendment to the labour act before the next International Labour Conference to be held in June. The tripartite committee has made progress in preparing draft amendments in some areas including definition of workers, trade union rights and maternity leave. The committee has proposed bringing the shops or stalls in any public exhibition or show established for its own requirement which deal only in retail trade under the labour law through scraping the existing provision 1(4)(e).

It has also proposed bringing hostel, mess, hospital, clinic and diagnostic centre (run not for any profit or gain), ocean-going vessel and agricultural farm where normally less than five workers work under the labour act scrapping the provision 1(4)(h), (m)and (n) respectively. The committee has also agreed that trade union should be allowed for the members of the watch and ward or security staff, fire-fighting staff and confidential assistant of any establishment and to scrap a portion of section 175 of the labour act. The tripartite committee has also suggested incorporating a new provision in the section of procedure regarding payment of maternity benefit. ‘The provision is: If any woman gives birth to a child before giving notice to her employer, the maternity benefit will be payable for eight weeks within three working days following the production of proof to the employer in favour of her motherhood,’ the meeting sources said.

Employers face dearth of qualified employees: MCCI

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Employers face dearth of qualified employees: MCCI

Employers are not getting the supply of adequate quality manpower although thousands of people join the country’s workforce every year, speakers said yesterday. The industrial sector does not get the required number of skilled people because of the mismatch between education and industry requirement, said Nihad Kabir, president of the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI). Every year 20 lakh people join the workforce but there is a lack of quality manpower, Nihad said. She said foreign employees remit at least $6.5 billion per year from Bangladesh. Local youths can occupy these positions by way of achieving quality. She was addressing the concluding session of “MCCI’s Youth Leadership Programme Agragami 2017” organised by the chamber at the International Convention City, Bashundhara in Dhaka on Sunday.

The chamber has been organising the event since 2014 in order to develop leadership skills and confidence among students. Nihad said, “I believe this event will give students access to leaders and organisations in the city, helping them understand context and unlock key leadership skills needed for today’s workforce.” Fazle Hassan Abed, founder of Brac, said the economy grew from $4.5 billion in 1972 to more than $250 billion at present. Literacy rate went up to 73 percent from only 25 percent in 1972, while fertility rate came down to 2.1 percent from 6.4 percent during the period, he said. In the last four decades, life expectancy rose to 72 years from 46 years and rice production to 37 million tonnes from 10 million tonnes.

“We have done well in many aspects of development and I must say that we have collaborated with the government, the private sector and civil societies in these achievement in the last 47 years,”Abed said. Mohammed Farashuddin, a former governor of the central bank, urged the young generation to play their role in building the nation. He said the young generation was advanced in thinking but not in work. “So, you should be innovative to generate ideas.” Syed Nasim Manzur, managing director of Apex Footwear Ltd, encouraged the youth to bear the vision to become future leaders.

Laila Rahman Kabir, a former president of the MCCI; M Anis Ud Dowla, chairman of ACI Group; Prof Imran Rahman, vice-chancellor of the University of Liberal Arts Bangladesh; and Syed Gousul Alam Shaon, managing partner of Grey Bangladesh, were present at the programme.

Exports decline 1.38pc

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Exports decline 1.38pc

Export earnings fell 1.38 percent year-on-year to $3.05 billion in March due to a decline in leather goods shipment.

March’s receipts fell short of the $3.16 billion target for the month, according to data from the Export Promotion Bureau (EPB). Leather and leather goods sector—the second largest export earner after garments—fetched $848.78 million in the July-March period, down 8.04 percent year-on-year. The shipment of leather and leather goods went down largely as the relocation of tanneries from Hazaribagh to Savar has hampered production of such goods.

All the tanneries have been relocated, but only 25 out of 155 have so far started production in their new location, industry people said.

Garments exports grew 9.11 percent year-on-year to $22.83 billion in July-March. Knitwear exports rose 11.61 percent to $11.32 billion and woven garments exports increased 6.75 percent to $11.51 billion during the period.

Garment shipment, which account for more than 80 percent of the national export, grew because of the increased sales of high-value items and the depreciation of the local currency against the US dollar.

“The higher exchange rate of the US dollar helped exports a bit,” said Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association.

The exchange rate rose to Tk 84 a dollar, up from Tk 78 and Tk 80 previously.

Rahman said garment exports would grow by 10 percent at the end of the current fiscal year as the market trend is favourable for Bangladesh.

Thanks to the significant improvement of the structural, fire and electrical safety in garment factories, western retailers and brands are coming with bulk orders, he said.

Nearly 90 percent remediation work in the garment factories has already been completed, which has brightened the image of the sector.

Bangladesh is also home to the highest number of green garment factories in the world, according to Rahman.

Moreover, the country is moving towards high-value items from basic garments. As a result, exporters are getting better prices, he said.

Jute and jute goods also fared well in July-March thanks to the diversification in the sector.

The demand for jute goods from Bangladesh is rising as customers are gradually giving up the use of harmful polythene globally. In July-March, jute and jute goods fetched $818.09 million, up 11.91 percent year-on-year, EPB data showed.

Jute production surged from 65 lakh bales in 2014 to 70 lakh bales last year for better prices ensured by a government rule that made its use mandatory in goods packaging, according to the jute ministry. More than 100 crore sacks were additionally produced thanks to the new rule. Local entrepreneurs also expanded the export base by increasing the number of products made from the natural fibre to 240 this year from 135 last year. Overall, exports grew 6.33 percent year-on-year to $27.45 billion in July-March period. It, however, narrowly missed the periodic target of $27.55 billion.

Shipment of agricultural products grew 15.46 percent year-on-year to $472.23 million, while frozen food exports were up 6.57 percent to $407.71 million. Home textile export surged 15.08 percent to $669.87 million and footwear shipment rose 5.84 percent to $187.09 million.

Exports of plastic goods fell 19.49 percent to $73.59 million in the July-March period.

Ecnec approves 10 projects including excavation of 5 Dhaka canals

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Ecnec approves 10 projects including excavation of 5 Dhaka canals

The excavation of the canals is scheduled to be completed by December next year

The Executive Committee of the National Economic Council (Ecnec) on Tuesday approved 10 projects amounting to a total cost of Tk3,416 crore, including one to excavate and re-excavate five canals in Dhaka in a bid to reduce water logging.

The projects were approved at an Ecnec meeting held at the NEC conference room in the capital, with Ecnec Chairperson and Prime Minister Sheikh Hasina in the chair.

“Today (Tuesday), a total 10 projects were approved with an estimated cost of Tk3,415.86 crore. Of the total cost, Tk 3,400.93 crore will come from government funds while the remaining Tk14.93 crore will come from the organisations’ own funds,” said Planning Minister AHM Mustafa Kamal when briefing reporters after the meeting.

Of the 10 projects, nine are new while one was revised.

The project titled “Land acquisition, excavation and re-excavation of Hazaribagh, Baishteki, Kurmitola, Manda and Begunbari Canals” will be implemented from December 2018 to December 2019, the minister said.

Dhaka Water and Sewerage Authority (Wasa) will implement the project at an estimated cost of Tk 607.16 crore, with all of the funds coming from the state coffers, he added.

Mustafa Kamal said the main objective of the project is to reduce water-logging by keeping the flow water through the canals normal during the rainy season.

The main activities of the project include acquisition of 30.562 acres of land for the five canals, provision of compensation to the affected people, construction of 0.15km of road-crossing culverts, 13.50km of canal excavation and erection of some 2,200 pillars.

Of the 30.562 acres of land, 4.355 acres will be acquired for the Hazaribagh canal, while 6.385 acres will be for Baishteki and Journalists’ Colony canal, 4.613 acres for Kurmitola canal, 1.905 acres for Begunbari canal and 13.304 acres for the Manda canal.

The Ecnec meeting also approved another project titled “Establishment of Kishore-Kishori Club,” to set up some 4,883 adolescent clubs across the country to enable marginalised adolescents to resist child marriage and gender-based violence, said the planning minister.

The Department of Women Affairs under the Women and Children Affairs Ministry will implement the project by December 2020, with an estimated cost of Tk551.56 crore.

The adolescent clubs will be set up in 4,553 unions and 330 municipalities under 64 districts.
In addition, the Ecnec meeting approved a project for widening the Elenga-Jamalpur national highway at a cost of Tk 489.82 crore. The Roads and Highways Department will implement the project to upgrade some 77.60 km of the highway into four lanes by June 2020.

This four-lane highway will stretch from Elenga to Sarishabari via Kalihati, Ghatail, Madhupur, Gopalpur, Dhanbari and Jamalpur Sadar.

The seven other projects approved at the meeting are the “Sheikh Sayera Khatun Medical College, Medical College Hospital and Nursing College, Gopalganj (2nd revised) Project” (involving Tk705.04 crore), “Joyeta Tower Construction” (Tk154.25 crore), “Strengthening Publicity Programme for the Development of Rural Communities” (Tk59.63 crore), “Replacing Ashuganj 132 KV AIS Substation with 132 KV new GIS Project” (Tk356.99 crore), “Strengthening Bangladesh Institute of Management (BIM) in Dhaka” (Tk 147.86 crore), “Canal Re-excavation Works for Irrigation at the Coastal Polders in Barguna District” (Tk 61.33 crore),and the “Widening and Strengthening Mawna-Phulbaria-Kaliakoir-Dhamrai-Nabinagar (Dhulibhita) Highway Project” (Tk 282.22 crore).

Ecnec approves 16 projects involving Tk 15,969 cr

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The Executive Committee of the National Economic Council (Ecnec) on Tuesday approved a total of projects, including 15 new ones, involving an estimated cost of Tk 15,969.24 crore.
The approval came from the regular weekly meeting of Ecnec held at the NEC conference room here with Ecnec Chairperson and Prime Minister Sheikh Hasina in the chair. Briefing reporters after the meeting, Planning Minister AHM Mustafa Kamal said, “A total of 10 projects were approved today and Tk 15,969.24 crore will be required to implement those as per the initial estimate.”

The three biggest schemes are Mymensingh Region Rural Infrastructure Development Project involving the initial cost of Tk 3,183.56 crore, Rangpur Division Rural Infrastructure Development Phase-II Project involving estimated cost of Tk 2,884.86 crore, and the Project of the Existing Polytechnic Institutions’ Infrastructure Development for Creating Admission Scope for More Students, involving an initial expenditure of Tk 2,561.92 crore.

The Planning Minister said the Mymensingh Region Rural Infrastructure Development Project will be implemented to repair roads, including the flood-damaged ones, in six districts of Mymensingh region from October 2017 to June 2022.

He said the Rangpur Division Rural Infrastructure Development Phase-II Project will also be implemented at the same time in eight districts of Rangpur Division.unb

Apparel exports saved by sturdy dollar

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The favourable US dollar-taka exchange rate has lent a helping hand to apparel exporters in the outgoing calendar year, cushioning the fallout from the uncertain political climate in the Western world. In the first 11 months of 2017, Bangladesh exported garment items worth $26.40 billion, up 1.38 percent year-on-year, according to data from the Export Promotion Bureau.
At the start of the year, the greenback traded between Tk 78 and Tk 79 and during the course of the year it crawled up. On December 20, it traded at Tk 83.20. “The current exchange rate is favourable for exporters. We should handle the exchange rate softly,” said Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh. He went on to suggest that the dollar can be allowed to appreciate to up to Tk 85.

If it goes past the Tk 85-mark, it will be bad for the balance of payment and macroeconomic stability as imports would become costlier. However, exporters want further devaluation of the local currency. “The exchange rate has only started becoming export-friendly,” said Faruque Hassan, managing director of Giant Apparels, a leading garment exporter.
The local currency should be devalued further against the dollar to Compensate for the rising cost of production such that exporters can continue to be competitive on the global stage. At least 10 percent devaluation of the currency is fine for the sector as garment exporters have faced low exchange rate over the last five years, he added.

“The exchange rate is still not up to the mark when compared with our competing countries like India and Turkey,” said Abdus Salam Murshedy, managing director of Envoy Group, another major garment exporter.

Apart from the favourable exchange rate, the rising shipment of value-added items, brighter image of Bangladesh’s garment sector after remediation works, relative political calm and automation of production also helped prop up garment exports in 2017. “The outgoing year was good for us,” Murshedy said, adding that the absence of any major untoward incident like labour or political unrest was a boon for the apparel exporters.

Garment exporters are cautiously optimistic about the new year as the country’s apparel sector is on a strong footing following the thumbs-up from the Accord and Alliance, the two foreign factory inspection agencies.

Nearly 80 percent of the remediation works to fix electrical, fire and structural flaws have been completed.

“After the inspection and remediation, our capacity has been internationally recognised. We are hoping for better business opportunities after this,” Murshedy said. Besides, the economies of major export destinations are rebounding gradually from the shocks of Brexit and general elections in many EU countries, he said.

Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association, forecasts that export receipts will be about 10 percent higher next year.

“Ideally, it should be more than 15 percent given the current capacity of the factories.”

However, for achieving higher export growth the government should give the highest priority to addressing issues like congestions in the premier port in Chittagong, Hazrat Shahjalal International Airport and Benapole land port to shorten the lead-time, he said.

Adequate power and energy should be ensured and the infrastructures, especially the Dhaka-Chittagong highway, must be enhanced.
The exporters see the political instability as a major challenge in the new year as the general election is due to be held at the end of next year or in early 2019. “We expect there will not be any political instability — we hope the political leaders will give priority to a stable export growth for the sake of the country.”

A good number of new factories will come into operation next year as entrepreneurs are putting in money in the sector targeting the shifted work orders from China, the largest garment exporter worldwide.

Chinese firm to set up mobile assembly plant

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Chinese mobile phone maker Transsion Holdings is set to establish a device assembling plant in Bangladesh over the next few months, making it the first foreign brand to do so.

The government has slashed the customs duty for mobile components meant for local assembling by 36 percentage points to 1 percent in the last budget, which has piqued the interest of many local and global players. At the same time, the government doubled the customs duty on handset import to 10 percent, which made Transsion’s decision to set up the assembling plant easier, said Rezwanul Haque, chief executive officer of Transsion Bangladesh. Transsion has targeted to market its locally-assembled devices — both smart and feature phones — from the second quarter of next year, he said. It has completed all planning, with commercial assembling scheduled to start in the middle of next year.


“This can encourage the other global brands to come here and set up plants,” he said, while declining to disclose Transsion’s planned investment on the plant.

As of now, local brand Walton is marketing its locally-assembled devices, while local ICT service provider Aamra has announced plans to set up a mobile assembling plant. “Our first target is to cater to the local market and then will plan about the export market,” said Haque, who is the immediate past general secretary of the Bangladesh Mobile Phone Importers’ Association. Transsion’s assembly plant, which will be located in Gazipur, will look to pull together 5 lakh units per month with its 1,000 member-strong workforce. The company will file its application for the assembly plant with the telecom regulator in the first week of January.

“Before filing the application, we will make sure that all the requirements are fulfilled,” Haque said, adding that he is happy with the arrangements so far. At present, Transsion has presence in 58 countries in the world and is running three factories outside of China: India, Nigeria and Ethiopia.

In 2016, 3.12 crore units of handsets worth Tk 8,000 crore were imported.

WB gives $150m to help upgrade 4 land ports

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Bangladesh signed a $150 million financing agreement with World Bank to modernisetrade related infrastructure, systems and procedures.

The government will set up a National Single Window, which will allow traders to submit all import, export and transit information required by customs and other key regulatory agencies via a single electronic gateway under a WB-financed project.

“This will facilitate faster and more transparent international trade procedures and reduce transaction time and cost for the private sector,” said a WB statement.

These improvements will help Bangladesh strengthen regional connectivity and boost trade with India, Bhutan and Nepal, according to the WB.

With the loan, four land ports — Bhomra, Sheola, Ramgarh and Benapole — will be developed and improved under Bangladesh Regional Connectivity Project 1, the statement said.

The WB said these land ports were key to facilitating regional and transit trade, especially with India. These improvements would help Bangladesh increase trade and freight volumes and reduce truck clearance time at border posts.

Truck clearance time at the Bhomra land port will be reduced by 83 percent, from 72 hours to 12 hours.

Kazi Shofiqul Azam, secretary of the Economic Relations Division (ERD), and Qimiao Fan, WB country director for Bangladesh, Bhutan and Nepal, signed the agreement at the ERD.

The credit is from International Development Association, WB’s concessional lending arm. The loan is interest-free and repayable in 38 years, including a six-year grace period, and carries a service charge of 0.75 percent.

“Bangladesh has enormous potential for increasing trade with its neighbours, particularly India. Currently, its trade with India is only less than half of its current potential,” said Fan.

“By addressing the key barriers to trade, especially transport and clearance delays, Bangladesh can become more competitive regionally and globally, and reach more emerging and dynamic markets with diversified product mix, including higher-value garments.”

Azam said: “Bangladesh has doubled its market share in global exports between 1995 and 2012, and more than doubled the value of shipment in the last five years. But the potential is much higher.”

Geographically, Bangladesh can play an important role in regional trade and logistics networks, and as a transit country in South Asia. The project will help Bangladesh take advantage of its strategic location in increasing exports and lower import costs, he said.

The WB said the project would pilot activities to help remove bottlenecks faced by women in trade and business.