[🇧🇩] Light Engineering Industry in Bangladesh

[Saif]

Light Engineering - Sourcing Bangladesh

www.sourcing-bangladesh.com

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Industry Overview​

Small and Medium Enterprises (SMEs) have been playing pivotal role in the economic development of Bangladesh. The contribution SMEs in GDP of Bangladesh is 20.25%. The sector comprises heterogeneous group ranging from trading to manufacturing depending on employment, turnover and capital employed. Light Engineering Sector (LES) is one of the SME sectors that has been playing a crucial role. Light Engineering Sector is largely comprised of small enterprises and some medium enterprises. According to the available information, the Light Engineering Sector (LES) in Bangladesh consists of over 40,000 firms and generates an annual revenue of about BDT 20,000 crores a year. Most of LES output plays a critical role in key national sectors such as agriculture, transportation, construction, RMG etc. According to rough estimations, Light Engineering Sector of Bangladesh created about 3,00,000 direct employment and at the same time around 30,00,000 indirect job opportunities in different supportive industries. It acts as feeder to key national industries. Export of Light Engineering products/ Equipment fetched over 600 million US$. It plays a vital role in the socio-economic development of the country. Light Engineering Industries (LEI) or more broadly Light Engineering Sector (LES) are the mother of all industries. Machinery and spare parts produced by the entrepreneurs of this sector are supplied to various mills and factories. Since, LES occupy a unique position in the economy of Bangladesh, it deserves due support from all concerned including Banks and NBFIs of the country.

The Products are:​

Spare parts of Paper & Cement Mills, Bicycle, Fancy light fitting, Construction equipment, Battery, Electrical wires and cables, Iron Chain, Cast iron articles, Carbon rod, Automobile spares, Electronics items, and Stainless Steel Wares.

Product of LES in Bangladesh:​

Light Engineering Sector in the range of SME posses a capital investment within the gamut from cottage to medium industries including small industries as has been defined in the industrial policy of the country. The product variety of this sector encompasses all kinds of ferrous and non ferrous metal products, foundry products, machinery, equipment and instruments (electrical and non-electrical), spare parts, electrical and electro-mechanical products, parts of machine and manufacturing processes that are made from ceramics, rubber, plastic, glass etc and the spares made of electronic components including circuits are considered as LES products. The sector predominantly consists of products from foundry and machine-shop. The electrical parts and gazettes also belong to this sector. The major services in the LES are repair, maintenance, erection, installation, fabrication, support services, consultancy etc.

Product Lines of LES:​

Product lines of LES are quite wide and diversified. It has been engaged in manufacturing machinery and spare parts for various engineering and non engineering sectors. Products of this sector are of proven quality and many of these items do confirm to export standards. They may be broadly classified as follows:

Spare parts:​

The subcontractors and other spare parts makers around the country have developed various types of spare parts locally. These spare parts commonly belong to rail engine, rail line, automobile, machine tools, jute and textile, tea processing, chemical industries (like fertilizer, cement etc), sugar and food industries, water transport, pharmaceutical industry, gas line fittings, bathroom fittings, electronic accessories, electrical accessories, agro-support and agro-processing, telecommunication, electrical pole fittings, water supply and irrigation, etc. Apart from these, there are LES throughout the those produce many other types of spare parts as per orders of their clients and market needs

1. Complete Machines:
   The LES of the country also produce complete machines mostly belonging to the following sectors:
2. Agro-support and Argo-processing:
   Sprayer, Weeding Machine, Power Tiller, Hydro Tiller, Foraging Machine, Threshing Machine, Rice Mill, Rice Boiler, Rice Dryer, Low Lift Pump, Deep Tube Well, Deep Well Turbine Pump, Low and Medium Pressure Centrifugal Pump, Sluice Gateetc.
3. Tea Processing:
   CTC Machine (Single, Duplex, Triplex), Rotor vane Machine, Barbara Leaf Conditioner, Green Leaf Sifter, Mackintosh Sorting Machine, Middleton Stalk Extractor, Trines Sorter, Slow Speed Fibre Extractor, Tea Sorting Machine, Rolling Table, Trough Weathering Unit, Miracle Mill, Ball Breaker, Duplex Tea Packer, etc.
4. Food Processing:
   Flour Mill, Spice Grinding Machine, Oil Expeller, Biscuit and Bakery Plant, Vermicelli and Noodles Making Machine, Juice Extractor from Sugar Cane, Liquid Filling Machine, Bottle Sealing Machine, etc.
5. Pharmaceuticals:
   Mixer Machine, Mixing Barrel, Emulsifier, Ball Mill, Vacuum Emulsifier, Tablet Making Machine, Blister Making Machine, etc.
6. Jute and Textile:
   Spinning Machine, Industrial Sewing Machine, Softener Machine, Hand Loom, Power Loom, Twisting Machine, Doubling Machine, Scroll Roller, etc.
7. Water Transport:
   Engine Driven Local Boats, Launch, Steamer, Trawler, Barge, Dredger, etc.
8. Road Transport:
   Body Building of Bus and Trucks, Improvised Transport locally known as Bhotbhoty, etc.
9. Construction:
   Concrete Mixer, Soil Testing Machine, Brick and Stone Crusher, Crane, Road Roller, Grand Roller, Floor Polishing Machine, Metal Doors and Windows, Roof Hoist Machine, Brick Making Machine, etc.
10. Furniture:
    Metal Furniture of various types both for household and office, various types of equipment are also seen as a recent development.
11. Electrical and Electronic Appliance:
    Humidifier, Dehumidifier, Water Heater, Ceiling Fan, Wires and Cables, Power Transformers, Voltage Stabilizer, IPS, Electronic Control System, etc.

Prime Exportable Products of LEI :
Iron Steel , Copper Wire , Stainless Steel Ware , Engineering Equipment , Electrical Products and Bicycle are main exportable of Light Engineering Sector.

Main Export Market​

The European Union (EU) countries are one of the biggest markets for bicycles, where consumers buy around 18 million units a year. This is the reason why Bangladeshi manufacturers are targeting the European markets for exports, especially to the UK, Germany, Italy and Netherlands. According to Eurostat, Bangladesh is the third-largest exporter of bicycles to the EU and the 8th largest exporter in the global market.

The LE product iron and steel are exported in Saint Barthelme, Singapore, Indonesia, India, Myanmar, Thailand, Japan, Sri Lanka, Turkey, USA, Italy, Taiwan, UAE, Australia and bi-cycle are exported in Germany, UK, India, Belgium, Ireland, Spain, Denmark, Sweden, Italy, Australia, Finland, Russian Federation, Austria, Brazil, France.

Government policies for developing Light Engineering Sector:​

• In the export policy 2018-21, Light Engineering products, including bicycle and auto parts, have been considered as one of the special development sectors. Several points are mentioned in the policy including:

01.	Supply of investment credit at reduced rate of interest on a high priority basis.
02.	Moratorium on income tax;
03.	Various cash assistances
04.	Export credit on easy terms and reduced rate of interest; and
05.	Subsidized rate for Air Transportation, Duty drawback and bond facilities

• A plan has been undertaken to establish ‘Light Engineering Cluster Village’ near Dhaka in order to develop the Light Engineering industry.
• In the 8th- Five-Year Plan, emphasis has been given to attract FDI in the Light Engineering sector to increase investment, for greater and easier market access, and for easier transfer of technology. To facilitate FDI in the Light Engineering sector, the Govt. is planning to set up Special Economic Zones and hand over these SEZs to investors from Japan, China, India and other countries.
• In the Industrial Policy 2016, Light Engineering sector has been considered as one of the Highest Priority Sectors.
• 15% Cash incentives are being provided to ensure its competitiveness
• This sector has been included as special development sector in Export Policy 2018-21.
• A Light Engineering Cluster Village will be established near Dhaka for the development of Light Engineering industry; and
• A modern laboratory and common facilities center will be established for the development of light Engineering sector.

 

[Saif]

Light Engineering Sector Bangladesh

Light engineering industries are specially suitable for their high labour intensity, innovativeness and low capital investment.

www.projectsprofile.com

LIGHT ENGINEERING INDUSTRIAL SECTOR

The burgeoning domestic market and the prospect of significant cost reductions for companies sourcing components and finished goods for international markets makes Bangladesh a compelling choice for investors.

Light Engineering Sector of Bangladesh:

Having become a major player in the global apparels industry, Bangladesh is now seeing the emergence of a new promising sector which can further enhance the country’s export diversity – the Light Engineering Sector (LES). This newly emerging sector has witnessed exponential growth and contributed about 1.5% to our export earnings during the financial year end June 2016. Statistics of the Export Promotion Bureau (EPB), Bangladesh show more reasons to boast. The export figure from engineering products stood at $510.08 million in FY 2015-16, making it a booster sector in our industrial policy. Additionally, time series data of the last five year shows that cumulative figures for engineering products in FY 2011-12 stood at $375.49 million. The export map had earlier shown bicycles as the leading item, whereas, now we have engineering equipment from the likes of Globatt and Duranto achieving global recognitions.

The Light Engineering Sector (LES) that draws the least attention of the policymakers has emerged as a potential cost cutting sector by producing at least 50 percent substitutes of imported items in the country. This important sub-sector is now providing critical support to industrial, agricultural and construction sectors by manufacturing a wide range of spare parts, castings, moulds and dices, oil and gas pipeline fittings and light machinery, as well as repairing those. Sector players claim that electrical goods like switch, socket, light shed, channel, cables and electrical fans, generator, which are manufactured by the LES are now meeting 48% to 52% of the country’s demands, which was earlier met through import. Export growth was estimated at 30%. The light engineering sector as ‘the mother of all sectors,’ because it provides backup support to cement, paper, jute, textile, sugar, food processing, railway, shipping, garments capital machineries by repairing and maintaining those. A recent study conducted by International Finance Corporation (IFC) in partnership with UK Department for International Development and Norwegian government shows that LES has in its employment 6,00,000 people involved in 50,000 micro enterprises and 10,000 Small and Medium Enterprises. Another study conducted by Bangladesh University of Engineering and Technology however, estimates that LES comprises of around 40,000 enterprises employing around 8,00,000 people.

Industry Situation

The light engineering industry in Bangladesh continues to grow each year. This labor-intensive sector produces a diverse range of items, including import substitute machinery spares, plant machineries, small tools, toys, consumer items and paper products for the domestic market. Most of these enterprises are located in and around Dhaka metropolis. Entrepreneurs from China, Japan and Korea have taken advantage of Bangladesh’s cheap and easily trainable labor and its infrastructure facilities to manufacture products for the export market.

LIGHT engineering industries form an important sector of the national economy in terms of the number of units, employment and annual turnover. According to Bangladesh Engineering Industry Owners Association (BEIOA), a total of 40,000 such units are producing capital machinery, spare parts of imported machines – new or reconditioned. Their total economic value is claimed to be Tk 20,000 crore a year. The sector reportedly provides employment to some 20 lakh people. According to a recent report, export of light engineering equipment fetched US$220 million and US$189 million in 2007-08 and 2008-09 respectively. But potential of the sector cannot be fully utilised for lack of capital and support services. In spite of having a large number of experienced technical hands, the sector cannot make innovations as they use age-old machinery. Banks and financial institutions are reportedly less interested to invest in the sector.

Bangladesh depends on foreign countries for costly capital machinery. Local light engineering industries can meet a part of the demand at cheaper prices if the industries are given financial support to produce modern machinery. These industries are already doing a significant part of maintenance works of the existing industries supplying spare parts fabricated locally and thus saving huge foreign exchange. Light engineering industries along with other SMEs are considered engines of industrialisation. They absorb more workforces and can help achieve the goal of poverty reduction.

Bangladesh has hardly any heavy industry. The country with about 30 million unemployed people needs labour intensive industries. Light engineering industries are specially suitable for their high labour intensity, innovativeness and low capital investment. Stakeholders in the sector want the authorities to create a special fund to provide loans at low interest rates. The SME Foundation may extend financial support to them. Policy support for the development of this vital sector would give rich dividends, say experts.

Engineering Enlightenment

The import substitution sector provides critical support to industrial, agricultural and construction sectors by manufacturing a variety of spare parts. Players from this sector now claim that electrical goods like switches, sockets, light sheds, channels, cables and electrical fans and generators, which are manufactured by the LES are now meeting 48% to 52% of the country’s demand, which previously was met through imports. The LES is also called the “mother of all sectors”, because it provides back up support to cement, paper, jute, textile, sugar, food processing, railway, shipping, garments capital machineries by repairing and maintaining those.

Out of the major LES hubs in Bangladesh, the one in Rangpur–Dinajpur concentrates on producing spare parts for automobiles, railways, mills, factories and maintenance work. On the other hand, Bogra and Natore’s hub focuses more on foundry, agro-machinery, factory spares, LPC, cylinders and maintenance work. Sylhet’s hubs are focus on spare parts for mills and factories. The Dhaka-Gazipur-Narayangonj hubs rely on producing capital machinery, bicycles, construction equipment and spare parts. Khulna-Barisal hubs are concentrating on spare parts of mills, factories and industries; and the Chittagong hubs focus on ship breaking activities, spare parts for automobiles and maintenance work.

A study by Japan International Cooperation Agencies (JICA) has shown that there are a total of 40,000 small-scale light engineering enterprises in Bangladesh producing around 10,000 different types of items for construction, agriculture and other industries. Another study, conducted by the International Finance Corporation (IFC) in partnership with the UK’s Department for International Development (DFID) and the Norwegian government, shows that this sector employs around 600,000 people who are involved in 50,000 micro enterprises, and 10,000 small and medium enterprises. The study conducted by the Bangladesh University of Engineering and Technology (BUET), however, estimates that the sector comprises of around 40,000 enterprises, employing some 800,000 people. These figures are different because of the methodological variations in the studies. However, given this information, it is quite ironic how the LES draws such little attention from policy makers. This is especially alarming as it has emerged as a potential cost cutting sector by producing at least 50% the items which can be applied as import substitutes.

LES Contribution to Various Sectors

CONSTRUCTION SECTOR

mixture machine, piling machine, construction crane, soil moulding, machine, auto bricks manufacturing machine, brick crasher, stone crasher, concrete mixer machine, vibrator machine.

AUTOMOBILE SECTOR

spring, break dram, bush, pulley, piston ring, gijon pin, gijon bush, slip, head sheet valve, auto crankshaft, hanger pin, head seat, gear shaft, nut & bolt, auto valve, auto gas cylinder, connecting bush, shaft, cabling, sit socket, block liner, booster connecting, booster body, booster pin, automobile filter, radiator engine fan, CNG engine fan, motorcycle bearing, chain cover, motorcycle pinion, motorcycle sit cover, motorcycle carrier, motorcycle cylinder and motor cycle paddle.

PAPER & PULP SECTOR

manual knife, gate valve, agitator, pneumatic valve, compressor pump, gear coupling, felt roll, helical gear, spur gear, herringbone gear, compressor, roller, pump and cutter.

PHARMACEUTICAL SECTOR

pharmaceutical blister, packing machine, tablet packing machine, tablet steep machine, tray dryer, tablet machine 16 punch, fluid bed dryer machine SS, film cutting machine tablet, liquid filling, sealing and labelling machine, pharmaceutical powder mixer machine, tablet steep machine, malit mill machine, wrapping machine.

MOULD & DIE SECTOR

industrial parts, egg tray, garment hanger, water filter, cookeries, plastic bottle, cosmetic, toy, sanitary and shoe.

RAILWAY SECTOR

center p-boat, brake bim, brake shaft, 2 inc, CI coupling, brake hamper, rail channel pin and cable, bearing, elbow, mini-puli, bolt, cylinder liner, piston, compressor, S.P. cylinder, hanger and horn.

MARINE SECTOR

marine popular shaft, sugan bush, sugan, head, head valve, ring, fiver bush, machine tools, lathe machine, power press, shaper, hydraulic press, cooling tower, etc.

 

[Bilal9]

Capital, technology, training, policy support needed to advance light engineering industry: Experts​

They also stressed the need to remove some policy anomalies, setting up a specialised economic zone, easy access to finance, technology up-gradation and skill development for the growth of the sector.​

Speakers at a discussion programme on the light engineering sector in the capital on 30 January. Photo: Courtesy

There is an urgent need for taking measures to understand the global demand and strengthen stakeholder's capacity to capitalise the potential of Bangladesh's light engineering sector, experts said at a roundtable on Tuesday (30 January).

They also stressed the need to remove some policy anomalies, setting up a specialised economic zone, easy access to finance, technology up-gradation and skill development for the growth of the sector.

Experts came up with the observations at a roundtable discussion titled "Unleashing the export potential of light engineering in Bangladesh", organised by Development Research Network at its office in the capital's Mohammadpur area.

Speaking on the occasion, Bangladesh Engineering Industry Owners Association (BEIOA) President Abdur Razzaque said, "Bangladesh does not account for even 1% of the $8 trillion dollar light engineering global market.

"A special economic zone is required for domestic companies in the light engineering sector to gain a foothold in this market. These are what Taiwan did and Thailand is doing now. It is also happening in Howrah, West Bengal, India. Earlier it happened in Gujarat."


Razzaque also said the industry needs capital, modern technology, training, policy support, and planned economic zones.
"These five must come together," he said.

Additional Secretary to the Ministry of Commerce Abdur Rahim Khan presented a keynote paper at the roundtable jointly moderated by Executive Director of Dnet M Shahadat Hossain and its Senior Research Fellow Dr Muhammad Shariat Ullah.

He said the country's light engineer sector now needs a meaningful push in line with the changes in global demand.

"Developed countries are now shifting towards hi-tech manufacturing instead of light engineering. The tendency is creating opportunities for countries like Bangladesh," he also said.

Small and Cottage Industries of Bangladesh President Mirza Nurul Ghani Shovon said a time-bound action plan is required for the development of the light engineering sector.

"How to increase exports with the needs of our country will be in this action plan," he said.

Mirza Nurul Ghani Shovon said alongside export oriented ones, local light engineering entrepreneurs should also get required government's policy support.

Bangladesh Bicycle and Parts Manufacturer and Exporters Association (BBPMEA) Secretary-General Luthful Bari said only five countries - China, the USA, India, Singapore, and Japan - import light engineering products worth $2.51 trillion.

"If we focus, we can export products to these countries. Because they are now tending to make high tech products," he said.

According to an analysis of National Board of Revenue data presented at the event, the sector saw a fluctuating trend in the export values from fiscal year 2017- 18 to fiscal year 2019-20.

The sector saw a significant increase in fiscal year 2020-21, reaching $529 million. In the next fiscal, the value reached $795.63 million, indicating robust growth.

However, in fiscal year 2022-23, the export value decreased to $585.85 million.

 

[Bilal9]

First Bangladeshi e-bike launched, to head to Germany within a week​

Talks are underway to export in UK and Brazil​

Infographics: TBS

Bangladesh's first locally-manufactured electric bicycle (e-bike) is set to be exported to Germany just within a week of its debut in the domestic market.

RFL Group introduced its e-bike "Duranta" in the domestic market on Thursday, marking a significant milestone as the first such initiative in the country.


RN Paul, the company's managing director, told The Business Standard that the e-bike began to raise interest from international buyers even before its local launch.

"The first export order came recently from Germany, and the shipment will be sent by next week," he said.

Paul further said discussions are ongoing with Brazil and the UK for export. "Soon they will come to visit our factory to give their final nod."

Initially, two models of the e-bike – Duranta E-Rider 101 and Duranta E-Rider 201 – will be available in the market. Another two models of the bike are on test and will be launched soon.

In the local market, the Duranta E-Rider 101 model will cost Tk42,000 and Duranta E-Rider 201 Tk55,000.

Duranta e-bike is manufactured at the factory of Rangpur Metal Industries Limited, a concern of RFL Group, located at Habiganj Industrial Park in Habiganj. The factory has an annual production capacity of around 5,000 units of e-bike.

Md Mahmudur Rahman, the chief operating officer of Rangpur Metal, said they received an order for one container of e-bikes for $36,000.

He declined to mention the number of bikes to be exported.

Potential of e-bike market

Pran Group MD RN Paul said e-bikes have a huge demand in the international market, which is worth around $120 billion.

E-bikes are gaining popularity across the world as a convenient and eco-friendly alternative to traditional bicycles and motorised vehicles, he added.

"So, it is the right time to enter the global market, otherwise, we will lag behind," said Paul.

Regarding the local market, he said although late in the scene, e-bikes are becoming popular in urban areas of the country. "As per our assumption, there is an annual demand for at least 10,000 units of e-bikes in Bangladesh."

Now, China-made batteries are being assembled in Bangladesh, he told TBS. "Soon, we will go for battery production of our own."

Duranta features

Duranta uses a 36-volt lithium battery, which is being produced at the Rangpur Metal factory.

Its CEO Mahmudur Rahman said, "The e-bike can run at a speed of 25km per hour and can go up to 45km effortlessly in one charge. It will take about 4-5 hours to be fully charged which may consume around a unit of electricity."

It is also possible to pedal Duranta like regular bicycles.

Mahmudur also said customers will get a six-month warranty for electrical parts on purchasing Duranta e-bike. Besides, a customer will get four free servicing facilities in the first six months.

 

[Bilal9]

RFL manufactures helmets for the first time in country​

Currently, almost all helmets used in Bangladesh are imported, mainly from India and China​

RFL Group has launched motorcycle helmets in the market, for the first time by a local company in the country, with the aim of delivering high-quality helmets within the purchasing power of common people.

RN Paul, managing director of RFL Group, unveiled the cover of "Safemet" branded helmet at a hotel in the capital on Thursday.

Initially, two types of helmets will be available in the market. The half-face helmet will have a maximum retail price of Tk1,400 while the full-face helmet will cost Tk2,250.

These helmets are being produced in the factory of Durable Plastic Limited, a sister concern of RFL Group, located in Palash, Narsingdi.

The factory, with an initial investment of Tk20 crore, has an annual production capacity of over 120,000 pieces.

Currently, the annual helmet market in the country is over Tk500 crore. Almost all helmets used in Bangladesh are imported and about 60% of them come from India and the remaining from China.

Addressing the occasion, RN Paul said a helmet is an important accessory for bikers. Apart from ensuring safety, it is mandatory for bikers and pillion riders to wear helmets as per the existing laws of the country.

The number of motorcycle users in Bangladesh is increasing day by day due to various reasons including socio-economic conditions and lifestyle changes. For the same reason, the demand for helmets is also rising, he said.

Paul also said the helmets available in Bangladesh are almost imported and most of the imported helmets are not of standard quality. The Safemet helmet is Bangladesh Standards and Testing Institution (BSTI) certified, which is the only one in Bangladesh.

Standard helmets should be used by everyone during journeys. In this context, RFL started the helmet business. The main purpose of entering into this business is to deliver high-quality helmets within the purchasing power of people, he added.

During the ceremony, Toukirul Islam, executive director of Durable Plastic Limited, said the main feature of the Safemet helmet is that it is made of advanced ABS shell and PC material. It has a high-quality belt and locking system. Moreover, there is an advanced ventilation system to ensure the comfort of the user.

He also said that there is a plan to export Safemet helmets after meeting the needs of the country. Some foreign buyers have already visited the factory and expressed their satisfaction with the production system.

 

[Bilal9]

Walton launches affordable e-bike​

The new energy-efficient models will not require BRTA registration​

Walton Digi-Tech Industries Limited has launched a new affordable model of electric bike TAKYON Leo in the market recently.

The eco-friendly e-bike that comes in three variants can run for 40-80 kilometres on a single charge, according to a statement issued by the company.

It will take six-eight hours to charge up the battery and this bike will cost consumers only Tk0.10 per km, reads the statement.

The three variants with 12 AH, 20AH, and 23 AH battery packs are priced at Tk49,850, Tk56,850 and Tk59,850, respectively.

Unlike its first model TAKYON 1.00 e-bike that came with a price tag of Tk1,27,750 a few months ago, TAKYON Leo will not need any registration with the Bangladesh Road Transport Authority (BRTA) as the policy waived e-bikes having a paddle option from the registration.

Walton e-bike is the first-ever in the segment in Bangladesh that has received such approval from the BRTA, said the company.

Each of the four e-bikes can be charged at home as their portable chargers are made to be used in 220-volt power lines.

The company offers one-year and two-year warranties for the Leo bikes, depending on the variants.

ICT Division Director General Md Mostafa Kamal was present at the TAKYON Leo e-bike launching ceremony that took place recently at Walton Headquarters in Chandra of Gazipur.

Walton Digi-Tech's Additional Managing Director Engineer Liakat Ali, Walton Hi-Tech's Deputy Managing Director Alamgir Alam Sarkar, Senior Executive Director Easir Al-Imran and Walton Digi-Tech's Chief Business Officer Touhidur Rahman Raad, among others, attended the function.

A bigger plan

The global automobile and two-wheeler industry is rapidly going electric amid the ongoing calls to go green and the global fuel shock in 2022 only expedited it.

The global market of electric vehicles is estimated to reach about $92 billion within 2028, from $40 billion in 2021.

In Bangladesh, electric vehicles are yet to be in the mass market.

However, the demand already started to grow with the increasing supply. Walton Digi-Tech has long been working on electric vehicles, said the company's Additional Managing Director Liakat Ali.

Currently, the company is locally assembling the Leo models and it is preparing for full-fledged manufacturing in the coming days, Liakat Ali told The Business Standard recently.

Walton Group is intensively working on building the EV ecosystem in the country and it has a detailed plan to set up charging stations and other infrastructure for EVs, he said, adding that the company also has plans to launch electric cars in future.

Akij, Green Tiger, Runner and a few others have been marketing e-bikes in the country while Baagh Eco Motors and Palki Motors are respectively working on electric three-wheelers and cars.

"We are facing some challenges as this sector is fully new in the country. To overcome them, we need more assistance from the government including suitable policies for the production and import of raw materials, related parts and components, Liakat Ali added.

 

[Saif]

Bangladesh can have bigger slice of UK’s $327bn light engineering market​

 

[Saif]

Light Engineering Industry's contribution to Heavy Industry.

 

[Saif]

Light Engineering Industry has a domestic market of Tk. 70000 crores.

 

[Saif]

Burgeoning prospect for the light engineering in Bangladesh

The Light Engineering (LE) sector makes a remarkable contribution to the economy of Bangladesh. The sector has innumerable prospects in poverty alleviation through employment generation; increasing contribution to GDP; growth of the local industries, reduction in import of LE products, and increasi

thefinancialexpress.com.bd

Burgeoning prospect for the light engineering in Bangladesh
NASIM AHMED
Published :
Nov 11, 2023 20:54
Updated :
Nov 11, 2023 21:05


The Light Engineering (LE) sector makes a remarkable contribution to the economy of Bangladesh. The sector has innumerable prospects in poverty alleviation through employment generation; increasing contribution to GDP; growth of the local industries, reduction in import of LE products, and increasing export opportunity. Industry insiders claim that the sector is contributing 3 per cent to the GDP. According to the Ministry of Industries, the sector shares the domestic market worth USD12 billion. The existence of abundant low-cost labour and high domestic and external demand are the dominant reasons behind the burgeoning prospects of the LE sector in Bangladesh.

The LE enterprises are small firms that produce machinery, equipment, tools, metallic household appliances, sanitaryware, electrical, electronic, electro-mechanical, and mechatronic products mainly by metals through engineering and technological processes. The major products are spare parts for paper and cement mills, bicycles, light fittings, construction equipment, batteries, electrical wires and cables, iron chains, cast iron articles, carbon rods, automobile spares, electrical and electronics items, and stainless-steel wares. Around 50,000 LE industries are operating in the country. According to the Bangladesh Engineering Industry Owners Association (BEIOA), the LE sector manufactures 10,000 types of products.

According to the industry insiders, the sector created 3,00,000 direct and 30,00,000 indirect job opportunities in different backward and forward linkage industries. A Dhaka Chamber of Commerce and Industry source predicted export earnings from the sector would be around USD 15 billion by 2041. The source estimated that the world market size is about USD 8 trillion, which has created a burgeoning prospect for Bangladesh to export LE products. Light Engineering Road Map prepared by the SME Development Working Committee of the Business Initiative Leading Development for the Ministry of Commerce, projected the export volume for the sector in 2030 to the tune of USD12.56 billion(BSS, 16 January 2023).

Despite having a brighter prospect, the LE sector faces many challenges in the evolving market and trade globalisation. The sector is mostly based on traditional and indigenous technologies. Apart from competition in the global market, the changes in customer needs and preferences drive LE entrepreneurs to innovate or upgrade products. In the evolving industrial context, the production techniques and processes are trailing the sector uncompetitive except in areas where precision and sophistication are less important. Lack of quality raw materials, shortage of skilled manpower, market information gap, lack of access to finance, and inadequate communication infrastructure are other crucial challenges. The Bangladesh Institute of Development Studies report identified a 33.6 per cent skill gap in the sector.

According to the Bangladesh Investment Development Authority, the sector meets 50 per cent of the overall demand of the country. In the 2021-22 fiscal year, the sector saw a significant year-on-year export growth of 50.4 per cent to USD 795.63 million from USD 529 million in the 2019-2020 fiscal (BBS and EPB). However, the export volume for fiscal 2022-23 dropped to USD 585.85 million. The export target of engineering products for 2023-24 has been fixed at USD 630 million (EPB). The main export markets for light engineering products are Thailand, Japan, the Netherlands, India, South Korea, the United Kingdom, Taiwan, and Pakistan.

However, with the recent government initiatives, the prospect for the sector is getting brighter. In the budget for the 2022-23 fiscal, the government provided a 10-year tax holiday for LE producers. Besides, there was a VAT exemption for the production and commercial distribution of power tiller and the supply of locally collected scrap in the foundry industry. The LE is considered a thrust sector and was given the highest priority in the Export Policy 2021-24.

The government has formulated the Light Engineering Industry Development Policy 2022, which aspires to ensure infrastructural development, easy financing, and industrial incentives for the sector during its implementation between 2022 and 2027. Low-interest loans will be provided from a special fund for the purchase of new technologies as well as the development of existing ones. The policy sets eleven strategic objectives: infrastructural development, modernisation and development of technology, development of forward and backward linkages, human resource development, market development, and expansion, research and development, establishment of industry clusters, development of common facility, quality assurance and certification, access to finance, development of investment climate.

The policy outlines a time-bound action plan for addressing the challenges inhibiting its growth. It is expected that the Finance Division and Bangladesh Bank will take the initiative to establish a venture capital fund to ease the production process of LE products by 2025. A thirty-five-member high-powered Industrial Development Council chaired by the industries minister will review and monitor the implementation of the policy. The policy also intends to help the sector thrive to attain the goal of increasing the industrial sector's contribution to 40 per cent of GDP by 2027.

A dedicated industrial park and industrial cluster, an e-commerce platform for LE entrepreneurs, re-skilling and up-skilling to form a technologically skilled workforce, enforcement of AI, rationalisation of raw material import duty, strategy to attract domestic and foreign investment will further boost the sector both in the domestic and foreign market.

The LE would be more value-adding and can earn substantial foreign currency if provided with adequate financial, technical, infrastructural, and marketing support. With the appropriate policy support, the sector can stride as the backward linkage for many mainstream local industries such as garments, leather and footwear, electronics, food, agro-processing, and pharmaceuticals. The LE sector must harness appropriate technology and infuse more investment to enhance domestic and global competitiveness as well as increase the quantity of production.


Nasim Ahmed, PhD is currently an Associate Professor at the Bangladesh Institute of Governance and Management, Dhaka.
nasim.ahmed@bigm.edu.bd

 

[Saif]

A silent revolution in light engineering industry has occurred in Jinjira.

 

[Saif]

Dholaikhal, Zinzira to be made light engineering hub: Mannan

Dholaikhal, Zinzira to be made light engineering hub: Mannan

www.daily-sun.com

Dholaikhal, Zinzira to be made light engineering hub: Mannan​

Special Correspondent​

Friday, 25 August, 2023,12:00AM

​

Planning Minister M A Mannan said the country's Dholaikhal and Zinzira will turn into light engineering hubs like Korea, Taiwan, Malaysia, and China due to the government’s business-friendly policy.

“If Korea, Taiwan, Malaysia, China could succeed in the light engineering sector, Bangladesh can also be successful. And we are on the right track now,” he said while speaking at a seminar as the chief guest.

Dhaka Chamber of Commerce & Industry (DCCI) organised the seminar on “Import Substitute Industry in Bangladesh: Perspective of Light Engineering Sector”, held at the DCCI premises in Dhaka on Thursday.

Industries Secretary Zakia Sultana was present as the special guest. DCCI President Barrister Md. Sameer Sattar chaired the event.

The Planning Minister agreed that there are challenges “but the private sector of Bangladesh is resilient enough to overcome these challenges and from the government all possible policy support will be given.”

“Inconsistencies among the government agencies regarding different policies are not good for the private sector,” he said.

MA Mannan said, “If we can formalise the local small light engineering hub at Dholaikhal and Jingira, one day they will be able to contribute to the economy.”

He stressed making policies consistent. According to him, at present the public-private partnership and relationship are at its best as the government is very business-friendly.

Industries Secretary Zakia Sultana said that Bangladesh’s light engineering sector is still import-based.

“The light engineering sector is an untapped sector and it has great prospects of creating a large backward linkage industry ensuring diversified industrial base. The Light Engineering Industry Development Policy 2022 has already indicated a comprehensive action plan for 2022-27.”

She said that the entrepreneurs of this sector should be incentivised to mitigate import reliance.

The secretary pointed out that the government will try to boost policy harmonisation and coordination among the concerned agencies.

According to her, skill development and curriculum upgradation are necessary for capacity building.

“Government is also planning to establish an Automobile Research Institute in Narayangonj with the help of Japan,” she added.

DCCI president Md. Sameer Sattar said that light Engineering sector, if given right policy support, can serve as the backward linkage industry to many mainstream local industries like food, leather and footwear, electronics, agro-processing and pharmaceuticals industries.

He emphasised the need to recognise the light engineering sector as a high-priority sector in the Industrial Policy 2022 to provide sufficient incentives and ensure substantial growth of the sector.

“To secure the target of private investment to 27.35 percent of GDP by FY 2025, development of the light engineering sector is crucial as it will strengthen local value and supply chain in many allied industries.”

DCCI boss said, “The current tariff structure on import of light engineering products is counter-productive for the growth of the local light engineering sector.”

“In this regard, a study is needed to know further the needs and bring appropriate changes in the tariff structure that will protect this sector,” he pointed out.

Walton Additional Managing Director SM Shoyeb Hossain Nobel presented the keynote paper. He highlighted that the light engineering sector of Bangladesh is generating revenue of Tk 200 billion and contributes about 3 percent to the GDP.

“It is increasing at 10 percent every year. The world market is about $45 billion. About 1.6 million people are employed in this sector. 50 percent of our local demand is met by this sector.” In FY 2021-22, the export of light engineering sector was $796 million, he said.

Nobel said that the sector is completely import-based and therefore would need a separate duty structure and backward linkage industry policy for this sector.

“Lack of easy access to finance, quality of products, demand uncertainty, policy inconsistency, no incentives for local manufacturers, lack of lab and R&D, data of actual demand are few of the challenges of this sector.”

In the panel discussion session, President of Bangladesh Steel Manufacturers Association Manwar Hossain said, “Now we have to focus on other promising sectors other than RMG.”

He said that our investment in human capital is still poor. He called for increasing cash incentives to this sector.

Chief Marketing Officer of Fair Group Mohammad Mesbah Uddin said that the light engineering market will reach$ 10 billion by the year 2030.

He called for value addition “as there is a huge scope of investment opportunity.”

Mesbah Uddin emphasised policy guidelines and developing science and technology-based education systems in the country and long-term policy consistency.

Meghna Group Director Muhammad Mushtaque Ahmed Tanvir said that there is a demand of 5 million bicycles in the European market.

“At present we need investment in the local manufacturing of mold and dies because it costs huge for import.”

Managing Director & CEO of Transcom Electronics Limited Arshad Huq said, “Bangladesh’s consumer market is ready. Many global brands want to come to Bangladesh and invest.”

But he laid emphasis on the quality of products that need to be maintained.

Arshad Huq informed that US company Whirlpool has invested in Bangladesh in the form of a joint-venture.

He stressed policy consistency and developing human resources.

Former President of DCCI Matiur Rahman urged the government to reduce import duty in the sector.

He put emphasis on long- term policy, skill development and more technical and vocational training.

A wing of the Ministry of Industries can be established at the NBR, he suggested.

The government can initiate establishing testing labs and R&D for the future growth of this sector, he added.

DCCI’s senior vice president SM Golam Faruk Alamgir (Arman) gave a vote of thanks. DCCI vice president Md. Junaed Ibna Ali was also present on the occasion.​

 

[Saif]

LIGHT ENGINEERING INDUSTRY: FORGING THE PATH FOR A BETTER ECONOMY

LIGHT ENGINEERING INDUSTRY: FORGING THE PATH FOR A BETTER ECONOMY​

Mehedi Hasan Manager Credit Risk Management IDLC Finance Limited

Light Engineering Industry (LEI) is considered as one of the key industries which is going to contribute significantly in the economy of Bangladesh. It has also enormous scope to add value to the economic parameters of this country. It is very obvious that technological advancement has logical power to shift the demand from one product to another and Light Engineering Industry has potential to create value to this technological advancement and participate positively to the economic development of Bangladesh along with reduction of poverty by creating employment opportunities. Our economy is largely concentrated on RMG export. Experts have agreed on a point that concentration of our export of more than 80% on a single sector is not sustainable in the long run and it should be diversified by a long term policy. Light Engineering Industry is considered as a thrust sector which has current contribution in GDP of around 2% and has the potential to become one of the major sources of export earning along with fulfilling the domestic demand. Light engineering mainly deals with manufacturing light (less capital intensive) products which satisfy the demand of end user and other manufacturing entities. It is one of the major sources of spare parts for several industries including agriculture (rice, jute, flour, lentil, sugar, spices, feed & bakery), gas transmission & distribution, construction machineries, kitchenware & bathroom fittings, metal products, mold & dies, transport (road & water), pharmaceutical, paper & pulp, printing & packaging, RMG & textile and others.

This industry started its journey to support the large industrial units in 1950s in East Pakistan. After 1985 the industry got accelerated due to industrialization of other industries. During that time LEI evolved mainly in Dholaikhal, Jinjira, Mirpur, Syedpur, Bogura and other areas. Bangladesh Small and Cottage Industries Corporation (BSCIC) had significant contribution to support the small entrepreneurs during that time. BSCIC provided low interest rate loan to support the LE businesses. It was observed that many prominent players in this industry got BDT 0.1 million/ BDT 0.2 million loan from BSCIC which enabled them to kick-start started their journey during 90s.
LEIs are located mainly on the industrialized areas of Bangladesh. Light Engineering clusters are based on the districts which consist of Dhaka, Chattogram, Narayangonj, Gazipur, Bogura, Natore, Pabna, and Jashore.

Industry Overview

Around 40,000 light engineering workshops/ enterprises are operating in Bangladesh where 10 million people are actively employed. Lion portion of the LE enterprises fall on cottage & micro segment. Market size of this industry is around 25,000 crore per year and before pandemic the growth rate was 20 to 25% per year. Most of the light engineering enterprises support the local need of indigenous industries. Around 90% raw material of this industry is procured from ship breaking industry. It’s been observed that the export performance of LE products has decreased by 14% during the FY 2019-20 which needs to be taken into consideration by policy makers. There are some major steps takens by the Government which will surely boost up the performance of this industry. Government has decided to establish 10 dedicated light engineering industrial parks in Dhaka, Narayanganj, Jashore, Bogura, Narsingdi, Munshiganj, Mymensingh and Madaripur. The major export destinations of LE products are India, UK & Japan, Germany. The industry currently meets up the demand for around 50% substitutes of imported items in the country which positively contributes our BoP (Balance of Payment). As per the estimation of The Business Promotion Council, operating under the commerce ministry, the industry is producing around 3,815 types of machineries, spares and accessories.

Prospects

Light Engineering Industry is considered as ‘the mother of all industries’ since it facilitates backup support of spare parts and repair to almost all industrial sectors including plastic, cement, paper, jute, textile, sugar, food processing, railway, shipping, and garments. On the other hand single sector dependency on export is a challenge for the economy. Moreover, as developing nation, duty free excess will be restricted for RMG after 2025 as it is wise to concentrate on other sectors that could participate in the export as alternative sources and light engineering industry would be one them attractive sources to our export fleet. The backward linkage is very important in an economy and light engineering industry can develop a strong backward and forward linkages between LEI and other sectors. Currently, around 10 million people are working in this industry but it has huge potential to create much more employment opportunity that will help our country reduce poverty and make labor market more efficient. Needless to say that more employment opportunity will directly push our socio-economic development on higher side. LEI can become one of the major contributors in GDP which is now only around 2%. A study showed in 2018 that Bangladesh’s total investment in LE sector is only USD 15 billion against the demand of USD 7 trillion LEI products in the global market. Encouraging this industry will lead to reduce the import of LE products which will have positive impact of our foreign currency exposure. The study also conveyed that most of the developed countries have been focusing to develop LEI that plays as catalyst role for the development of countries’ industrial base. With proper financial, technical, infrastructural, distribution support, it could play a great role in export next to RMG and Agriculture.

Business Dynamics

Raw materials used in this industry are metal scrap, pig iron, hard coke, limestone and ferroalloys such as ferrosilicon, ferromanganese and others. The price of raw material has been increased significantly which affects the bottom line profitability of this industry. The current prices of raw materials are given below:

Light engineering products are made in several phases in LE enterprises. A composite factory is fully equipped with machineries including furnace, induction furnace, different types of dice, lathe machine and others. Big players in this industry have full set up from melting raw materials in furnace to finish products. Very few of them are also using CNC (Computer numerical control) machine for perfect finishing. There are many participants in this industry those do not have factory set up with furnace and dices. They normally source unfinished products from the factories and finish in their workshop mainly equipped with several lathe & grinding machines. Production capacity is mainly depended on furnace capacity. The melting capacity of furnace is normally found starting from 5 MT to 20 MT. Based on the melting capacity of furnace, the factory is equipped with dices and other finishing lathe machines.

The production process includes sand molding, charging raw materials, melting, pouring, knocking out & finishing

Challenges

Light Engineering industry is facing many obstacles to grow. These challenges need to be identified properly and proper actions should be taken by the policymakers in order to add more value to the economic indicators of Bangladesh. Major challenges of this industry are discussed below:

Lack of Modern Technology is one the major challenges of LEI. Most of our LE enterprises are using old and backdated machineries from those the quality & competitive product cannot be produced. The leading countries of LE like China, Japan, and India are using modern technologies. They have been using CNC (Computerized and Numeric Controlled) technology since long. Whereas in Bangladesh use of CNC is rare. Normally, LE enterprises of Bangladesh applies trial & error method to develop a product which requires more time and cost as well as preciousness remains a concern.

Price fluctuation of raw materials is another concern. The current price of scrap is around BDT 47/Kg which was normally 32 to 35 before pandemic. Again, the price of imported raw materials like pig iron, hard coke, limestone and ferroalloys has also increased significantly which makes this industry difficult to maintain expected bottom line profitability.

Lack of skilled work force is also a challenge for this industry. The industry is labor intensive and manual process driven as skilled work force is very important for accurate finished products. Proper training and use of advanced technology may reduce this gap.

Price of imported LE products is comparatively lower than the products produced in country. Chinese cheap spares are available in the local market which is another obstacle to grow our indigenous LE enterprises.

Lack of capital and Finance is also a major concern of this industry. Most of the workshops can be categorized as “Small” in terms of initial capital. There are many workshops those have only one or two lathe. Due to lack of access to finance, they do not get the proper opportunity to grow even though Government has arranged some lending program for light engineering enterprises at lower interest rate.

Recent Initiatives

In 2020, Bangladesh Prime Minister Sheikh Hasina announced the LEPs as the “product of the year” during the inauguration program of Dhaka Trade Fair-2020. A 10 year tax holiday will be enjoyed by the LE product manufacturers if they cater to factories with nonfinished products or parts. Bangladesh Automobile Manufacturers and Assemblers Association (BAAMA) is trying to go for joint ventures in components and parts manufacturing and it will certainly mitigate the existing technology issues. Several pre-finance program is going on to create access to finance for LE enterprises. Government has recently decided to establish 10 dedicated light engineering industrial parks in Dhaka, Narayanganj, Jashore, Bogura, Narsingdi, Munshiganj, Mymensingh and Madaripur.
It is obvious that light engineering industry has immense scope to add value to the major economic indicators of Bangladesh. The major goal of an economy is to create employment and LEI is highly labor intensive which can create more employment opportunity and accelerate our expected growth. This industry is already acclaimed as the important sector for the future development considering the backward linkages of almost every industries. There are some challenges ahead to make this industry take off and reach the expected level. However, there are many adroit businessmen operating in this industry whose hard work and business acumen will lead this industry to desired level. Proper policy support, guidance from authority & leading businessmen, access to finance and use of advanced technology can mitigate the limitations and lead this industry to the optimum growth.

 

[Saif]

Some of the small factories in Bangladesh are making electric testers to compete Chinese ones in the market. If Govt. support is given these factories can modernize and produce much better quality light engineering products.

 

[Saif]

https://thefinancialexpress.com.bd/views/columns/light-engineering-warrants-an-institutional-shape

Light engineering warrants an institutional shape

Indisputably, the country's light engineering sector has immense potential for growth. Yet, while no one has contested this fact, it is still far from assuming the highly important role it is supposed to play.

Despite its informal nature and unregulated patterns of work, light engineering is frequently acknowledged as a promising catalyst for economic activity. Not only does it foster the growth of countless small businesses but also serves as a vital hub for the production of numerous engineering products.

As a feeder sub-sector, light engineering produces machines, equipment, tools of heterogeneous varieties for domestic usage in mills, factories and engineering workshops. Besides providing cost-cutting benefits to the consumers, its all important role is in saving foreign exchange that otherwise the country would have to spend on imports.

It is estimated that the sector currently accounts for around 50 per cent substitutes of imported items in the country. This is reflected in the support it provides to industrial, agricultural and construction sectors by manufacturing a wide range of spare parts, castings, moulds and dices, oil and gas pipeline fittings and light machinery, as well as repairing those. Equally significant is its role in job creation. Rough estimates suggest as many as 600,000 skilled and semi-skilled workers are employed by around 40,000 micro enterprises and 10,000 small and medium enterprises (SMES) under this sub-sector. The sector is reportedly manufacturing products worth Tk250 billion with local technology. The Business Promotion Council, operating under the commerce ministry, estimates that local light engineering industries produce 3,815 types of machinery, spares and accessories.

Despite the highly useful and laudable role, the downside of the sector is its failure to take an institutional shape which undermines its potential for future growth. In order for the sector to attain an institutional shape as well as desired growth and diversification, the key requirements are government policy support, public-private joint initiatives for institutional and financial assistance, availability of technical and business information, innovation and upgrading of technology, capacity building, research and development facilities and removal of a host of growth-impeding factors.

A news item published in this newspaper recently highlighted some of the prospects as well as the potential of the sub-sector that could be capitalised on for its growth as a major import-substitute industry. Quoting experts, it said by investing Tk 60 billion in the improvement of the light engineering sub-sector in a planned and targeted manner, it is possible for the country to save Tk 650 billion as import substitute of light engineering products every year. This also conversely implies that if the light engineering units, spread out all over the country, are not taken care of immediately to suit the varying demands of the consumers, imported products would soon seize the domestic market. The need for the sector's modernisation through incorporation of appropriate technology is all the more important as global competition will spare no effort to take control of niche markets.

These small and medium enterprises are currently facing serious hardships on various counts, according to the Bangladesh Engineering Industry Owners Association (BEIOA). These include a lack of advanced technology, dearth of skilled manpower, absence of product diversification and market promotion measures. Over and above, the entire industry is without any worthwhile credit finance. Industry insiders opine that bringing the innumerable work units under an integrated plan is crucially important, and to do so, a separate policy for the sector is long overdue. Supportive government policy for the sub-sector would also facilitate adoption of work programme for product development and product adaptation for both domestic consumption and export.

Although lacking in institutional shape, light engineering in the country has a solid foundation since long, aided mainly by a considerably big pool of skilled and semi-skilled workforce. While the need to train the workforce to upgrade skills is important, more important is the need to energise it by facilities for large-scale technology upgrading which can happen through increased investment. Insiders are of the view that segmenting the sector along the types of works done might offer the opportunity for the government to look at the prospects of each of the sub-sectors as well as identify the support they need--- not only policy-related, but also technological and financial and so forth. Observers feel that some fiscal incentives are also needed for the sector, such as concession in payment of VAT.

Concerned quarters believe that there is a critical need for basic infrastructural facilities like gas, electricity, water and dumping yards. This may be possible with arrangements for the units to be located in dedicated work zones in clustered forms depending on the types of works performed. So, a good deal needs to be thought out to work on a systematic plan of action to set things right for the industry to keep growing. It is in this context that the PM's declaration, a couple of years ago, of light engineering as the product of the year should be seen as more than just motivational but a pressing call for appropriate policies and actions to equip the sector with the vigour and strength it so badly needs.​

 

[Saif]

বিà¦à¦«à¦à¦¿à¦à¦ à¦à¦° হালà¦à¦¾ পà§à¦°à¦à§à¦¶à¦² শিলà§à¦ª বিষà§à¦ পরামরà§à¦¶ সà¦à¦¾ à¦à¦¨à§à¦·à§à¦ িত

বাà¦à¦²à¦¾à¦¦à§à¦¶ বিনিà§à§à¦ à¦à¦¨à§à¦¨à§à¦¨ à¦à¦°à§à¦¤à§à¦ªà¦à§à¦·à§à¦° (বিডা) à¦à¦° à¦à¦¦à§à¦¯à§à¦à§, 'Potentials of the Light Engineering Industry/Sector in Bangladesh' শà§à¦°à§à¦·à¦ à¦à¦¬à§à¦·à¦£à¦¾ à¦à¦¾à¦°à§à¦¯à¦à§à¦°à¦®à¦à¦¿ বাà¦à¦²à¦¾à¦¦à§à¦¶ ফরà§à¦¨...

thefinancialexpress.com.bd

বিএফটিআই এর হালকা প্রকৌশল শিল্প বিষয়ক পরামর্শ সভা অনুষ্ঠিত
এফই অনলাইন ডেস্ক
Published :
May 14, 2024 17:50
Updated :
May 14, 2024 17:50

বাংলাদেশ বিনিয়োগ উন্নয়ন কর্তৃপক্ষের (বিডা) এর উদ্যোগে, 'Potentials of the Light Engineering Industry/Sector in Bangladesh' শীর্ষক গবেষণা কার্যক্রমটি বাংলাদেশ ফরেন ট্রেড ইনস্টিটিউট (বিএফটিআই)-পরিচালনা করছে।

এর অংশ হিসেবে ১৪ মে, ২০২৪ তারিখে বিএফটিআই এর সম্মেলন কক্ষে একটি অংশীজন পরামর্শ সভা অনুষ্ঠিত হয়েছে।

এই সভায় প্রধান অতিথি হিসেবে উপস্থিত ছিলেন বিএফটিআই এর প্রধান নির্বাহী কর্মকর্তা ও বাণিজ্য মন্ত্রণালয়ের সাবেক সিনিয়র সচিব ড. মোঃ জাফর উদ্দীন।

সভায় বিশেষ অতিথি হিসেবে উপস্থিত ছিলেন বাংলাদেশ বিনিয়োগ উন্নয়ন কর্তৃপক্ষের (বিডা) এর পরিচালক (যুগ্ম সচিব) জনাব এম মিজানুর রহমান।

অনুষ্ঠানে সভাপতিত্ব করেন বিএফটিআই এর পরিচালক মোঃ ওবায়েদুল আজম। বিএফটিআই এর এক প্রেস বিজ্ঞপ্তি থেকে এ তথ্য জানা যায়।

প্রধান অতিথি ড. মোঃ জাফর উদ্দীন বলেন, "লাইট ইঞ্জিনিয়ারিং একটি সম্ভাবনাময় শিল্প। এই খাতের উন্নয়নের জন্য সরকার নানাবিধ পদক্ষেপ গ্রহণ করেছে এবং সরকারের সকল মন্ত্রণালয় ও সংস্থা একযোগে কাজ করছে। বাংলাদেশ বিনিয়োগ উন্নয়ন কর্তৃপক্ষের (বিডা) উদ্যোগে এই গবেষণাটি বিএফটিআই কর্তৃক পরিচালনা করতে পারায় আমরা আনন্দিত।"

বিশেষ অতিথি বাংলাদেশ বিনিয়োগ উন্নয়ন কর্তৃপক্ষের (বিডা) এর পরিচালক (যুগ্ম সচিব) জনাব এম মিজানুর রহমান বলেন, "লাইট ইঞ্জিনিয়ারিং শিল্পের পরিধি অনেক বড়। সরকার লাইট ইঞ্জিনিয়ারিং শিল্পকে গুরুত্ব দিচ্ছে। এ শিল্পে বিনিযোগ আকর্ষণের ব্যাপক সম্ভাবনা রয়েছে।"

এছাড়াও সভায় উপস্থিত বাংলাদেশ ইঞ্জিনিয়ারিং ইন্ডাস্ট্রি ওনার্স এসোসিয়েশন এর সভাপতি জনাব আবদুর রাজ্জাক সহ পাবলিক ও প্রাইভেট সেক্টরের প্রতিনিধিবৃন্দ তাদের মূল্যবান মতামত প্রদান করেন।​

 

[Bilal9]

Prime Machineries is an example of medium sized companies who make bespoke machinery targeted toward shoe Industries and other sectors like Melamine cookware. They have effectively substituted imports of machineries for non-automated sectors like these.

 

[Bilal9]

Bangladesh Cable Industry was founded sixty plus years ago and has continued to forge ahead beyond various types of Home wiring and ACSR power cable products, they now produce advanced telecom cable products in copper as well as glass fiber (fiber optics cable). It was originally a govt. sector undertaking and remains so today.

 

[Saif]

Bangladesh Cable Industry was founded sixty plus years ago and has continued to forge ahead beyond various types of Home wiring and ACSR power cable products, they now produce advanced telecom cable products in copper as well as glass fiber (fiber optics cable). It was originally a govt. sector undertaking and remains so today.

We should invite private investment in this sector massively. Only one public industry is not enough to meet the local demand let alone exporting to other countries. Can't we produce raw materials for this industry locally? If we can, it will save us huge foreign currency.

 

[Bilal9]

Extruded UPVC door and CNC machine made engraved solid wooden doors manufacturing in Bangladesh. Horrible designs though, they need some design help.

 

[Bilal9]

In the bustling heart of Gazipur's Sreepur Upazilla, Alpha Carbon Technology Limited hums with activity. Here, a 20-year-old woman, Suraiya, meticulously assembles carbon fiber pieces for $2000 Bicycles by hand in an intricate process that requires her to arrange 268 individual pieces with precision and focus without the aid of machinery. Once again, Bangladesh is the pioneering entrant in this Bike export light engineering sector, as seen two decades earlier with Chromoly aluminum alloy bike exports.

Suraiya is among the 365 workers, predominantly women, who make carbon fiber components for bicycle frames, forks, and seat posts.

Working under the guidance of around two dozen technicians from China and Taiwan, they assemble pre-cut carbon sheets with precision in every step of the process.



These efforts represent a notable milestone for Bangladesh as it becomes the pioneering South Asian nation to produce high-value carbon components for bicycles.

A single carbon fibre bicycle frame commands a price of around $200, equivalent to the export value of 166 T-shirts priced at $1.2 each. In contrast, a steel frame costs only $20, while aluminum frames range from $30 to $40.

The factory, established through a collaboration between Meghna Group, the largest bicycle manufacturer and exporter in Bangladesh, and partners from Germany and Taiwan, currently operates with a production capacity of 50,000 frames, 100,000 forks, and 240,000 seat posts annually.



Demand rising for carbon frames

With export demands on the rise, Alpha Carbon Technology Ltd has decided to expand the factory's capabilities to meet the growing orders since the start of its commercial production early last year.

"We will double our frame production capacity to 100,000 units by July next year, driven by an increase of new orders," said Javed Hossain Khan, general manager of the company.

Photo: Syed Zakir Hossain

Javed expressed confidence in the company's future export prospects, citing successful product testing in key markets such as Germany, Sweden, and the UK.

Meghna, in a joint venture, is pioneering the manufacture of carbon fiber bicycle components for export — a strategic move poised to help Bangladesh diversify its export base reducing its heavy dependence on ready-made garments.

The global carbon fiber bike market, which remains relatively modest at around $3 billion in 2023 in stark contrast to the traditional bicycle market of over $80 billion, is expanding rapidly due to its remarkable attributes, including durability, lightweight construction, superior strength and corrosion resistance.

One of the two dozen highly skilled Chinese and Taiwanese technicians, experts in crafting carbon fiber bicycle components, is mentoring a local worker at Alpha Carbon Technology Limited factory in Sreepur upazila of Gazipur. The photo was taken recently.

One of the two dozen highly skilled Chinese and Taiwanese technicians, experts in crafting carbon fiber bicycle components, is mentoring a local worker at Alpha Carbon Technology Limited factory in Sreepur upazila of Gazipur. The photo was taken recently.

Moreover, consumers in the Western markets are increasingly favoring eco-friendly carbon fiber bicycles over aluminum or steel alternatives.

Will diversify country's export basket

Mizanur Rahman, chairman of Meghna Group, emphasized the strategic significance of introducing this technology to Bangladesh. "The goal is to diversify the country's export opportunities, especially amidst a decline in traditional bicycle sales, notably in crucial markets like the European Union and the UK throughout 2023," he said.

According to data from the Export Promotion Bureau, Bangladesh's bicycle exports totaled only $53.87 million during July-February of the current fiscal year, marking a steep decline of nearly 45% from the $97.50 million recorded for the same period a year earlier.

"We will not be able to boost our exports solely on low-end products after graduating from the LDC status in 2026. We must pivot towards producing high-end goods for global markets," Mizanur told TBS.

A row of carbon fiber frames for high-end bicycles can be seen at Alpha Carbon Technology Limited in Boromi, Sreepur upazila of Gazipur.

As an example, he cited Japan's evolution from garment manufacturing, a position akin to Bangladesh's current status, toward high-end manufacturing sectors over time. He anticipated that the apparel production currently dominated by Bangladesh might eventually shift to African nations.

"As part of this strategy, we have made investments in the production of carbon fiber components for bicycles. We are currently manufacturing three key components, but our next step is to introduce carbon fiber handles. Following that, we have plans to export bicycles entirely crafted from carbon fiber," Mizanur said.

"The export value of a carbon fiber bicycle starts at no less than $1,000, with retail prices often exceeding $2,000 per unit. With government support, Alpha Carbon could potentially export at least $100 million worth of carbon fibre bicycle products per year," he said.

Photo: Syed Zakir Hossain

"However, achieving this goal will not be without challenges. The company requires government assistance, primarily due to the substantial 60% import duty on the essential raw material, carbon fibre, imported from Japan," Mizanur said.

"Additionally, the lack of a consistent power supply presents a significant hurdle. Finally, acquiring a bond licence is essential for Alpha to sustain competitiveness in the global export market," said the Meghna Group chairman, calling for a 10-15% government incentive over the next three years to enhance competitiveness with manufacturers from other countries.

"We do not want incentives for years or decades. We will achieve competitiveness as a carbon fibre component manufacturer within a few years," he said.

Bond facility will help

About the bond license, Md Luthful Bari, chief operating officer of Alpha Carbon, said they need the licence as it will enable them to import duty-free raw materials and machinery. Also, as per the Customs Act 1969, 100% of export-oriented businesses are eligible to get bond facilities.

Bond licenses, particularly for industries like garments and textiles, have been instrumental in fostering industrial development and significantly contributing to the economic growth of the country.

Bari also emphasized the importance of uninterrupted power supply, saying that the lack of quality power could potentially damage their machinery and products.

Photo: Syed Zakir Hossain

Photo: Syed Zakir Hossain

What are carbon fibre bikes and who buys them?

A carbon fibre bike is a bicycle constructed primarily using carbon fibre sheets, also referred to as prepreg material, which is precisely cut into specific shapes and sizes according to the design of the frame, fork, seat post or wheelset.

These bikes are predominantly utilized in high-end racing applications. Common types of carbon fiber bicycles include road bikes, mountain bikes, city bikes, and more.

The demand for carbon fiber bikes is particularly high among athletes, with road bikes being especially favored in Europe and North America — the main markets for this type of bicycle. The cost of manufacturing such bikes is anticipated to decrease, potentially leading to a shift in major markets towards countries like China and other developing nations.

Which countries make components for carbon fiber bikes

Several countries specialize in manufacturing components for carbon fiber bikes. Taiwan stands out as a leading producer, renowned for its advanced manufacturing capabilities and expertise in carbon fiber technology.

China also plays a significant role, with numerous factories catering to both domestic and international bicycle brands.

Among the EU countries, Italy boasts a long tradition of bicycle manufacturing and is esteemed for its craftsmanship and innovation in carbon fibre technology. Also, Germany manufactures this kind of bicycle as it is known for its engineering prowess.

Bangladesh is now one of the half-a-dozen countries globally to specialize in producing these ultra high tech products.

Photo: Syed Zakir Hossain

In the United States, particularly in states like California and Colorado, companies focus on high-performance carbon components for various types of bikes.

While Japan, though not as prominent, excels in precision engineering and high-quality standards. These countries collectively contribute to the global supply chain for carbon fiber bike components, meeting the demands of cyclists worldwide.

Bangladesh enters high-value carbon fibre bike parts making

In the bustling heart of Gazipur's Sreepur upazila, Alpha Carbon Technology Limited hums with activity.

www.tbsnews.net

 

[Bilal9]

Artificial Quartz Engineered export quality (honed and polished) stone slabs made in Mirzapur Bangladesh.

 

[Bilal9]

Carbon fiber parts of bicycles are now being manufactured in Bangladesh. Bicycle frames, forks and seat posts are being manufactured at the Alpha Carbon Technology factory established at Barmi in Sreepur Upazila of Gazipur. Which is being exported to various European countries including Germany.

 

[Saif]

Light engineering expo, Bangladesh aims to export $100b in $7t global market

Bangladesh is poised to significantly increase its footprint in the global engineering and light engineering products market, currently valued at a staggering US $7 trillion - of which the country’s contribution amounts to less than 1% at present. Industry leaders rather bullishly believe th

thefinancialexpress.com.bd

Light engineering expo, Bangladesh aims to export $100b in $7t global market

UNB
Published :
May 27, 2025 20:35
Updated :
May 27, 2025 20:35

Bangladesh is poised to significantly increase its footprint in the global engineering and light engineering products market, currently valued at a staggering US $7 trillion - of which the country’s contribution amounts to less than 1% at present.

Industry leaders rather bullishly believe that with adequate policy support, investment, and infrastructure development, Bangladesh could export up to $100 billion worth of engineering products.

This optimistic outlook was shared by Md. Abdur Razzaque, President of the Bangladesh Engineering Industry Owners’ Association (BEIOA), during a press conference held on Tuesday at the Economic Reporters Forum Auditorium in Dhaka.

The press conference announced the upcoming Bangladesh Light Engineering Expo 2025, organized by BEIOA in collaboration with the Export Competitiveness for Jobs (EC4J) project under the Ministry of Commerce.

The domestic market for engineering products in Bangladesh is approximately Tk40,000 crore, with local industries fulfilling up to 50 percent of the demand, leaving the remainder to imports.

BEIOA president Razzaque highlighted the light engineering sector’s substantial contribution to the national economy, employing over 3 lakh people and contributing nearly 3 percent to the country’s GDP. The sector’s annual exports exceed $795 million, playing a crucial role in economic diversification and job creation.

The Bangladesh Light Engineering Expo 2025 is scheduled for May 29 and May 30 at the Shahid Abu Sayed International Convention Center, Shahbagh, Dhaka. The two-day event will feature leading domestic light engineering companies showcasing their latest technologies, components, and innovative products. Participating firms will have the opportunity to present their goods and services, connecting with new buyers and potential investors.

Selected companies will exhibit products such as dye and mould, industrial parts, agricultural equipment, metal casting, and electric equipment.

Razzaque emphasized that the expo serves as a platform for BEIOA to seek government support for modernizing domestic industries, facilitating technology transfer, improving product quality, and expanding exports. He urged the government to provide incentives comparable to those offered by competing nations like Vietnam, China, and India to enhance the light engineering sector’s global competitiveness and sustainability.

Key requests to the government include establishing compliance-enabled industrial zones for light engineering products, reducing customs duties on raw materials, and providing cash incentives and priority access to bank loans.

He also stressed the need for technology transfer, modern design development, and necessary training for technical excellence. Furthermore, Razzaque called for a simple and effective patent registration system to protect locally manufactured components and designs, and appealed for training and incentives to increase employment opportunities for women and youth.

Responding to journalists’ questions, Razzaque confirmed that the expo will feature 44 stalls from 27 domestic companies.

Md. Abdur Rahman Khan, EC4J Project Director, stated that the light engineering sector is one of four sectors that can closely compete with the readymade garment industry.

He assured that the government is working to meet the demands of the sector to facilitate further improvement.

Khan highlighted the expo as a crucial platform to connect manufacturers, importers, and buyers, emphasizing that showcasing Bangladesh’s potential will help reduce import dependency and accelerate exports.​

 

[Saif]

Light engineering sector eyes dedicated industrial zone

Light engineering products manufacturers of the country demanded dedicated industrial park or zones to establish compliant and global standard factory units to compete with international competitors.

www.newagebd.net

Light engineering sector eyes dedicated industrial zone
Staff Correspondent 29 May, 2025, 22:53

Guests visit the stalls at the Bangladesh Light Engineering Expo 2025 at the Shahid Abu Sayeed International Convention Centre Auditorium of Dhaka on Thursday. | Sony Ramani

Light engineering products manufacturers of the country demanded dedicated industrial park or zones to establish compliant and global standard factory units to compete with international competitors.

They also urged the government to provide adequate policy support, removal of tax and VAT related issues.

They were speaking at the inauguration ceremony of the Bangladesh Light Engineering Expo 2025 at the Shahid Abu Sayeed International Convention Centre Auditorium of Dhaka on Thursday.

The two-day expo, organised jointly by Bangladesh Engineering Industry Owners’ Association (BEIOA) and Export Competitiveness for Jobs (EC4J) Project under the Ministry of Commerce, will continue till May 30.

In his speech as chief guest, Mahbubur Rahman, secretary of the Ministry of Commerce, said that Bangladesh needs to prioritise engineering and technology exports in the coming days, with the local light engineering sector playing a crucial role in this regard.

He also said that they want to meet multiple times with entrepreneurs from this sector, as small changes can improve the industry.

He added that the United States has imposed reciprocal tariffs on Bangladesh. Despite a trade deficit of only 6 billion dollars, Bangladesh is still struggling to manage it.

‘To unlock the potential of the light engineering sector, policy support is necessary. Although it is difficult to allocate separate land for this industry, we will consider it as the sector can be allocated a dedicated zone,’ he added.

He urged stakeholders to provide ideas on what can be done and the light engineering sector could be an alternative to the readymade garment sector.

He noted that a significant portion of Vietnam’s export income comes from engineering and technology products, whereas Bangladesh’s export composition is quite the opposite.

Hosne Ferdous Sumi, Senior Private Sector Specialist and Task Team Leader, EC4J Project, World Bank, said that the light engineering sector must focus on the global value chain and they have to capture the global market trends.

‘There are opportunities for innovation and diversification of the light engineering sector, Bangladesh should work to capture these,’ she added.

Hafizur Rahman, administrator of the Federation of Bangladesh Chamber of Commerce and Industry, said that this sector could be a game changer.

‘However, light engineering exports have remained stagnant for a long time. Entrepreneurs in this sector face capital shortages and have limited connections with international markets,’ he added.

He also said that according to the BIDA roadmap, this sector has the highest potential. Therefore, the government should seriously consider matters related to tariffs and taxes.

Abdur Rahim Khan, Additional Secretary and Project Director of EC4J, said that the sector has some issues in policy and coordination, which need to be addressed.

‘If we can remove the hindrances related to duties and policy, the boost of the sector will be a must,’ he added.

In his welcome speech, the BEIOA President Md Abdur Razzaque expressed his gratitude to the Chief Guest, Special Guests, participating member companies, representatives from the print and electronic media, and leaders from the central and district branches of the association.

He extended special thanks to the EC4J Project under the Ministry of Commerce for implementing various programs according to the needs of the light engineering sector.

He said that the light engineering sector has five sub sectors, like mold, electrical and electronics, agro manufacturing machineries, foundry, and bycyle where they produce all types of engineering products for almost all sectors.

‘There is immense potential in this sector. To utilize that potential, a separate industrial park like that for leather is required. We also need policy support and exemptions on taxes and duties for importing raw materials,’ he added.

Commercial Counselors from some countries also joined the event, who suggested the manufacturers go more micro or subsector level, as light engineering is a vast concept.

A total of 27 industrial enterprises are participating in the fair.

The expo is expected to play a meaningful role in promoting local engineering products, services, and technologies.

Moreover, entrepreneurs from the domestic engineering industry presented various policy proposals in front of policymakers and media for the holistic development of the sector.

These proposals are anticipated to encourage the government and development partners to initiate programs for the sector’s growth.

The expo is open to all from 11:00 AM to 8:00 PM every day.​

 

[Saif]

Govt should afford needed fillip to light engineering sector

LIGHT engineering, which could fetch up to $100 billion from export if properly nourished, warrants that the government should provide the sector with policy support, scopes for investment and the needed infrastructural development. It is in this...

www.newagebd.net

Govt should afford needed fillip to light engineering sector
31 May, 2025, 00:00

LIGHT engineering, which could fetch up to $100 billion from export if properly nourished, warrants that the government should provide the sector with policy support, scopes for investment and the needed infrastructural development. It is in this context, people involved in the sector have called for dedicated industrial parks or zones for the establishment of factories, keeping to global standards, to compete on the international market. The stakeholders have also demanded adequate policy support, which includes tax issues especially on the import of raw materials, at the inauguration of a two-day light engineering exposition held in Dhaka on May 29. The Bangladesh Engineering Industry Owners’ Association and the Export Competitiveness for Jobs Project of the commerce ministry have organised the exhibition. The commerce secretary, who attended the occasion as chief guest, has said that Bangladesh needs to prioritise engineering and technology export, where the light engineering sector could play an important role. The sector is said to have accounted for 3 per cent of the gross domestic product in the 2022 financial year whilst the apparel sector accounted for 9.25 per cent of the gross domestic product that financial year.

A Bangladesh Investment Development Authority report on the light engineering sector, published in June 2024, shows an almost consistent growth in light engineering product export, beginning with $355.97 million in the 2018 financial year that reached $795.63 million in the 2022 financial year, with a decline in the 2020 financial year. The report, however, shows a decline to $585.85 million in the 2023 financial year. The sector is reported to be generating about Tk 200 billion and the market is reported to be growing at 10 per cent. There are about 7,500 units — factories, shops and workshops — at Dholaikhal and Jinjira, the light engineering hubs of the capital city, that employ about 60,000 people. The needed fillip for the sector could create an opportunity for the innovation and diversification of the sector and Bangladesh should seize the opportunity. The commerce secretary at the programme has said that the government wants to meet light engineering entrepreneurs as small changes could improve the industry. The export of light engineering products, which have fetched some money, has remained somewhat stagnant for long. Because the entrepreneurs in the sector are faced with the shortage of capital and have limited connections on the international market. The government should now seriously take note of the barriers that hinder the growth of the light engineering sector.

The government should, therefore, afford the needed fillips to the light engineering sector on issues that have come up to reap the benefits. It should also attend to the issue of skills of the people employed in the sector.​