ICE Business Times, February 2016 by ICE Media Ltd.

Contents 20 TIMES

feb 2016

Vision Statements

Md. Atiqul Islam, Director, Islam Group Arshad Jamal (Dipu), Chairman, Tusuka Group Anwar-ul-Alam Chowdhury, Chairman, Evince Group A H Aslam Sunny, Chairman, Crony Group Vidiya Amrit Khan, Director, Desh Garments Ltd.

IBT Cover Story

Realizing the $50 Dream for Bangladesh’s Apparel Sector

A confident worker inside one of DBL Groups’ factories

6 From the Editor

Columns

14 Shamsul Huq Zahid 16 Asaduzzaman

Content TIMES

feb 2016

Interviews

18 Md. Siddiqur Rahman, President, BGMEA 40 Md. Fazlul Hoque, Vice President, BTMA 52 Shamsuzzaman Khan, Director General, Bangla Academy 70 Dewan Sajid Afzal, General Manager, Executive Machines 81 Abdullah Al Maher, CEO and Managing Director, Samadhan Merchandising Services 82 John Sakhawat Chowdhury, Managing Director, NKSoft Bangladesh

Features 38 42 46 50 62 67 74 84 86 88 90 92

Fashionable Progress Bangladesh-Canada Bilateral Trade Super Growth of the Super Corridor Upholding the Legacy The Trade History of Khatungonj The Shrimp Story EBL Making a Social Difference Star Wars: The Finances of the Force How Smart is Your Smartwatch Strategy: To Be Human and To Be Yourself Companies to Look Out for in 2016 Capital Market Update

Word of Mouth 8 10 11 12 32 78 The ETP Plant inside the DBL Group of factories

State of Affairs FBCCI and Telecom Industry Entertainment Business GSR Conference Banking Corner Apparel Industry

FROM THE EDITOR WorldFish, an international research organization, recently launched a pilot application funded by USAID to establish digital traceability in the shrimp sector. The app is designed to help Bangladeshi farmers manage traceability to increase production as well as to bring transparency in shrimp marketing. Considering the European Unionâ&#x20AC;&#x2122;s ban on shrimp imports from Bangladesh in 1997, this is just another indication of how far we have advanced. Having graduated to the lower middle-income rung of the development tier recently, Bangladesh's progress over the last decade is unquestionable. With the RMG sector leading the way, more regional investors have been inquiring about making FDIs prompting the government to form new EPZs. The dynamic growth of the Middle and Affluent Class segment with their growing disposable incomes has also opened doors for new opportunities. The lure of low-cost labor, which was one of the competitive advantages of China is not there anymore. Bangladesh too can take a page from China's book and grab opportunities

This Issueâ&#x20AC;&#x2122;s Photographs by

a global business magazine from bangladesh a global business magazine from bangladesh INTERNATIONAL

TIMES

TECH

How smart is Your Smartwatch?

THE APPAREL TARGET

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at www.icebusinesstimes.net

Shrimp is the new white gold Exploring the BangladeshCanada Bilateral Trade Scenario

A. H Aslam Sunny

Arshad Jamal (Dipu)

Anwar-ul-Alam Chowdhury

Write to us at

Md. Atiqul Islam

Md. Siddiqur Rahman

Hitting the $50B BullsEye ON OUR 50TH ANNIVERSARY

editor@icebusinesstimes.net, or send us a note at www.facebook.com/icebusinesstimes www.twitter.com/BusinessTimesBD

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four companies to look out for in 2016 feb 2016

Vidiya Amrit Khan

Din M Shibly Ashraf Uddin Apu Kazi Mukul Hossain Tuhel

to diversify its export basket and move up the value chain. For that, we will need skilled labors, world-class managers, and efficient marketers. Following in the footsteps of the RMG sector, our IT sector too can emerge as a force to reckon with. We must not expect that change will occur as a result of the globalization of the world. It is not just a matter of witnessing innovation but understanding its essentiality. Currently, we are known as one of the best countries to outsource to. Nevertheless, we need to fuel our own innovation mill and churn out applications, softwares and IT solutions that will mitigate the domestic demands and brand Bangladesh in the world as a nation of innovators. Winston Churchill stated, "To improve is to change; to be perfect is to change often." For us, it is important to change the mindset. Our education system should be as such that it encourages pupils to think, ask questions and find logical solutions. The creation of better thinkers and innovators will help us embark on a path towards a self-sustaining economy for a better tomorrow.

Vision Statements TK. 100 | www.icebusinesstimes.net

Vol. 6 No. 6 | february 2016

Publisher & Editor : Director, International Publications : Executive Director : Managing Editor : Assistant Editor : Sub Editor : Staff Feature Writer : Designer : Business Development : Business Promotion : Research Assistant : Brand Promotion : Finance & Accounts : Sales & Distribution :

Abul Khair Zeenat Chowdhury Nawshin Khair Tawhidur Rashid Irad Mustafa Shaikh Ashfaque Zaman Asaduzzaman Sk. Yeahhia Md. Nizam Uddin Forhad Mohammad Imran Lamina Yeasmin Effat Ara Laizu Md. Abdul Alim Md. Nazrul Islam Md. Rubel Khan

Published by Abul Khair on behalf of ICE Media Limited, Kushal Centre, Plot 29, Sector 3, Uttara C/A, Dhaka- 1230 and printed at M.K. Printers,189/1, Tejgaon I/A, Dhaka-1208 Editorial and Commercial office: 3rd Floor, House: 4, Block: B, Road: 23 A, Banani, Dhaka 1213 Advertising, Sales, Subscription and Distribution: 01812656969, 01759391168, 01920335953, 01716783698, 01913818402 Tel: 09666773313 Fax: 88-02-8901205 Editorial & Marketing Queries: editor@icebusinesstimes.net, businesstimes.1@gmail.com

Word of Mouth State of Affaires

Prime Minister Sheikh Hasina called on President Abdul Hamid at his Jatiya Sangsad Bhaban office and thanked him for his speech in the winter session of Parliament

Prime Minister Sheikh Hasina inaugurated the World Trade Center in Chittagong on the eve of the centennial of the Chittagong Chamber of Commerce & Industry (CCCI)

CPA Chairman Rear Admiral Mohammad Nizamuddin Ahmed has been appointed the new Chief of Naval Staff and was adorned with the badge in the presence of Prime Minister Sheikh Hasina in her office

Prime Minister Sheikh Hasina with the winners of the Bangabondhu Krishi Podok 1420 giving ceremony

Prime Ministerâ&#x20AC;&#x2122;s Photographs by Sumon Das

Word of Mouth

Bangladesh Investment and Policy Summit

It’s about seizing the opportunities and supporting the emerging tiger The two day long Bangladesh Investment Policy Summit came to an end on 25th January 2016 a five-star hotel in the city. Prime Minister Sheikh Hasina inaugurated it on 24th January which was hosted by the PMO office, Board of Investment(BOI), BUILD (Business Initiative Development) and FBCCI (Federation of Bangladesh Chamber of Commerce and Industries). More than 100 international participants took part in the two-day long high-end seminar where Dr. Syed Abdus Samad, Executive Chairman BOI; Gautam Adani, Chairman Adani Group; Cecile Fruman, Director World Bank Group; Dr. Tawfiq-e-Elahi Chowdhury, Advisor to the Prime Minister; James J Emery, Head of Strategy for the Global Manufacturing, Agribusiness and Services Industry, IFC were the keynote speakers. Finance Minister Abul Maal Abdul Muhith, Industry Minister Amir Hossain Amu, Comerce Minister Tofail Ahmed, Chief Minister of India’s Meghalaya Dr. Mukul Sangma, South Asia Region CEO of Axiata Limited Dr. Hans Wijavasuriya and FBCCI President Abdul Matlub Ahmad and Build President Asif Ibrahim also took part in discussions. In a reaction on the outcome of this high-end investment policy support summit, President of FBCCI Abdul Matlub Ahmad informed ICE Business Times that the theme of this invest summit was to promote Bangladesh across the globe. “It was a big event for projecting Bangladesh and its investment opportunities across the globe. Adani group and Reliance group came up with a proposal to attract investment. There are large investments from China and Malaysia. At this stage the biggest imporvement is required in the skill development area. There is a need for skill hands that run machines and technical colleges and universities. We are going to meet the education minister to change the curriculum after tertiary education,” he added.

Export Promotion

The 21st Dhaka International Trade Fair (DITF)-2016 The Dhaka International Trade fair -2016 is took place with fervor and zeal. Everyday there was a large numbers of visitors attending the fair to collect their favorite products. The Export Promotion Bureau and the Ministry of Commerce organized this event in Sher-E-Bangla Nagar, Dhaka. The Prime Minister Sheikh Hasina inaugurated the month-long fair on 1st January. This event is becoming a center point of projecting the quality exportables of Bangladesh to the visitors from national and international platforms. Even the local producer in the remote areas of rural Bangladesh who do not have the financial strength to participate in International Trade Fair had the opportunity to display their products to the buyer from abroad at this fair. The overseas participants also had the opportunity to display their products to the consumers of Bangladesh where the domestic market of consumer goods is expanding. The visitors also expressed their satisfaction by the duty free environment and this year there are 553 stalls that had been set up. Fifty-six of these stalls and pavilions sold foreign products. The new addition of this fair is the strong presence of local home appliances, electronic goods and products, where Bangladesh is considered a new entrant. Walton showcased and sold more than 400 models of different types of high standard products. The company released some products such as inverter technology based no-frost refrigerator, 3-door no-frost refrigerator (526 liter), donut maker, sandwich maker, cake maker, travel blender, LED bulb, switch, socket, sealed lead acid recharge battery, holder, fan regulator and many other electronics and electrical home appliances.

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Word of Mouth

FBCCI

“Bangladesh is the best destination for investment” Bangladesh is the best place for investment and many body including Adani and Reliance group is coming with 6 billion dollar of investment in energy sector said Abdul Matlub Ahmad of FBCCI (Federation of Bangladesh Chamber of Commerce & Industries). The entire board was present in the annual meet the press and appraisal of the activity session held on 27th January, 2016 at FBCCI conference room at Dhaka. Shaiful Islam (Mohuddin) Vice President FBCCI conducted the session and Harun-ur-Rashid, Abu Motaleb and Shiekh Fazle Fahim and Bazlur Rahman spoke on the occasion. The president of FBCCI also added that our rate of interest is very high and the root cause that load of NPL (Non Performing Loan) of Tk 60,000 and we are planning to discuss the issue with the Bangladesh Bank very intensively although rate of interest is coming down, we need to make this percentage a single digit value. While discussing his roadmap and touching his achievement he said that we have placed 86-budget observation and government has taken many observations of us very seriously and responded positively. He declared that we would establish an information center for releasing all the news and information to build repo and make it clear for all our stakeholders. The President of FBCCI said that we are in partnership with NBR to realizing taxes and working in close relationships. He added that energy security is the most important objective to achieve. He has also said that SME and MSME is the main sectors where he is putting this thrust and taking notes for the suggestion from the media for disseminating information. Responding the query from the media Shaiful Islam (Mohiuddin stated that they are working intensively to reduce bottlenecks and now infrastructure is the main thrust. He postulates that even if we are able to generate 14,000 megawatts of electricity, it is not enough. Our gas supply is very low and no new gas connections are here. He added that we need to adjust the oil price where it is come down from 110 dollar to 30 dollar at the international market but in our country still it very high. He also stated that government has fixed a target of $60 billion export target by 2021 where with many adversaries the export target of garments is more than 2 %. Touching on the TIB report, he explains that the report also said that we are resorting kickbacks for getting compliances which is a matter of dismay. In regards to capital flight, he stated that many things are related worth immigration and non business persons everywhere in the world. Business community are sticks to their investment and not prone to capital flight .

Telecom Industry

Axiata and Bharti Airtel Agree to Merge Operations in Bangladesh

Axiata Group Berhad (“Axiata”) and Bharti Airtel Limited (“Bharti”), signed a Definitive Agreement to merge their respective telecommunication subsidiaries in Bangladesh. Post-merger, the combined entity operating as Robi will serve approximately 40 million customers. The joint strengths of Robi and Airtel will deliver the widest mobile network coverage across Bangladesh, strengthening its position in the mobile Internet segment as well as consolidating its position as the second largest operator in the country. The telecommunications landscape in Bangladesh has been one of high-growth albeit intensively competitive with six players. The proposed merger is set to strengthen the industry structure, competitiveness and, more importantly, bring greater benefits to customers in terms of network quality and coverage and an improved offering of data products and services. Upon completion, Axiata will hold 68.3% controlling stake in the combined entity, while Bharti will hold 25%. The existing shareholder, NTT DOCOMO of Japan, will hold the remaining 6.7%. Supun Weerasinghe, Chief Executive Officer of Robi said, “The highly competitive and crowded Bangladesh telecommunications sector solicits consolidation and we believe this merger will form greater economies of scale for both groups. Additionally, it will result in shared investment capacity of the leading two industry players to optimise strategies and deliver enhanced value to consumers, benefitting the industry at large. “Going forward, the combined capabilities of Robi and Airtel will be directed towards providing customers an unparalleled portfolio of innovative mobile and broadband offerings at affordable rates. We believe this to be a powerful differentiating factor and a very compelling value proposition for our customers.” Gopal Vittal, Managing Director and CEO (India and South Asia), Bharti Airtel said, “There is a compelling rationale for bringing together the strengths of both entities. The combined entity will be well positioned to leverage the operational synergies to serve customers better with world-class services and contribute to the growth of the telecommunications sector in Bangladesh.”

Word of Mouth

Entertainment Business

“Bengal Digital”, Bangladesh’s First Digital Cable Television Service, Launched

Bengal Digital, the nation’s first true digital cable television service, has been launched on 19 January 2016 (Tuesday) at the ballroom of Pan Pacific Sonargaon, Dhaka. Abul Maal Abdul Muhith, MP, Minister of Finance, Government of Bangladesh launched the service as the Chief Guest. Hasanul Haq Inu, MP, Minister of Information, Government of Bangladesh was present as the Special Guest and Zunaid Ahmed Palak, MP, State Minister of Post, Telecommunications and Information Technology (ICT Division), Government of Bangladesh was the Guest of Honor of the launching program. Abul Khair Litu, Chairman of Bengal Communications Limited presided over the launching ceremony. Digitization of CATV signal is imperative for providing best quality service, HD channels and for meeting viewers’ demand for various channels. Bengal Communications Limited, the largest cable based services provider

in Bangladesh through its associates, launched their digital cable television service “Bengal Digital” to be at the forefront of the revolution in entertainment business in Bangladesh. Bengal Digital is the nation’s first true digital cable television service with all important features like Conditional Access System, Subscriber Management System, Call Center etc. Bengal Digital brings out immense benefits for all parties involved: Viewers, Operators, and the Government. Viewers of Bengal Digital shall get enhanced picture and sound quality comparing with existing analog cable television, large number of channels in multiple packages, option to subscribe preferred channel(s) from Ala Carte channels’ group, HD channels etc. It has also the facility to record TV channels’ program, Smart UI (User Interface), Channel Guide, Video on Demand, Games, Interactive Applications etc. Transparency in revenue generation from

cable TV business creates opportunity for Government to realize 100% VAT against subscription fee which is not the case for existing business. The government shall also get scope to communicate and interact with the people from all community by using the digital cable TV subscribers’ database. Bengal Digital’s Subscriber Management System (SMS) ensures 100% revenue collection, increased revenue from high value packages, video on demand, gaming, interactive services etc. Bengal Digital has the capacity to provide more than 250 satellite channels including SD and HD through multiple Service Packages. Bengal Digital is starting its services with multiple Service Packages. Service Packages are created considering viewers’ age, taste, culture and affordability. Monthly subscription of the Service Packages starts from Tk 350. The option is available for the subscriber to subscribe preferred channels on A La Carte basis also. Bengal Digital has also the plan to introduce OTT, Video on Demand, Gaming and interactive channels very soon. Bengal Digital’s signal is now available in different cable networks in Dhaka. The network coverage of Bengal Digital is expanding everyday to ensure its reach to each home in Dhaka by this year. Services of Bengal Digital shall be provided through

using of High Definition STB. Bengal brings multiple types of STB with different features considering subscribers’ viewing preferences. Subscriber may contact with the local cable operator or Bengal Digital (www.bengaldigital.tv, Hotline- 16459, 096667 16459) directly for digital cable television service. With state-of-the-art technology, Bengal has partnered up with the best names in the industry to revolutionize the entertainment business in Bangladesh. Bengal Communications Limited has set up Digital Headend Solution with the equipment of THOMSON, globally renowned company for broadcasting equipment. NAGRAVISION SA has supplied Conditional Access System (CAS) of Bengal Digital. NAGRAVISION is regarded as the world market leader for this very specialized service. Magnaquest Technologies Limited is the Subscriber Management System (SMS) provider of Bengal Digital. Magnaquest has over twelve years of rich domain expertise in offering solutions to DTT, DTH, OTT, Cable TV, MSO, ISP, IPTV and Triple Play Operators. The top-notch UPS ensures uninterrupted power supply for the smoothest operation. To top it off, BCL prides the most stunning and one-of-a-kind monitoring panel in the whole country.

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Upcoming Event

Global Social Responsibility Conference 2016 Bangladesh German Chamber of Commerce & Industry (BGCCI) is going to host the 4th Global Social Responsibility Conference on 3rd of March 2016. This year the theme will be â&#x20AC;&#x153;Aid to Trade: Better World, Safer Generationâ&#x20AC;?

At the end of the day, they have to Remember what their responsibilities are to society and the next generation. They have to leave behind a legacy and a safer place for the next generation.

lobal Social Responsibility Conference, in partnership with the Government of Germany, Government of Bangladesh, United Nations System in Bangladesh and most prominent businesses conglomerates operating in Bangladesh, will focus on issues like regional knowledge sharing network for RMG, environmental sustainability, food safety and personal initiative (corporate citizenship). With a view to facilitate and address growth and sustainability issues in Bangladesh, BGCCI organized the first successful conference in 2010 to allow a platform of discussion and exchanging ideas among national and international stakeholders. Following the great success achieved by the 1st Global Social Responsibility Conference, BGCCI and its partners decided to put more emphasis on promoting the wider approach of CSR. This entails promoting the triple bottom line strategy, thus complementing social economic elements with environmental considerations, for the second time, tackling Green Economy. The 3rd Conference organized in 2014 highlighted innovative and responsible solutions to emerging challenges of water contamination, energy shortage, waste management, and social protection issues that are

imperative for economic progress. It is difficult to arrange a conference that focuses at the core of sensitive topics but BGCCI has always been responsible enough to raise topics that have not been discussed previously. Transparency and celebrating the hidden champions create awareness and motives others to join the bandwagon. So we want to showcase the trend setters and discuss topics which will enlighten the entrepreneurs and motivate them to be more responsible. At the end of the day, they have to remember what their responsibilities are to society and the next generation. They have to leave behind a legacy and a safer place for the next generation. Using trade as a vehicle to promote sustainable development agenda creates a win-win situation for countries such as Bangladesh and all their trade partners in the journey to become a middle income country. The real task is to become sustainable with integrated CSR policies. For further details, please contact with Adnan Nafis, Deputy Executive Director, BGCCI e-mail: adnan.nafis@bgcci.com

Column Economy

In search of a ‘feel good’ factor in the economy I Shamsul Huq Zahid In terms of the growth of GDP, Bangladesh’s economy is set to do better this fiscal (2015-16) than any of the recent years, according to projections made by multilateral lenders. Major economic indicators, including export, import, remittance earning, revenue growth and FDI (Foreign

Direct Investment) inflow recorded a modest growth, if not anything spectacular. The government leaders are now selling the ‘success’ story almost without a pause, with an assurance that the country would soon graduate from the recently gained Lower Middle-Income Country (LMIC) status to the Middle-Income Country (MIC) status. Amidst all the achievements made in recent years what has been missing is the ‘feel good’ factor in the economy. That is what is hurting the all-important investments. Despite having relatively stable macroeconomic fundamentals, the country

could not exploit their benefits up to the desired level, primarily because of the low level of investment in the productive sectors. The recent conclusion of the 2015 calendar year was no exception, notwithstanding the fact that the economy could largely overcome the shocks it had received in the initial months of the year from political mayhem spearheaded by the BNP-led opposition over the controversial 2013 general election. However, the political front has been rather quiet despite the presence of a sort of uneasiness since then. It does appear that confrontation on the streets over political issues will be unlikely in the near future unless something serious occurs. The rest of the current fiscal period is expected to be calm and trouble-free. But economists do not expect any major turnaround in private investment because of a host of factors, including problems with energy supply, the high cost of doing business and a sort of fear about future political developments. Businesses feel that rivalry between the two major political parties is too deep and destructive in nature and unless and until the two decide to make way for each other, troubles may erupt at any time.

Amidst all the achievements made in recent years what has been missing is the â&#x20AC;&#x2DC;feel goodâ&#x20AC;&#x2122; factor in the economy. That is what is hurting the all-important investments.

T The stagnancy in investment in recent years has stirred up worries also among the policymakers. That is why the central bank which has been particularly focused on the job of inflation taming has, as of late, changed its stance on its half-yearly monetary policy with a hope that the lending rate would further come down and banks would have more funds to offer to the long-term private investors. The realities on the ground are a bit different from what is being perceived by most policymakers in the government and the central bank. The banks have enough funds to offer to their clients, but they are now exercising caution while selecting their borrowers for many of them have already learned their lesson from the hasty and imprudent selection of borrowers. In fact, the country has not been able to develop or create enough of entrepreneurs that its economy should have. In fact, there is no dearth of

entrepreneurs. But a vast majority of them is involved in wholesale and retail trading, transport business and repair, storage of food and other goods and health services. The latest Economic Survey of 2013 revealed that less than 12 per cent of all economic units are involved in some sort of industrial production. Since the number of large and medium scale industrial units is still small, employment in manufacturing remains at a low level. Most employments are thus made informally which is contributing to the high incidence of underemployment in the country. The economy has grown over time but it has not gained the depth it requires to become strong and steady. In a market economy, the private sector remains the main driving force. Unfortunately, it has remained highly disorganized. Lack of skill, education, capital and infrastructural supports from the state has stood in the development of true entrepreneurs. Manufacturing should have filled up the vacuum created by the declining share of the farm sector in the economy but that has not happened. The services sector is very disorganized and holds the greatest responsibility for this. There is no denying that the

economy has been growing at a modest rate. But the greater part of the expansion is based on domestic demand. Such dependence is not at all healthy for any economy. Since the small economic units generate a small number of jobs and pay insufficient wages and salaries to their employees, the economy cannot acquire a healthy picture despite its reasonable rate of growth. The economy carries on with a dilapidated look no matter what the people in power claim from time to timein an attempt to show their achievements as much bigger than what they actually are. The economy does need growth but it should not be just in terms of GDP. The growth needs to be reflected in the creation of well-rewarding employments in the real sectors of the economy. The manufacturing sector should also expand to areas that in addition to meeting the local demand must cater to the needs of the external markets. However, that would not happen automatically. The government must remove hurdles to business and offer incentives so that they feel comfortable in doing business. The policies would have to be redesigned to make those truly business-friendly, not just on paper. The cost of doing business would have to be reduced to a justifiable level. On the top of everything, two thingsâ&#x20AC;&#x201D;bad politics and graft--would mar every effort taken to make the business and investment environment better. However, these two are formidable challenges. Getting those remedied even up to a tolerable level remains a difficult job. And the moot question is, who will shoulder the difficult tasks?

The writer is a senior journalist. He can be reached at zahidmar10@gmail.com

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Column Equality

Stitching the Seams of Equality J Asaduzzaman Jane Austen’s Pride and Prejudice helped shed light on the world of women in a time when they had to be content with living in male dominated societies of the 18th century. As a matter of irony, those traits are still present in modern societies especially in developing countries like ours. We have witnessed a progressive change over the years, as women have become more vocal regarding their contribution; an action that has captured people’s attention. M Noorul Quader, a freedom fighter and the Founder Chairman of Desh Group, was the first to take an initiative to provide women with industrial training from aboard. On 2nd October 1978 he published an advertisement in The Daily Ittefaq and The Observer, expressing his desire to recruit both women and men to undergo training in the technical and marketing fields of the garment industry. He had sent 130 people, 18 of which were women, to Daewoo’s State of Art Technology in Pusan, South Korea. His visionary

Asaduzzaman is the feature writer of ICE Business Times.

move ushered a new era in the women empowerment scene of our country. Today, we have around 35 lac women working in different roles ranging from entrepreneurs to machine operators to helpers and the number keeps on growing. During one of my journeys with public transports, I met one woman who informed me that both she and her spouse worked in Babylon Garments but she yearned to live a more independent life. In her factory, there are women ranging from the age bracket of 18 to 60 years-most of who had come from rural areas. Many of them got the job tthrough some acquaintance who were already working there. Some of these women were single mothers, some lived in messes and some even were the sole earning persons of their families. This trend is quite common in most labor intensive societies but it also shows how our society has advanced to the point where the women are dealing with more responsibilities. However, this aspect is largely absent from the middle class, who are yet to accept these changes. In their renowned study “Socio-Economic Factors of Readymade Garments Workers in Bangladesh”, Dr. Nazrul Islam and Abu Sayef Md. Muntaquimul Bari examine factors such as, housing, water and sanitation facilities, medical facilities and first aid treatment, wage and

productivity, social status, adaptation of cultural values and norms, attachment with labor unions, ownership arrangement and leave with pay and overtime which effect the socio-economic status of the garment workers of Bangladesh. They recommend that the workers should not be denied these facilities and if they are properly provided with it, it will help improve the socio-economic status of the workers in Bangladesh. This study also identified that working hours, privacy issues, harassment-free work environments, insurance, transportation and education facilities have not been adequately improved yet. To achieve the $50 billion targetby 2021, we will have to think about this huge workforce. Without their well-being, all our hopes will be nipped in the bud.

We have witnessed a progressive change over the years, as women have become more vocal regarding their contribution; an action that has captured people’s attention.

Person of Interest BGMEA

â&#x20AC;&#x153;My aim is to protect this sector from any kind of external disruptions or problemsâ&#x20AC;? Md. Siddiqur Rahman President, BGMEA

Md. Siddiqur Rahman

Born in Borguna on 1st July, 1955, the son of Late Abdul Hamid Howlader, Md. Siddiqur Rahman started his business journey with Sterling Garments Ltd. gradually expanding his business into Sterling Group. Rahman is currently the president of the BGMEA. Prior to this, he served the BGMEA as the Vice President (Finance) and the Second Vice President for the terms of 2010-2011 and 2012-2013, respectively.

Q What are the main challenges faced by the RMG sector now? Energy is the number one problem at this moment. We need uninterrupted supply of gas and electricity to move forward. We can claim that we are self-sufficient in terms of our electricity supply but there is a necessity to Organizations like JICA and IFC hopefully upgrade our and the World Bank are trying continue electricity to contribute by providing soft because the transmission lines. loans with interest rates lower profits from The energy policies than 5% through the this stability we have also needs Bangladesh Bank. are quite to be updated. It is evident. impossible to help an industry grow There is an abundance of labor without proper energy being in our country, though we are provided so we are consistently hiring expatriates in high-end asking the Government about positions. How can we change when this problem will be this? alleviated. We have around 44 lacs worth of Secondly, we must focus on manpower in this industry and infrastructural development. We many of them are working in are saying that we need to reach mid-level and high-end positions. our $50 billion target on our 50th However, we still have around anniversary in 2021. We will need eighteen to twenty thousand to double our current level of expatriate workers in this sector as export, which is around $25.5 well, who are working in prominent billion.This does not necessarily positions in the factories and buying imply that we have to double our houses. Presently, there is not much capacities. We can achieve our we can do. Fortunately, we have the target through increasing the BGMEA University of Fashion and production efficiencies of our Technology and some other workers and machines. institutions, which will be provide Another challenge regarding the the necessary knowledge to our labor force in the industry is that students and workers regarding the workers mostly belong in the apparel technology, merchandising, 18-30 year age bracket. People in etc. allowing them to attain higher this age group are vulnerable to level posts. Hopefully within five outside influences leading to years, we will have a more disputes and unrest. We have to self-sufficient system in place. quell the disputes before they start because the buyers lose faith What is the main target you and confidence in us when they have set for your tenure? hear about labor unrest. My aim is to protect this sector from The future stability of political any kind of external disruptions or situations will also play a major problems so that we can move role in the advancement of the forward towards our $50 billion industries in our country. The target. With Garments villages and conditions are stable now and will

Special Economic Zones being constructed, we can nurture the growth of our industry further. Nonetheless, there are still some unused areas owned by the Government, which they could lease to us. We could relocate the small and medium industries to those areas as they, along with their owners are facing some serious problems. They are in need of assistance and if that isnâ&#x20AC;&#x2122;t provided to them, they may not be able to survive creating a significant problem for the growth and future prospects of this sector. We have already gone into an agreement with the Chittagong City Corporation and signed an MOU, which will ensure the construction of ten buildings where these businesses will be able to reallocate to. Apart from that, organizations like JICA and the IFC World Bank are trying to contribute by providing soft loans with interest rates lower than 5% through the Bangladesh Bank. Ensuring the survival and growth of these small and medium businesses will benefit us greatly in the future. I hope to oversee their protection and development during my stint.

What are your thoughts regarding the relocation of garments factories to other lesser-developed areas of the country? With an adequate supply of electricity, we will be able to relocate our factories to rural areas. In the future, we will see factories and industrial areas in places like Barisal and Bhola when the right infrastructures are in place.

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Vision Statement

Apparel Diplomacy is in Demand

Md. Atiqul Islam

Director, Islam Group Immediate Past-President of BGMEA

In the light of the tragic Rana Plaza collapse and the Tazreen fire, 2013 was deemed an unfortunate year. However, with leadership and hard work of Islam and his team at BGMEA, turned 2014 into a profitable year for the apparel industry, the flag bearer of Bangladeshâ&#x20AC;&#x2122;s export activities. Their dedication is a testament that Bangladesh can overcome any obstacle; he elaborates upon his story of teamwork and success against the odds.

s an association, we have set a target of $50 billion in export for the 50th anniversary, which will be a milestone in Bangladesh. The sector has immense potential that has been proven by the workers and entrepreneurs. We have distinguished ourselves against the previous tragedies: locals had postulated that the industry has no standards and lacks compliance, though the statement was contradicted by the engineers of ILA, according to whom only 2% of the industry required correction. The Bausia garments village in Chittagong is in its final stage and will become an economic zone for the sector. I truly belive this will show that Bangladesh is following an innovative plan, which will open a new chapter for attracting investments and creating new possibilities for the apparel industry in the global market. I would like to outline the contribution of the apparel industry. The RMG has had a profound impact on both the country and its GDP. If we consider the growth in

The Bausia garments village in Chittagong is in its final stage and will become an economic zone for the sector. I truly belive this will show that Bangladesh is following an innovative plan, which will open a new chapter for attracting investments and creating new possibilities for the apparel industry in the global market.

the last five months, it has increased by 9.52%. Given that sales will continue to flourish, we can attain the target that we have set. We are currently bringing in $26 billion and additional manpower is required to reach $50 billion. The unemployment rate in our country is rather high. The textile industry can provide many jobs particularly with our backward linkages in fabrics, yarn, dyes, embroidery and washing. Sadly, the proposed four-lane road from Chittagong to Dhaka that has been in the works for such a long time has not materialized. The decrease in traffic congestion and improvement in transport efficiency would help elevate profits further. The numerous obstacles that we are facing in terms of infrastructure and necessary resources can be overcome if we work with the respective government agencies. For example, we are obtaining fertilizers from various companies who are using gas during their production activities. If this fertilizer was imported, the gas being used for it can be utilized in more productive areas. A report from the Standard Chartered Bank indicates that 256 jobs will be created for every $1 million invested in the textile sector. The implementation of this practice would be a labor incentive for the industry. The use of fabrics and transportation cost would double to $30 billion and $300 million, respectively. This will increase the salary of labors, banks and the source of taxes. I strongly encourage entrepreneurs to diversify their products, expanding to suits, lingerie, jackets and swimming costumes. Incorporation of high value products will change our market by appealing to new regions such as Eastern Europe

and Latin America. These markets are still buying their products from China and India so our embassy officials and foreign ministries must collaborate in the effort to promote apparel diplomacy. I would like our industry to contemplate upon our capacity to meet the demands in fashion trends in Europe. The continent is in the forefront of fashion trends but still highly dependent on other countries for apparel production. There is a necessity to incorporate a more globalized knowledge and use the manpower within our country. I have come to the conclusion that skill development is one of the major challenges for Bangladesh. The productivity of the work force is 70%, where as the competitors’ productivity starts at 90%. This gap requires minimization because dismal skills are decreasing the buyer’s bid for various products on a daily basis. There is a necessity to prioritize the numerous skills required from a worker and their compliance towards these responsibilities with an emphasis on production engineering, refinement of skills, and acquired efficiency. There is a need for increased public-private partnerships. In addition, the Embassies and High Commissions must take immediate steps for apparel diplomacy in order to instill confidence in the quality with LEAD certified factories. Upon his visit, Harvard Professor, Jack Arnold stated that the factories of Bangladesh are unique to South Asia. This is a fact because we are leading the way into more environmentally friendly factories against global warming. Our tag line should be “Made in Bangladesh with pride.”

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Vision Statement

Moving Forward with what is Ours Arshad Jamal (Dipu)

Arshad Jamal (Dipu)

Chairman, Tusuka Group

Arshad Jamal (Dipu) obtained degrees from various worldclass universities. He started his business while he was a student in Dhaka University. He established Tusuka Fashion Ltd in 2000 and is the chairman of the Tusuka group. His success has allowed him to enter International Telecom and NovoTel Ltd. He has served as the Chairman and board member of the BGMEA and a director in research and policy matters and as a facilitator between the government and BGMEA.

The industry has synchronized itself, attempting to execute forward linkages as well as significant backward linkages.

have witnessed the great transformation in our RMG sector. The industry has synchronized itself, attempting to execute forward linkages as well as significant backward linkages. Emerging entrepreneurs must undertake processes to acquire sufficient knowledge regarding the industry. The industry is dependent on a few factors, one of which is the availability of the workforce. Fortunately, we are more than sufficient in that area and we have received the

necessary regulatory support unlike other third world countries. As a facilitator, I have identified a few issues that are very important to us. These issues include the handling of workers, dealing with buyers and regulatory concerns. The Rana Plaza incident has ushered an era of increased awareness about workersâ&#x20AC;&#x2122; safety in RMG factories. It initiated the need for a national tripartite committee of the government. We have seen a progressive change in the industry with the amendments of the labor laws and upward revision of minimum wage. The safety of employees has become a major concern with the evacuation drills in practice and fire fighting equipments at hand. The implementation of evacuation and safety plans are being created with the building of any new structures as well as the ones that have been constructed. Manufacturers, buyers and the current government have realized the necessity to monitor and evaluate these programs continuously. Although there is a questionable debate about the scope and limitation of these alliances, the emergence of agencies and companies that overlook these factors have highlighted and accelerated the development of a safe working environment. Direct investments from foreign clients are always in question given our limitations regarding infrastructure, political unrest and lack of skill, energy and security. As Bangladeshi entrepreneurs, we have to strive to reach greater heights of success, which will provide safe EPZs attracting the interest of

foreign investors. The degree of improvement that has occurred and continues is predominantly conducted under the management of local entrepreneurs and should remain as such. If we look at countries like Vietnam or Cambodia, the majority of investors in the RMG industry are from Korea and/or Taiwan. These investors do not share the same responsibilities to increase the growth of the country they are investing in. As Bangladeshis who are investing in their own country, we have a desire to increase the potential of our own national economy. I believe that we can look up to Hong Kong as a model for structured management. They have a balance of managerial philosophy, working procedures and working culture. We need to emulate this process with the management structures and and monitoring procedures in order to attain higher productivity. Finally I would like to address the necessity to ensure that workers are being compensated for their work in a fair manner. If workers are content, productivity will directly increase. The industrialists should always remember that their workers are human beings who require support and monetary benefit. www.icebusinesstimes.net

Vision Statement

50 billion by the 50th year Anwar-ul-Alam Chowdhury Chairman, Evince Group

Anwar-ul-Alam Chowdhury

Anwar-ul-Alam Chowdhury is the Chairman of Evince Group. He is the former president of BGMEA.

by consistently providing profitable production and design quality, We have proven that we are one of the top contenders in the international market of the garment industry.

he world market for the garment industry is $450 billion and it is experiencing a 6% growth on an annual basis. Though China is the largest producer in this sector, Bangladesh has to compete with Myanmar, Cambodia and Kenya as an emerging potential for this business. If we start improving our human resources, we can reach optimal profitability with the help of the government. We have proven that we are one of the top contenders in the international market of

the garment industry by consistently providing profitable production and design quality. The succeeding step is to improve our image within the international platform. We must demonstrate that we are a progressive nation capable of bringing prosperity to our people. The government is now generating 1,400 Megawatts of electricity but the demand for energy is continuously increasing. On top of that, we do not have a concrete energy policy or reliable alternative source of energy. Contrary to popular belief, labor is not the cheapest component of our industry, it is gas. Unfortunately gas is becoming a dire resource and alternatives such as electricity are not feasible in terms of cost. In this respect, coal becomes the cheapest source to generate power and coal-based power plants have already become a matter of concerns due to environmental impacts. Though we have a large supply of manpower, it is lacking in educated professionals, who possess the technical and professional skills to oversee the operations of a garment factory. The requirement in the number of garment workers has increased from 300 to 1500 or 2000 workers

per garment factory. With this change, there is a greater requirement for CEOs, CFOs, HRMs, etc. The government, educational sectors and institutions must work together to alleviate these lackings in the future. The fact of the matter remains that we were the first generation of entrepreneurs in this market and there is much we must learn and assimilate in order to compete with the growing demands of international market. The third generation that is currently taking regulatory positions in the industry must recognize the limitations of the previous generation in order to progress further. The market is drastically changing with the incorporation of newer technologies and globalization and these entrepreneurs must keep that in mind as they attempt to increase the growth and potential of the industry.

The market is drastically changing with the incorporation of newer technologies and globalization .

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Vision Statement

Knitting the Standards A H Aslam Sunny Managing Director, CRONY group

A H Aslam Sunny is the Managing Director of CRONY group and eight of its sister concern companies. He has served as the Vice President of Bangladesh Knitwear Manufacturers & Exporters Association (BKMEA) and the Senior Vice President of the Bangladesh Volleyball Federation. Sunny has received a number of accolades, which include the Banking Award, SSE Award and the Gold Award for â&#x20AC;&#x153;Inclusive Skill Developmentâ&#x20AC;? from GIZ, Bangladesh.

nitting is an integral part of the RMG and overall exports of Bangladesh. During the FY 2014-25, the Bangladesh Knitting Industry (BKI) comprised of 48.75% share in the RMG export. We are confident that with market diversification activities, the innovative approaches of the BKMEA and policy support and financial assistance from the government, we can surpass the Woven Garment Industry. The Knitting industry could always meet the standards of the Rules of Origin (ROR) set by the World Trade Organization (WTO). Following the WTO 10th Ministerial Conference, we have decided that we must expand our reaches to the Plurilateral Free Trade Agreements, which comprises of 12 countries who hold 40% of the World GDP.

Bangladesh is currently holding the 2nd position in the world Knitwear Market. Though China has led this market for a long period of time, countries such as India, Vietnam and Turkey are strong competitors. Indiaâ&#x20AC;&#x2122;s strengths lie in the consistent cotton production within their country and backward linked factories functioning in a productive manner. Turkey has captured many of the retails brands in the Middle East as a result of well-rooted plans and proper execution. An independent medium size RMG firm can design 50- 150 products on a daily basis in Turkey. There are also potential countries where RMG is rising such as Sri Lanka and Myanmar. We have conducted extensive research and according to the BKMEA studies, Bangladesh must expand the industry to retail branding in the near future; they will not be able to cope with the transformations that the world RMG market is going through or meet the standards of Sustainable Development Goal initiated by the United Nations. Unfortunately the industry could not reach the targeted growth for the last FY 2014-15 due to some situations of de-facto and de-jure. Our biggest markets are the EU and the United States of America, with a respective growth rate of 1.9% and 9.96%. We have only experienced an overall growth of 4.11% because we are mostly associated with traditional markets. This is an indication that we must explore our emerging markets especially Commonwealth Independent States (CIS) and Gulf Cooperation Council (GCC). Australia is an emerging market for the BKMEA sector and according to our research, it has grown 23.88% during the FY 2014-15. Australia currently

has an embargo on airfreight from Bangladesh; we are hampering the export business of Bangladesh by not taking measures to rectify this issue. We are attempting to enhance the efficiency of the entire force from the factory level workers to the managerial bodies with the implementation of the Skills for Employment Investment Programs (SEIP). This initiative has drastically improved the capacity and quality over the past two years. Moreover, the Instituteof Applied Research & Technology (IART), which was established by BKMEA, is working in cooperation with Productivity Improvement Cell and Social Compliance Cell to further enhance productivity and ensure safety within the workplace. The industry has made significant progress, but the time has come for more refined designing institutes that can comply to the diverse demands of fashion.

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Vision Statement

Greater Female Representation is Essential Vidiya Amrit Khan Director, Desh Garments Ltd. Former Director, BGMEA

Vidiya Amrit Khan completed her LLB honors (Bachelors of Law) from Kingâ&#x20AC;&#x2122;s College London, University of London LLB and Postgraduates in Professional Legal Skills from Inns of Court School Law. She is current the on the Board of Advisor for the Alliance for Bangladesh Worker Safety, the Treasurer of Switzerland Bangladesh Chamber of Commerce and Industry and the Director of Desh Group of Companies and Desh Garments Limited. She served as the Director of Bangladesh Garments Manufacturers and Export Associations (BGMEA).

''Here is to strong women. May we know them. May we be them. May we raise them.'' ~ Unknown

he Ready Made Garment (RMG) industry employs 4.5 million women, making up for nearly 90% of the workforce of the sector. Without their skills and aptitude for work hard, it would be fair to say that the RMG sector would possibly not be where it is today. After all, although deemed physically weaker than men, women are far more patient, resilient and adaptable to varying environments, though often labeled otherwise. The Late M. Noorul Quader, the pioneer of the 100% RMG industry, saw the strength in these women. He noticed how the women from the villages, were sewing away and making the 'kathas', making clothes for their children, husbands and fathers, complete their domestic requirements and out in the fields. He felt that the women of Bengal were no less than our men. He felt as though it was his duty to empower them. Hence, Quader, amongst some controversy and some

curiosity, choose to empower the women of Bangladesh. In 1978, Quader sent a 130 people to Daewoo's state-of-the-art technology in Pusan, South Korea to be trained in the technical and marketing expertise for garments manufacturing and exporting. This was the very first time that women (18 out of the 130) were sent abroad to receive any industrial training of its sort. And so began the brave journey of these silent women who woke up at dawn, set their homes straight and left for work, some with the support of their families and some without. Unfortunately, in all these years, this majority of women representation is mostly limited to the factory workers, and not so much reflected in the mid management or top management level. Not in the way that we would have wanted it to be after 37 long years of very intensive labor. Today, women in Bangladesh have reached heights that are often not even existent in the first world. Our Honorable Prime Minister is a woman, the Leader of the Opposition is a woman, as is the Speaker of the House followed by Ministers, Members of Parliament, Country Managers of leading MNCs are women, there are judges who are women and so many successful, enlightening entrepreneurs who are all highly educated and efficient women. They have all set standards of leadership for us. Yet, relatively speaking, there are not many women who are leading the RMG industry or holding positions as we go up the work place rankings or even positions in trade body associations, labor unions and the like. To achieve this, the women who are working to make a name for themselves in the business community need to raise their

voices and be heard. The few of us should no longer be used to create an impression of gender equality or that society is giving the female workers equal right. Because at the end of the day, how many women are their in the RMG factories who are line supervisors, department heads or factory managers? When what we have done today is only make a valuable contribution to the forward movement of our economy. Not to mention, the younger generation of women who are entering the corporate world today are extremely bright and it is high time they get the right recognition also. The Rana Plaza incident in 2013 served as a wakeup call for all the entrepreneurs as the whole worldâ&#x20AC;&#x2122;s focus shifted towards us. We have recovered from that phase and now we are doing well once again. We must now focus our attention towards the betterment of our exports so we can continue to do better than our neighbors, like Vietnam, Laos, Cambodia and Myanmar and even China, when it comes to environmental compliance and workersâ&#x20AC;&#x2122; safety. My father set up a garment factory with Koreans in 1978. He made a platform; unfortunately didnâ&#x20AC;&#x2122;t live long enough to lead the revolution that is happening. He not only imported the know-how of industrial scale garment manufacturing but also formulated the instrument of the Back-to-Back Letter of Credit and bonded warehousing system at the factory level. There were training facilities, childcare systems, workers benefits in his factory at that time, which was beyond the imagination for many. Since then, although there has been a lot of progress on the one hand, the majority haven't really been able to move away from the high volume, low value added www.icebusinesstimes.net

product line. We need to grow much further and catch on much quicker. Ask the right questions. Why is China more efficient and productive than us? How is India adding value to its products? Why haven't designing sections become common fold in the majority of factories by now? We need to analyze the whole paradigm. We will have to aim much higher and go up the value chain so that we can free ourselves from this vicious circle whereby we leave ourselves with very little bargaining power in front of our buyers. This entire step will allow us to have more skilled operators who are better trained and required to apply their intelligence further, as opposed to sitting behind a sewing machine. When various training seminars take place and skill development sessions are held, we must be more specific in selecting women for the more challenging methods or technical trainings. Side by side with operational skills, we must also educate them and teach them skills, which are otherwise biased towards the men. Why are we not training more and more women to become mid management level executives or work and time study officers or quality assurance managers? At the end of the day, itâ&#x20AC;&#x2122;s the same amount of physical endurance that is needed to work in a factory for 10 hours. During a seminar organized at Harvard University, I was invited by the organizers to be on a panel to speak about gender equality and female workersâ&#x20AC;&#x2122; rights. They invited me, as I was a female entrepreneur who was in charge of running our family business. I decided to do that when I was 28 years of age and still continue to follow my dream.

At the same time, I was then also an elected Director of the BGMEA. Nazma Akter, a very well known trade union leader from Bangladesh, was present at the seminar as well. We were representing female workers and their concerns relating to issues like lactating mothers, women's sanitation, work place abuse, and having a male union leader representing them at the work place. Unfortunately, these millions of women were only to be sandwiched between a male labor union leader, a male factory manager, a male line supervisor and a male owner, in what is a predominantly male dominated society. After all this time, and all our sincerity and hard work, did we not deserve positions right at the top? Why was it acceptable to have a women working for 10 hours behind a sewing machine but not a woman taking the lead to manage the lines in a factory? The current BGMEA Board of Directors was formed based on a selection process and ironically, not a single woman was 'selected' to grace the position of a Director to represent the women in the industry. Even in the parliament, our Honorable Prime Minister has reserved seats for women. A sector that employs more than 4 million female workers doesnâ&#x20AC;&#x2122;t have a single woman in the apex body that decides the fate of their lives, their benefits and the policies that would give them the platform to become real empowered women in society. After all, these are the same women who are often the single income earners in their families. We need female representatives, who understand the need of female workers, to bring forth the issues of health and safety. Therefore, I have one humble request to all concerned parties.

When various training seminars take place and skill development sessions are held, we must be more specific in selecting women for the more challenging methods or technical trainings. When you talk about women's participation, training, women workers rights and gender equality, let it not be to tick a few boxes of keeping our conscience clear. The discussion should focus empowering the workingwomen of today so that they can, in turn, build a society, which will then, welcome and respect their daughters and those very strong women thereafter.

Word of Mouth Bangladesh Monetary Policy

Domestic demand is the new engine for achieving our growth target According to the Bangladesh Bank Governor, Dr. Atiur Rahman, Bangladesh has always been reliant on its exports to serve as an engine to help drive our growth but now our domestic demand will also help us in attaining our growth target. He revealed this while unveiling the new Monetary Policy for the January-June period of the current fiscal year at a press conference at the Central Bank Headquarters on 14th January 2016. Deputy Governor, SK Sur Chowdhury answered queries and Chief Economist, Dr. Biru Paksha Paul moderated the session. The Governor went on to speak about economic indicators pointing towards a solid growth momentum in FY 2016 where exports are picking up despite a challenging external environment. The import of capital machineries grew robustly in recent months and the private sector growth rose, from 13.2% during the last MPS in June to 13.7% in November. This was supplemented by strong private sector external borrowings. Interest rates have declined with spreads now at less than 5%. He also made a forecast of 6.8-6.9% growth rate in FY 2016 and an inflation at 6.1% in June 2016. He was hopeful that with continued political stability, growth rate could be 7%. In the new monetary policy statement, rate of repo and reverse repo was lowered by 50 basis points with immediate effect. Now the interest rate on repurchase agreement (repo) came down to 6.75% from 7.25%, while the reverse repo rate was re-fixed at 4.75% from the existing level of 5.25%. Repo rate is the rate at which the central bank of a country lends money to commercial banks in the event of any shortfall of funds while the reverse repo rate is the rate at which the central bank borrows money from commercial banks within the country. Dr. Atiur Rahman also spoke of the Bangladesh Bank’s initiative to make the bond market more accessible to domestic, foreign and NRB investors. This was to be achieved by upgrading the market infrastructure and diversifying the domestic investor base. In this context, he added that developing pension funds and the insurance industry would be important for mobilizing long term funds. The upcoming IFC Taka bond will provide more resources for investment and a benchmark for currency risk, which will aid local currency bonds. The Governor mentioned that the Bangladesh Bank will provide a $200 million transformation fund to support Green Transition in the export oriented textiles and leather industries, supplemented by another $300 million from the World Bank. With that, the export development fund has now reached $2 billion. Deputy Governor, SK Sur Chowdhury spoke about creating

conduits for financial inclusion and spaces for SMEs and MSMEs to develop. He also highlighted the creation of spaces for the empowerment of women. He explained that capital flight is still a serious issue and needs to be handled cautiously with the help and coordination of different agencies.

Recognition

Dharitri bangladesh recognizes social achievers

Dharitri (Earth) Bangladesh, a research organization based in Dhaka recently honored eight prominent personalities of the country in eight different categories by counting their contributions for the country, the society and its people. The categories are as follows: Environment, Serving Humanity, Education, Culture, Agriculture, Peace, Fine Arts and Special. The program was held at the National Museum auditorium at Shahbag. The recipients are as follows: i) In Environment, Dr. Atiur Rahman ii) In Humanitarian Services, Dr. Samanta Lal Sen iii) In Education, Dr. Farzana Islam iv) In Culture, Tapan Mahmud v) In Agriculture, Zir Kumar Shau vi) In Peace, Ajoy Roy vii) For Fine Arts, Rafiqun Nabi and vii) In Special Category, Masud Ahmed. Dharitri recognized the contribution of Dr. Atiur Rahman for introducing environment friendly Banking, and for his unyielding patriotism and his unending love and affection for the nature. In his written speech Dr. Atiur Rahamn said, “I was trying hard for a policy to introduce environment friendly sustainable methods and to create a Green Transformation funded through our reserves.” AFM Asaduzzaman received the award on behalf of the central bank governor.

Word of Mouth Banking Corner

Bank Asia organized a School Banking & Financial Literacy event to create savings attitude among students by involving them in modern banking services

Dr. Atiur Rahman inaugrating the Agent Banking activities of NRBC Bank

SK Sur receiving an award for his contribution in agriculture and banking from Integrated Crops Management (ICM) Farmers' Club of Rangpur

Dhaka Bank holds Annual Managersâ&#x20AC;&#x2122; Conference 2016

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Bangladesh Bank Governor Dr. Atiur Rahman with distinguished bankers after receiving the bdjobs.com's Best Employer award 2014

Dr. Atiur Rahman at the Green Finance for Susutainable Development Conference organized by Bangladesh Solar and Renewable Energy Association

â&#x20AC;&#x153;Business Conference-2016â&#x20AC;? was held at Modhumoti Bank Limited

The 8th International Exhibition on complete Pharma Manufacturing took place in the city from 28th to 30th January 2016

The 13th Dhaka Interntional Textile & Garment Machinery Exhibition took place from 28th to 31st January

Southeast Bank Limited donated Tk 25 Lac for installation of CCTV Cameras primarily at Gulshan, Banani, Niketon and Baridhara Residential and the Diplomatic Zone of Dhaka city to ensure greater safety and security

Mohammed Mahtabur Rahman, Vice Chairman of NRB Bank Limited recognized as Commercially Important Persons (CIP) by the government for his outstanding contribution to the economy. Nurul Islam, Honorable Expatriatesâ&#x20AC;&#x2122; Welfare Minister, handed over CIP Cards along with the certificate at a function in the cityâ&#x20AC;&#x2122;s Probashi Kalyan Bhaban

Fashionable Progress

Fashion Industry Know Hows

By Ashok Kumar Das

Fashion plays a very important role in improving the economy of a nation and helps in changing the society by providing a transitional stage from one custom to another. Nowadays, people of all ages desire to wear fashionable items because the price ranges of those items have become affordable. Today, with sustained economic growth, rising educational attainments and per-capita incomes, growing exposure to global trends concerning what is â&#x20AC;&#x2DC;fashionableâ&#x20AC;&#x2122; and the effects of mass-media, the demand for all modes of fashion is growing quite strongly.

THE FASHION SECTOR FROM AN INTERNATIONAL AND NATIONAL PERSPECTIVE

BANGLADESH'S FASHION DESIGN IN INTERNATIONAL MARKET

The fashion industry is an exciting, fast paced and demanding sectors which attracts thousands of prospective employees each year to a spectrum of roles. Although western fashion is now popular around the world, Asian countries have developed their own style and fashion trends. As a developing Asian country, Bangladesh is practicing and adopting fashionable products day by day. We have a hundred years of glorious culture and heritage. We have many social and religious festivals all the year round. Eid festivals, Pohela Baishakh, summer and winter come with its own trends every year. It helps the numerous fashion houses in Bangladeshto grow.

In Bangladesh, fashion houses that use local fabrics and traditional concepts of design have already been operating for over four decades now. Bangladesh is proud to have a variety of handmade crafts like Jamdani, Rajshahi silk, Reshmi silk. Perhaps, the most famous yarn from this part of the subcontinent is Dhaka Muslin, a superfine silk yarn embellished with intricate hand embroidery. Most of the designers of Bangladesh run their own boutiques and produce not only for a local clientele but have participated in various international fashion events. But the fashion design of Bangladesh is struggling to strengthen its position in the international market.

FASHION HOUSES IN BANGLADESH Industrial revolution enhances the opportunities to grow many clothing industries and fashion houses. The modern industry, fashion houses run by individual designers, started during the 19th century with Charles Frederick Worth, the first designer to have a label sewn into the garments. In Bangladesh Bibi Rusell is often considered as the pioneer of fashion industries. During the late 1990s, she started emerging the fashion industries in Bangladesh, bringing renaissance to fashion industrial growth in the country. It was her ideas to bring the nation together and promote the fashion retailing emerge in the country. Aarong, Kaykraft, Yellow, Anjan, Vasavi, Mantra, Shoppers, World, Rang,

Zara, Richman, Lubnan, Tendz, Sada Kalo, Ecstasy, Smartex, Menz club, Ahang fashion, Doors, Fit Elegance, Nabila fashion, Bibiana, Banglar Mela are the leading fashion houses of Bangladesh. Brands like Yellow, Richman, Trendz, Ecstasy, Menz Club are following western styles and have attracted a good number of crowds. In spite of giving priority to western fashion, they do not neglect Bangladeshi traditional dresses. On the other hand, many fashion houses mainly depend on Bangladeshi traditional dresses. Among them Anjans, Banglar Mela, Aarong are the mentionable fashion houses. These fashion houses give priority to handloom and handicraft products. Deshi Dosh, a purely deshi and attractive name has managed to unite together under one roof a

Technology, Bangladesh University of Textiles (Fashion Department), Shanto-Mariam University of Creative Technology, College of Fashion Technology and Management and etc.

SOME FIGURES ON THIS SECTOR

Q total of ten local fashion houses with the common goal of promoting the culture, colors and the clothes of Bangladesh in front of its own people or the entire world for that matter. All these brands have succeeded to a great extent in making people passionate about homegrown products that contain the flavor of local cultures and also provides a wide variety of designs.

SCHOOLS TO MAKE DESIGNERS There are a number of well-known specialized art schools and design schools in Bangladesh from where a significant number of designers come from every year. They play an important factor in helping this sector floruish. The most notable design schools in Bangladesh include: BGMEA University of Fashion and

In total, 16 clusters have been identified in this sector, which are located in 10 different districts in Bangladesh. It is claimed that there are at least 4900 fashion houses of varying sizes, employing 5 million people where women's participation is 70%. Approximately 90% of these are proprietorship businesses. According to Fashion Entrepreneurs’ Association of Bangladesh [FEAB] information source, around 1 million handloom weavers are directly engaged in the fashion industry, whereas around 2 million people from other sectors are indirectly dependent on this sector. This industry produces Tk. 29 billion worth of value added and accounts for approx. 2% of the export receipts of Bangladesh. Gross value of output per establishment is Tk 194 Lac; Total turnover is around Tk 6000 Crore. The average number of machineries in use per firm is 18.09. Unit replacement cost per machine type is Tk 5.08 Lac. The total replacement cost of core machinery per firm is Tk 91.97 Lac. The average value of fixed assets per establishments is approx. Tk 1 crore. The average number of employees per firm is 133 (including contractual workers). 40% of the enterprise operate within their own land and rest in rented premeses. The average bank loan size

required for financing their activities is Tk 1.51 million. Equity/Retained Earnings and debt at the start-up are Tk 30.86 Lac and Tk 1.39 Lac, respectively. The equity - debt ratio at start-up is 96% vs 4%. 88% of this sector for Medium, Small and Micro (Employee number less than 100) level business. At the start-up, this industry was fiercely reliant on equity as opposed to debt, garnering almost all the capital used during the start-up year from owner resources. (Source: BDRL research and SMEF survey of six sectors)

CHALLENGES AND PROSPECTS The industry insiders have argued that without any direct government patronization so far, a ‘silent revolution’ has been created in the fashion industry of the country by the passionate entrepreneurs of the traditional fashion houses. The leading trade associations in this sector like Banglacraft, FEAB, BWCCI, CWCCI have pointed out the following specific challenges which are faced by the entrepreneurs in this sector: - There is no policy or guidance set at the national level pertaining to this industry. Even, there is no particular department or administrative unit of the government to advocate and support this industry. - Lack of special and differential treatment in terms of accessing finance from the formal lenders. - Threats from the invasion of Indian and Pakistani made clothing and textiles. Moreover, local producers have to pay 5% VAT, while the import duty of the same products is

4%. Consequently, the local fashion houses face fierce competitions from imported products that can be charged at relatively lower prices. - The lack of quality fabrics is also a challenge for the fashion industry. - Overcoming problems due to political unrest. Along with the gradual growth in the past, this industry sees a bright future ahead as more people are intending to use homegrown products in the recent years. Thus, traditional fashion is gaining increased attention from the people of the country. The size of the local market with more than 160 million people creates opportunities for the industry to grow faster in the near future. As such, specific promotion policies pursued for the benefit of the industry should be devised by the government. Providing financing incentives along with more relaxed interest rates and hassle-free VAT systems are considered by the associations in the fashion industry as the subsequent urgent need to accelerate the growth of the industry. The writer is working as the Head of Research, Training and Compliance in The Bangladesh Rating Agency Ltd. (Subsidiary of Dun & Bradstreets). The article is the opinion of the writer and does not reflect the viewpoint of this magazine.

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Interview Apparel Industry

Md. Fazlul Hoque

Vice President, BTMA

Bangladesh has been growing as a textile hub and we are now the second largest operator in the global RMG sector. However, we are still encountering numerous challenges as we try to mitigate the ever-growing demand. What is your opinion regarding this matter? Although this industry is one of the largest in Bangladesh and is still expanding, it faces many challenges. These include inadequate infrastructure, shortages in skilled labor and gas supplies, unstable international cotton prices, erratic supplier behavior, inadequate incentives for expansion, gas price hikes, payment delay by banks on the maturity of bills, stable electricity supplies, political instability and bureaucratic tardiness. Transportation through highways is a very important factor in the textile industry given that the raw materials are predominantly transported from the factory to the port. There is a necessity for highways to be widened and free of traffic queues for ideal transportation. An uninterrupted gas and electricity supply needs to be

provided in order to secure uninterrupted functionality and continuous production. If the government provides these provisions, it will increase profits and indirectly help fulfill the governmentâ&#x20AC;&#x2122;s vision for 2020. All political parties should have positive attitude, acting rationally in order to achieve economic growth and increased investment can be nurtured and encouraged. The textile industry is not receiving the sufficient investment due to both external and internal problems, which restrict new investments. The unpredictable internal conditions of Bangladesh cause a rapid decrease of foreign investments in all industries especially the textile. The government should create regulations to control this situation.

Md. Fazlul Hoque

The largest industry in Bangladesh still faces many challenges

Md. Fazlul Hoque is the founder of Ahmed Group and the Vice President of Bangladesh Textile Mills Association (BTMA). He passed his HSC from Notre Dame College, Dhaka and completed his Graduation from Dhaka University. In 2001, he became an entrepreneur by establishing a garments manufacturing company named Sajib Fashion Wear Ltd. after which he slowly expanded his businesses. Presently, Ahmed Group comprises of four companies under the direct supervision of Hoque. As a Vice President of the BTMA, Hoque attends many workshops, seminars, trade fairs within the country and abroad, organized by commerce ministries, federation of chambers, trade development association, etc.

Due to infrastructural issues and soaring land prices, textiles and spinning industries are suffering. How do you think this problem can be alleviated? Entrepreneurs emphasize the necessity to set up and improve industry infrastructural development as a mandatory requirement. The infrastructure situation in Bangladesh is one of the most underdeveloped in the world; it impedes the economic growth of the country. The Government is planning to set up 100 Economic zones to attract new investment. However, this is being delayed because the government cannot ensure uninterrupted electricity and gas in these areas. In addition, the rising price of land and lack of infrastructural facilities further discourage textile industry owners from setting up new industries in the country.

Are the raw materials, such as cotton, that you are importing from India and other countries adequate enough to help you meet the demand? Bangladesh is the third largest cotton consumer in the world. Last year alone, our textile mills imported approximately 5.5 million bales of cotton from India, Uzbekistan, Pakistan, USA, China, and Africa; 60% of our cotton is export from India. Unfortunately, there are impositions of unethical prohibits on these exports without prior notice. If our textile mills utilized 100% of their capacity, the material requirement for raw cotton would be around 10.50 million bales (480 lbs. per bale)

To be able to employ skilled workers and efficient manpower in this sector, what measures have you taken and what initiatives do you expect from the government? Despite the large number of workers available in the

The cost of production rises directly with the continuous increase in the price of gas. This creates the problem for the local textile industry to compete in the international market.

workforce, there is a shortage of skilled manpower in the textile industry, especially textile engineers and technical personnel. We hope that the government will take steps to meet this demand by introducing government regulated Undergraduate (B.Sc.) and Graduate (M.Sc.) courses with a practical base in both public and private universities. In this context, BTMA is operating a textile-based institute, NITER, under Dhaka University. It runs an undergraduate course on textile engineering with 600 students currently enrolled.

What sort of fiscal allocation are you expecting from the government?

profiting from a 4% cash incentive due to the import of cotton; a rate, which was 5% in the last fiscal year. We are expecting the government to reset this to the 5% rate through which the industry will be additionally relieved. The cost of production rises directly with the continuous increase in the price of gas. This creates the problem for the local textile industry to compete in the international market. Therefore, we anticipate that the government will reconsider this case. Furthermore, the increased interest rates of the bankâ&#x20AC;&#x2122;s financing cost will have a prominent effect. We are expecting the government to reduce the bankâ&#x20AC;&#x2122;s interest to the single digits again.

Spinning mills are currently www.icebusinesstimes.net

Special Report Bangladesh-Canada Bilateral Trade

Exploring the Possible Impact of Bangladesh’s Graduation from an LDC

Over the last decade, the growing bilateral trade with major developed and developing countries, including Canada, has significantly contributed to the development of Bangladesh. With a GDP growth rate of 6%+ over the decade, Bangladesh’s per capita income has reached US$1,054, which has helped reduce the poverty levels during the same period. As a result, Bangladesh has nearly reached the minimum threshold level for becoming a lower middle-income country. Since other major economic indicators (such as economic vulnerability and human resource related

By Dr. Khondaker G Moazzem & Kishore Kumer Basak Dr. Khondaker G Moazzem is the Additional Research Director and Kishore Kumer Basak is the Senior Research Associate of the Centre for Policy Dialogue (CPD). The paper was presented in a seminar organized by Bangladesh-Canada Chamber of Commerce and Industry in 2014. IBT is printing with permission from the authors. For further queries, please contact: Dr Khondaker G Moazzem at moazzemcpd@gmail.com.

indicators) are improving Bangladesh’s graduation from LDC to a developing country would be possible in the near future. Graduation from an LDC to a developing country not only raises country’s pride but it bears costs as well. Canada’s preferential market access provided to LDCs would no longer be valid for Bangladesh as the country graduates from the LDC category, which would bring changes in Bangladesh’s trade relationship with Canada.

CANADA’S POSITION IN BANGLADESH’S INTERNATIONAL TRADE Bangladesh’s international trade has made significant progress during the last decade - from US$13.9 billion in 2002 to US$43.9 billion in 2010. During this

period, Canada has emerged as a major trading partner and has become the seventh largest export destination for Bangladesh (3.7% of Bangladesh’s total export in FY2014). Import from Canada has also increased which made it Bangladesh’s 18th largest source (with 1.9% of Bangladesh’s total import in FY2011). From the perspective of Canada, Bangladesh is yet to emerge as an important source of Canada’s import. Out of Canada’s total import of US$461.8 billion, Bangladesh’s share was only 0.25% during 2013. Bangladesh’s export to Canada has significantly improved in the 2000s particularly because of the Generalized Scheme of Preference (GSP) facility for LDCs (Table 1). In fact, the Canadian GSP is often ‘referred’ as most favorable for the promotion of LDCs’

ANALYSIS OF CANADA’S TARIFF STRUCTURE

Although Bangladesh’s overall export has accelerated in the Canadian market it was not diversified rather concentrated to a limited number of products (Table1). Apparels are accounted for about 90 per cent of Bangladesh’s export to the Canadian market. The export basket has been concentrated with fewer items over the years.

Import has significantly increased during the last decade as well; however, this rise has little relation with the rise in export (Table 2). Between 2002 and 2013, import has

increased from US$44.5 million to US$ 642.1 million because of Canada’s growing importance to Bangladesh as a major source for some products.

Table 1: Bangladesh’s export to Canada (‘000 $) HS Product code (at 2 digit) TOTAL '62 '61 '63 '65 '64 '03 '94 '66 '69 '53 '95 '30 '48 '39 '19 '07 '42 '16 '57 '56

Product label

All products Articles of apparel, accessories, not knit or crochet Articles of apparel, accessories, knit or crochet Other made textile articles, sets, worn clothing etc Headgear and parts thereof Footwear, gaiters and the like, parts thereof Fish, crustaceans, molluscs, aquatic invertebrates nes Furniture, lighting, signs, prefabricated buildings Umbrellas, walking-sticks, seat-sticks, whips, etc Ceramic products Vegetable textile �ibres nes, paper yarn, woven fabric Toys, games, sports requisites Pharmaceutical products Paper and paperboard, articles of pulp, paper and board Plastics and articles thereof Cereal, �lour, starch, milk preparations and products Edible vegetables and certain roots and tubers Articles of leather, animal gut, harness, travel goods Meat, �ish and seafood food preparations nes Carpets and other textile �loor coverings Wadding, felt, nonwovens, yarns, twine, cordage, etc

Value in 2007

Value in 2010

Value in 2013

507140 218551 223688 40744 7271 1756 3246 558 0 1883 2103 613 0 31

813254 353527 366868 59792 10246 2392 7421 1853 497 595 1094 403 0 66

1156251 555048 477883 70768 16289 8738 7513 4937 3819 1372 1109 1079 979 948

2836 324 557 63 703 202 236

2703 373 644 207 1100 481 756

836 648 585 555 554 532 262

Average yearly growth (CAGR) (%) 14.7 16.8 13.5 9.6 14.4 30.7 15.0 43.8 --5.1 -10.1 9.9 -76.8 -18.4 12.2 0.8 43.7 -3.9 17.5 1.8

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Source: Trademap database

export because of having flexible rules of origin (RoO) with only 25% of local value addition. Before the introduction of this GSP scheme, Bangladesh’s total export to Canada was less than US$100 million throughout the 1990s (only 125.7 million in 2001 which was only 1.9 per cent of Bangladesh’s total trade). With the support of preferential market access Bangladesh has been able to increase its export over to US$1.0 billion within a decade (US$1.3 billion in 2013 with a market share of 3.7 per cent of total export in FY0215).

Canada’s import tariff structure has evolved over the year in pursuant with its national demand. As a result, the average Most Favored Nation (MFN) applied rates varies from as low as 0% (for cotton) to as high as 248.9% (for dairy products) (Table 3). Clothing which is Bangladesh’s major export product to Canada faces a tariff of 16.5%. Since Canada provides duty-free market access under different agreements and arrangements to the developed and developing countries including LDCs, a large share of imported products enjoy zero duty. The highest share of products imported under zero duty is cotton (100%) followed by petroleum (98.0%), non-electrical machinery (95.8%) and minerals and metals (86.9%). This indicates that

Source: Trademap database

Table 2: Bangladesh’s import from Canada (‘000 $) Product code

Product label

TOTAL '10 '07 '72 '12 '90 '88 '84 '47 '85 '44 '99 '48 '39 '32 '38 '86 '34 '63 '94 '23

All products Cereals Edible vegetables and certain roots and tubers Iron and steel Oil seed, oleagic fruits, grain, seed, fruit, etc, nes Optical, photo, technical, medical, etc apparatus Aircraft, spacecraft, and parts thereof Machinery, nuclear reactors, boilers, etc Pulp of wood, �ibrous cellulosic material, waste etc Electrical, electronic equipment Wood and articles of wood, wood charcoal Commodities not elsewhere speci�ied Paper and paperboard, articles of pulp, paper and board Plastics and articles thereof Tanning, dyeing extracts, tannins, derivs,pigments, etc Miscellaneous chemical products Railway, tramway locomotives, rolling stock, equipment Soaps, lubricants, waxes, candles, modelling pastes Other made textile articles, sets, worn clothing etc Furniture, lighting, signs, prefabricated buildings Residues, wastes of food industry, animal fodder

Bangladesh has yet to develop its competitiveness beyond a limited number of products (mostly apparels) to take the advantage of duty-free market access, which other countries have been doing.

BANGLADESH’S GRADUATION FROM LDCS: POSSIBLE IMPLICATIONS ON ITS EXPORT TO CANADA According to Canada’s GSP scheme for LDCs, countries would not be entitled to the benefits of duty-free market access if it graduates from its LDC status. By becoming a developing country, import from Bangladesh would face the MFN rates, which are applicable for other developing countries. As mentioned earlier, Canada’s MFN tariff rates widely vary from 0% to over 240% depending on the products. Hence, a loss of entitlement of duty-free market access would imply facing the applicable MFN tariff rates. Among Bangladesh’s top

twenty export items to Canada, which comprise about 72% of Bangladesh’s export- sixteen products have MFN tariff rates of 17-18%, one product has tariff rate of 9% and two products have 0%. In other words, Bangladesh is

Value in 2007 344109 139434 82992 19151 58677 1115 206 10914 11947 2266 127 441 945 1825 118 13 1352 5 31 152 7967

Value in 2010 578339 283724 153474 44677 71740 1046 114 6223 2625 1329 831 1743 878 1059 15 49 1900 21 0 25 1

Value in 2013 642052 246168 239950 88981 26911 9548 6105 5812 3785 3738 2632 1853 1205 931 429 415 392 356 333 259 257

Canadian market (Table 4). Bangladesh’s market share comprises between 8% and 22% while China has a market share between 22% and 60%. Other competing countries with a considerable share include India (2% to 9%), Cambodia (2% to 9%), USA (1% to 7%) and Vietnam (2% to 10%). Bangladesh’s competitors include both developed, developing and LDCs a number of them enjoy preferential schemes at different levels.

CAGR (%) 11.0 9.9 19.4 29.2 -12.2 43.0 75.9 -10.0 -17.4 8.7 65.7 27.0 4.1 -10.6 24.0 78.1 -18.6 103.6 48.5 9.3 -43.6

currently enjoying preference margin of 9% of these products over products of non-LDC countries. Analysis of top export products reveals that Bangladesh is the second most important import source after China in the

Table 3: Import Tariﬀs in the Canadian Market (2013) Product groups Animal products Dairy products Fruit, vegetables, plants Coffee, tea Cereals & preparations Oilseeds, fats & oils Sugars and confectionery Beverages & tobacco Cotton Other agricultural products Fish & �ish products Minerals & metals Petroleum Chemicals Wood, paper, etc. Textiles Clothing Leather, footwear, etc. Non-electrical machinery Electrical machinery Transport equipment Manufactures, n.e.s.

Source: WTO

MFN applied duties AVG Dutyfree in % 24.5 66 248.9

3.3

10.4

76.4

4.3

29.4

21.4

3.9 3.9 0.0 2.8 0.9 1.0

36.4

47.9

100

79.2

0.7 1.3 0.5 0.3 1.3 0

0.5 0.6

4.4

2.3

65.5

3.8

0.1

85.6

2.9

16.5

in % 0.8

13.9

82.8

1.0

0.9 0.8

Imports

5.4

10 11

1.6 1.9

0.5

93.2

14.9

2.5

61.2

5.6

1.1 5.8

83.3 41.1

9.4 17

Duty-free

in % 54.2

81.9 69.4 17.8 68.1

6.3

31.9

100

59.4

86.9 98.5 69.7 78.6 28.4

0.2

31.4 95.8 85.7 13.4 73.4

Now, if Bangladesh graduates from its LDC status it has to provide MFN tariff rate. This MFN tariff rate will be higher than that of LDC and non-LDC enjoyed which enjoy preferential tariff. Under the new situation, Bangladesh’s competition in the market would increase where LDCs and other non-LDCs would become more competitive. This would make it difficult for local exporters to maintain their competitiveness. In a dynamic point of view, this would further narrow down exporting countries’ utilization of their export potentials in major markets like Canada. The extent of impact on Bangladesh’s export will depend on what kinds of bilateral trade agreements and arrangements Canada has with Bangladesh’s competing countries. Canada has bilateral free trade agreements with 12 countries/group of countries. It is currently negotiating with 10 countries/group of countries for signing a Free Trade Agreement (FTA). It has recently completed discussions on bilateral FTA

Table 4: Bangladesh’s Major Competing Countries in the Canadian Market and Their Market Share (%) in Selected Set of Products

Exporters

Canada import (000 $)

Source: Trademap database

China Bangladesh India Cambodia Mexico Honduras USA Viet Nam Indonesia

Product: 610910 Tshirts, singlets and other vests, of cotton, knitted

Product: 620462 Womens/g irls trousers and shorts, of cotton, not knitted

Product: 611020 Pullovers, cardigans and similar articles of cotton, knitted

Product: 620520 Mens/bo ys shirts, of cotton, not knitted

540531

503520

594178

21.7

50.4

8.2

7.1

21.6

8.8 7.7 6.2 4.7 4.0

with the EU. A number of Bangladesh’s competing countries either are members of existing FTAs or would become the members. Hence, Bangladesh’s export is likely to face further competition even under its existing LDC status. The competition would be fiercer when Bangladesh will not have LDC status. However, the preference margin would gradually reduce due to slow reduction of MFN rates particularly of manufactured products, which partly reduce the competitive advantage of countries enjoying duty-free market access facility. Overall, Bangladesh’s export to Canada would face adverse competition when it does not have duty-free market access facility. Hence, it would be difficult to maintain the growth within its existing export items.

305203

Product: 611030 Pullovers, cardigans and similar articles of man-made �ibres, knitted 549369

Product: 620193 Mens/boys anoraks and similar articles,of man-made �ibres,not knitted 178119

55.2

39.0

60.7

59.6

9.2

1.9

6.1

Market share (%)

16.1

1.7 3.8 7.4 1.9 1.5

12.3

3.2 1.0 1.7 4.6 3.2

bilateral trade shows that Bangladesh’s export to Canada may face adverse consequences when it is no longer an LDC. This analysis could be an appropriate test case to understand the possible impact of Bangladesh’s graduation from LDC on its bilateral trade with developed and developing countries. Since Bangladesh is likely to be adversely affected while it loses its LDC status, it needs to take precautionary measures and should be prepared. a) Detailed analysis on possible implications on Bangladesh’s export:

19.7

8.3

2.2 5.6

8.5

15.8

4.0

1.1

1.3

3.2

10.1

2.0 5.8 3.6

0.5 3.2

Bangladesh government should undertake a detailed product-wise analysis to appreciate the possible adverse impact on export due to loss of duty-free market access facility in the Canadian market. Such an analysis would help in the understanding of the nature and extent of impact on Bangladesh’s export with a view to set strategies for bilateral trade negotiations. b) Identify the suitable strategies to deal with these issues: With the understanding on the nature and extent of possible impact on bilateral trade, Bangladesh needs to

identify strategies to accommodate the situation. First, Bangladesh should identify a list of products where it needs preferential scheme most, followed by another list of products where the preferential scheme is also important. Second, Bangladesh needs to address these issues with the Canadian government and request for a favorable preferential market access scheme. Third, Bangladesh needs to identify products where MFN rates are zero and would not have any implications in the tariff rates after its graduation from LDCs. Since trade potentials for such products are found to be high, putting an emphasis on enhancing their export capacities would be equally important. c) Finding strategies for enhancing productivity: Bangladesh needs to improve its productivity in order to maintain its competitiveness over other developing countries. Hence, Bangladesh should take sector-specific measures to improve its productivity and efficiency, which will help reduce production costs and make local products competitive in the Canadian market.

BANGLADESH’S PREPAREDNESS WITH REGARD TO GRADUATION FROM LDC STATUS Analysis of Bangladesh-Canada www.icebusinesstimes.net

Special Feature Padma Bridge

Super Growth of the Super Corridor By Asaduzzaman

Bangladesh is at a crucial point in its development story with the potential to attain even higher growth by utilizing three growth corridors: a) Chittagong – Myanmar and Asia; b) the super corridor, Dhaka – Jessore – Khulna – Mongla and lastly, c) Sylhet – Tamabil – India. The growth of the super corridor business hub, which was previously facilitated by rail and river transports since the 19th century, now has the prospect of the Padma Bridge construction using the country’s own resources. The importance of the Mongla Port has already

been noted by both the private and public sectors. This will receive even further attention when the construction work completes in 2018. Silumtaneously, activities of the port will be increased exponentially. Under such circumstances, the port is going to have a much larger role in trade and commerce activities, particularly in the South and South-West part of the country. Bangladesh has now graduated to the Lower Middle-Income country status and by 2021, we expect that it will receive the Middle-Income status. When this happens, the economic super corridor will be the

center of attention with a diversified industrial area supported by a power plant and an airport. The mighty Padma is a transnational river with an ancient history. The areas dissected by this river has been reinvigorated by the work orders to complete the Padma Bridge, leading to a hike in the price of land up to 300% to 500% over the years. This new economic super corridor stretching over two thousand kilometers will have Dhaka positioned centrally with Khulna and Barisal as its arms. With the potential to bring in trillions of dollars of business, the super corridor will be instrumental

in helping our country move into the Middle-Income classification. The construction of the bridge will help provide a road and rail link between developed Southwest region of the country with the more developed Eastern half (which includes the capital, Dhaka and the port city, Chittagong). It is expected to lead to a greater integration of regional markets within the national economy by facilitating transport across the river. Given the interdependence of various economic sectors, the direct impacts of the Padma Bridge on a certain few sectors will most likely induce a chain of changes in the rest of the

sectors and industries across the country. When completed, the bridge is expected to generate welfare for the people of Bangladesh in general and particularly for the citizens of the South Western regions. The benefits are expected to arise from the greater integration of regional markets and the increased economic activity in the area. During the time of its construction, the associated service activities will create greater demand for consumer goods, energy and utility as well as transport services, all of which will have spillover effects in the economy. www.icebusinesstimes.net

OPINION 1

Kazi Aminul Haque, President of the Khulna Chamber of Commerce & Industry

The roads toward Mongla Bandar have to be four lanes otherwise traffic jams will prevent people from being benefited by the Padma Bridge. We also have to continue with the development of the Mongla Port. The Khan Jahan Ali Airport also needs to be completed to lessen the traffic induced pressure, which will fall on the bridgeâ&#x20AC;&#x2122;s shoulders. Ensuring uninterrupted gas supplies will also be key in guaranteeing the unhindered progress of economic activities in the area.

OPINION 2

Rear Admiral Riazuddin Ahmed, Chairman, Mongla Port authority,

The development of the Mongla Port is a continuous process. However, this process has recently been accelerated over

the past five years. For the future growth of Bangladesh, dependency on one port is not safe. During the 2007-2008 period, the growth of the port was really slow as customs facilities, traffic management and banking facilities which are required to attract the right businesses were more or less absent. The government has taken the initiative to bring in the right infrastructural changes in 2009 which leads to more business moving through the port. By 2018, with the construction of the Padma Bridge completed, it will become a dynamic seaport.

When completed, the bridge is expected to generate welfare for the people of Bangladesh in general and particularly for the citizens of the South Western regions.

Feature

Leading Industrialist

Upholding the Legacy Aziz Al Kaiser Tito

Vice Chairman, Partex Star Group

Aziz Al Kaiser Tito

Partex Star Group is a local enterprise with a global outlook. It is truly a world-class business conglomerate with a diverse range of products, services and customers. The Group has a dedicated core management to efficiently lead its operations. With Bangladesh getting increasingly involved in the arena of world trade and commerce, Partex Star Group emphasizes on the need to expand its base, add value to its products and services and be more competitive. It also aims to become more value driven and environmentally compliant.

he operations of Partex Star Group have always contributed to Bangladesh’s growth in industrialization and GDP. With the ultimate responsibility to take the country to new heights relying on organizations belonging to the stature of Partex Star Group, the company has been developing more and more facilities for much bigger industrialization and the introduction of innovative products and service. These ventures have seen the creation of increased job opportunities, taking the nation towards greater prosperity. Partex Star Group is continuously evolving and expanding its business and customer base together with their customers and professional workforces. The Group shall contribute comprehensively building a prosperous future for the nation. When it comes to its workforces, the team is dedicated to creating an enriched customer experience through a top to bottom focus on excellence in execution from the hiring of people to the selection of merchandise, the negotiations with vendors to the design of showroom and the generation of the purchase order to the delivery to customers’ homes. Behind the crowning success of the company, Aziz Al Kaiser played an instrumental role. The successful industrialist with an appreciable acumen and a vision of great proportion represents a new genre of entrepreneurs. Within a short span of time he helped lead the group to a major spell of diversity that contributed to the Group’s surge forward with strong corporate governance. He also contributed towards the implementation of Group’s major investments from grassroots till completion of

The Making of a Successful Brand Partex group started its journey in the 1960s after which there was no looking back. With its commitment to quality, the venture flourished under the dynamic leadership of the Group’s Founder Chairman M.A. Hashem, who was among a very few local entrepreneurs of his time with sheer determination to excel in the business. In 2011, Partex Star Group evolved as a completely separate entity by incorporating the Group’s major companies and industrial units brought together under the new entity - The Partex Star Group entity. Partex Star Group owns two major domains – consumer durables like different types of boards (particle board, veneer board, melamine faced chip board, plywood, PVC sheet) doors, adhesives & furniture to FMCG like dairy products, cookies, spices etc. Besides the Group has stakes in Steel, Cable, Agro, Real Estate, Fashion-wear, Distribution and Logistics. Also, the Group has its presence in service sectors through associate companies that include Banking, Leasing, Insurance and Telecommunications.

the projects and turned Partex into a household name in the country. Kaiser joined his family business after the successful completion of his graduation in business management from London. A caring parentage and an enterprising family upbringing helped him hone his leadership skills and qualities from childhood. Kaiser’s special emphasis was on the Group’s flagship company, Star Particle Board Mills Limited. By virtue of his outstanding leadership, foresight and dedication, the Group launched a new genre of industrial units. He added more value to the group’s surge with more corporate stakes in banking, insurance, shipping and capital market. The key concept working behind this success- More Diversity for More Strength- is aimed at expanding the Partex Industrial base to an epic proportion in respect to the nations yield in industrial development encapsulated almost totally in the private sector. One of the prime examples would be the Danish subsidiaries of Partex Star Group. In this group, Danish Condensed Milk Bangladesh Limited is the most rewarding unit of Partex Star Group. Danish Condensed Milk is the first in the Condensed Milk Industry that started operation

in 1991 and possesses the leading position in the local market. During his stint as the Chairman of The City Bank Limited from January 2007 to till November 2011, Aziz Al Kaiser opened a new chapter in the history of the bank. During his stewardship the Bank, besides complete rebranding of its look and profile, had undergone a massive transformation in the core functional areas like operations, IT, credit and compliance; reinvigorating retail banking, SME, corporate and treasury functions; fostering long term strategic union with American express, introducing AMEX Cards, Amex Cardholders’ Cozy lounge at international airport, Citygem Priority Banking, City Manarah Islamic Banking Window CBL Money Transfer Sdn.Bhd. in Malaysia; expanding ATM network, establishing City Brokerage and City Bank Capital Resources Limited and so on and so forth. He helped in elevating City Bank to newer heights from being a traditional branch–based bank to a fast-growing local bank of international stature. Success brought laurels. The bank received a number of prestigious awards including the Strongest Bank in Bangladesh Award 2010 by Asian Bankers, American

Express GNS Marketing Award and Moneygram International Best Corridor Collaboration South Asia Awards 2011. Beyond business Aziz Al Kaiser takes profound interest in art, culture and sports. He was among the National Team Managers of Bangladesh’s historical Inaugural Test Cricket and lent his dynamic credence with Bangladesh Cricket Board (BCB) in top management capacities like its Adviser, Vice President, Director and Chairman of the Committee for Marketing and Commercial. The passionate sports enthusiast has contributed greatly in convening a number of sports events of national scale. Beside this, he is involved with a number of welfare organizations e.g. Lions Club of Dhaka Oriental, Dhaka Club, Gulshan Club, Uttara Club and Kurmitola Golf Club, He is President of Noakhali Diabetic Association and M.A Hashem Diabetic Hospital. He is also a donor member of M.A Hashem University College. The leading industrialist thus has established himself to be an inspirational figure for entrepreneurs of his time who want to make it big both locally as well as globally.

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Interview Bangla Academy Shamsuzzaman Khan Director General of Bangla Academy

history, the tool of progression Q

Rabinranath Tagore believes that intelligentsia is a mindset. However, there is a schism among our intelligentsia. What is your opinion of this? If we look at the situation in its entirety, intellectuals are playing a partisan role. Political conditions and the rise of terrorism across the globe has ushered such conditions. My observation is that we must work towards a democracy where the government will take praise and constructive criticism into account. We must flourish in an environment where we are allowed to express our differences in opinion.

There is an expectation of a high standard of English from our publication industry, which requires a significant amount of development. Why do you think this development hasnâ&#x20AC;&#x2122;t occurred? There are 400 books published on an annual basis, 120 of which are on par with the required standards. This is because some publishers and editors are acquiring tasks with the incentive of profit. They are not focused on what they must publish and the quality that is being published. The sectors of editing and publishing require a great deal of improvement.

Shamsuzzaman Khan

Expecting these students to contribute in our current economy is an not plausible given that they are receiving inadequate education that will not allow them to obtain basic jobs.

With the rise of English medium schools, is there a rise in competition among schools? There is an increase in competition not only because of the requirement to learn two languages simultaneously. Students must be taught both national and international history and culture. They must also learn to be eloquent in both languages.

We also have a huge number of students in hundred of madrasas. What are your thoughts on their curriculums? Madrasa curriculum needs to be updated to meet contemporary standards. Subjects like maths and science and history should get more importance. These will help students with the knowledge that they need to be on par with those from Bengali and English medium schools. Once upon a time, highly educated scholars used to come out of madrasass, we donâ&#x20AC;&#x2122;t see that anymore. Expecting these students to contribute in our current economy is an not plausible given that they are receiving inadequate education that will not allow them to obtain basic jobs.

What actions need to be taken in order to allow progression to thrive? We must implement a balanced education that incorporates the nurturing of our cultural heritage and teaches the most modern and scientific theories. The education system must nurture human values and cultural minds.

There is a regression of formal language and proper use of the traditional dialect in certain mass media outlets. What is your opinion regarding this? We have published a book regarding proper Bangla grammar as an attempt to standardize the language. This will help create uniformity in spoken languages, making communication and education formal.

What is your message for the younger generation? The trends of education may put an emphasis on modern democracy and technology but you should learn the heritage and history of your nation. Study history, which is a tool of progression.

Cover Story Apparel Industry

Realizing the $50 billion Dream for Bangladesh’s Apparel Sector By Zahedul Amin

Bangladesh’s transition as a lower middle income country has been the cause of jubilation for many. Although a number of factors can be attributed to sustained economic growth, some key sectors had a major role in augmenting this transition. Bangladesh’s apparel sector is one of the major success stories which had its humble beginning in early 1980s. The sector has

since grown by leaps and bounds with ‘Made in Bangladesh’ apparels spreading across the globe. Currently, the sector is exporting $25.4 billion worth of apparel as of FY2014-15, accounting for 81% of country’s export and employing 4.2 million workers. The export growth has been impressive, despite sporadic political turmoil in 2013-14 and early 2015, which signifies

BANGLADESH APPAREL EXPORT (USD M) 30,000

24,491 25,491

25,000

20,000

15,000

17,914 10,699

19,089

21,515

12,347 12,496

10,000

5,000 -

2007-08

2008-09 2009-10

2010-11

2011-12

2012-13 2013-14 2014-15

Source: Export Promotion Bureau

the sector’s resilience and entrepreneurial spirit. Given this spectacular success, industry leaders and policymakers are bullish about the sector’s prospects. However, considering a number of demand-supply variables, the road to progress may hardly be a smooth ride. Bangladesh is currently the third biggest apparel exporter trailing China and India. The closest

competitors are Vietnam and Indonesia. In the recent past, China has been plagued by rising labor costs and recently by economic slowdown. Alongside, their policymakers have consciously adopted a stance of moving up the value chain, catering to high value apparel demands. This resulted in an influx of apparel orders to smaller competitors;

Source: United States International Trade Commission

Inside a factory situated in Dhaka Export Processin Zone

Global Apparel Market Share 40% 35% 30% 25% 20% 15% 10% 5% 0%

34%

5.4%

Bangladesh being a major beneficiary. According to McKinsey studies on Global Apparel market in 2012 and 2015, Chief Procurement Officers (CPOs) of major clothing brands have pinpointed Bangladesh as

5.1%

4.7%

4.5%

3.5%

their top choice as sourcing destinations. With CPOs adopting a ‘China plus one’ policy, Bangladesh’s RMG exports have gathered steam despite two fatal Industry related accidents.

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Inside DBL’s Showroom

Over last three years, several different players have emerged including Myanmar, which returned to the mainstream on the back of recent political reforms. Others are also offering competitive costing with the likes of Cambodia and Vietnam leading the way. The biggest long term threat for Bangladesh are some of the Sub-Saharan African nations with Ethiopia

emerging as the major potential challenger. According to the latest Mckinsey report on the apparel sector published in 2015, Bangladesh still retains the preferred position for apparel sourcing, but is closely followed by Vietnam, India and Myanmar. Ethiopia became the first African country to make it to the list. Sub Saharan countries like Ethiopia enjoy a number of benefits through—preferential trade agreements (GSP to USA and EU), cheap labor

Top Sourcing Destinations, 2015-2020 23% 5% 5% 5% Tunisia

Indonesia

Ethiopia

China

Turkey

Myanmar

India

13% 10%

Sri Lanka

33% 30% 30% 30%

Egypt

48%

Vietnam

China’s economy has slumped with its GDP growth expected to slide below 7% in the coming year. Chinese policymakers have responded by depreciating the RMB to make exports more attractive. The trend is set to continue in 2016. Bangladesh will be directly impacted as Chinese apparels are becoming cheaper. However, since the sector imports RMG accessories and fabric directly from China, Bangladeshi apparel may become more affordable and competitive in the international market. The Chinese are becoming more prosperous with their per capita income crossing $7,000 in 2014. Bangladesh should not only target shifting apparel orders from China, but also look to capitalize on the growing Chinese middle-class.

Emerging Players will Invigorate Competition

Bangladesh

Chinese Economy Edging Towards Maturity

Source: Mckinsey Apparel Sector Report (2015)

(lower than Bangladesh), surplus electricity, cheap land price, preferential investment terms and proximity to EU and USA. In the next decade, countries like Ethiopia can pose a major challenge in the low-value segment of the apparel market. Although Bangladesh is still focused on low value product segment, as cheaper competitors come up, overall supply dynamics will evolve. Bangladesh’s apparel wage rates have been increasing over last couple years and direct costs are expected to rise further. A comparison of the monthly average salaries of apparel workers shows that Bangladesh’s ($68) labor costs are higher compared to that of Ethiopia ($37), but lower than those of Vietnam ($120). As Bangladesh’s labor cost goes up, it will become increasingly difficult to complete in the low-value segment.

Economic Stagnation Stalling Demand Growth for Apparel

EU is Bangladesh’s largest RMG export destination constituting 60% of the total export followed by US market with export of 21%. Bangladesh has recently diversified into emerging export markets including Australia, Brazil, China, Japan and South Africa accounting for 15% of the total export. The EU has been experiencing an economic downturn since the global financial crises in 2008. The economic scenario has further dampened due to Greece’s credit defaults. Recent political rows with Russia and the resulting

105 100 95 90 85 80

Emerging Markets

Canada

USA

Exchange Rate Trend (EURO-BDT)

Source: Exchange Rate Trend between Euro-BDT (FX Exchange)

21%

15%

BANGLADESH’S RMG EXPORT FY 2014 EU 60%

Source: Export Promotion Bureau (EPB)

uncertainty over gas supplies have further contributed to the doldrums. The recent fall in the Euro exchange rate has been due to the slowing down of the regional economy. This has made Bangladeshi apparels more expensive to EU consumers which will result in slower growth. The US, the single largest importer of apparel from Bangladesh, has recently cancelled GSP for Bangladesh’s export citing a number of reasons. Although apparel was never part of GSP, BGMEA had been lobbying hard to get tariff free access for apparel. The recent development may have a major dent in ensuring free access of Bangladeshi apparel.

Inside the factory of Shasha Demin

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Inside the factory of Hameem Demin

Bangladesh needs to Re-align their Long Term Strategy

As Bangladesh faces increased competition from new entrants in lower segments, concrete steps need to be undertaken to fulfill the $50 billion export target. • Move towards higher value products: As it stands, Bangladesh runs the risk of entering a race to the bottom, with both current competitors and new entrants sporting highly competitive wage rates which are close to or even lower than Bangladesh’s average wages in the apparel industries. Moving into higher value products should be an important long-term focus for Bangladesh’s apparel sector. • Align Monetary Policy for currency depreciation: Bangladesh Bank (BB) should look to maintain the currency value and not allow appreciation for the sake of exporters. While the government is already offering export incentives, cheaper currency will also be a major boost. Alongside, cheaper currency might also attract FDIs in apparel sector, specifically from China.

Inside the factory of Shasha Denim

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DBL Group’s Showroom

• Improve Backward Linkage: Most of the raw material for the apparel sector has to be imported from abroad. Although some of the cotton used is sourced locally, for instance, the vast majority of it is sourced abroad, mostly from China. In this regards, manufacturers can consider forward contracting to protect against potential shocks in the global cotton market. Alternatively, manufacturers can explore the option of acquiring lands in Africa to establish cotton plantations in the long run.

• Developing Mid-Tier management: Currently, there is a significant deficit of talented mid-tier managers in the apparel industry. Due to branding issues and low pay compared to other industries such as banks and FMCG, most fresh graduates are reluctant to enter the apparel sector. RMG leaders and the government must work hand in hand to increase the appeal of the apparel industry as a place of employment. • Diplomatic Overtures: The Government must aggressively pursue economic diplomacy by mending and

The biggest long term threat for Bangladesh are some of the Sub-Saharan African nations with Ethiopia emerging as the major potential challenger. strengthening relationship with top importers including US and EU countries. Also, concrete steps need to be taken to develop markets in emerging apparel markets like Japan, Turkey, Brazil, Australia and Canada. In their 2012 report, Mckinsey had projected that Bangladesh’s apparel sector export will grow to $42 Billion in 2021. Local industry leaders have earmarked a $50 Billion RMG export target within 2021. All of this will become an impossible dream if we fail to build a launching pad for taking the apparel sector to newer heights.

Zahedul Amin is the co-founder of LightCastle Partners, a business data firm. The article was published with permission from the author. He can be reached at zahedul.amin@lightcastlebd.com

Decreasing the gap between men and women allows for the prosperity of entirety of a workforce and a society.

Chittagong Khatungonj

The Trade History of Khatungonj By Pankaj Dastider

A A number of recent fraudulant cases have shaken up Khatungonj. Until the recent times the tradition of trade was a mutual understanding. History says that during the 8th century the Muslims from Arab Peninsula had come to the shores of Bengal and established their influence over the local people. They created links in the Bay Bengal for trade, establishing a small business community. These communities were known as sawdagars and emerged as an important intermediary. Traders from Arab Peninsula came to Chetigaon (Chittagong) with commodities. The local sawdagars received commodities from the Arabs and, on their behalf, sold those commodities to local traders in different parts of Bengal. The Arabs were brave as seafarers when they embarked on sea voyages in traditional big boats.

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This is how the ‘sawdagari trading’ came into existence in this part of the country. The conception of wholesale markets emerged in this part of Bengal several centuries prior to that of Dhaka. Wholesale trading was booming in Chittagong far ahead of the Capital. It was due to the proximity of the largest seaport of Bengal and pro-active entrepreneurship of the local people that Chittagong has become the hub of all trade, import and commerce with centuries of tradition. The imported goods are traded through D/O (delivery order), cash and credit across the country. The D/O is a transferable instrument by nature which might have the possibility to hike the value of goods to some extent which, if required, the regulatory body can go against. Khatungonj-Chaktai plays an important role in the supply and pricing of commodities of the country. Apart from Chittagong, Moulavibazar of Dhaka, Khulna, Jessore, Bogra and Naogaon have footings in commodity businesses but their presence mostly depends on border trade with India, Nepal and Bhutan. On the other hand, the importers of Khatungonj in Chittagong import goods mainly from Australia, Brazil, Canada, China, India, Pakistan, Russian and Ukraine through different trading houses based in Singapore, USA, Canada and, Australia. Chaktai-Khatungonj is the country’s major wholesale market for consumer goods where billions of Taka were once transacted everyday

through trading on ‘good faith’. Day in, day out, the market was always reverberating with the hue and cries of porters, laborers and traders. It deserves to be a commercial zone taking into consideration its enormous role as a supply line for consumer items. The means for transporting cargo from the market to nearby places were bullock carts on the road and small boats in the waterways of Chaktai Khal (canal), a tributary of the Karnaphuli River. The merchant ships also used to anchor at the Karnaphuli River which flows beside the market in the eastern part of the city. Sultan Mahmud Shah of Gour allowed the Portuguese merchants to trade in Chittagong by the beginning of the 16th century. Following the Portuguese; the British, Dutch, French and Armenians started trading in the region. Thanks to the Chittagong Port and its geographical location a trading centre flourished at the Chaktai-Khatungonj bet. The trading later spread to the adjacent Korbanigonj and Asadgonj areas. Traders and merchants called it the Wall Street of Bangladesh. Khatungonj was set up as a marketplace by Hamidullah Khan on the land owned by his second wife, Khatun Bibi. Later, the entire area was named as Khatungonj. Chaktai was named after the Chaktai Khal (canal) while Asadgonj and Koranigonj were named after the then wealthy persons who were land owners of the area. Khatun Bibi was born in the Syed family of Haola village under Boalkhali Upazila. Haji Ahmed Meah, an old

trader in the city, recalled that the wholesale trading was under the control of the non-Bengali during the British and Pakistan period. During the Pakistan period, most of the import and export was done with West Pakistan. The people of Karachi and Bombay (Mumbai) had absolute control over the trade and commerce in Khatungonj. Some items including rice were also imported from Myanmar (then Burma). Only 10 percent of the East Bengal was involved with trade at that time. Some of them left Bangladesh after its independence. Sushil Rajgaria was a notable figure and an influential Marwari businessperson, was almost forced to leave the country for Kolkata in 1993. He said the luster of trade of Khatungonj is no less important from then till now. In the past, there were a few shops and warehouses in the market. It has increased by several times over the decades. The number of buyers and sellers has increased. Businesses have been divided. However, the trade and business have lasted until now as the main port of the country is in Chittagong. Cargoes, mainly cereals imported through the sea port come to the warehouses at Khatungonj by trucks. But some businesses of Chittagong have been shifted to Dhaka due to port side bureaucratic tangles. Again, the road communication of Khatungonj is very bad. As the roads towards Khatungonj are narrow the trucks laden with goods face

a logjam of traffic. Besides, the low-lying Khatungonj often goes under water during the monsoon causing huge financial losses to the traders every year. In the face of such troubles, trading centers have grown up in other parts including Dhaka, Narayangonj and Jessore-Nayapara. Till the nineties, the trade and business at Khatungonj-Chaktai were based on good faith which was the special feature of the wholesale market. Then there was the arrival of cheque defaults which made the traders panic-stricken. The first black spot that marked the wholesale market was when one Bibhuti Bhusan cheated with traders in 1988. He left the market with millions of Taka collected from the small traders in advance against D/Os, selling consumer goods to them. The latest report reveals that one Nasir Uddin, owner of a trading house at Khatungonj, is on the run with Tk. 110 million from traders of Khatungonj. The Marwari and Hindu traders of Khatungonj-Chaktai faced hostile and malicious treatment from the government during 2001-2006 as the government agencies then were asked to a keep watch on the activities of the Marwari traders and the businesspersons of the Hindu community. The agencies were advised to prepare a comprehensive list of the non-Bengalee and Hindu traders. Bangladesh Bank also directed the scheduled banks to report on the banking transactions of the Marwari traders, the

amount of loan they received from different banks and their overall activities. The central bank made the instructions following the swindling of the huge amount of money from the banks by Marwari tycoons Om Prakash Agarwal and Giridhari Lal Modi. In Chittagong, Shushil Rajgaria, another Marwari business tycoon, left Chittagong in October 1993. Aside from these fraudulent cases which have bedeviled the once centre of business excellence, the traders at Khatungonj have also been suffering from huge financial losses due to damaged goods stored at the warehouses of the market as the area is a low-lying one. Reckless use of the Chaktai Khal without dredging works, lack of retaining walls on both banks of the canal and silts caused due to indiscriminate hill cutting are responsible for the inundation of the area. This is experienced almost every monsoon season over the last two decades. The latest floods caused by heavy rain were the ones by the end of July and beginning of August 2015. It caused financial losses worth Tk 1.00 billion (Tk 100 crore) due to damages to consumer goods at the countryâ&#x20AC;&#x2122;s major wholesale market. Shops and warehouses went under knee-deep water at Khatungonj and Chaktai as rainwater coupled with high tide water, the influence of cyclones and full moon poured in afresh. Several hundred tonnes of goods including onion, ginger, garlic, peas, dry fish, CI Sheet, salt, turmeric, chili, pulses and other food items

have been damaged in the water. The damage of goods has been estimated to at least Tk. 100 crores, according to the estimates of the Khatungonj Trade and Industries Association. The area was severely affected by the high tide water. Roads went under water and trading remained suspended for a week or so. By the influence of high tide in the sea, the water swelled and poured in over a hundred shops and warehouses. The warehouses and shops on both sides of the low-lying Khatungonj Road, Chaktai Mosjid Lane, Chal Patti, Drum Patti and Rajakhali area were inundated. Chaktai-Khatungonj has about 10 roads and sub-roads on which more than a hundred trucks, mini trucks, covered vans and other vehicles move between the port and the Chaktai-Khatungonj area

every day. But these roads are very narrow. As a result, the traders and shoppers who go to the wholesale market face severe traffic congestion. The vehicles face logjam for hours together. The traders have demanded expansion of the roads and lanes to the Chittagong City Corporation, Chittagong Development Authority and Chittagong district administration. They said that the government is getting a huge amount of revenue from the market but indifferent to expansion and renovation of the roads, lanes and drains. During the rainy season, the roads are filled with muddy water. The CDA and CCC have been requested time and again to take up road expansion and renovation projects. They have also suggested the Chaktai expansion connecting road be linked with the Marine Drive or link road, which can solve

Wholesale trading was booming in Chittagong far ahead of the Capital. It was due to the proximity of the largest seaport of Bengal and the pro-active entrepreneurship of the local people.

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the traffic congestion partially. Trade body leaders of Chittagong said the Prime Minister is committed to developing the port city but the country’s leading wholesale consumer market still remains neglected. The market has waterways for transportation of cargo with the rest of the country at a comparatively lower transport cost but the Chaktai Khal is getting silted due to lack of dredging and being grabbed by influential persons on both sides of the canal. Residents living on both banks of the canal throw away their household wastes in the canal. The businesses have urged the government to chalk out a plan for the development of Chaktai, Khatungonj and Karnaphuli river area, which will immensely contribute to the national economy. This wholesale market faces another severe blow during programs of political unrest like hartals and blockades. During the first three months of 2015 (January to March) the market experienced the lowest turnout of around Tk 10 billion from Tk 300 billion each month. Trading, import and export in the market remained almost suspended during political instability due to the problems in the transportation systems. There are over a hundred branches of different state-owned and private

scheduled banks around the wholesale market. The traders’ transaction in banks exceeds Tk 5 billion a day. The number of traders who have bank transactions is no fewer than 15,000. So the negative impact of the political unrest including general strike (hartal) and blockade on the banks is disastrous. Besides, the banks are also badly affected when their clients face cheque defaulting. General Secretary of Khatungonj Trade and Industries Association, Syed Sagir Ahmed said a huge quantity of spices especially the cardamom and cumin are brought into the country through smuggling from across the Indian borders. This trend remains almost unchecked throughout the year resulting in financial losses for the genuine importers of the spices. In letters to the Finance and Commerce Ministries, he said 2000 metric tons of cardamom enters every year in the local market through smuggling and the government loss in terms of revenue is over Tk 15 billion. Again, 6000 metric tons of cumin enters the local market through smuggling and the government loss in terms of revenue is Tk 8.40 billion. The association leaders demand that the government turns Chaktai-Khatungonj into a commercial zone and take up projects for widening the roads, lanes and drains to

ChaktaiKhatungonj is the country’s major wholesale market for consumer goods where billions of Taka was once transacted everyday through trading on ‘good faith’.

save the traditional commercial centre from flooding, water-logging and severe traffic congestion. The canals of the Karnaphuli river including Chaktai Khal and Rajakhali Khal need dredging, widening and recovery of their navigability, construction of a broad marine drive from Sadarghat to Karnaphuli and setting up a boat-ghat at Chaktai, construction of underpass and overpass to solve the traffic jam, bringing down the bank interest to single digit, easing of the tax payment system and setting up a branch of the NBR (National Board of Revenue) in Chittagong, formulating stringent rules to resist

check default and fraudulence by the dishonest traders are among other demands placed by the association to the government. Allegations are there that prices of essential commodities are hiked by hoarders, wholesalers and importers of Khatungonj. On most occasions, especially during every Ramadan month and following months, the prices of commodities are hiked artificially in contract with the international market prices. Every year before the Ramadan month the Commerce Minister and senior officials of the relevant ministries and the NBR (National Board of Revenue), Chittagong city mayor, local administration and trade body leaders sit with importers, wholesalers, commodity producers and millers to keep the prices of consumer goods normal in conformity with their import prices in the international market. But the wholesale traders and small shoppers remain unconcerned, causing immense suffering for the poor consumers.

The writer can be reached at pankajdastider@gmail.com

The Shrimp Story

Shrimp Industry Food Export

G.M. Rafiqul Islam

A As the second largest export item in bangladesh after RMGs, shrimp encompasses a very important role in the economy, Shrimp farming is an established practice in the coastal areas in Khulna, Satkhira, Bagerhat and Coxâ&#x20AC;&#x2122;s Bazar districts. Conventionally, farmers had trapped tidal water in low laying inter tidal lands by constructing small dikes and harvested shrimp for 3-4 months. The practice utilizes only wild shrimp and fish from tidal waters. The shrimp species harvested from the country are mainly black tiger shrimp (Bagda), brown shrimp (Horina), white shrimp (Chaka) and giant freshwater shrimp (Golda). Following the independence of our country, the interest in shrimp production grew with rising prices and global demand. Shrimp farms were established in subsidiary lands near coastal rivers where the inundation of saline water is possible. The farms steadily expanded in the 70s and 80s, experiencing rapid growth in 90s with the first establishment of local hatcheries in the latter part of the decade. The frozen shrimp industry, which was the sector that garnered the largest foreign exchange, flourished in the 80s. However, it has crashed and is no longer profitable with only 28 of the 78 processing units in the nation still functioning. Concerned experts speculate that this vulnerability is a result of the failure to develop a repertoire with foreign markets. According to the Export Promotion Bureau, the shrimp Photographs by Tuhel Hossain

export experienced fluctuations in sales. An icreased sales in the beginning of the millenium was followed by a decline in the FY2008-09 and a subsequent increase in FY2010-11. Many investors have incurred significant losses due to white spot diseases, which have deterred foreign investments. Furthermore, dishonest businessmen of the Rupsha region, who employ â&#x20AC;&#x153;push practiceâ&#x20AC;?, a method in which they inject water, jelly and chemicals to increase the weight of the shrimp, have also harmed the business.

There is a necessity for the unification of the country to stop such incidents in the interest of our national economic development. The Vice-President of Bangladesh Frozen Foods Exporters Association, Sheikh Abdul Baki states that if this continues to happen, the 24 shrimp processing units in Khulna will decrease to approximately 8 to 10. Therefore quality control is of utmost importance if we want widen our export horizon. The present production of shrimp, which is 4500 kilograms per hector, comes from semi-intensive methods. He commends the project of Ghazi Fisheries for providing farmers with adequate training, water and soil testing solutions, and creating a virus-free balanced diet for shrimp fry. Their methodology and improvements have brought shrimp production to record levels. Correct scientific methods allow farmers to harvest shrimp twice a year if the fries are released at the beginning of the year. Various sources from the Fisheries Department state that the cultivators of Khulna, Bagerhat and Satkhira districts created approximately 200,000 hectares of land for shrimp (Bagda and Golda) cultivation in about 98 thousand plots during the last fiscal year. The sources added that all the farmers of this area had a bumper production of shrimp last year. However, they are still concerned with the lack of preventive measures againt the white virus attack.

The frozen shrimp industry, which was the sector that garnered the largest foreign exchange, flourished in the 80s. However, it has crashed and is no longer profitable with only 28 of the 78 processing units in the nation still functioning. www.icebusinesstimes.net

Interview Inside Out

The Eternal Series The General Manager of Executive Machines, Dewan Sajid Afzal, articulates the truly distinctive experience of BMW. Interview by Ashfaque Zaman

How are you helping BMWâ&#x20AC;&#x2122;s brand promotion in Bangladesh? In Bangladesh, we deal with a very niche market therefore you have to be creative and careful. We promote the brand through experience; our main focus is to give our clients a luxury experience whether it is through our retail showroom or separate promotional engagements. We engage our clients with events on a quarterly basis, attempting to reach them on a personal level. The idea is that luxury is exuberated and our clients feel appreciated.

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experience BMW and our hospitality on an interactive level.

How difficult is it to maintain an international brand in our local market? Are you using the generic BMW marketing plan or your own strategy in the context of Bangladesh?

According to BMWâ&#x20AC;&#x2122;s market study, the consumer market reaches 1000 new consumers every year. How do you entice these new clients? There are many factors involved in attracting new clients. Two important factors include having the passion for cars and the purchasing power. The target is to find a balance between these two. In Dhaka this number is about 400 to 500, and we focus on potential customers that have a passion for a luxury vehicle because it tends to be an exclusive investment. Our aim is to invite the consumers to different events and showcases, which allows them to

It is very difficult primarily because you have to balance the international and local expectations. BMW has a certain required guideline in terms of marketing, sales processing and branding that must be maintained. For example, everything from the tiles to the furniture in our showroom has been imported in accordance with BMW Global Guideline. But when it comes to marketing, we do try to keep the local culture and mindset in consideration. BMW appreciates this as they understand diversity.

Two factors that affect the sales of cars, political instability and congestion. How have these factors affected your sales? Political instability will definitely affect sales of cars temporarily. In this instance, the niche market becomes advantageous because our customers will buy the car when the country becomes stable eventually. As far as road congestion is concerned,

The seven series will be the most innovative and most luxurious car in the market with a number of key features. This includes the gesture control, which allows you to control audio, video

1st quarter 2015

74,312 781

With BMW celebrating its centennial by releasing the seven series, what can customers look forward to in this series?

The Latest Report of BMWâ&#x20AC;&#x2122;s Automotive & Motorcycle Segment in Units Sold

451,576

BMW

we have turned that into our advantage. If you are going to be stuck in traffic for 3 hours, the best vehicle to be stuck in is in a BMW. Unbeknownst to most, the concept of a luxury car has changed. It is no longer about being a status symbol. It is an idea that has evolved into giving precedence to convenience, comfort and cost. Keeping these three in mind, we provide 5 years of free service, maintenance, repair and parts once you buy a car from us. This becomes very advantageous for our clients as they donâ&#x20AC;&#x2122;t have to worry about anything for the next five years other than fuel costs. So, if you consider the positives, they far outweigh the negatives, and this entices our customers to come and buy now. Since no other brand is offering this in Bangladesh, our sales has seen a steady rise while others have witnessed a decline.

MINI

Rolls-Royce

31,370

Motorcycles

The mind-frame of a committed operative

As you enter Afzalâ&#x20AC;&#x2122;s office space, there is a framed speech above his table. He elaborates that he has placed the Civil War speech given by his inspiration Abraham Lincoln. Afzal postulates, â&#x20AC;&#x153;It is not just the speech, it is the person. He proves that with conviction, unwavering belief and complete dedication, your goals can be achieved. Lincoln reminds me that if you have a certain objective in mind, you must be fully invested in achieving it.â&#x20AC;?

A Dashboard Perspective What distinguishes BMW from any other automotive company?

What is the Achilles heel of BMW? How do you overcome it?

As of 2016, we have a century of research, knowledge and experience behind our cars and for our brand value. Our greatest strength would definitely be the skilled workforce. Our clients are getting the best technology and the best people including the best engineers and the best aftersales service available in the country. Our engineers are highly skilled and we have unparalleled after sales service. Upon the purchase of the car, our clients are ensured that there will be no fuss for the next 5 years because of the free services, free parts, free repair and free maintenance contract we provide.

Our greatest weakness would be cost. If you look at the duty charge for cars in Bangladesh, the high cost is a direct result of the high duty. If a client inquires about the prices, we duly educate them of the breakdown. But there is an advantage to this as well. The duty that we pay, and the customers in turn gives us goes directly to the government exchequer. Rest assured this money is then spent on development projects the government so efficiently undertakes. In a way, we are all contributing to the development of the country and economy.

Strength

W Weakness

and phone call with simply gestures. More focus is put on the passenger, where the back seats are like a business class lounge. There is a built-in tab that controls the multi-media and the movement of the seat amongst others. The most innovative feature is the display key. The key will tell you how much fuel you have, and whether the car is locked. The remote control feature allows you to mobilize and relocate your car from the outside. It eases the tensions of parking.

By 2020, BMW group wants to strengthen their position to selling 2 million units per annum. They see Bangladesh as a potential country for sales growth. Why do you think BMW has particularly chosen Bangladesh? The duty for the car has a great deal to do in this aspect. If you look at BMW cars, we try to focus on environmentally friendly engines. BMW have gradually taken the initiate to lower the engine sizes. It has changed from a 2.0-liter engine to a 1.5-liter engine. The 1.5-liter segment has a lower duty of 131%, compared to 2 liters, which is 217%. The new models that are being imported have significantly lower prices, opening an all-new target group, such as bankers and private sector employees.

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Eastern Bank Limited CSR

EBL MAKING

A SOCIAL

E C N E R FE

DIF

Eastern Bank Limited (EBL) believes that their responsibility extends beyond the core business in order to create a better society. Investing in todayâ&#x20AC;&#x2122;s society will create a better tomorrow because the betterment of society correlates with the future of the company. They feel a responsibility towards customers, shareholders, and stakeholders giving priority to ethical conduct and integrity; emphasizing on the necessity for corporate governance as a

Decreasing the discrimination between men and women allows for the prosperity of an entire workforce and society.

fundamental pillar for their approach and actions in banking. The Institute of Chartered Secretaries of Bangladesh has recognized their priority towards corporate governance with the prestigious gold award. Their actions are governed by values and sustainability, which they strive to achieve through sustainable growth.In an ever-changing world, EBL prioritizes stability as a marker for societal and individual growth against the environmental and social challenges of that society. EBL has targeted the youth with their CSR initiatives. They aspire to create a better future by instilling confidence and higher aspirations in the youth through providing pathways of education that lead to better employment opportunities.

also provided an inspirational program about her journey to success.

I In partnership with Dhaka University Alumni Association (DUAA) since 2007, they have created a scholarship program. These scholarships are awarded to over 250 students each year from the numerous tertiary educational fields. The preceding year, 566 students from the 74 departments of Dhaka University were awarded with this scholarship. Each of the students receives a Tk 5000 EBL lifestyle card. Since their inauguration, the EBL-DUAA initiative has donated Tk 1.5 million and more than 30 computers to various educational institutes. Decreasing the discrimination between men and women allows for the prosperity of an entire workforce and society. EBL has arranged special training programs for their female employees. Nasreen Sattar, Management Skills Development Specialist and former CEO SCB, Afghanistan, conducted a series of programs regarding leadership. Nazneen Sultana, Deputy Governor, Bangladesh Bank,

With health being one of the pinnacles of a flourishing society, EBL has donated state of the art ambulances to Anjuman Mufidul Islam, a non-profit organization. They provide free health services for those that cannot afford it. In addition, EBL has donated necessary hospital equipment to various hospitals. Their humanitarian efforts extend to those less fortunate such as the elderly and poverty-stricken citizens by donating blankets during the harsh winter of the Dhanbari Upazilla in the Tangail District and of Kishoregonj. In 2014, they donated Tk 5 million to Prime Minister’s Relief Fund for those affected by the flood. EBL practices the need for a cleaner environment within their working space with the Go Green campaign, which reduces the consumption of electricity and paper. They are introducing the idea of carbon banking to reduce carbon footprint emissionby running some ATMs on solar power. They have extended this practice on a national level with support from the South Asia Enterprise Development Facility (SEDF), by being the first bank to offer Sustainable Finance loan in South Asia, helping companies implement energy-saving measures.

“Lakho Konthe Sonar Bangla”. An event that took place on 26th March 2014, the Independence Day of Bangladesh that brought together 254,537 people. It received a Guinness World Record and demonstrated that patriotism is a wonderful phenomenon that unites and progresses a nation. They have donated Tk. 5 million to the ‘Bangladesh Cricket Board’ for the expansion of Bangladesh because EBL believes that encouraging platforms of recreation promote positive social change.

EBL has targeted the youth with their CSR initiatives. They aspire to create a better future by instilling confidence and higher aspirations in them through providing pathways of education that lead to better employment opportunities.

Further promoting the idea of solidarity within a society and nation through culture and sports, EBL donated Tk 5 million to the organization of the event

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Advertorial

EXIM Bank

Technological advancement in banking is generating new expectations among customers. Sheikh Moyeen Uddin

Senior Executive Vice President, EXIM Bank Limited

In Bangladesh retail banking is expanding but there are challenges which will need to be hurdled. Also product diversification will be required. What is your take on this? The economic growth in the country has generated new consumers. The demographic changes in income, emerging middle class and changes in life style have evoked new expectation from retail

Sheikh Moyeen Uddin is a banking veteran with over 31 years of experience in the industry. Over the course of his career, he has worked in Sonali Bank, Al-Arafa Islami Bank and Prime Bank. He is currently a Senior Executive Vice President at EXIM Bank Limited, specializing in credit, investment risk analysis, foreign trade management and Islamic banking.Â

customers. Technological advancement and its use in banking is also generating new expectations among customers as to how many of these demands are to be met and how they are delivered. This indicates the prospect of retail banking is increasing in the country. In our opinion, how the banking sector in aggregate and each bank individually responds to following challenges will shape the future of retail banking in Bangladesh: 1. Product innovation: Banks need to develop new products for both asset side and liability side based on demographics. The expectations normally vary from customers to customers. Salaried employees may need Investment/Loan for car, housing etc while senior citizens, retired persons or NRBs may want better deposit rates and other kind of products. 2.Reaching to new customers: Customers now are not only present in major divisional cities, but also in districts, towns, upazillas and villages. Reaching these customers is one of the challenges which banks need to think. Bank can use internet banking, ATM booths etc not only as customer-focused but also as tools for selling various products. The emerging opportunity to reach new areas will require banks to use effectively agent banking and mobile banking. 3. Use of technology: Customers now want speed and efficiency, but at a lower cost. Banks need to invest more on technology to achieve faster connectivity between branches, setting up of Central Data Repository, generation of MIS, prevention of frauds and reducing transaction costs. The use of internet banking is now restricted to balance check and some other basic

functions. But the balance transfer between various banks through internet banking is emerging as demand now. The use of ATM/Debit cards at any booth of any bank irrespective of the provider of the cards is also a major concern. 4. Improved customer service: Providing superior customer services is becoming an important issue for any bank. Customers now want prompt service with minimum response time, efficient service delivery, tailor-made and value-added products to suit specific needs, hassle-free procedures, minimum transaction cost and pleasant and personalized service. Part of the future success now depends on how a bank is delivered at its customer’s services with utmost satisfaction. 5. Customer relationship management: In the era of intense competition, banks now need more customer retention and loyalty. Banks now need to develop right products and services and cross-selling products to lower promotional costs which is only possible by developing long-term mutually beneficial relationship with the customers. Customer Relationship Management (CRM) is, therefore, becoming one of the strategies that every commercial bank will consider to increase the company's revenue performance. To sum up, the retail banking’s future success will depend on how effectively a bank can innovate its new products according to the demand of customers, position them in the market, use the full advantage of technology to retain their customers through superior customer services and cater to the needs of the emerging market niches. Banks focusing on retail base now should

prepare themselves to face the above challenges along with traditional ones such as Non-Performing Investments/Loans, Liquidity Risks, Credit Risks, Interest Risks etc.

The banking industry in Europe has seen erratic behavior from their retail customers. How would you describe the customers here in Bangladesh?

Retail customers have always been highly sensitive throughout the world. So is the case with Bangladesh. Factors like low financial literacy, high expectation in terms of speed and quality of service, and high competition from peer banks also contribute to this ultra-sensitivity of the retail customers. Banks must prepare themselves to face this challenge along with different initiatives to educate the customer through financial literacy program and handle customer with utmost care.

The financial market still needs further development and as we still don’t have enough diversified products banks are faced with excess liquidity. Financial inclusion is also an issue as a large portion of our population still remains unbanked. How will banks tackle these problems?

further development. New products tailored to the customer demand need to be developed and promotion strategy needs to be personalized to suit the individual customer. Bank can also promote their products over Social Networking Sites (SNS) like Facebook, Twitter etc. banks can use of government’s drive for Digital Inclusion as a springboard for financial inclusion taking the advantage of different social networking platforms along with other Alternative Delivery Channels (ADC) like Mobile Banking and Internet Banking.

What retail products are being provided by your bank and how do they set you apart from other banks? What is your most successful retail product and what products are you planning on introducing in the future?

All products our products are Shariah Compliant. Terms and conditions are also highly flexible. Consumers who want flexibility and Shariah compliant products prefer us over others. Among these products, EXIM Abashan & Mudaraba Monthly Savings Deposit Scheme is the most desired product among our retail customers. We have a few products in the pipeline but for business confidentiality we cannot reveal them now.

The technological advancement and its gradual usage in the banking sector have transformed itself from a provider of plain vanilla services to a provider of universal banking. Mobile Banking, Online Banking, Automated Teller Machine (ATM), Point of Sale (POS), Internet, Mobile Application etc. have been introduced in the banking sector. The financial market still needs

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Word of Mouth Apparel Exhibition

Apparel Industry

RMG Sourcing Trade Stirred Visitors In a bid to enrich the apparel industry, a four-day international sourcing trade show on the RMG industry was held under one roof in the Capital from 13th to 15th of January. While inaugurating the show, Minster of Industries, Amir Hossain Amu, said, “300 factories in accessories and packaging sector are in operation in the country. Also 30 to 35 products are being produced in the backward industries of the RMG sector. The country earned about $5.61 billion in fiscal year 2014-15 by exporting surpluses after meeting the local demand.” Zakaria Trade & Fair International, ASK Trade & Exhibitions Pvt. Ltd and Bangladesh Garment Accessories & Packaging Manufacturers & Exporters Association (BGAPMEA) organized the 15th edition of GARMENTECH Bangladesh 2016 – International Apparel Machinery & Allied Products Tradeshow, the 7th edition of International Yarn & Fabrics Sourcing Fair and the 7th edition of GAP Expo-2016 International Garment Accessories, Packaging & Related Machinery Expo at the same venue. Around 300 companies from more than 30 countries took part in the exhibitions at the GARMENTECH Bangladesh 2016 and the International Yarn & Fabrics Sourcing Fair and GAP Expo-2016. Dhaka North City Corporation Mayor and apparel entrepreneur, Annisul Huq said, “Some NGOs, along with some of our competitors have been trying to harm our RMG industry. In this situation, the governments’ policy support is important to take the industry forward.” The co-organizers of the event M.A. Mannan, MP, State Minister for Finance and Planning; Md. Tajul Islam, MP, Chairman Standing committee on Ministry of Power Energy & Mineral Resources; Anawar-Ul-Alam Chouwdhury (Pervez), Former President, BGMEA; Rafez Alam Chouwdhury, President, Bangladesh Garment Accessories & Packaging Manufacturers & Exporters Association (BGAPMEA) and Nanda Gopal K, Director ASK Trade & Exhibitions Pvt Ltd, were present at the inauguration ceremony along with others. Nanda Gopal K, Director of ASK Trade & Exhibitions Pvt. Ltd., said, “When we started GARMENTECH Bangladesh in 2002 the RMG

Appraisal of the effectiveness : of GAPEXPO 2016 Bangladesh

China

12%

Japan

Germany

Singapore

59%

17%

Participating Companies from Differnent Countries in the GAPEXPO 2016 Developed

Inadequate

Development Required

22%

11% 67%

Impression of the Participants in the GAPEXPO 2016 Machineries

Garments accessories

31%

69%

Product Types in the GAPEXPO 2016

General reaction of the visitors of GAPEXPO: Bangladesh

India

China

4% 13% 83%

Nationality of Visitors in the GAPEXPO 2016

Excellent

Poor

No Comments

91%

The Impression of Visitors about the arragement of the GAPEXPO

Business

Service

Fashion Designer

45%

50%

Occupation of Visitors in the GAPEXPO 2016

sector was exporting $4.5 billion and we have seen the sector grow rapidly to reach $27 billion plus in the last 15 years. GARMENTECH Bangladesh and its concurrent shows have played its parts in bringing global suppliers closer to the door steps of the local makers through live demonstration of technology, yarn & fabrics and garment accessories & packaging all under one roof.” Rafez Alam Chouwdhury, President of Bangladesh Garment Accessories & Packaging Manufacturers & Exporters Association (BGAPMEA) said that, “This show is a meeting point where we are showcasing 30 to 35 types of garments accessories. Also there are 450 stalls where buyers can look through products and machineries.” He said that the buyers are coming to Bangladesh because the low cost and good quality of our products. ‘GARMENTECH Bangladesh 2016’ showcases the latest in sewing, knitting, embroidery, laundry, finishing, dyeing, CAD/CAM, printing, cutting, spreading machinery from leading companies of Japan, Korea, Taiwan, China, India, Turkey, Hong Kong, Singapore, Germany, USA, Sri Lanka and Bangladesh. Some of the machinery are being launched in Bangladesh for the first time, keeping in mind the needs of the industry. The show was visited by decision makers and technical and production personnel from the RMG sector in the country. Into its 7th edition, the International Yarn & Fabrics Sourcing Fair had the latest collection of natural and synthetic yarn and fabric and its blends both for woven and knit sectors showcased by overseas companies from India, China, Singapore besides Bangladesh. In quest for value added garments, sourcing newer and innovative blends of natural and synthetic fabrics were showcased for the benefit of merchandisers, buying agents and RMG makers.

In Bangladesh, there are currently at least 5000 employees of foreign origin working in high-end jobs. The outward remittances are around $8-10 billion with local employees holding prominent positions in the Garment sector only. What is your take on this situation in the high-end job market in our country? The problems in this area can be attributed to the poor image of Bangladesh as well as the lack of confidence of eminent local employers in their employees. This can also be linked with the lack of previous experience, adequate degrees in the related fields and a lack of proper exposure. These factors culminate and can also lead to the lack of strong personalities required to hold these positions. Due to these issues multinationals and even local employers are looking for more experienced foreign managers with strong personalities to hold Managerial, CEO or COO positions.

As an international recruiter,

what discrepancies did you find in our high-end job seekers compared to their foreign compatriots? Work wise, the local experts are more than qualified but there are stark differences when it comes to aspects like personality, integrity and the mannerism through which they handle situations. Some of these things arise from cultural drawbacks but still make a big difference. Another noteworthy issue is that local workers tend to be more submissive and display better attitudes when it comes to working with foreign supervisors or managers.

Have you noticed any changes in the new generation of workers in Bangladesh regarding more technical jobs such as those in the IT sector? Yes, there is a substantial, visible difference. The new generation is more confident and knowledgeable; these attributes along with their talent, vigor, and creativity will help them surpass their competitors. In recent times, we

have seen the success of our local universities in international business competitions. Many local prodigies have been winning awards, which will help them attain reputable positions in Fortune 500 companies.

What can be done to minimize or narrow the gaps in order for our workforce to counterbalance the competition with their international counterparts? First of all, local companies have to create the scopes for local managers by nursing people and providing training. Patience and tolerance will also be required with the younger employees, before they are endowed with larger responsibilities, as they will make mistakes in the progression of their career. The local managements will have to learn to be more supportive to boost the confidence level of upcoming local leaders. We can use India and China as examples of countries that have not shied away from using local experts, local labor and local technologies to boost their growth.

Abdullah Al Maher

Work wise, the local experts are more than qualified but there are stark differences when it comes to aspects like personality, integrity and the mannerism through which they handle situations.

Interview Human Resource

Stronger personalities are required to hold ceo or coo positions Abdullah Al Maher

CEO and Managing Director, Samadhan Merchandising Services Senior Board Advisor, Kilpatrick Abdullah Al Maher has nearly 20 years of experience in developing and managing businesses at the local and international levels. Before joining Kilpatrick, he has worked as the Country Manager for Sears Roebuck, USA for the Bangladesh operation, the General Manager at TMS group from Germany and as the Import Manager of Coastline Mode GmBH in Germany. He is also the CEO and MD of Samadhan Merchandising Services, a sourcing and trading company. He earned a Masters Degree in English Literature and Languages and an MBA in International Marketing at American International University of Bangladesh. He recently sat down with IBT to discuss the potential and problems of managing the human resource pool in Bangladesh.

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Interview NKSoft

Innovations in Information Technology John Sakhawat Chowdhury

Managing Director, NKSoft Bangladesh

John Sakhawat Chowdhury is the Managing Director of NKSoft Bangladesh, the Director of the Utility Division at Fujitsu Network Communications and a member of the Board of Directors of numerous prestigious IT and Electronic associations. He has served as the Vice President of KEMA Quality and the Director of Smart Grid at KEMA Consulting, where he developed Smart Grid solutions for utilities in the USA, Australia, India and South America. John has received a Presidential Award by IBM in 2006 and is considered one of the top twenty smart grid experts according to Dallas Business Journal, dedicating a 25-year consulting career to improving electric utility business performances. Recently, he sat down with IBT to discuss what NKSoft were bringing to the IT table in Bangladesh.

I want to be able to hire consultants as opposed to programmers because consultants understand why they are coding something.

NKSoft was established in Bangladesh in 2013, whereas in America it was founded in 1997. How have you used this experience to help bridge the gap between the local and international IT Sectors?

The first aspect is developing resources. In America, we have a structured process and methodology we use when we hire a graduate. We had to train the respected authorities how to use this methodology before they start coding. The training system includes development methodology, communication skills, mannerism and how they develop code and test it. This was a challenge in Bangladesh because of the lack of available skilled labor.On average I was able to hire 15 to 20 employees of the 65 that applied! We would like to conduct a training program that is similar to a boot camp. A qualified graduate would simulate the working experience that would test them. It would be like a boot camp because it is a 3-month rigorous process that would guarantee them a job placement.

What are the main bottlenecks, which need to be overcome? I believe that one of the major problems is the loss of potential from our country. We witness top-tier students of prestigious universities such as BUET and Dhaka Universities who receive scholarships abroad, are flourishing in overseas working fields. We must work to create that environment here. Furthermore we need adequate practical training;employees need to understand why they are doing the task at hand.I want to be able to hire consultants as opposed to programmers because consultants understand why they are coding something. They understand the

business whether it may be a power grid issue or a data analytics issue.

Why do you think these bottlenecks are in existence? I compare this to a contractor making a building. They will ask you the specification and conduct various tests before they create a building. Their goal is to create a structure that will satisfy the clients need and be able to withstand natural disasters. They must first come up with a blueprint and architectural plan. Similarly, we must analyze and understand a program before we introduce it to the market. Technology is a driving force and it needs to be understood. The IT sector is similar to the garment sector in the early 90s; it has potential but needs to be properly molded to international standards.

Being an expert in the energy sector, what are your thoughts on the energy crisis in Bangladesh? What can be done to overcome it? The overall distribution of the power grid needs to be changed because with the standing one, there is a copious amount of technical loss. We need to incorporate smart grid technologies like they do in other countries.With technologies like smart meters we can improve efficiency. The medium and low voltage sectors contain censors that can apply these technologies; numerically, we are looking at an 11% technical loss, which can be reduced by 4 to 5%. A difference that becomes profitable within the year if one were to observe total consumption. Currently there are smart meter pilots being proposed and we are planning to put this into practice within the next 5 years.

How do you incorporate your motto, â&#x20AC;&#x153;Innovation,

Integrity and Intensityâ&#x20AC;? into your work? The system of the power grid has not changed; it has just been improved upon. If you look at what Apple has done for the phone business, they have created a product that allows you to have a phone with an entertainment system. They have completely changed the market and that is why innovation is the foundation; it is about constantly improving the customer experience. In my company, integrity entails acting in accordance to everything that you have committed to. Without integrity the prospects of any personal or business relationship does not exist. Finally intensity is giving presidency to what we do. It is not only about putting in the effort but also about acting to the best of your abilities.

What can we expect from NKSoft in Bangladesh in 2016? We are currently working on 40.05 acres of land in Gazipur and we have been obtaining the necessary approvals from the government to develop a special IT zone or an IT park. Our park will be of international standards, where there will be greenery and housing; it is like a city within a city. We will provide the basic necessities such schooling, training, boot camp and housing to ensure that everyone is self-sustainable. We are using a foreign security team so that the safety is not a matter of concern within the IT Park. There will be a small green power plant that will provide approximately 50 to 70 megawatts. We will also strictly adhere to the guidelines we were provided with, for instance, the six buildings that we are developing will be no higher than 6 stories on 1.5 acres. We are only using about 10 acres for the purpose of buildings; the rest will consist of all greenery. www.icebusinesstimes.net

Star Wars Business Reel

The Finances of the Force By Sheahan Nasir Bhuiyan

Star Wars: The Force Awakens was undoubtedly the most anticipated film release in a long time. Haters might not agree but one simply cannot argue against the numbers. As of January 23rd 2016, the film has made $1.89 billion in worldwide box office. In a month. One month is all it took to become the third in the all-time list. Not only that, the film smashed many other records including taking the shortest time to reach the $1 billion mark (12 days), as well as earning the biggest worldwide opening weekend gross at $529 million. All this from a movie that has a reported budget of $200 million. And this is just the tip of the iceberg. In order to fully comprehend the monetary scale of the Star Wars universe, one has to travel to a time far, far away, back to 1975. George Lucas and his producer, Gary Kurtz, were trying to convince their studio, 20th Century Fox, to approve their next project, then called “The Star Wars”. They claimed the anticipated return would be close to $8 million, $12 if they were lucky. Fox

agreed, and it can be guaranteed that even in their wildest dreams, they could not have foreseen what was to come. Since then, 11 films have been released (including special editions and remasters) which contributed to a worldwide gross of $11.2 billion from just releases and rentals. These figures, when inflation is adjusted, which I believe is necessary to understand the true scale of the empire, come around to an unbelievable $20.9 billion. Let's leave the films behind for a bit and explore the other avenues of income generation. A recent report by the NPD estimates that Star Wars has earned retailers more than $32 billion through merchandise sales alone. The NPD has also predicted that this number grows by $1.5 billion every year. Not surprising, since toys based on the new film alone has already raked in $700 million in 2015. Apart from merchandises, Star Wars licenses were sold to gaming giants, Electronic Arts with the much-anticipated release of the “Star Wars Battlefront” game. Initially, publishers were reluctant to sell Star Wars licensed novels. That all changed in June 1991 when award-winning author Timothy Zahn’s Heir to the Empire topped the New York Time’s list of hardcover fiction bestsellers, creating yet another avenue for income. Apart from the toys, the games and the books, Star Wars rights were sold to a host of companies cashing in on the popularity of the franchise. Prior to the release of the film, Google launched a feature which let users either pick the dark side or the light side of the Force and selected Google interfaces, like YouTube or Gmail would reflect your choice. Uniqlo has a wide array of clothing lines featuring Star Wars logos and characters. Even Volkswagen featured a junior Darth Vader trying to start a car engine using the Force in their commercials. The latest film just adds on to an already vast empire. This film was released almost as a reboot and has won the hearts of millions of people who are just getting introduced to the universe. Girlfriends who were always reluctant to watch any Star Wars films have gone through all six in preparation for the release of this one. Twenty something parents who grew up watching Star Wars will take their kids to the film. Such a massive cultural movement has never been seen before. And Disney will be there all along to make the most of it. To be fair, as long as the ‘prequel’ disasters are never repeated, no one will bat an eyelid.

Tech Smartwatch

How smart is your smartwatch? Gimmicky dud or useful gadget? By Abhijit Asad

martwatches are the new â&#x20AC;&#x2DC;inâ&#x20AC;&#x2122; thing of the gadget world, and it seems people from everywhere wants one. The memories of pulp sci-fi from the mid-20th century are yet to fade, and people canâ&#x20AC;&#x2122;t seem to get enough of the idea of wearing a little computer on their wrist that would do far more than telling the time. However, in practice, how well does that really work out? It is widely held in the public perception that Apple is the primary innovator when it comes to technology, and any new technology reaches perfect levels of user-friendliness and aesthetics when Apple gets hold of it and starts to manufacture it (half-truths at best, but that is an argument for another day). However, the evolution of smartwatches proved to be a rather unique deviation from this trait. Not only was Apple far behind in the race to launch

the first mainstream smartwatch, but eventually when it did release a smartwatch, it was no better than the ones released by its competitors. On the plus side, however, this has opened up avenues for every manufacturer to go with their original takes on smartwatches instead of attempting to blindly ape Apple as many of them would have done. As a rather interesting

boon, Google (sorry, Alphabet) has released a trimmed-down version of the Android operating system called Android Wear that is specifically geared toward wearables and numerous smartwatch manufacturers have also picked up on it. Nevertheless, it is quite refreshing to see that many smartwatch manufacturers are choosing to go with their own proprietary takes on smartwatch operating systems, such as Samsung’s Tizen, Apple’s watchOS and Microsoft’s nameless ‘wearable architecture optimized for low-power micro-devices’. Given the limited customization options of the software on the restrictive smartwatch hardware platforms, this gives the buyers the freedom to choose whichever platform feels the most user-friendly and usable to them and go with it. But what is it that makes a smartwatch successful, or even good? The biggest challenge faced by every smartwatch manufacturer at present is providing a decent battery life. Whereas standard wristwatches can go for years on a single battery, even the best smartwatches need at least a weekly recharge, which is quite easy to forget and can be extremely frustrating for people who are reliant on it. With the inclusion of more bells and whistles (such as fitness trackers and push notifications) enabled, the charge cycles can go up to being as frequent as a daily matter, which means having to remember yet another gadget to feed alongside all the other ones that we carry with us. Some prototypes with additional flexible battery cells stuffed within the watch band have emerged from several manufacturers, but they are still some time away from hitting the shops. Even when they do, we are not in a position to predict how well they would hold out in practice. The next problem is that even the most barebones smartwatches are prohibitively expensive. For some reason, the novelty factor of smartwatches is still very far from wearing off despite their obvious limitations, allowing manufacturers to rip off early adopters with barely constrained glee, charging upward of several hundred dollars for mediocre technology that is still very much in its infancy. However,

The biggest challenge faced by every smartwatch manufacturer at present is providing a decent battery life. it is safe to assume that as the Chinese electronics manufacturers of Shenzhen finish reverse-engineering and improving upon current smartwatch technology, we will start seeing the emergence of lower-price smartwatches that can destabilize the existing market and put an end to much of the premium pricing going on here. Speaking of mediocre technology, however, smartwatches are crippled from the get-go by a huge disadvantage in the form of an absence of input and options. Although it’s now possible to stuff a relatively high-resolution display into a small form factor, the challenge lies in the fact that you can’t put a screen larger than 2” (and even that is huge) on a smartwatch without making it very ungainly and heavy. The problem intensifies even further when it is taken into account that all the interaction between the user and the watch takes place by means of that screen. Not only is manipulating a tiny touchscreen (capable of showing only a small number of things at a time) a pain with our large, clumsy fingers, with our digits obscuring a large part of whatever is onscreen. It also prevents the OS developers to program a lot of functionality into an interface of that

size. For instance, you really cannot expect to type out a response to a text message using a proper touchscreen keyboard on such a tiny screen, instead having to rely on canned responses, or just having to pull out your phone and essentially negating a major purpose of your smartwatch altogether. Vocalizing a response is not a solution either in these cases, given the limited processing ability of the smartwatch’s tiny CPU combined with the still-rather-wonky nature of voice recognition software, especially for non-standard words. While smartwatches do come with buttons or crowns to make usability a little easier, it is still far away from being a capable standalone device with adequate input and output options. All in all, it is safe to say that smartwatches are certainly an interesting facet of modern technological development, with a few genuinely useful features such as NFC-based payments (not universally supported though) along with the ability to check out (but not respond to) notifications from your phone/tablet. In practical terms, they are still far away from attaining maturity the way mobile phones or laptops have, and somewhat like tablets, they have managed to navigate themselves into a cornered evolutionary niche. Their extremely limited processing power, low battery life and lack of input/output prevent them from being standalone utilities combined all but ensure that they are getting out of the ‘support device’ status anytime soon. Therefore, if you are planning to blow your hard-earned money on one, do so at your own risk, because rest assured that while you will be getting novelty in spades, you won’t be getting nearly as much utility out of it as one would like.

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9. Provide proof. Can you back up any claims with testimonials? Use case studies, real-world examples, success stories, or even embedded tweets from your audience praising your work/product.

7. You don't need to be â&#x20AC;&#x2DC;sellyâ&#x20AC;&#x2122; to sell. Honesty works, as does teaching or simply explaining how something works. Focus on the benefits to your audience, not on the features.

5. Summarize any important points or conclusions right at the start of a page. Just in case people stop reading there, they can get the gist of it.

3. Use the language that is understanable. Establish a sense of relatability. Look at who reads your site, comments on your blog posts, subscribes to your newsletter, or buys your products. You can even ask a handful of them that have paid for your products to describe their experience with the product.

1. Use your own voice. Your website needs consistent colors, fonts and design Similarly your writing needs to be just as consistent in its tone and style. The easiest way to do this is to write in your unique voice.

10. Take a stand. Your audience isn't everyone, and you aren't going to please every single person that reads your writing. Have an opinion, draw a line in the sand and aim to please your audience.

8. Stories are more interesting and memorable than cold facts and figures. Write like the human being you are, and not like a sales/marketing robot.

6. Become a curator, not a collector of words. Edit relentlessly. Cut as much as possible. Don't bother with checking word count, only bother with getting your point across clearly.

4. Don't get too clever or creative. Creative, flowery writing has it's place (see: beatnik cafes). For your website, don't make your audience think too hard about what you mean or confuse them with your creativity.

2. Focus on headings. 80% of people read all the headlines, whereas only 20% read all the content on a page. Know that regardless of how good your content is, most people will scan it quickly, hunting for what they want. Make the hunting easy with great headlines.

Writing good contents or even any contents at all is yet to be recognised as a key strategy for companies or any business entity in Bangladesh. While the first-sight is considered to be the most important one for life, a company and its products and services can best be presented through the contents about everything related. Hopefully with increasing number of consumers and growth of business, more professionalism will be used in this area.

The most important lesson is this: write with genuine passion for what you do. Exhibit your enthusiasm for how your business helps its customers. Show your readers why you care about them, and they'll care about what you do in return.

According to Paul Jarvis, effective content is writing that engages, entertains, and--most of all-- achieves your business goals such as closing sales, getting mailing list signups, etc. It's content that people actually want to read. He has come up with 10 steps to effective content writing:

How effective content writing helps achieve your business goals

TO BE HUMAN AND TO BE YOURSELF

Strategy

2016 Prospects International

for in

Companies to look out

2016

By Sheahan Nasir Bhuiyan

DBS Bank in Singapore is one of the biggest banks in South East Asia and it is in the prime position to grow even bigger from a rise in the interest rates in the United States Federal Reserves, or more commonly known as “The Fed”. Confusion at this point is understandable as to why or how an increase in rates in the US will majorly affect banks in Singapore, particularly DBS. The Fed has kept interest rates at its lowest levels since the banking sector crash in 2008, to lower the cost of borrowing and make funds more accessible for a lot of struggling businesses at the time. However, The Fed is now confident that the economy has recovered sufficiently, and continuing with a low-interest rate will lead to higher inflation rates. As such, they have raised interest rates for the first time in years in 2015. Singapore uses the Singapore Interbank Offered Rate (SIBOR) to determine the rates at which banks lend each other money, and SIBOR is tied to the US rates. For example, if The Feds increase rates to 2%, local banks can increase SIBOR to 1.5% and still get business from foreign banks as it is cheaper to borrow. DBS has already capitalized on the speculation of increased rates and its third quarter earnings for 2015 shows a jump in profits by 6% through an increase in net interest income of 13%, an all time high. DBS has cut the number of total fixed deposit by 5% from a year earlier, increasing its net interest margins. Furthermore, property loans in Singapore are also tied to SIBOR so the entire mortgage market will be affected by US rate increases. With loans expected to grow by 6% in 2016, according to CEO Piyush Gupta, expect DBS to challenge the entire Asian market.

A Promising Year to Look Forward To

Listed as the top company in MIT Technology Review’s 50 Smartest Companies, Illumina is poised to make a massive impact in 2016. In January 2014, they announced the arrival of its HiSeq X Ten System, a technology that is capable of sequencing the complete DNA of humans, in under US$ 1,000. Even a decade ago, the cost was close to a hundred million dollars. The significance of this cannot be understated. This technology gives medical researchers the ability to analyze each individual’s genome to predict what diseases a person may contract in the future, and take necessary preventive measures, or even eliminate the risk entirely through highly personalized medication. Babies can have their full genomes analyzed before they are five years old and even those with extremely rare conditions will have more than a fighting chance to lead normal lives. When this news was announced, Illumina already dominated the competition with a whopping 70% share of the market. They are predicting that sales of their sequencing technology will increase by 20% or more in 2016, possibly obliterating any competition that is left. Expect this technology to usher in a world of change in the coming year.

2016 will be a make or break year for GAP Inc. Sales trends for their three major brands, Old Navy, Banana Republic and Gap were all heading south coming into 2013. Things were looking rather bleak for one of the biggest apparel icons in the industry until the appointment of Stefan Larsson as the global head of Old Navy. Despite the continuing decline of the other two brands, Larsson successfully revived the Old Navy brand, increasing sales figures by over 10% in the third quarter of 2015. His achievements did not go unnoticed and unfortunately for GAP Inc., Ralph Lauren tapped him to be their CEO in September 2015. What followed can only be described as a disaster. Prior to his departure, Old Navy posted comparable sales growth in 12 of the 14 prior quarters. The alarming decrease in sales figures were compounded by poor performance in the Holiday season, normally a time for heavy sales. For a major brand like GAP, the loss of one executive should not lead to such poor performance in such a short time. Their initial plans for 2016 were to extend their successful merchandising strategies to Banana Republic and Gap. However, with Old Navy crashing, current CEO Arthur Peck must revive the fortune of their flagship brand, again, if it does not want to follow in the footsteps of American Apparel which filed for bankruptcy in 2015.

The Struggle is Real Pfizer is set to lose approximately 20% of its current revenue from the loss of patents extending into 2017. The scenario is one Pfizer has been experiencing over the last ten years. Pfizer faced their biggest challenge when they lost the patent for Lipitor in 2011, which led to a drop in revenues by over 20%! They managed to recover from that and are currently trading their shares at a 10 year high. Some analysts predict that Pfizer has the capacity to ride out the loss of major patents through developments in its pipeline, as well as increasing revenue through mergers and acquisitions. A successful bid for Allergan which is predicted to be completed in the second half of 2016 will make Pfizer the world’s biggest drug-maker in terms of revenue. Moreover, Pfizer has invested significant amounts in biosimilars, a market which has the potential to be worth around $20 billion by 2020. In their late-stage pipeline, they boast five biosimilars of the most popular drugs on the market. However, things may not turn out smoothly despite the strategies in place to mitigate the loss of patents. Mergers have a potency to reduce R&D expenditures, and in an era with amazing medical breakthroughs coming up, Pfizer cannot afford to do that. When it acquired Wyeth, R&D was cut from a total of $12 billion between the two companies to just $6.5 million. Moreover, apart from biosimilars, a lot of their drugs are in the early stages of testing, with no clear date of winning approval. Such factors will play a huge role in 2016 to determine Pfizer’s fate.

Capital Market Update

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Top Ten Companies by Turnover Value for this fortnight (December 16-31, 2015) Value in Volume in % of total Name of the Securities Category Tk. mn Nos. Value BeximcoPharma A 1,743.55 20,468,702 3.95 QuasemDrycells A 1,484.48 13,265,394 3.36 BEXIMCO A 1,171.79 39,742,799 2.66 Emerald Oil Industries Limited A 1,115.89 17,869,769 2.53 Square Pharma A 1,109.53 4,354,689 2.51 ACI Limited. A 1,056.64 1,946,821 2.39 KDS Accessories Limited N 931.36 10,941,148 2.11 BSRM Steels Limited A 800.02 8,350,152 1.81 Aftab Automobiles A 791.11 12,239,240 1.79 Titas Gas A 733.98 15,392,768 1.66

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Top Ten Companies by Turnover Volume for this fortnight December 16-31, 2015) Value in Tk. % of total Volume in Name of the Securities Category Nos. mn Value BEXIMCO A 39,742,799 1,171.79 3.95 Al-ArafahIslami Bank A 28,777,367 417.90 2.86 United Airways (BD) Ltd A 25,969,728 189.19 2.58 Regent Textile Mills Limited N 21,172,713 438.41 2.11 BeximcoPharma A 20,468,702 1,743.55 2.04 Emerald Oil Industries Limited A 17,869,769 1,115.89 1.78 AppolloIspat Complex Ltd. A 17,817,628 307.64 1.77 Titas Gas A 15,392,768 733.98 1.53 One Bank Limited A 15,334,980 231.58 1.53 Summit Power A 14,579,030 575.24 1.45

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Top Ten Gainer Companies by Closing Price for this fortnight (December 16-31, 2015) Last Current Fortnight % of Value in Fortnight Closing Name of the Securities Category Change Tk. mn Closing Price in Price in Tk. Tk. Apex Spinning. A 113.30 91.60 23.69 262.33 National Housing Finance and A 34.80 28.50 22.11 207.32 Investments Limited Anwar Galvanizing B 82.00 67.70 21.12 157.45 QuasemDrycells A 124.90 104.40 19.64 1,484.48 Rangpur Foundry A 116.70 98.20 18.84 269.79 Monno Ceramic B 41.30 34.80 18.68 55.73 Agrani insurance A 17.00 14.40 18.06 7.01 FAS Finance & Investment Limited A 11.40 9.70 17.53 34.65 BDFINANCE B 11.60 9.90 17.17 60.95 GQ Ball Pen A 85.40 73.00 16.99 157.46 Top Ten Loser Companies by Closing Price for this fortnight (December 16-31, 2015) Current Last Fortnight Fortnight % of Value in Closing Closing Name of the Securities Category Change Tk. mn Price in Price in Tk. Tk. LR Global Bangladesh Mutual Fund A 5.50 7.00 (21.43) 64.37 One Keya Cosmetics A 12.00 14.40 (16.67) 136.71 Regent Textile Mills Limited N 19.80 23.10 (14.29) 438.41 Mithun Knitting A 64.20 73.00 (12.05) 303.22 MozaffarHossain Spinning Mills Ltd. A 23.00 26.10 (11.88) 38.41 Tallu Spinning Z 17.70 19.70 (10.15) 26.35 Meghna Petroleum Limited A 152.60 169.60 (10.02) 141.33 RahimaFood Z 37.40 41.50 (9.88) 14.09 Bangas A 233.50 258.90 (9.81) 93.30 Grameen Mutual One A 18.60 20.40 (8.82) 11.96

Average Daily Value Traded Tk. mn 23.85 18.85 14.31 134.95 24.53 5.07 0.64 3.15 5.54 14.31 Average Daily Value Traded Tk. mn 5.85 12.43 39.86 27.57 3.49 2.40 12.85 1.28 8.48 1.09

Disclaimer: Dhaka Stock Exchange does not hold any responsibility for these date.

Top Ten Companies by Turnover Value for this fortnight (January 1-15, 2016) Name of the Securities