Presentation on in Mngmt.-sallu

Welcome to

our presentation

Introduce to usIntroduce to us

OUR GROUP NAME

GROUP-E

We are Seven memberWe are Seven member Salman L. Rahman .............. ID: 103-0250-407

Jannat Islam ............... ID: 103-0231-407

Shima Aktar...........................ID: 103-0102-407

Rabeya Siddiqua...........ID: 111-0150-407

Mahmudul Hasan………….ID: 112-0114-407

Tabassum-E- Alam.......ID: 131-0086-407

Naznin Akhter Bristy……..ID: 131-0219-407

Our TopicsOur Topics

THE HISTORY OF EPZ IN BANGLADESH

AND

THEIR ROLE IN THE ECONOMIC DEVELOPMENT

ABOUT BEPZA ABOUT BEPZA

The Bangladesh Export Processing Zone Authority (BEPZA) is an agency of the Government of Bangladesh and is administered out of Prime Minister’s Office. The Government provides numerous incentives for investors for opening factories in EPZs. In order to stimulate rapid economic growth of the country, particularly through industrialization, the government has adopted an 'Open Door Policy' to attract foreign investment to Bangladesh.

Continued……

ABOUT BEPZAABOUT BEPZA

The Bangladesh Export Processing Zones Authority (BEPZA) is the official organ of the government to promote, attract and facilitate foreign investment in the Export Processing Zones. The primary objectives of an EPZ is to provide special areas where potential investors would find a congenial investment climate, free from cumbersome procedures.

ABOUT EPZABOUT EPZ

An export processing zone (EPZ) is defined as a territorial or economic enclave in which goods may be imported and manufactured and reshipped with a reduction in duties or minimal intervention by custom officials (World Bank 1999).

Continued……..

Objects of EPZ in BangladeshObjects of EPZ in BangladeshThe main objectives of EPZ are given below:

Promotion of foreign (FDI) & local investment.Diversifications of export.Development of backward & forward linkages.Generation of employment.Transfer of technology.Up gradation of skill.Development of management Plots/factory BLDG in

custom bonded area. Infrastructural facilities.Administrative facilities. Fiscal & non-fiscal incentives.

History of History of EPZEPZ in Bangladesh in Bangladesh

History of EPZAfter the independence the stagnant economy of the war ravaged country was desperately seeking private capital, technical knowhow to facilitate the industrialization process to achieve economic growth. During the initial years it could not happen. However, a visit by the than World Bank Vice President Mr. Robert McNamara in the early eighties to Bangladesh transmitted the concept of EPZs to us. Since then EPZs, in tune with the liberal industrial policy of the government along with investment friendly legal & institutional framework like Foreign Private Investment (Promotion and Protection) Act’1980, have made significant progress.

Continued…………Continued…………

Pioneer EPZ of the country Chittagong EPZ started functioning in the year 1983 in the Port city of Chittagong, seeing its unprecedented success the second one came into being in 1991inDhaka. Presently there are as many as eight operational EPZs and two proposed EPZs indifferent locations of the country contributing to the overall economic development process of Bangladesh through promotion of export and FDI (Foreign Direct Investment), generation of employment, transfer of technology, and development of forward and backward linkage industries and so on.


In continuing to that policy, EPZ is playing as a prime role as an economic instruments for attracting foreign direct investment, employment, foreign exchange earning and technology transfer. In the age of globalization the concept of EPZ has become more significance for economic growth. Result reveals that EPZ in all over the country has a dramatic increasing trend from 1975 with 25 countries and the numbers of EPZs were 79, now 2003 it has covered 116 countries that covered more than 3000 zones.


As a result 42.0 million are employed within those zones (Agarwal, 2005). Geographically, politically and economically, in 1971 Bangladesh has got an independent and it covers 144,000 square kilometers and has a population of about 150 million with a density of 953 persons per square kilometer (HDI, UNDP Report, 2008). Bangladesh had to face the challenges, as a result, its economy has been diversified with limited resource and rapidly growing population.

Continued…………Continued…………Bangladesh is late starter in the process of liberalization, particularly after 1990s, it’s

opening up the economy with attendant liberalization of the trade regime (GOB, the fifth

five year plan, 1997-2002). This trade liberalization geared up the country’s economic

condition like as export, employment, investment and boomed the private sector for

economic development. Apart from welcoming private sector, Government had taken

initiative to welcome foreign investor with incentive. Finally, Government had taken a

decision to emerged capital investment in Export Processing Zone in the name of

industrial development. After reviewing the tremendous success of that zone, Government

had decided to establish the second one at Dhaka in 1993. Then the zone has increased in

number 8 including Chittagong and Dhaka.

EPZ IN BANGLADESHEPZ IN BANGLADESH

EPZ IN BANGLADESHEPZ IN BANGLADESHNAME OF ZONE YEAR OF

ESTABLISHMENTNO. OF PLOT

CHITTAGONG 1983 454

DHAKA 1993 388

MONGLA 2000 162

COMILLA 2001 208

ISHWARDI 2001 166

UTTARA 2001 155

ADAMJEE 2005 200

KARNAFULI 2005 100

RELATED ORGANIZATIONRELATED ORGANIZATION Prime Minister’s Office Board Of Investment National Board Of Revenue Bangladesh Bank Ministry Of Commerce Ministry Of Home Affairs Export Promotion Bureau Register Of Joint Stock Company Chittagong Port Mongla Port Hazrat Shahjalal (R) Airport, Dhaka Shah Amanat Airport, Chittagong Pan Pacific Hotel Sonargoan Ltd. Janata Bank Ltd.

BRAND PRODUCT MADE IN BANGLADESH EPZs BRAND PRODUCT MADE IN BANGLADESH EPZs NIKEREEBOKLAFUMAH & M (SWEDEN)GAPBROUKSJ.C. PENNYWALMART KMARTOSPIG (GERMANY)MOTHER CARE (UK)LEEWRANGLERDOCKERSNBATOMMY HILFIGERADIDAS, etc.

LIST OF COUNTRIES SO FAR LIST OF COUNTRIES SO FAR INVESTMEN INVESTMEN

1. Australia 16. Malaysia2. Bangladesh 17. Marshal Island 3. Belgium 18. Mauritius4. BR. Virgin Is. 19. Nepal5. Canada 20. Netherland6. China 21. Pakistan7. Denmark 22. Panama8. France 23. Portugal9. Germany 24. S. Korea10. India 25. Singapore11. Indonesia 26. Sri Lanka12. Ireland 27. Sweden13. Italy 28. Switzerland14. Japan 29. Taiwan15. Kuwait 30. Thailand etc.

TYPES OF INVESTORTYPES OF INVESTOR

Type-A100% foreign owned including Bangladesh nationals ordinarily resident abroad.

Type - B Join venture between foreign and Bangladesh entrepreneurs resident in Bangladesh.

Type - C100% Bangladesh entrepreneurs resident in Bangladesh

HOW TO APPLYHOW TO APPLY

Collect Prescribed Project Proposal Format from BEPZA on payment of Tk. 3000.00.

Submit the proposal along with the required documents mentioned in the project proposal format.

For executive of lease agreement pay one year rental for land and four months rental for Standard Factory Building, as security deposit.

Labor IssuesLabor IssuesEnsure the congenial production climate. Establish the franchise of the workers. Competitive wages in respect of semi skilled, skilled and

high skilled. The average monthly wages has been practiced as follow:

Unskilled US$ 39.00-48.00 Semi-skilled US$ 55.00 Skilled US$ 61.00-109.00

Other benefits include Conveyance Allowance, House Rent, Medical Allowance, Maternity Benefit, Festival Bonus, Provident Fund and Overtime.

The parliament passed the EPZ Workers Association and Industrial Relations Act 2004.(up to October 2010).

YEAR WISE TOTAL EMPLOYERYEAR WISE TOTAL EMPLOYERYEAR LOCAL EMPLOYMENT

CURRENT CUMULATIVE

2007-2008 17130 218299

2008-2009 16394 234693

2009-2010 28064 262757

2010-2011 43666 306423

2011-2012 33598 340021

2012-2013 (December 2012) 10242 350263

YEAR WISE EXPORTYEAR WISE EXPORTYEAR EXPORT IN (MILLION US$)

EXPORT (MUS$)

CURRENT CUMULATIVE

2007-08 2429.58 16333.04

2008-09 2581.70 18914.74

2009-10 2822.54 21737.28

2010-11 3697.62 25434.89

2011-12 4210.80 29645.69

2012-13 (December 2012) 2240.87 31886.56

YEAR WISE INVESTMENTYEAR WISE INVESTMENTYEAR Investment (million us$)

TOTAL

CURRENT CUMULATIVE

2008-09 148.03 1582.47

2009-10 221.99 1804.46

2010-11 313.23 2117.69

2011-12 339.26 2456.95

2012-13 (December, 2012) 150.37 2607.33

Export Performance: Export Performance: During 2004-05 export performance of Bangladesh raised upto US$ 8654.52 million (13.83% growth).

Most contributors to the exportable items are RMG (Woven Garments and Knitwear), Frozen food, Home textile, Computer Service, bicycle and ceramic.

Bangladesh Export by Major Products Bangladesh Export by Major Products WOVEN GARMENTS

KNITWEAR

FROZEN FOOD

JUTE GOODS

LEATHER

CHEMICAL PRODUCTSRAW JUTE

TEA

OTHERS

IncentivesIncentivesFiscal Incentives10 years tax holiday for the Industries to be

established before 1st January, 2012 and Industries to set up after 31st December, 2011 tax holiday period will be:

TAX EXEMPTION PERIOD RATE OF TAX EXEMPTION

FIRST 2 YEARS (1st & 2nd yrs) 100%

NEXT 2 YEARS (3rd & 4th yrs) 50%

NEXT 1 YEARS (5th years) 25%

Non – Fiscal IncentivesNon – Fiscal Incentives100% foreign ownership permissibleEnjoy MFN (most favored nation) status No ceiling on foreign and local investmentFull repatriation of capital & dividendForeign Currency loan from abroad under direct

automatic routeNon-resident Foreign Currency Deposit (NFCD)

Account permittedOperation of FC account by 'B' and 'C' type Industries

allowed.

THE ECONOMIC DEVELOPMENT OF THE ECONOMIC DEVELOPMENT OF EPZEPZ IN IN BANGLADESHBANGLADESH

As an economic enclave acceleration of EPZ contribution to GDP in terms of employment, export and investment are significantly positive by measuring EPZ percent of those factors. As we have seen in employment data table and graph, it reveals that 22% sharing in employment as a national contribution. Only EPZs have the lion contribution 22% in employment generation all over the country. And women participation is 64% where men were 36%. Apart from this, in the light of export performance, EPZ contribution is gradually increased and the EPZ share more than 17% of total export during FY 2006-2007.

Continued…………Continued…………The rate of investment from EPZ is increasing day by day. In the fiscal year 2005-2006 the volume of investment was 112.83 million US$, 152.34 million was 2006-2007 and 154.34 million US$ in 2007-2008. And in the year of 2011-2012 it become US$ 2456.95 and in 2012-2013 it become US$ 2607.33 million. In the age of globalization the concept of EPZ has become more significance for economic growth.

The garment industry has played a pioneering role in the development of industrial sector of Bangladesh. Resultantly garment is now one of the main export items of the country. At present there are more than 2100 garment factories in the country employing more than 12 lack labors.

Continued…………Continued………… Economic Profile

It reveals from the Economic Profile of Bangladesh that last year’s GDP was recorded at US$61.41 billion with 5.40% annual growth.

Industry: GDP growth of broad Industry sector was 8.43% in the last year compared to 7.10% in the preceding year. The performance of the industrial sector was mainly based on the growth in textile and wearing apparel, drugs and pharmaceuticals, fertilizer, petroleum products, glass products, cement, electronics, footwear and food and beverage industries. In the last year the contribution of this sector in national income is 28.44%.

Continued…………Continued…………Agriculture

Agriculture still holds an important position in our national economy in creating employment and increasing national income. In the last year the contribution of this sector in national income is about 21.91%. Growth in agriculture has increased to 2.41%. Growth during the year preceding year was 3.29%. Fish production in the last year has increased by 5.03%. Growth in the sector during the preceding year was 3.6%. Food production during the last year was about 30.05 million tons compared to 27.90 million tons in the year preceding year

Continued…………Continued…………Services

The service sector continued to the largest contributor to the country’s real GDP growth in 2004-2005. The sector grew by 5.7% during the year, compared to 5.4% in 2003-2004 and contributed 49.65% to GDP growth. All sub-sectors shared in the overall growth of the services sector activities, but relatively higher growth rates were registered by education (7.66%), transport, storage and communication (6.64%), hotel and restaurant (7.29%), financial services (6.77%), public administration and defense (5.75%). Service, 49.65%Agriculture, 21.91%Industry, 28.44%.

Continue…………Continue…………

Investment and savings Gross national savings during the year 2004-05 was 26.50% of GDP compared to 25.40% during the previous year. In the FY 2004-05 the rate of total investment was 23.14% of GDP in which the shares of public and private sector were 5.90% and 18.50% respectively. Total investment registered by BOI was US$ 19,992 million out of which US$ 8763 million was foreign investment. Investment made by in the EPZs was US$ 987 million.

Continue…………Continue…………Use of Foreign Currency

The exporters can deposit a certain amount of their export earning in foreign currency under a retention quota in their foreign currency account in the form of US dollar, Pound, Sterling, Japanese yen or Euro.This foreign currency can be used to fulfill real business needs like business trips abroad, participation in export fair or seminars in foreign countries, import of raw materials and spare parts and setting up office abroad. Presently 10% has been fixed for lower value added products (like RMG, petroleum by products, Naphtha, furnace oil etc.)and 50% for high value added products (like Computer software and data entry/processing service etc.)


GSPGeneralized System of Preferences (GSP) is a preferential treatment of tariff facilities (by way of reduced or duty free tariff rates) which is granted by the industrially Developed countries to the eligible products imported from Developing or Least Developed Countries. The scheme is non-reciprocal and non-discriminatory system of preferences. The objectives of the GSP scheme are:

a. To increase export earnings of the preference receiving

countries; b. To promote their industrialization and c. To accelerate their economic growth.


New GSP Scheme of EUWith a view to encourage greater co-operation, EU member-states have recently adopted the new preferential market access system, which is the new GSP scheme. The reform of the GSP scheme will make the EU’s system of preferential market access simpler and fairer then before. The new GSP scheme as a whole will be in operation from 1st January, 2006.

Continued…………Continued…………Textile

Ready Made Garments, Textiles and Composite Textiles a. Sector Highlights

The Ready Made Garment industry in Bangladesh accounts for more than 75% of total exports. Government incentives for the spinning and weaving industries include a 15% cash subsidy of the fabric cost to exporters sourcing fabrics locally.

b. Industry Background and Status The phenomenal growth in RMG was experienced in the last decade. With about 2,600 factories and a workforce of 1.4 million, RMG jointly with knitwear accounted for more than 70% of total investments in the manufacturing sector during the first half of the 1990’s. At present, number of RMG factories exceeded 3,000, employing over 50% of the industrial workforce and having 75% of the total exports earning of the country.

Continue…………Continue………… c. Industry Outlook Multi-Fiber Agreement (MFA) and Generalized System of Preference (GSP) of the EU are the main actors behind acquainting Bangladesh RMG products to global market ensuring assured market access. Bangladesh is now a significant RMG supplier to North America and Europe. Till today, Bangladesh RMG industry largely depends on the imported yarns and fabrics. Bangladesh produces only 10% of export-quality cloth used by the garments industry. There are enormous opportunities in setting up composite textiles industry combining textile, yarn and garments.

Continue…………Continue………… d. Investment Opportunities RMG and textile sectors have enormous investment opportunities. Government provides highly favorable policy framework for investment in these sectors. Investors have the following choices:

Establishment of new textile/RMG mill in the private sector.

Joint ventures with the existing textile / RMG mill. Acquisition of public sector textile mills that are being

privatized. Indirect investment through financial services and /or

leasing.

Continued…………Continued………… Frozen Foods

Frozen Shrimp, Frozen Fish, Other Items a. Sector Highlights Government is promoting semi-intensive shrimp

farming. Fish and prawn exports registered a modest growth in

past decade. Shrimp processing and export industry is largely

dominated by the smaller unorganized sector. 15% cash incentive is given to shrimp export amount.


b. Industry Situation The frozen foods export is the second largest export sector of the country. After some initial difficulties in terms of quality achievement, exporters have earned credibility and trustworthiness in the global market. Assurance of reliable and continued product quality is a major challenge in this sector. Technology orientation, marketing perceptions, and quality improvement aspects invite foreign investment in this sector.

Continued…………Continued…………Information Technology

Data Processing, Software Development, Hardware Manufacturing a. Sector Highlights

To instigate the IT industry robustly, deregulation of the telephone has been decided and executed by mid 2003.

The extensive growth of mobile telephony resulted in significant opportunities.

The industry is at its introductory stage and has opportunity of capitalizing the potential.

Bangladesh has a well-educated, skilled, dedicated and growing IT workforce. Continued….

Continued…………Continued…………There is a fast growing domestic market and export

demand. Strong research assistance from the universities and

research institutions are available.Government is keen in establishing IT related

infrastructure for the development of the industry. Connectivity with the information highway through

submarine cable. b. Industry Status

IT Hardware Import Policy Export of Software, data processing, transcription etc.

Continued…………Continued…………Ceramic

Tableware, Sanitary ware, Insulator Sector Highlights

Global market of ceramic tableware is about US$10 billion. Bangladesh Ceramic tableware has a good reputation to the

international market like North America and EU countries. Bangladesh has achieved technical expertise on ceramic

tableware manufacturing. Sanitary ware and insulator has also a domestic and

international market demand. The clean gas reserve required for firing is a great

competitive advantage for Bangladesh.

Continued…………Continued…………b. Industry Status A few ceramic table ware manufacturers dominate the industry producing high quality products for the international brands. A pool of skilled manpower has been developed. The latest technological advancements in ceramic are also acquainted. Bangladesh produces high quality Bone China transferring the technology from Japan. The domestic market is also attractive. Some low-quality tableware are imported from mainly China to cater the demand of lower segment of the domestic market.

ConclusionConclusion

Bangladesh Export Processing Zone has a vital role to the total economy of the country.

Foreign investment comes through this process which makes Bangladesh to prosperous industrialization.

Thank You All

Documents

Presentation on in Mngmt.-sallu