PROJECT PAPER

Ten years performance of Bangladesh Export Processing Zone Authority

(BEPZA)

Prepared By
Ariful Islam
ID: 81610011
Master of International Trade and Business
1st Batch
Department of International Business
University of Dhaka

Supervisor
Dr. S.M. Mahfuzur Rahman
Professor
Department of International Business
Faculty of Business Studies

University of Dhaka

Date: 26 JULY 2018

Introduction

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. 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.

Two fully operating EPZs, one in Chattogram and the other near Dhaka have attacted a wide
range of investors. Another four EPZs, one at Mongla, a southern port city of Bangladesh,
one at Cumilla, and unique place between Dhaka and Chattogram, one at ishwardi near the
Jamuna Bridge and the fourth one at Nilphamari named Uttara EPZ near Syedpur Airport
have already started operation. Other two EPZs Adamjee near Dhaka and karnaphuli in
Chattogram are progressing fast for allotment of plot to investors.

According to BEPZA Act, the objectives of BEPZA are: (i) to foster and generate economic
development of Bangladesh by encouraging and promoting foreign investments in a zones:
(ii) to diversity the sources of foreign exchange earnings by increasing export of Bangladesh
through a zone : (iii) to encourage and foster the establishment and development of
industries and commercial enterprises in a zone in order to widen and strengthen the
economic base of Bangladesh, and (iv) to generate productive employment opportunity and
to upgrade labor and management skills through acquisition of advanced technology (GOB
1994). Meanwhile, Chattogram Export Processing Zone (CEPZ) and Dhaka Export
Processing Zone (DEPZ) were established which started functioning in 1983/84 and
respectively. Currently, Bangladesh has been promoting EPZ program more vigorously with
the creation of four more EPZs in Mongla, Cumilla, Ishwardi and Uttara (Nilphamari) with a
heavy claim on scarce national resources inviting a serious study and debate, It is
important to see whether further replication of the EPZs is worthwhile in terms of the
national resources deployed and the role the existing EPZs play in expediting the process of
industrialization in Bangladesh
Objectives of the study

The objective of the present paper is to examine whether the EPZs have been
successful in achieving the desired goals as laid down in the, BEPZA Act and has
contributed to the industrialization process of the country. Promotion of FDI & Local
Investment

 Promotion of Export
 Promotion of Diversification of Export

 Generation of employment

 Development of Backward and Forward Linkage

 Transfer of Technology.

 Upgrade of Skill

 Development of Management

 Promotion of International Marketing.

Literature Review :

Bangladesh Economic Survey-

Bangladesh Institute of Development Studies

Bangladesh Investment Development Authority(BIDA)

The survey of BEPZA

The Survey of BGMEA

Bangladesh Economic Survey

Bureau of Bangladesh Statistics

General Features

Bangladesh offers an unparalleled conductive investment climate compared to the other

South Asian economics .

Bangladesh is a largely homogenous society with no major internal or external tensions and
a population with great resilience in the face of adversity (e.g. natural calamities).

Bangladesh is a liberal democracy and mostly a one race and one religion country. The
population of this country irrespective of race and religion have been living in total
harmony and understanding for thousands of years.

It enjoys broad non-partisan political support for maker oriented reform and offers the most
investor friendly regulatory regime in South Asia.

Bangladesh owns a trainable, enthusiastic, hardworking and low-cost (even by regional

standards) labor force suitable for any labor-intensive industry.

Geographical location of the country is ideal for global trades with very convenient access to
international sea and air route. Bangladesh is the bridge between ASEAN and SAARC
nations.

Bangladesh is endowed with abundant supply of natural gas, water and very fertile soil.

Although Bengali is the official language, English is widely spoken as second language,
English is widely spoken as second language. Majority of even moderately educated
population can read, write and speak in English.

As a result of low per capita GDP present domestic consumption is not significant, However,
it may be considered that there exists a middle class with significant purchasing power. As
economic growth picks up, the purchasing power will also grow substantially and in a
country of more than 133.4 million people, even a small middle class may constitute a
significant market.

Bangladeshi products other than armaments enjoy complete duty and quota free access to
EU, Japan, Canada, Australia, Norway and most of the developed countries . However, for
apparel export to USA, Bangladesh has a quota regime which is generally favorable.

Vision

To become a significant contributor for economic development of Bangladesh.

Mission

Strengthen the economic base of Bangladesh through industrialization, promotion of

investment, boost up export and generation of employment in the Export Processing Zones.

Regulatory and Legal Framework

Investment in Bangladesh is well protected by law and by practice. Major laws related to
foreign investment are:

The Foreign Private Investment (Promotion and Protection)Act of 1980

The Bangladesh Export Processing Zones Authority Act of 1980

The Investment Board Act of 1989

The Companies Act 1994

The Bangladesh Private Export Processing Zones Act of 1996

The Industrial Policy 2016(Proposed)

The Import Policy Order 2003-2006

 Bilateral Investment Agreements

The Foreign Private Investment (Promotion and Protection) Act 1980 induces a guarantee
of fair and equitable treatment to foreign private investment. Such national treatment is also
provided in bilateral investment treaties (BITs) for the promotion and protection of foreign
investment which was concluded with 24 countries listed below.

1.Austria 9. Italy 17. Switzerland

2. Belgium 10. Japan 18. The Netherlands

3. Canada 11.Korea, DPR 19.The Philippines

4. China 12.Korea,Republic of 20. Turkey

5. France 13. Malaysia 21. Thailand

6. Germany 14. Pakistan 22. UK

7. Indonesia 15. Poland 23. USA

8. Iran 16. Romania 24. Uzbekistan

CHAPTER ONE : REASONS FOR SETTING EPZ IN BANGLADESH

EPZ set up in Bangladesh due to various reasons Major reason among them is expedites
export activities and stimulates rapid economic growth.

These reasons are :

 stimulate rapid economic growth

 Enhance industrialization

 Adopted with Open door policy i.e. Globalization

 Attract foreign investment

 Provide special areas where potential investor would get congenial investment
climate.

 Smooth export procedure, free from cumbersome procedures

 Development export promotion strategy

 More employment generation

 Development of export oriented industries

 Proper use of domestic available raw materials

CHAPTER TWO : THE BEPZA ACT- 1980

An Act for the establishment of the Bangladesh Export Processing Zones Authority. Whereas
it is expedient to make provision for the establishment of the Bangladesh export processing
Zones Authority for creation, development, operation, management and control of Export
Processing Zones and for matters connected therewith . It is hereby enacted as follows:

Short title and commencement:

(1) This Act may be called the Bangladesh Export Processing Zones Authority Act, 1980,

(2) It shall come into force on such date as the Government may, by-notification in the
official Gazette, appoint-
Definitions :

In this Act, unless there is anything repugnant in the subject or context

(a) ‘Authority’ means the Bangladesh Export Processing Zones Authority established under
section 3.

(b) Board means the Board of Governors of the Authority,

(c)Executive Board means the Executive Board of the Authority

(d) Executive Chairman means the Executive Chairman of the Board.

(e) Prescribed means prescribed by rules made under this Act. and

(f) Zone means a place or place or places to be specified by the Government under Section
10 as a Export Processing Zone for the purposes of setting up export- oriented industries .

Type of Investment

Type- A 100% foreign owned including Bangladeshi nationals ordinarily resident in Abroad

Type – B Joint venture between foreign and Bangladeshi entrepreneurs resident in

Bangladesh.

Type- C 100% Bangladeshi entrepreneurs resident in Bangladesh.

EPZs of Bangladesh

 Adamjee EPZ
 Chattogram EPZ

 Cumilla EPZ

 Dhaka EPZ

 Ishwardi EPZ

 Karnaphuli EPZ
  Mongla EPZ

Mode of Investment

Investment in convertible foreign currencies by foreign investors, Option to establish public/

private Ltd. companies or sole proprietorship/ partnership concerns.

Investment Guarantee

Foreign Private Investment (Promotion and Protection) Act, 1980 secures all foreign
investment in Bangladesh. OPIC’s (Overseas Private Investment Corporation, USA)
insurance and finance programmes operable. Security and safeguards available under
Multilateral investment Guarantee Agency (MIGA)of which Bangladesh is a member.
Arbitration facility of the International Center for the Settlement of investment Dispute
(ICSID) available.

Tele-communications
E-mail, internet, Fax ISD, NWD & Cellular services are available at all Zones.

Communication

Adequate sea, rail, road and air communication services are available.

One window same day service and simplified procedure

BEPZA

-Issues import/Export permits

-Provides infrastructure facilities

-Offers One Window Same Day service

-Potential investors are required to deal only with BEPZA for investment and all other

operational purposes.

Work Force

Bangladesh offers a substantial manpower reserve skilled, semi-skilled & un-skilled. BEPZA
is vested with the responsibility to administer labour matters for matters for all its
enterprises.

Average Monthly wages

Apprentice/ Trainee US $ 65.00

Unskilled US $ 84.00

Semi-skilled US $ 68.00

Skilled US $ 120.00
Other benefits include Conveyance Allowance, House Rent, Medical Allowance, Maternity
Benefit, Festival Bonus and Overtime Benefit.

Working Hours

48 hours week in a factory

39 hours week in an office

Employees Leave

10 days casual leave in a year

17 days Earned leave in a year

14 days sick leave in a year

10 days Festival holiday in a year

Package of Incentives
 Incentives & Facilities

Fiscal Incentives
1. 10 years tax holiday for the Industries to be established before 1st January, 2012 and

Duration and rate of tax exemption for Mongla, Ishwardi & Uttara EPZ for the industries set
up after January 01, 2012:

Duration of Tax Exemption Rate of Tax Exemption

First 03 years (1 , 2 and 3 year)

st nd rd
100%

Next 03 years (4 , 5 and 6 year)

th th th
50%

Next 01 year (7 year)

th
25%

Duration and rate of tax exemption for Chattogram, Dhaka, Cumilla, Adamjee,& Karnaphuli EPZ for
the industries set up after January 01, 2012:

Duration of Tax Exemption Rate of Tax Exemption

First 02 years (1 and 2 year)

st nd
100%

Next 02 years (3 and 4 year)

rd th
50%

Next 01 year (5 year)

th
25%

2. Duty free import of construction materials

3. Duty free import of machineries, office equipment & spare parts etc.
4. Duty free import and export of raw materials and finished goods
5. Relief from double taxation
6. Exemption from dividend tax
7. GSP facility available
8. Accelerated depreciation on machinery or plant allowed
9. Remittance of royalty, technical and consultancy fees allowed
10. Duty & quota free access to EU, Canada, Norway, Australia etc
Non – Fiscal Incentives
1. 100% foreign ownership permissible
2. Enjoy MFN (most favored nation) status
3. No ceiling on foreign and local investment
4. Full repatriation of capital & dividend
5. Foreign Currency loan from abroad under direct automatic route
6. Non-resident Foreign Currency Deposit (NFCD) Account permitted
7. Operation of FC account by 'B' and 'C' type Industries allowed.
Facilities
1. No UD, IRC, ERC and renewal of Bond license
2. Work permits issued by BEPZA
3. Secured and protected bonded area
4. Off-Shore banking available
5. Import on Documentary Acceptance (DA) basic allowed
6. Back to Back L/C
7. Import and Export on CM basis allowed
8. Import from DTA (Domestic Tariff Area)
9. 10% sale to DTA (Domestic Tariff Area)
10. Customs clearance at factory site
11. Simplified sanction procedure
12. Sub-contracting with export oriented Industries inside and outside EPZ allowed
13. Relocation of foreign industries allowed
14. Accords Resident-ship and Citizenship
15. One Window same day service and simplified procedure.

Indicative List of Industries

Garments and Garments Accessories, Textiles Agro-based industries, Chemicals Backward

and Forward linkage industries, Electrical equipment and components Electronic products,
Software, optical goods, Woven and knitted fabrics, Engineering products, Leather products
and Foot-wear, Toys Medical and Biological instruments, Pharmaceutical products, Plastic
molded, products Industries based on new uses of jute, Cutting / Polishing of precious and
semi precious stones, Household fittings and equipment, Head-wear Jeweler Homological
instruments, Scientific measuring instruments, Aircraft instruments Laboratory ware, Printing
and Publishing, Printing and copying equipment and accessories.

Chattogram Export Processing Zone

Location

South Halishahar 3.10 kms from the Sea Prot, 5.50 kms from the main business center, 7.21
kms from the Chattogram international Airport
Profile of Zone

Zone area : 183.37 hectares (453 acres)

Number of Industrial Polts. 428 Size of each plot : 2000 sqm(Approx)

* Tariff : US$2.2000/sqm/ year.

Space of Standard Factory building : 58244.98 sqm(Approx)

* Tariff : US$ 2.75 sqm/ month.

Space of Warehouse : 2667.79 sqm

* Tariff : US$ 2.75/ sqm/ month

Dhak Export Processing Zone

Location

Ganakbari, Savar,35 kms from Dhaka city center, 25 kms from Zia International Airport 304
kms from Chattogram sea port.

Profile of Zone

Zone area : 143.70 hectares (346.51acres).

Number of Industrial Plots : 388 size of each plot : 2000 sqm

*Tariff : US $ 2.00/ sqm/ year

Space of standard Factory Building: 79843.19 sqm

Tariff : US $2.50/ sqm/month

Space of Warehouse : 2356 sqm

Tariff : US$ 2.50 sqm/month

MONGLA EXPORT PROCESSING ZONE

Location

Mongla port area, Bagerhat, 105 kms from Jessore Airport, 397 kms from Dhaka and 664
kms from Chattogram Sea Port

Profile of Zone

Zone area : 186.21 hectares (460 acres) Number of industrial Plots : 162 (first phase) size of
each plot : 2000 sqm

Tariff : US $ 2.00/sqm/year.

Space of standard Factory Building : 18000 sqm

Tariff : US $ 1.25/ sqm/month

CUMILLA EXPORT PROCESSING ZONE

Location

Cumilla old Airport area. 167 kms from Chattogram Sea Port, 97 kms from Dhaka

Profile of Zone :

Zone area : 104.44 hectares (258 acres) Number of industrial Plots : 208 (first phase) size of
each plot : 2000 sqm

Tariff : US $ 1.25/sqm/ year.

Space of standard Factory Building : 18000 sqm

Tariff : US $ 1.60/ sqm/month

ISHWARDI EXPORT PROCESSING ZONE

Location

Pakshi, Pabna Pakshi Bridge through by pass road 3.7 kms, 10.60kms, from ishwardiAirport,
130 kms from Jamuna Bridge 280 kms from Dhaka 255 kms from Mongla Port, 110 kms
from Rajshahi Airport and 412 kms from chitt agong Sea Port.

Profile of Zone

Zone Area :309 acres) 290 nos plot.

Number of Industrial Plots : 2000 sqm

Tariff : US $ 1.25/ sqm / year

Space of Standard Factory Building : 18000sqm

Tariff :US $1.60 /sqm /month

UTTARA EXPORT PROCESSING ZONE

Location

Shongalshi, Nilphamari, 18 kms from syedpur Airport, 401 kms from Dhaka, 650 kms from
Chittangong Sea Prot. 586 kms from Mongla Prot.

Profile of Zone

Zone area : 93.20 hectares (230.21 acres) Number of Industrial Plots : 155 (first phase Size
of each plot : 2000sqm

Tariff : US $ 1.25/sqm/year

Space of Standard Factory Building : 18000 sqm

Tariff : US $ 1.60 sqm/ month

ADAMJEE EXPORT PROCESSING ZONE

Location

Adamjee Nagar, Shiddirgonj, Narayanganj.15 kms from Dhaka city center, 40 kms from Zia
International Airport, 255 kms from Chattogram Sea Port.

Profile of Zone

Zone Area :118.62 hectares (293 acres)

Number of Industrial Plot: 200 (60 in 1st phase)

size of each Plot : 2000 sqm

Tariff : US $ 2.00/ sqm / year

Space of Standard Factory Building : 42737sqm

Tariff :US $ 2.50//sqm /month

KARNAPHULI EXPORT PROCESSING ZONE

Location

Chattogram Steel mill Area, North Patenga. 5.6 kms from Chattogram sea Port, 8 kms from
main business centre of Chattogram, 4.7 kms from Chattogram international Airport.

Profile of Zone

Zone Area :90.04 hectares (222.42 acres)

Number of Industrial Plot: 211 (100 in 1st phase)

size of each Plot : 2000 sqm

Tariff : US $ 2.00/ sqm / year

Space of Standard Factory Building : 2974 sqm

Tariff :US $ 2.50//sqm /month.

CHAPTER THREE : PERFORMANCE OF INDUSTRIES UNDER EPZ

Year Wise Investment

Chattogram Export Processing Zone

Year Cumulative ( Million US $ )

1983-84 0.87

1984-85 2.47

1985-86 6.07

1986-87 12.71

1987-88 14.5

1988-89 17.22
Chattogram Export Processing Zone

Year Cumulative ( Million US $ )

1989-90 25.8

1990-91 47.85

1991-92 71.51

1992-93 93.56

1993-94 122.74

1994-95 150.41

1995-96 166.54

1996-97 189.42

1997-98 232.02

1998-99 268.12

1999-00 283.3

2000-01 307.61

2001-02 329.98

2002-03 372.12

2003-04 427.55

2004-05 472.86

2005-06 508.82

2006-07 541.44

2007-08 667.9

2008-09 715.12

2009-10 772.64

2010-11 858.48

2011-12 960.23

2012-13 1094.06

2013-14 1203.52

2014-15 1355.54
Chattogram Export Processing Zone

Year Cumulative ( Million US $ )

2015-16 1466.25

2016-17 1556.83

2017-18 (December, 2017) 1599.82

Dhaka Export Processing Zone

Year Cumulative ( Million US $ )

1993-94 8.22

1994-95 16.49

1995-96 30.94

1996-97 61.96

1997-98 88.19

1998-99 123.69

1999-00 143.49

2000-01 167.55

2001-02 199.56

2002-03 258.69

2003-04 308.06

2004-05 359.41

2005-06 420.98

2006-07 508.44

2007-08 618.78

2008-09 649.17

2009-10 713.55

2010-11 785.93

2011-12 863.09
 Year Cumulative ( Million US $ )

2012-13 931.55

2013-14 1057.34

2014-15 1141.36

2015-16 1222.00

2016-17 1292.12

2017-18 (December, 2017) 1329.65

Karnaphuli Export Processing Zone

Year Cumulative ( Million US $ )

2006-07 1.91

2007-08 20.25

2008-09 48.15

2009-10 87.73

2010-11 135.29

2011-12 217.12

2012-13 263.05

2013-14 307.72

2014-15 372.53
 Year Cumulative ( Million US $ )

2015-16 433.04

2016-17 484.36

2017-18 (December, 2017) 507.56

Uttara Export Processing Zone

Year Cumulative ( Million US $ )

2001-02 0.16

2002-03 0.36

2003-04 0.78

2004-05 1.5

2005-06 1.5

2006-07 2.74

2007-08 2.89

2008-09 3.06

2009-10 4.75

2010-11 16.73

2011-12 22.7

2012-13 43.32

2013-14 60.59

2014-15 80.49

2015-16 114.02

2016-17 138.58

2017-18 (December, 2017) 147.65

Adamjee Export Processing Zone

 Year Cumulative ( Million US $ )

2007-08 45.39

2008-09 66.47

2009-10 92.63

2010-11 129.68

2011-12 164.23

2012-13 194.22

2013-14 267.96

2014-15 316.48

2015-16 371.18

2016-17 421.54

2017-18 (December, 2017) 446.61

 Year Cumulative ( Million US $ )

Year Total Export of Bangladesh Total Export of EPZs BEPZA’s

(US$M) (US$M) Contribution (%)

2000-01 6,467 1,068 16.51

2001-02 5,986 1,077 18.00

2002-03 6,548 1,200 18.33

2003-04 7,603 1,354 17.80

2004-05 8,655 1,549 17.90

2005-06 10,526 1,836 17.44

2006-07 12,178 2,064 17.00

2007-08 14,111 2,429 17.22

2008-09 15,560 2,582 16.60

2009-10 16,250 2,822 17.36

2010-11 22,924 3,698 16.13

2011-12 24,41 0 4,210 17.24

2012-13 27,018 4,856 17.97

2013-14 30,176 5,525 18.30

2014-15 31,198.45 6,113 19.59

. Most of the FDI (87%) have been brought by companies registered with the Bangladesh
Investment Development Authority(BIDA) , the balance (13%) have been invested in
companies registered with Bangladesh Export Processing Zones Authority (BEPZA).

Source : Bangladesh Economic Review 2017 and BEPZA Official Review.

Year Wise Export

Adamjee Export Processing Zone

Year Cumulative ( Million US $ )

2005-06 0.23

2006-07 9.69

2007-08 24.8

2008-09 84.92

2009-10 188.57
 Year Cumulative ( Million US $ )

2010-11 353.25

2011-12 560.57

2012-13 834.67

2013-14 1220.90

2014-15 1688.28

2015-16 2251.19

2016-17 2895.21

2017-18 (December, 2017) 3267.15

Chattogram Export Processing Zone

Year Cumulative ( Million US $ )

1983-84 0.16

1984-85 4.61

1985-86 12.21
 Year Cumulative ( Million US $ )

1986-87 27.47

1987-88 41.4

1988-89 57.48

1989-90 91.69

1990-91 139.67

1991-92 216.67

1992-93 343.71

1993-94 484.07

1994-95 671.05

1995-96 934.84

1996-97 1278.15

1997-98 1728.15

1998-99 2180.68

1999-00 2706.77

2000-01 3327.13

2001-02 3935.83

2002-03 4577.11

2003-04 5256.11

2004-05 6028.5

2005-06 6901.53

2006-07 7873.07

2007-08 8990.24

2008-09 10178.38

2009-10 11511.91
 Year Cumulative ( Million US $ )

2010-11 13178.79

2011-12 15062.6

2012-13 17157.72

2013-14 19419.342

2014-15 21803.099

2015-16 24222.81

2016-17 26476.97

2017-18 (December, 2017) 27654.56

Cumilla Export Processing Zone

Year Cumulative ( Million US $ )

2001-02 0.01

2002-03 1.16

2003-04 5.26

2004-05 14.91

2005-06 49.9

2006-07 95.91

2007-08 227.29

2008-09 323.14

2009-10 418.48

2010-11 563.95

2011-12 712.3

2012-13 889.24

2013-14 1098.66
 Year Cumulative ( Million US $ )

2014-15 1373.28

2015-16 1681.61

2016-17 2019.00

2017-18 (December, 2017) 2212.71

Dhaka Export Processing Zone

Year Cumulative ( Million US $ )

1993-94 5.26

1994-95 46.53

1995-96 119.75

1996-97 239.21

1997-98 424.85

1998-99 684.42

1999-00 1049.14

2000-01 1496.66

2001-02 1963.42

2002-03 2518.21

2003-04 3185.81

2004-05 3943.53

2005-06 4861.83

2006-07 5894.86

2007-08 7041.37

2008-09 8231.73
 Year Cumulative ( Million US $ )

2009-10 9448.22

2010-11 10969.99

2011-12 12584.44

2012-13 14365.17

2013-14 16302.69

2014-15 18300.15

2015-16 20484.03

2016-17 22575.33

2017-18 (December, 2017) 23636.97

Ishwardi Export Processing Zone

Year Cumulative ( Million US $ )

2004-05 1.09

2005-06 3.63

2006-07 5.86

2007-08 7.07

2008-09 7.86

2009-10 15.39

2010-11 41.35

2011-12 82.88

2012-13 138.59

2013-14 231.76

2014-15 340.02

2015-16 454.76
 Year Cumulative ( Million US $ )

2016-17 551.31

2017-18 (December, 2017) 609.83

Karnaphuli Export Processing Zone

Year Cumulative ( Million US $ )

2007-08 9.86

2008-09 48.99

2009-10 105.8

2010-11 243.96

2011-12 489.01

2012-13 868.62

2013-14 1395.48

2014-15 2105.22

2015-16 2928.50

2016-17 3781.58

2017-18 (December, 2017) 4257.18

Mongla Export Processing Zone

Year Cumulative ( Million US $ )

2001-02 1.55
 Year Cumulative ( Million US $ )

2002-03 4.55

2003-04 7.76

2004-05 15.59

2005-06 22.67

2006-07 23.98

2007-08 32.24

2008-09 39.3

2009-10 46.58

2010-11 74.52

2011-12 128.76

2012-13 202.86

2013-14 280.15

2014-15 364.41

2015-16 439.07

2016-17 484.86
 Year Cumulative ( Million US $ )

2017-18 (December, 2017) 511.04

Uttara Export Processing Zone

Year Cumulative ( Million US $ )

2006-07 0.08

2007-08 0.175

2008-09 0.41

2009-10 2.31

2010-11 9.08

2011-12 25.10

2012-13 45.48
 Year Cumulative ( Million US $ )

2013-14 78.71

2014-15 166.70

2015-16 355.50

2016-17 582.58

2017-18 (December, 2017) 690.25

Year Wise Employment

Adamjee Export Processing Zone

Year Cumulative ( No. )

2005-06 1625

2006-07 1816

2007-08 5989

2008-09 7772

2009-10 11789

2010-11 16156

2011-12 21017

2012-13 30874

2013-14 36007

2014-15 40091

2015-16 46459

2016-17 53122

2017-18 (December, 2017) 56127

Chattogram Export Processing Zone

Year Cumulative ( No. )

1983-84 624

1984-85 1780

1985-86 2512

1986-87 3240

1987-88 3438

1988-89 4207

1989-90 7001
Chattogram Export Processing Zone

Year Cumulative ( No. )

1990-91 9364

1991-92 14614

1992-93 17728

1993-94 20814

1994-95 25111

1995-96 30986

1996-97 39574

1997-98 46993

1998-99 54741

1999-00 57707

2000-01 68556

2001-02 75089

2002-03 83221

2002-03 83221

2003-04 85698

2004-05 94419

2005-06 104155

2006-07 116984

2007-08 123789

2008-09 138612

2009-10 150783

2010-11 166452

2011-12 176274

2012-13 185006

2013-14 182621
Chattogram Export Processing Zone

Year Cumulative ( No. )

2014-15 190815

2015-16 196969

2016-17 199757

2017-18 (December, 2017) 200764

Cumilla Export Processing Zone

Year Cumulative ( No. )

2001-02 442

2002-03 1440

2003-04 2494

2004-05 2814

2005-06 5787

2006-07 6105

2007-08 7777

2008-09 7712

2009-10 6964

2010-11 10841

2011-12 12776

2012-13 14713

2013-14 16474

2014-15 21821

2015-16 24343

2016-17 27019

2017-18 (December, 2017) 29518

Dhaka Export Processing Zone

Year Cumulative ( No. )

1993-94 5522

1994-95 7366

1995-96 12197

1996-97 16382

1997-98 23012

1998-99 29333

1999-00 36257

2000-01 41418

2001-02 42403

2002-03 42916

2003-04 48979

2004-05 56280

2005-06 64636

2006-07 74386

2007-08 75415

2008-09 71459

2009-10 74624

2010-11 82895

2011-12 85490

2012-13 88033

2013-14 88521

2014-15 86638

2015-16 89968
Dhaka Export Processing Zone

Year Cumulative ( No. )

2016-17 92340

2017-18 (December, 2017) 90860

Ishwardi Export Processing Zone

Year Cumulative ( No. )

2004-05 20

2005-06 56

2006-07 47

2007-08 76

2008-09 1537

2009-10 3028

2010-11 5060

2011-12 7653

2012-13 6071

2013-14 7194

2014-15 8323

2015-16 8055

2016-17 9058

2017-18 (December, 2017) 9590

Karnaphuli Export Processing Zone

Year Cumulative ( No. )

2006-07 174

2007-08 2990

2008-09 5403

2009-10 11674

2010-11 19781

2011-12 26830

2012-13 39070

2013-14 45645

2014-15 54812

2015-16 63118

2016-17 67629

2017-18 (December, 2017) 69282

Mongla Export Processing Zone

Year Cumulative ( No. )

2000-01 10

2001-02 170

2002-03 294

2003-04 285

2004-05 205

2005-06 300

2006-07 260

2007-08 478
Mongla Export Processing Zone

Year Cumulative ( No. )

2008-09 253

2009-10 352

2010-11 523

2011-12 1471

2012-13 1562

2013-14 1416

2014-15 1598

2015-16 1613

2016-17 2104

2017-18 (December, 2017) 2385

Uttara Export Processing Zone

Year Cumulative ( No. )

2001-02 644

2002-03 1044

2003-04 1530

2004-05 1050

2005-06 1250

2006-07 1397

2007-08 1785

2008-09 1945
Uttara Export Processing Zone

Year Cumulative ( No. )

2009-10 3543

2010-11 4715

2011-12 8510

2012-13 8679

2013-14 11139

2014-15 16003

2015-16 23127

2016-17 28152

2017-18 (December, 2017) 28541

Table 1.2 : FDI Inflow in Bangladesh during 2005-Distribution by Regulatory Agencies (in

Million US$)

FDI Components BOI- Registered Entities 2005 BEPZA- Registered EntitiesTotal

2005 FDI- 2005
Jan-Jun Jul-Dec BIDA Jan-Jun Jul-Dec BEPZA
Total Total
a. Equity Capital 242.7 168.1 410.8 9.6 5.2 14.8 425.6
b. Reinvested 124.7 89.1 213.8 19.4 14.3 33.7 247.5
Earnings
c. Intra- 51.4 58.5 109.9 33.9 28.4 62.3 172.2
Company Loans
Total 418.8 315.7 734.5 63.0 47.8 110.8 845.3
Source : Bangladesh Bank Enterprise Survey, 2006.

Performance of Industries under Bangladesh Export Processing Zone Authority (BEPZA).

EPZ 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-0
Total 26.24 35.50 19.80 24.06 32.01 59.14 49.36 51.35 61.57
Dhaka Invest
Total 185.64 259.57 364.73 447.51 466.76 554.79 66.60 757.73 912.3
Export
Chattogra Total 42.59 36.11 15.18 24.30 22.37 42.14 55.43 45.31 35.95
m Invest
Total 450.41 452.12 526.09 620.36 680.70 641.28 679.01 772.39 873.0
Export
 Mongla Total 0.00 0.00 0.00 0.05 0.43 0.11 0.80 1.49 0.00
Invest
Total 0.00 0.00 0.00 0.00 1.55 3.00 3.21 7.83 7.09
Export
Cumilla Total 0.00 0.00 0.00 0.00 0.64 1.05 9.03 19.01 10.18
Invest
Total 0.00 0.00 0.00 0.00 0.01 1.15 4.10 9.66 34.99
Export
Uttara Total 0.00 0.00 0.00 0.00 0.16 0.20 0.42 0.72 0.00
Invest
Total 0.00 0.00 0.00 0.00 – – – – –
Export
Ishwardi Total 0.00 0.00 0.00 0.00 0.10 0.50 – 0.05 0.76
Invest
Total 0.00 0.00 0.00 0.00 – – – 1.09 2.542.5
Export
Adamjee Total 0.00 0.00 0.00 0.00 – – – – 4.00
Invest
Total 0.00 0.00 0.00 0.00 – – – – 0.23
Export
Total Investment 68.83 71.61 34.98 48.41 55.71 103.14 115.05 118.52 112.4
Total Export 636.05 711.70 890.73 1067.91 1149.02 1200.22 1353.91 1548.68 1830.1

Table 6.3 shows the number of industries, investment cost, manpower and export
performance of the seven EPZs at Dhaka, Chattogram, Cumilla, Mongla, Uttara, Ishwardi
and Adamjee upto June 2017. 242 industrial units were operational in these seven zones
with a total investment cost of US$ 979.46 million. A total 1,77,809 manpower has been
employed in these industries. Besides, establishment of a total of 133 industrial units (32 in
Chattogram EPZ 26 in Dhaka EPZ, 22 in Cumilla EPZ, 14 Iswardi EPZ, 18 in Mongla EPZ,
6 in Uttara EPZ, 9 in Adamzee EPZ and 6 Karnaphuli EPZ) is underway . According to the
project proposal, another 66.007 jobs will be created, once those industrial units are
operationalised. During the FY 2005-06 commodities worth US$ 1830 million were exported
from the mills and factories of EPZ, which accounted for 18 percent of national exports.

Table 6.3: Industries under Bangladesh Export Processing Zone (EPZ) and their Performance
in terms of Investment and Employment Generations (Up to June 2017)
Goods Number of Industries Total Investment (MillionTotal
US$)
Manpower

Readymade Garments 49 253.28 94,742

Electronics 15 52.27 3,001
Textile goods 26 239.23 20,158
Metal goods 12 20.57 815
Leather goods 12 52.36 5.280
Plastics goods 13 21.24 1,025
Cap 07 43.12 12,583
Terry towel 16 34.89 4,491
knit textile 21 84.28 19,028
Garment goods 30 76.01 6,013
Others 41 102.19 10,674
Total 242 979.46 1,77,809

Source: (BEPZA).

Table 6.4: Annual Investment and Exports Status in EPZs located at Dhaka, Chattogram,
Mongla, Cumilla, Uttara, Ishwardi and Adamjee (1997-98 to 2005-06).

(Million US$)

CHAPTER FIVE:
Source : (BEPZA) June, 2006. CREDIT FACILITIES TO INDUSTRIES
IN EXPORT PROCESSING ZONES
(BANGLADESH BANK GUIDELINES FOR FOREIGN EXCHANGE TRANSACTIONS,
Volume-1
Instructions as of 31 May, 2009 issued to
Authorised Dealers and Money Changers in Foreign Exchange)

17. (A) 100% foreign owned enterprises in the EPZs known as Type A industries may obtain
short term foreign currency loan from overseas banks and financial institutions subject to
the following conditions:
(i) The loan shall be received through an AD in Bangladesh; and the loan proceeds
will be credited to the FC account maintained by the AD in the name of the Type-A
 unit, to be used for financing import of capital machinery and raw materials, payment
of interest / service charges, repayment of loans and for crediting Taka account for
meeting local expenses;

(ii) Only assets fully owned by the Type-A industry may be lodged as collaterals for
such loans;

(iii) Repayment of principal and interest on the loan shall be remitted out of the
balances available in the FC account without prior Bangladesh Bank approval. No fund
may be provided from the AD’s own resources for such repayment except with prior
approval of Bangladesh Bank;

(iv) In case the loan is called up by the creditor, the assets charged to foreign lender
will be allowed to be sold only in foreign exchange and proceeds, after paying off all
local liabilities in Bangladesh, may be remitted abroad with Bangladesh Bank’s
approval;

(v) No Taka loan against repatriable short term foreign currency loan will be allowed
to a Type-A industry.

(B) Type-B industries (joint venture projects) may also obtain such loans subject to
conditions applicable to Type-A industries as indicated above, except that Type-B
industries will not be permitted to mortgage / hypothecate their fixed assets, raw materials
in favour of any non-resident. The ADs may, however, issue guarantee to overseas banks /
financial institutions for short term foreign currency loans brought into Bangladesh by
Type-B industries, subject to prior approval of the Bangladesh Bank.
18. Taka loan may be granted to a joint venture (Type-B) industrial unit in EPZ up to 100%
of short term foreign currency loan brought in and encashed to taka. Loan in Taka for
procurement of capital machineries for setting up a Type-B industry, not exceeding the
local partners’ share of ownership of the unit, may be extended on normal banker-
customer relationship. Prior Bangladesh Bank approval should be obtained by the AD
while providing foreign exchange for import of the machineries out of the Taka loan.
Repayments of the Taka loans along with interests should be received out of the foreign
exchange earnings of the unit.
19. ADs may extend credit facilities to Type-C industries (100% locally owned) as
admissible to such industries outside EPZ.
20. In establishing import LCs on account of Type-A, B and C units in the EPZs ADs shall
bear in mind the position that the import payments may be made only out of the foreign
exchange earnings of the concerned units or out of their borrowings abroad credited in
their FC accounts, and that no funds from the ADs own foreign exchange resources can
be used for this purpose. Before opening inputs import LC against an export LC or
export order received by an EPZ unit the AD should satisfy itself completely about the
clarity of the conditions in the export order / LC, the standing and credit of the foreign
 buyer and the ability of the exporting unit for timely execution of the export order. In
opening inputs import LCs on account of Type-B and Type-C units, domestic value
addition requirements prescribed for the respective items by the Ministry of Commerce
should also be abided by.
Import payments against the LCs should be scheduled in a manner that payment
obligations do not fall due before receipt of export proceeds. In all cases of opening
inputs import LCs on accounts of units in the EPZ, ADs should satisfy themselves that
necessary arrangements have been made by the opener that in case of shortfall or delay
in export receipts, foreign exchange would be made available form external sources.

21. In the case of joint venture (Type-B) projects in the EPZs, the foreign partners will have
to arrange their contributions in foreign exchange from own or borrowed sources outside
Bangladesh and the local partners shall contribute their shares in local currency. In the
event, however, the contributions as per joint venture project agreements made by the
foreign partners are not sufficient to cover the cost of machinery and equipment, the
shortfall may be made up, with prior Bangladesh Bank approval, by conversion of Taka
into foreign currency up to an amount not exceeding the local partners’ shares /
contributions referred to above.

22. Bangladesh in NFCD accounts may be utilized for discounting usance bills drawn by
Type-A and B units of EPZs for supplying raw materials under back to back (BTB)
arrangement and accepted by ADs operating outside EPZs. However, utilization of NFCD
fund for the above purpose including payment for BTB sight LCs (as mentioned in Chapter
7) will not exceed 50% of total NFCD balance of the concerned bank.

CHAPTER SIX : Indicative List of Industries

 Textile
 Agro-based Industries

 Chemicals

 Backward and forward linkage Industries

 Electrical Equipment and Components

 Electronic Products

 Software

 Optical Goods
 Garments and Garments Accessories

 Woven and Knitted Fabrics

 Engineering Products

 Leather Products and Foot-Wear

 Toys

 Medical and Biological Instruments

 Pharmaceutical Products

 Plastic Moulded products

 Industries based on new uses of Jute

 Cutting/Polishing of Precious and Semi

 Precious stones

 Household Fittings and Equipment

 Head-Wear

 Jewellery

 Horological Instruments

 Scientific Measuring Instruments

 Aircraft Instruments

 Laboratory Ware

 Printing and Publishing

 Printing and Copying Equipment & Accessories

 Do-it-yourself Tools and Equipment

 Musical instruments

 NB: This list is not exhaustive, only indicative.

Table1.3 : Productivity Performance of EPZ Workers

Productivity Performance of EPZ Workers

Productivity Performance of EPZ Workers

During 2005-2006 the export performance of EPZ workers in textile cluster stands US$
10147.00 per worker whereas export performance of one DTA worker in the same sector
recorded US$ 4389.Therefore , EPZ workers productivity performance is 2.3 times than the
DTA workers
Sector DTA EPZ
Empl (Nos) Export US$Exp/Empl Empl (Nos) Export US$Exp/Empl
m US$ m US$
Textile 18,00,000 7901 4389 162766 1651.599 10147
Cluster
Total Export Bangladesh $10526 m 100%

EPZ $1835 m 17.43%

Bangladesh $7901 m 100%

RMG & knit Export EPZ $ 1652 m 20.40%

Table1.4 : PRODUCT WISE ENTERPRISES (UP TO August 2016)

PRODUCT WISE ENTERPRISES

Sl Product Unit Investment. US$ Employ ment
(Nos.)
1 Garments 58 25,825.23 212345

2 Textile 28 1500.774 45000

3 Terry Towel 16 88.555 36125

4 Knit & Other Textile 25 111.431 4700

5 Garments Accs 32 120.948 4841

6 Caps 6 98.735 2210

7 Tent 5 523.623 4587

8 Elec & Electronics 16 152.647 4581

9 Footware & Leather 12 352.559 4895

10. Metal Product 11 221.247 25831

11. Plastic Goods 14 121.433 4581

12. Paper product 2 50.837 5478

13. Fishing Real & Golf 1 131.480 8975

14. Rope 2 16.134 4785

15. Service oriented industries 3 42.30 2652

16. Agro product 10 5.63 7897

17. Miscellaneous 22 63.52 80921

Gr. Total 264 53,846.34 460,313

Table 7.10: ZONE Wise Statistics (Up to August 2016)

ZONE Wise Statistics (Up to August 2016)

Industry Investment Export Employment

EPZ In op. (No) U/impl. (No) (US$ in M) (No)
(US$ in M)
Chattogram 172 11 1,473.35 24,576.98 2,12,345
EPZ
Dhaka EPZ 106 9 1,234.30 20.819.56 90,470
Cumilla 40 30 257.31 1,736.86 25,580
EPZ
Mongla 22 16 41.12 454.67 1,668
EPZ
Uttara EPZ 12 07 121.59 385.10 23,512
Ishwari 16 16 99.00 467.42 8,214
EPZ
Adamjee 48 19 381.23 2,348.41 48,698
EPZ
Karnaphuli 46 18 441.46 3,057.35 63,802
EPZ
Total 462 162 4,049.37 53,846.34

Table 1.5 : ANNUAL ECONOMIC BENIDFIT FROM EPZs

Areas where Epzs have been established have become special growth centers in the economy of Bangladesh
as a result of organi zed and fast development of infrastructure including roads, electricity
gas, water supply, telecommunication, fire brigade, post office etc. "vastly it can say that,
E+s in Bangladesh have been instrumental in creating salutary impacts in terms of flow of foreign
investment, employment generation, export and foreign exchange earnings, and value -added
 overall in our national economy.

2003-04. 2004-05 & 2005-06

ANNUAL ECONOMIC BENDFIT FROM EPZs

2003-04. 2004-05 & 2005-06

Taka in Crore
Performance 2003-04 2004-05 2005-06
Export (Equ. BDT) 7821.73 9245.86 12848
particulars of Exp Amount %Exp Amount %Exp Amount %Exp
Wages 450 5.75 544 5.88 673 5.23
Rental 70 0.89 79 0.85 92 0.71
Utiliti 139 1.78 145 1.57 172 1.33
Sv. Charge 321 4.10 390 4.22 541 4.21
DTA Goods 2162 27.64 2353 25.45 3338 25.98
Admn. Exp 200 2.56 252 2.73 351 2.73
Telecom. 60 0.71 70 0.76 78 0.60
Surplus Retained by110 1.41 212 2.29 294 2.28
Local investors
Total 3512 44.90 4045 43.75 5539 43.07

CHAPTER EIGHT: RECOMMENDATIONS:

For polices encouraging firms to operate in the EPZs the key factors are :

(a) A clear foreign investment policy regime

(b) An open door policy to attract foreign investment

(c) Restriction-free and duty free access to imported inputs and capital goods

(d) Rapid and low cost customs clearance for imports and exports

(e) A Completely liberalized foreign exchange regime

(f) Speedy response of BEPZA

(g) Minimum regulatory control of actions and transaction within the EPZ.

(h) speedy development of backward- linkage industries, especially for the RMG sector.

(i) Maintain a satisfactory law and order situation.

(j) Reduction of lead time.

Conclusion :

EPZs in Bangladesh play a significant role in attracting foreign direct investment as well as
in involving local investment, which jointly contribute to an overall increase in the countries
volume of exports and in its earnings of foreign exchange. Foreign exchange earned through
exports by EPZ enterprises reduces deficits in the country balance of payments. A part of it is
converted into local currency to be spent on procurement of goods and services from the local
economy. BEPZA’s contribution to national export was 19.69% in 2015.

The two EPZs provide employment to about 4,69,313 Bangladeshi workers. As the average
family size in the country is 6 members, with only one earning member in a family, these
4,60,313 workers earn livelihood for more than 1.5 milllion people. In most cases, foreign
investment in EPZs accompanied by utilization of advanced technology and provides an
opportunity for the local workforce to acquire new skills. The trained workers also help
expedite transfer of technology.

Areas where EPZs have been established have become special growth centers in the economy
of Bangladesh as a result of organized and fast development of infrastructure including roads,
electricity gas, water supply, telecommunication, fire brigade, post office etc. The private
sector around the EPZ areas have come up with support investments in shopping centers and
market , transport agencies, accommodation and recreation facilities etc, which have
accelerated the pace of economic activities. In addition to provision of services to the
community associated with EPZs , the private sector has also sets up linkage industries
nearby EPZs to cater to the needs of industries within them. Many EPZ enterprises have
shifted their manufacturing processes of part of a process outside EPZ under subcontracting.

The EPZs in Bangladesh have been instrumental in creating salutary direct benefits in terms
of flow of foreign investment, employment generation, export and foreign exchange
earnings, and value added. Limited indirect benefits in terms of technology and skill transfer,
and linkages have taken place. Most important factors affecting the success of the EPZs in
Bangladesh are : (i) the existing macroeconomic policies affecting the EPZs (ii) a more or
less realistic exchange rate and stable macroeconomic environment, and (iii) low-cost labor.

A critical limitation of the EPZs is that they accommodate only the light industries
with no room for heavy industries, which are the main vehicles of technology and skill
transfer. EPZs are essentially an incomplete package in the overall industrialization process
underlining the importance of interfacing the EPZ policies with the DTA policies in order to
ensure synergic co-existence and growth of ether Wipes and the Data so that they can be
made mutually reinforcing in accelerating industrialization process and maximizing national
benefits.

Reference :

1. “Guide book of European Investment in Bangladesh” Bangladesh European Commission,

August, 2001

2 Banglasdeh Economic Review 2006.

3. Statistical Pocket Book 2005

4. GOB (1997), The Bangladesh Export Processing Zones Authority Act, 1980 (Act No.
XXXVI of 1980 as modified up to the 13 th December 1994), Government of the People’s.
Republic of Bangladesh. Ministry of Law, Justice and Parliamentary- Affairs, B.B Press.
Dhaka, (PP.1-11)

5. Hossain, Belayet (2001), Globalization and Chattogram Port: Problems and Prospects, a
paper presented at a roundtable jointly organized by BIDS and Chattogram University on 27
January, Chattogram (PP.1-23).

6. Reza, S.A. L. Export Processing Zone in Bangladesh : A Profile, Dhaka, 1990

7. Mondal, Abdul Hye: “The role of Export Processing Zones in the industrialization
process of Bangladesh: Lessons for future.’’

8. Zaid, Bakht & Mondal, Abdul Hye, Debapriya Bhattacharya and Mahmood Raisul Awal
(1994), An Evaluation of the Export Processing Zones in Bangladesh, Final Report,
Bangladesh Institute of Development Studies,

[PP. 1-99..]

9. “BEPZA (1998),’’ Information for Investors, Bangladesh Export Processing Zones

Authority, Dhaka; ( PP.87-88.)
10. Bhattacharya Debapriya (1998), Export Processing Zones in Bangladesh: Economic
Impact and Social Issues, working Paper No. 80, International Labor Offices. Geneva, (PP.1-
72)

11. DIDS (1997), Survey of Garment Workers, Bangladesh Institute of Development

Studies, Dhaka.