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April 1, 2010

Operators handle a state-of-the-art fabric cutter at a garment factory in Gazipur. Leading readymade garment
manufacturers are now shifting to automated production systems from the traditional ones to be more competitive in
global apparel business.Photo: Amran Hossain

Leading readymade garment (RMG) manufacturers are shifting to automated production systems
from the traditional ones to be more competitive in global apparel business, said industry
insiders.

They said adoption of fresh technology in the apparel industry is paying dividends to owners, as
it helps improve management, quality and delivery systems.

The industry operators have also brought about changes in cutting, knitting, dyeing, finishing and
packaging through the application of these new technologies.

RMG workers previously cut fabric manually, or the cutting machine¶s speed was time-
consuming. But now it is possible to cut fabric many times faster with the auto cutter machine.

Similarly, in the case of quality control, the automated machinery in a very short while can check
whether any needle or any other metal tool is mistakenly embedded in the packaged clothes,
according to the workers.

The new technology helps finish dyeing of several hundred yards of fabric in a few hours, says a
dyeing factory owner.

Viyellatex Group is the country¶s first garments factory that has implemented the expensive
Enterprise Resource Planning (ERP) solution from SAP Germany, said Group Chairman KM
Rezaul Hasanat.
Some multinationals and other local business houses now adopt the ERP solution, but in the
garments sector Viyellatex Group is using it, Hasanat pointed out.

³Viyellatex Group is one of the leading factories worldwide which is using ERP from SAP. The
group implemented the ERP in its Gazipur based factory in December last year at a cost of
$2million,´ Hasanat added.

³I save time and wastage in my factory in almost all the sections. I can know the on-time
production by one click alone,´ the Viyellatex boss said.

Talking to The Daily Star, Shahadat Hossain Kiron, managing director of Dekko Group, one of
the leading apparel makers, said he plans to install the SAP software to bring efficiency at all
levels.

He said currently almost all modern factories are setting aside their traditional methods and
adopting automated systems. ³Efficiency in cutting, knitting, dyeing and finishing has been
attained because of the application of these technologies,´ Kiron said.

Ghulam Faruque, chairman of SQ Group, a leading sweater maker, said he hired a Bangladeshi
born British specialist for his group to develop ERP aiming to ensure better management and
production systems.

³I hope SQ Group would be able to implement ERP in next six months,´ he said.

Faruque said Bangladeshi manufacturers mainly use sophisticated European and Japanese
technologies in their production units.

He said since manufacturers are now shifting to lean systems, they prefer these technologies to
enhance efficiency.

Bangladesh Textile Mills Association data say Bangladesh imported capital machinery and other
technologies worth Tk232.768 crore for the textile sector during July-April period of the current
fiscal year.

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September 27, 2009

Investment in the country showed a dismal picture in January-August period as global recession
and shortage of electricity and gas discouraged entrepreneurs in taking any decision.

Registration of domestic investment proposals dropped significantly to Tk 126 billion involving

971 projects from Tk 154 billion on 1104 projects in January-August of the last year.

Foreign direct investment (FDI) also dropped by 9.0 per cent to Tk 42.6 billion from Tk 46.9
billion in the last year¶s period, according to Board of Investment (BoI) data.

A delayed impact of the global recession has started hurting the economy and it will take some
time to recover, said BoI executive chairman Dr S A Samad on Thursday at the launching
programme of the World Investment Report 2009.

³FDI will fall if domestic investment drops as foreign investors do not take risk,´ he said.

Shortage of power, gas, other utility services and lands are the primary concern of the investors
as they hinder the development process in the country, he explained.

He, however, said crisis in utility sector can be an opportunity for the country as the sector may
attract billions of dollar, he said.

³In late 90s, the government received proposals worth billions of dollar in energy sector and it
resulted in construction of Haripur and meghnaghat power plants where the government did not
invest a single penny,´ he added.

The country can be a suitable location for sunset industries of Taiwan, Thailand and other Asian
countries, Mr Samad said.

³A Japanese chain store has registered with the BoI to set up a composite textile mills with an
investment of $300 million very soon, and we have received many inquires from the investors
around the world in the last couple of months,´ he said.

The BoI chief said a big investment can change the whole scenario and for that Bangladesh has
to sell its brand image abroad, he added.
³The country can facilitate export of Indian products through its port, and for that billions of
dollars of investment in infrastructure is needed to construct roads, highways and other
facilities,´ the BoI chief pointed out.

He said the BoI will act as a secretariat when public-private partnership (PPP) programmes go
into full swing, but for that it needs to recruit more people.

³The organisation does not have any organogram, and we have to inject fresh blood into the
investment agency to promote business climate,´ he said.

A professor of Jahangirnagar University Dr M Ismail Hossain in his presentation on the world

investment report for 2009 said in the last year the country received FDI worth $1.0 billion for
the first time.

Telecommunication sector received the highest FDI worth $641 million followed by banking
$141 million and textiles and garments $126 million, he said.

Egypt was the biggest source of the FDI flow with $373 million in the last year as Egyptian
telecom company, Banglalink, invested a large amount to develop its infrastructure

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September 27, 2009

The Asian Development Bank (ADB) has praised the government for ³prudent´ budgetary steps
to stimulate the slowing economy, but cited a delayed global economic recovery as the major
downside.

Even in the wake of the worst recession in living memory, the Bangladesh economy managed to
avert a major economic slowdown and was relatively unhurt compared to its competing Asian
peers.

The Asian lender, however, has blamed dampening demand exacerbated by slower growth in
exports and remittances inflow for Bangladesh¶s slight fall in growth last fiscal.

In its September economic update, the bank noted that the US$ 90 billion economy grew 5.9 per
cent in the fiscal 2009, slightly down from 6.2 per cent in the 2008 financial year.

It said the budget for the 2010 fiscal strikes a ³prudent´ balance between the need to stimulate
the economy against the backdrop of the global recession and to protect the poorest of the poor.

³It (new budget) increases spending on social safety net programmes to protect the poor, while
preserving macroeconomic stability,´ the ADB said in its update.

The report noted public investment declined further, sliding from 5.0 per cent of GDP (gross
domestic product) to 4.6 per cent, as annual development programme (ADP) implementation
continued to be weak.

³Taking the economy to a higher growth path and more rapid and sustainable poverty reduction
will require large-scale infrastructure investment well beyond what the government can provide,´
said the report, released Tuesday.

The government¶s strategy to address the infrastructure gap includes action on two fronts:
building a more conducive environment and enhancing the framework for public-private
partnerships (PPPs).

The agriculture sector grew by 4.6 per cent in FY09, up from 3.2 per cent in the last fiscal, owing
to high growth in food-grain production, aided by favourable weather and strong government
support.

The bank said measures to speed up delivery of seeds, fertilisers, power, and credit and scaled up
subsidies for fertiliser and power used for irrigation were key factors in boosting the sector¶s
output.
Industry sector growth, however, declined to 5.9 per cent last fiscal year, from 6.8 per cent in the
previous year as export production in the second half of the fiscal year slowed due to the global
slowdown.

Weak investor sentiment also affected manufacturing growth, as did slow implementation of
power and energy projects, and weak construction activity, the economic update said.

Growth in the power and gas sub-sectors dropped to 4.5 per cent in FY2009 from 6.8 per cent in
FY2008, while growth in the construction sector dipped slightly to 5.7 per cent.

The service sector growth, like that of industrial sector, also slowed slightly to 6.3 per cent in
FY2009, due to the slowdown in remittance inflows and lower trading activities.

Slower export growth and a fall in import volumes affected trade and transport services. Retail
and wholesale services were affected by moderating consumer demand.

Annual inflation declined to 6.7 per cent in FY2009 from 9.9 per cent in FY2008.

The ADB report said the successive cut in domestic fuel prices in October and December 2008
and January 2009, in line with the fall in international commodity prices and rise in domestic
food supplies, has helped to ease price pressures in recent months, particularly of foodstuffs.

Revenue collection remained unchanged at 11.2 per cent of GDP in FY2009 because of the sharp
fall in import growth due to the fall in international fuel and commodity prices, the global
economic crisis and slower expansion of economic activity.

Revenue from the National Board of Revenue sources increased by 10.7 per cent, far below the
budget target of 18.6 per cent and the 27.4 per cent growth of the previous fiscal year.

On the expenditure side, public spending was lower at 15.3 per cent of GDP, down from 15.9 per
cent in FY2008, because of savings on food, fuel, and fertiliser subsidies given the fall in
international prices and ADP underutilisation.

As savings on public spending were larger than the shortfall in revenue, the fiscal deficit of 4.1
per cent of GDP was lower than the budget target of 5.0 per cent.

Private sector credit growth slowed to 14.6 per cent year-on-year in June 2009, down from 24.9
per cent in June 2008, because of the slower trade growth and slackness in investment activities
due to the global economic recession.

Exports grew by only 10.3 per cent in FY2009, a sharp deceleration from the 15.9 per cent in
FY2008. Retail sales in developed economies fell, leading to a slowdown in garment export
orders and shrinking profit margins for Bangladeshi exporters through price reductions.

Imports in FY2009 rose by only 4.1 per cent, mainly due to the sharp fall in imports of food
items and capital machinery.
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