The light engineering sector, if given the right policy support, can serve as the backward linkage industry to many mainstream local sectors such as food, leather and footwear, electronics, agro-processing and pharmaceuticals.
Dhaka Chamber of Commerce and Industry (DCCI) President Md Sameer Sattar made the remark while chairing a seminar titled “Import Substitute Industry in Bangladesh: Perspective of Light Engineering Sector,” held in the city’s DCCI auditorium on Thursday.
Planning Minister MA Mannan was present at the programme as the chief guest, while Industries Secretary Zakia Sultana attended as the special guest.
Sattar said, “The government recognised the light engineering sector as a high-priority one in the Industrial Policy 2022 to ensure its sustainable development, while it requires financial and policy support.
“To increase the contribution of the private sector to GDP (gross domestic product) to 27.35 per cent by 2025, it is crucial to ensure comprehensive support, which will strengthen the local supply chain of the industry.”
He then said, “The current tariff structure on the imports of light engineering products is counter-productive for the growth of the local light engineering sector.
“In this regard, a study is needed to know further the needs and bring appropriate changes in the tariff structure that will protect this sector.”
Planning Minister Mannan said, “If Korea, Taiwan, Malaysia, and China could make success in the light engineering sector, Bangladesh would also be successful in future and the country is on the right track.
“There are challenges but the private sector of Bangladesh is resilient enough to overcome these challenges. All possible policy support from the government will be given. Inconsistency among the government agencies regarding different policies is not good for the private sector.”
He added, “If we can formalise the local small light engineering hub at Dholaikhal and Jinjira, one day they will be able to contribute to the economy.”
With an urge for policy consistency, the minister said at present the public-private partnership and relationship are at their best level as the government is very business-friendly.
Mentioning that Bangladesh’s light engineering sector is still import-based, Zakia Sultana said the sector is an untapped one and it has great prospects of creating a large backward linkage industry ensuring a diversified industrial base.
The light engineering industry development policy 2022 has already indicated a comprehensive action plan for 2022-2027, she said, adding that the entrepreneurs of this sector should be incentivised to mitigate import reliance.
The industries secretary said the government will try to boost policy harmonisation and coordination among the agencies concerned.
For the capacity-building skill, development and curriculum upgradation are necessary, she said. “The government is also planning to establish an Automobile Research Institute in Narayanganj with the help of Japan.”
Walton Additional Managing Director SM Shoyeb Hossain Nobel presented the keynote paper. He highlighted that the light engineering sector of Bangladesh is generating revenue of Tk 20,000 crore and contributes about 3 per cent to the GDP and it is increasing at 10 per cent every year.
“The world market is about $45 billion. About 1.6 million people are employed in this sector. Fifty per cent of our local demand is met by this sector,” he said, adding that in FY22, the exports of the light engineering sector stood at $796 million.
As this sector is completely import-based, he demanded for separate duty structure and backward linkage industry policy for this sector.
Lack of easy access to finance, quality of products, demand uncertainty, policy inconsistency, no incentives for local manufacturers, lack of lab and R&D, and data of actual demand are a few of the challenges of this sector, Shoyeb said.
In the panel discussion session, Bangladesh Steel Manufacturers Association President Manwar Hossain emphasised focusing on other promising sectors other than ready-made garments.
Mentioning that the investment in human capital is still poor, he urged for increasing cash incentives to this sector.
Fair Group Chief Marketing Officer Mohammad Mesbah Uddin said the light engineering market by the year 2030 will reach $10 billion. He also urged for value addition as there is a huge scope of investment opportunities.
He put emphasis on policy guidelines and developing science and technology-based education system in the country and long-term policy consistency.
Meghna Group Director Muhammad Mushtaque Ahmed Tanvir said there is a demand for 5 million bicycles in the European market. “At present, we need investment in the local manufacturing of mould and dye because it costs huge for import.”
Transcom Electronics Ltd Managing Director and CEO Arshad Huq said, “Bangladesh’s consumer market is ready. Many global brands want to come to Bangladesh and invest.”
He emphasised the quality of products that need to be maintained as well as policy consistency and developing human resources.
DCCI former president Matiur Rahman said the import duty of this sector should be reduced. He also put emphasis on long-term policy and skill development and more technical and vocational training.
“A wing of the Ministry of Industries can be established at the NBR. The government can initiate establishing testing labs and R&D for the future growth of this sector,” he suggested.
DCCI’s Senior Vice-President SM Golam Faruk Alamgir (Arman) gave a vote of thanks. DCCI Vice-President Md Junaed Ibna Ali was also present on the occasion.