South Korean investors in manufacturing and assembling industries are encountering substantial challenges while conducting business in Bangladesh, primarily attributed to the high customs duties imposed on raw materials and intermediate goods.
These impediments, along with other unavoidable circumstances, are impacting their operations.
South Korean Ambassador to Bangladesh, Park Young-sik, highlighted the issues faced by Korean companies during a seminar titled "Korean Investors’ CSR Activities and Business Outlooks," held at the InterContinental Hotel in the capital on Tuesday.
Ambassador Park Young-sik noted, "Samsung, engaged in the manufacturing of consumer electronic goods, including mobile phones, and Hyundai, involved in car assembly, particularly face difficulties due to the elevated customs duties on raw materials and intermediate goods. Additionally, issues like mobile phone smuggling and an influx of second-hand cars have compounded their challenges."
He stressed the importance of the Bangladesh government's attention to bolstering the foundation and enhancing the productivity of the manufacturing sector.
Park Young-sik emphasised the positive impact of these companies on the domestic job market, saying, "Samsung manufactures consumer electronic goods, including mobile phones, while Hyundai cars are being assembled at Bangabandhu Hi-Tech Park from this year, creating high-quality job opportunities through domestic production."
Furthermore, he expressed the intention of Korean companies to continue investing in the garment sector, suggesting the need for Bangladesh to diversify its export items.
The ambassador also observed that Bangladesh predominantly exports cotton-based garments, with less than 15 per cent consisting of man-made or synthetic garments, while the global market trend is the opposite.
He encouraged cooperation between garment companies from both countries to facilitate the export of man-made or synthetic garments, emphasising the need for significant capital and advanced technology in this sector.
Park Young-sik also expressed optimism about ongoing infrastructure projects in Bangladesh, expecting them to contribute significantly to the country's infrastructure development.
“Samsung manufactures consumer electronic goods, including mobile phones, while Hyundai cars are being assembled at Bangabandhu Hi-Tech Park this year. These companies are creating good quality jobs through domestic production,” the ambassador said.
“Korean companies will continue to invest in the garment sector. Bangladesh needs to diversify its export items. Bangladesh is currently exporting more than 85 per cent of cotton-based garments, while the export of man-made or synthetic garments is less than 15 per cent,” he continued.
“The world market is exactly the opposite. Increasing the export of man-made or synthetic garments requires huge capital and advanced technology. Here is the room for the garment companies of both countries to cooperate each other,” he stressed.
“I strongly hope that many ongoing infrastructure projects will make smooth progress and contribute greatly to Bangladesh’s infrastructure development,” he added.
The South Korean envoy recognised the vital role of Corporate Social Responsibility (CSR) in the bilateral relations between Bangladesh and Korea. “From sharing advanced technologies to promoting education, environmental sustainability, healthcare, and more, Korean companies have been instrumental in Bangladesh's social development,” he said.
According to data from the Bangladesh Investment Development Authority (BIDA), there are 454 registered Korean industrial units in Bangladesh. Of these, 198 units are fully Korean, set to invest approximately $286 million and generate an estimated 75,062 jobs. Additionally, 256 units are joint ventures, with planned investments of $6.59 billion and expected employment opportunities for 82,802 people across various sectors.
BIDA Executive Chairman Lokman Hossain Miah, who attended as the chief guest, highlighted the remarkable 39 per cent increase in bilateral trade between the two nations in 2022 compared to the previous year. He encouraged Korean investors to further invest in Bangladesh, emphasizing the country's conducive environment for profitable investments.
Lokman mentioned that 72 per cent of Japanese companies in Bangladesh had reinvested in the country, emphasising the favourable domestic market and the promising opportunities available to investors in Bangladesh.
The seminar also featured presentations from Youngone, Korea Expressway Corporation, LG, Samsung R&D, Dohwa Engineering, Samsung Electronics, Woori Bank, Samsung C&T Corporation, Korean RMG Contributor, and Save the Children, showcasing their CSR contributions in Bangladesh.