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3. Trade and Investment Promotion by the Netherlands |
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3.3 PSOM (programma
samenwerking opkomende markten) |
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To stimulate Dutch foreign direct
investment and pro-poor economic growth in Bangladesh (and
other developing countries and emerging markets) a financing
instrument called PSOM has been introduced by the
Netherlands government. This instrument has been introduced
in Bangladesh on 7 March 2005 [for more information, see the
press statement
[Web link Bellow] PSOM supports private sector
development by promoting cooperation between Bangladeshi and
Dutch companies on the basis of partnership. Financial
support up to 60% (maximum of EUR 825,000) is provided to
initiatives of private companies from the Netherlands and
Bangladesh in setting up jointly innovative projects, making
use of international and local know-how, goods and services,
which is environmentally friendly and has development
spin-off effects. On the website of the EVD, who is
responsible for administering PSOM, the eligibility
criteria, procedures and status of PSOM in Bangladesh can be
found (www.evd.nl/psom/).
Currently two PSOM projects are running while three projects
are in the pipeline.
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Press Statement
Bangladesh and the Netherlands agree on new investment
programme
In Asia, Africa and Latin America new markets are expanding
rapidly. These ‘emerging markets’ provide promising
opportunities for businesses to expand their investments and
trade relations. Trade and investments stimulate economic
growth, generate employment and enable the local population
to improve its standard of living.
Foreign direct investments (FDI) from Netherlands companies
into Bangladesh are still at a low level. The Netherlands
share in total imports to Bangladesh is 0,38%. The
Netherlands Government intends to increase investment and to
support private sector development. To this end the
Programme for Cooperation with emerging markets (PSOM) has
been introduced into Bangladesh.
A Memorandum of Understanding regarding PSOM was signed on 7
March 2005 between Mr. Md. Ismail Zabihullah, Secretary
Economic Relations Division of the Ministry of Finance and
Mr. Kees Beemsterboer, Ambassador of the Netherlands. PSOM
aims at supporting private sector development by promoting
cooperation between the business sectors in Bangladesh and
the Netherlands on the basis of equal partnership and mutual
benefit with a focus on private investments.
Financial support up to 60% is provided to initiatives of
private companies of the Netherlands and Bangladesh in
setting up joint innovative pilot projects in specific
sectors, making use of international and local know how,
goods and services. PSOM projects should meet the following
criteria:
-
Improve the position of the poor by
creating extra employment and income.
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Offer genuine prospects for further
investment (“visible spin off”) or else offer a
-
sustainable trade relationship with a
Bangladeshi company.
-
Have a pilot character that enables
replication or follow-up investments.
-
Include the transfer of knowledge
from one company to another and reflect a combination of
technical assistance, training, market research and
installation of equipment (hardware).
-
Be tailored to local circumstances
and skill levels.
-
Preferably have a positive impact on
the environment and on the position of women.
-
Not be feasible without PSOM
financing due to high risks.
Although priority is given to the development of
projects in the sectors of Agriculture & Agro-business
and Information and Communication Technology, good
project proposals for other sectors will also be
considered. The average PSOM contribution is Euro
500.000.
The Netherlands Foreign Trade Agency (EVD) will invite
at least once a year (consortia of) companies to submit
proposals. Every consortium will contain at least one
Dutch and one Bangladesh partner. The Dutch partner will
make the application to the EVD. Projects are selected
on the basis of an open tender procedure. EVD will
announce tenders on its website:
www.evd.nl
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PSOM Article
PSOM– a new Dutch
joint venture for Private Sector Development in Bangladesh
PSOM – Program
for Cooperation with Emerging Markets – was signed with ERD
the Netherlands on 7 March 2005. PSOM aims at supporting
private sector development by promoting cooperation between
the business sectors in Bangladesh and the Netherlands on
the basis of equal partnership and mutual benefit with a
focus on private investments.
Royal
Netherlands Embassy in association with DBCCI successfully
held a workshop for PSOM with participation from BOI, ERD
and other relevant representatives of different ministries
and the business community in 2005. Wim Bekker, the project
officer for Bangladesh from EVD, Ministry of Economic
Affairs in the Netherlands presented the key note paper. He
met with all interested companies on a one-to-one basis
later on.
The Dutch already has a
trade deficit and a small amount of Foreign Direct
Investment (FDI) in Bangladesh. The Netherlands has a trade
deficit to the amount of € 202 and ranks only 17th
in the country list of FDI in 2004 with an investment worth
$ 4.4 million only. Therefore, Bangladesh should try to
improve its overall image to attract FDI. A good trend is
seen by large investment proposals by India, USA, UAE,
China, France, UK and many other countries. It is expected
that this PSOM should encourage Dutch companies to take
advantage of this fund to invest in Bangladesh.
Two proposals
had been submitted in the August tender in 2005. One project
on fabric dye has been approved and ongoing. The next tender
date was March 2006 and it was on plastic bags which has
been recently approved. It is expected that a lot more
proposals may be submitted next time as awareness grows
about this available subsidized fund among the business
community of Bangladesh. Since Bangladesh is an LDC, the
joint Dutch Bangladesh project is entitled to obtain 60%
financial support from PSOM. However, one must take note
that the Bangladeshi company has to have a Dutch counterpart
and the proposal has to be submitted in the Netherlands by
the Dutch company. The project will go through strict
screening by EVD and later by an External Commission for
approval.
The project
has the following selection criteria:
-
Improve
the position of the poor by creating extra employment
and income.
-
Offer
genuine prospects for further investment (“visible spin
off”) or else offer a sustainable trade relationship
with a Bangladeshi company.
-
Have a
pilot character that enables replication or follow-up
investments.
-
Include
the transfer of knowledge from one company to another
and reflect a combination of technical assistance,
training, market research and installation of equipment
(hardware).
-
Be
tailored to local circumstances and skill levels.
-
Preferably
have a positive impact on the environment and on the
position of women.
-
Not be
feasible without PSOM financing due to high risks.
Although priority is given to
the development of projects in the sectors of Agriculture &
Agro-business and Information and Communication Technology,
good project proposals for other sectors will also be
considered.
Financial Aspects:
-
Maximum project
duration is 2 years, max. budget EUR 825,000;
-
Approximately EUR 2
million for Bangladesh per year;
-
Maximum total
project costs are approximately EUR 825,000 (60% PSOM +
40% companies);
-
PSOM contribution
is 60% (max EUR 495,000) and own contribution of project
partners is 40% (max EUR 310,000)
Company specific
information requirements:
-
Mature project idea
creating employment & income in Bangladesh;
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Two companies; one
Dutch; one Bengali, each partner providing
How to get started:
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Conceptualize Project idea/search
partner through Chambers/websites/contacts (Suggestion:www.sterenbergsalinas.nl,
www.sunsia.com,www.advanceconsulting.nl,
www.cbi.nl
Consultants such as KPMG, Ernst & Young).
-
Consult PSOM
website (Download: Tender Instructions / General
Brochure);
-
Download / fill out
/ send: Intake Form;
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Consult EVD the
Netherlands (one
can directly contact Wim Bekker at bekker@evd.nl)
Given the
above information, all that is needed to be done is GET DOWN
TO BUSINESS WITH NO TIME TO WASTE. |
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PSOM FAQ
Programme for
Co-operation with Emerging Markets (PSOM)
Frequently Asked Questions
Background
The Minister
for Development Co-operation of the Netherlands has
initiated PSOM in order to alleviate
poverty
through co-operation between Dutch businesses and businesses
in the PSOM countries* with a focus on private investments.
A total of EUR 51 million is yearly available for new
commitments to PSOM projects.
Key-aspects
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Financial support
(50-60% of the initial investment costs is paid in
the from of a grant) is provided to joint
initiatives of at least a Dutch company
(lead-company) and a company in the PSOM country in
setting up joint innovative pilot-projects, making
use of international and local know-how, goods and
services. Companies from other countries may join
the consortium. |
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It is expected that
successful try-outs will be continued on a
commercial basis and/or duplicated by the private
sector. |
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The business projects
are expected to contribute to poverty alleviation.
Projects creating substantial local employment,
transferring knowledge, making extensive use of
local SMEs in the supply chain, operating in
geographically disadvantaged regions, generating
income for a substantial group of beneficiaries
and/or contributing in other ways substantially to
poverty alleviation will receive priority in the
selection process. Projects however have to be at
all times sound business proposals that lead to a
sustainable business relation.
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Implementation
The Programme
shall - on behalf of the Government of the Kingdom of the
Netherlands- be executed by the Dutch Government Agency EVD,
in consultation with the Royal Netherlands Embassies and
local authorities.
EVD is
responsible for the accurate implementation of PSOM.
A
PSOM pilot project must:
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be
initiated by a private company from the Netherlands (applicant), together with a company from the PSOM
country (recipient); |
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be
innovative for the PSOM country (new product, new
production method); |
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contain large commercial and/or financial risks
which make it unlikely that the project will be
initiated without PSOM's involvement; |
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have
pro poor effects (employment creation, positive
income effects etc.); |
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consist of a combination of technical assistance and
hardware; |
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not
exceed a maximum budget of EUR 1,500,000 (or EUR
800,000 for LCD's); |
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be
finalized within two years; |
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lead
to commercial follow up investments.
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Procedure
The EVD will
invite twice a year in March and August (consortia of)
companies to submit proposals for projects. The Dutch
company in the consortium will make the application to the
EVD and serve as the contact point with the EVD. The
proposals must be based on the tender instructions which are
available on the PSOM website
www.evd.nl/psom.
Also on this website there is information available on
information meetings, workshops and there is a description
of a number of successful PSOM projects. After appraisal all
companies that were successful will be awarded a
result-based PSOM-contract. During the appraisal process EVD
will consult the Netherlands Embassies in the PSOM
countries and visit both the Dutch and local project
partner.
Frequently asked
questions
Eligibility
Q:
Can starting companies
apply for PSOM?
A:
All companies applying for PSOM should prove their financial
capacity to finance the own contribution of 40-50%. This
must be supported by audited financial reports of the last
two years. Starting companies normally cannot fulfill this
requirement and are then not eligible for PSOM. Starting
companies are recommended to look for a financially strong
business partner, which becomes the lead investor.
Q:
Can starting companies be
the recipient of a PSOM project?
A:
Yes, but recipient companies should be duly registered in
the PSOM country and have substantial activities.
Q: Can the local
partner be a 100% subsidiary company of the Dutch company?
A:
Yes, but the PSOM programme prefers a local partner company
with clear roots in the PSOM country. For PSOM projects in
China, the recipient must be a 100% Chinese company.
Q: Who decides which
countries are eligible for PSOM?
A:
The Ministry of Foreign Affairs decides. The list is based
on the DGIS partner countries plus a few emerging markets
countries. No new non-partner countries are added
Q: Why are only
Mozambique and Uganda open for lead-investors from other
countries?
A:
The partial untying of PSOM in these two countries is an
experiment. There are currently no plans to expand this
experiment.
Q: Can foreign
companies outside the Netherlands and the PSOM country be
involved as partners in the consortium of PSOM projects?
A.
Yes they can be project partners, however, they can be not
the applicant or recipient.
Q: Can the own
contribution be paid for by one of the project partners, not
being the recipient or applicant?
A:
The project partners must show their commitment to the
project by contributing financially to the project. In case
of difficulty in financing the own contribution another
project partner can contribute partially.
Q: Can a project
consist of more technical assistance than hardware?
A:
The type of project defines the balance between technical
assistance and hardware.
Q: Can a company
apply twice for PSOM?
A:
In principle this is possible. The projects should have
different activities. The applicant must be able to manage
both projects and must be financially strong enough to make
multiple follow-up investments. Companies that have applied
for PSOM can also be project partners in other projects.
Q: Are there rules
for the division of shares between joint venture partners?
A:
Ideally the division should be on a balanced basis (around
50-50). However sometimes the recipient is unable to cover
half of the own contribution. In these cases a different
division of shares may be proposed, but each partner must be
seen to contribute substantially.
Procedures
Q: Can companies from
PSOM countries apply directly for PSOM to the EVD?
A:
No, PSOM proposals are submitted by the lead company
(applicant) to the EVD. The lead company must be registered
in the Netherlands. Only for companies interested to start a
PSOM project in Mozambique and/or Uganda the lead company
can be another foreign company from a DAC-I country. PSOM
promotes foreign investment, so the lead company is always a
foreign company.
Q: Are there
organizations that can help a local company find a partner
from the Netherlands?
A:
Local companies could consult the Netherlands Embassies for
assistance. They can also search for a (trade-) partner on
the website of CBI
www.cbi.nl.
EVD can provide lists of consultants and intermediary
organizations that specialize in match making.
Q: What role can
research institutes, universities and NGO's play within
PSOM?
A:
They can not play the role of applicant or recipient, but
they can very well play a role as a project partner
providing training or services within the project.
Q: How is the
selection of the proposals carried out?
A:
The selection is done by EVD. The proposal is firstly
checked on completeness and then judged according to set
criteria. These criteria are listed in the tender
instructions (www.evd.nl/psom). Subsequently EVD's ranking
is presented to an external board. Here the outcome of the
appraisal is decided upon. During the appraisal process EVD
will normally visit the applicant and the recipient. In most
cases external experts are also involved in the appraisal
process.
Q: Is PSOM a subsidy?
A:
No, PSOM operates through a tender procedure whereby
successful bidders get a contract with the EVD. The annual
budget is limited and only the best proposals are offered a
contract.
Q: How do projects
compete?
A:
Depending on the MoU for the PSOM country concerned, either
the first two or the first four projects that score the
highest number of points (and at least above the minimum
required points) are awarded a contract. Should more
projects for a PSOM country qualify, then the proposals with
the highest points worldwide are awarded a contract
depending on the funds available.
Q: How often a tender
is held and where do I find information on the tender
process?
A:
Twice a year there will be a call for proposals. The
information on the exact dates for submission and the tender
instructions are available through the website www.evd.nl/psom.
Q: How are the
different criteria weighed in the selection process?
A:
There are a number of criteria on which a project proposal
is evaluated;
strategic interest
project plan, financial aspects and
capability, additionality and development effects.
See
www.evd.nl/psom
for the tender instructions.
Implementation
Q: Does the hardware
that is being purchased in the PSOM project have to come
from the Netherlands?
A:
No, it can be bought wherever the companies get best value
for money, but the environmental standards of the equipment
must meet European safety and emission standards.
Q: Who becomes the
owner of all PSOM (hardware) investments?
A:
The recipient in the PSOM country becomes the owner.
Normally a Joint Venture will be set up and becomes the
recipient and owner of these hardware investments. For
China different rules apply. The Chinese business partner(s)
will be the benificiary of the hardware part financed
through the programme (for details see the PSOM MoU with
China).
Q: Can second hand
goods be purchased under a PSOM project?
A:
Yes, on the condition that reasonable guarantee conditions
apply and that the price is checked on it's market
conformity.
Q: What is market
conformity?
A:
The price of hardware with a value > EUR 25,000, that is
purchased under a PSOM contract, should be validated by an
independent validation organisation (SGS, Veritas etc.), on
its market conformity. The request to purchase hardware must
be accompanied by a market conformity document stating that
the price is fair and reasonable.
Q: What is a result
based contract?
A:
A PSOM contract is based on the results that are defined by
the applicant in the project proposal and agreed in the
contract. Once a result has been achieved, EVD will make a
payment as per the contract. When a result is not achieved
EVD will not reimburse the costs.
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Agro Update 2006
A Sketch of the AGRO
Sector in Bangladesh
Updated July 2006
Agricultural Sector: Bangladesh
has an agrarian economy (23% share of GDP) with most of its
population still heavily dependent on the agricultural
sector in terms of its substantial contribution to the gross
domestic product (GDP) and employment. Agro sector has
always remained in the focus but recently Bangladesh
Government and the business community has jointly emphasized
the need to promote this sector without which emancipation
of poverty and achievement of pro-poor growth cannot be
attained. Agriculture in Bangladesh is mainly categorized
into Crop & Vegetables, Fishery, Livestock & Poultry, and
Forestry. This sector is the source of production for
domestic consumption and source of raw-materials for
processing/manufacturing for the local market and export. It
is a vital source of foreign exchange earning.
Basic
Economic Indicators:
-
Share in GDP: 22.8 %
-
Growth rate of agriculture
is 2.7 (p) %
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Employment Share: 60% of
labor force
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Foreign Exchange Earnings
from Agro-Processing Sub-sector: US$ 52 million
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Agro Processing Sub-Sector
Growth Rate: 10 – 15%
Agriculture
Share in GDP and Sectoral GDP Growth Rate in 2004
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Share in GDP
22.8 |
Growth Rate
2.7 |
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a)Agriculture
and Forestry |
17.7 |
2.4 |
|
i) Crops and
horticulture |
12.9 |
1.7 |
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ii) Animal
farming |
2.9 |
4.5 |
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iii) Forest and
related services |
1.8 |
4.5 |
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b) Fishing |
5.2 |
3.6 |
(Source:National Accounts Statistics, Bangladesh Bureau of
Statistics (BBS), July 2004, p = provisional
Annual Report, Bangladesh Bank, 2003-04
Bangladesh
Agro Processors Association (BAPA) 2005
This
sector has the potential to foster
economic growth in the near to medium term by
commercialization and expansion of economic activities
associated with this sector as it is a vital source of raw
materials and can still claim to have productive
agricultural land. Despite natural calamities, like flood,
the agriculture sector as a whole has performed well in
Bangladesh during the last few decades. Domestic as well as
international market potential, development and value
addition in agriculture have created favorable prospects for
agribusiness development in the country. Agro-climatic
conditions are suitable for production of a wide variety of
crops, livestock, fish and forest products. In addition, the
large population provides a sizeable supply of low cost
labor, which also favors agribusiness development.
Activities under this sector:
Agri business encompasses:
-
Commercial
production of agricultural commodities
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Transformation of agricultural commodities into products
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Provision
of inputs to the production
-
The
marketing and distribution of agri commodities
-
Agri
business is commercially oriented with organized
linkages among different sectors. It excludes agro based
activities that are conducted at a subsistence level.
Agri business system consists of suppliers of production
inputs and services, commercial producers, market
intermediaries, agro-processors and other
agribusiness-related entities. Agribusiness systems
differ according to the commodities involved and their
particular economic, political, social and physical
environment.
Potential:
-
Stressed
in Government of Bangladesh (GOB) Policies including New
Agricultural Policy, The Export Policy and the
Agricultural Marketing Policy.
-
It is in
the GOB’s Thrust Sector List.
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Budget
2006/07 continues and reinforces focuses on this sector
Budget for Agriculture: Total
budget expenditure in Budget 2006/07 is Tk 69740 crore (Tk
694.70 billion). Agriculture accounts for 7.5% of the use of
budget resources.
Tk. 5802 crore
constitutes in:
Ministry of
agriculture – Tk 3149 crore (42% higher than revised FY
2005/06)
Ministry of
Fisheries and Livestock Tk. 578 crore (36% higher than
revised FY 2005/06)
Ministry of
Environment and Forest Tk. 242 crore
Ministry of
Land Tk 371 crore
Ministry of
Water Resources Tk 1466 crore (22% higher than revised FY
2005/06)
Government Policy &
Incentives:
-
In Budget 2006/07 once
again it was mentioned that with the increase of
budgetary allocation for expansion and development of
agriculture and agro-based industries, the Government is
also increasing the quantum of agricultural credit and
subsidies.
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Agricultural subsidy of
Tk 1200 crore is allocated in FY2006/07.
-
Tk. 244 crore for
agricultural research is
allocated in FY2006/07
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Tk. 6000 crore
target for agricultural
credit distribution in FY2006/07. Up to March 2006
the total agricultural credit disbursed stands to Tk
4000 crore.
-
For the development of
agro-product processing and software industries,
allocation for Equity Development fund has been raised
to Tk 200 crore from TK. 100 in previous year.
-
To build agro-based farm
and industries, an allocation of Tk. 150 crore has been
made under the Agro-based Industries Assistance Program
in this budget (raised from Tk. 100 crore from
previous).
-
Tk. 50 crore has been
allocated in FY 2006/07 to create a fund called Fund
for Assistance to Small Farmers Affected by Natural
Disasters.
-
Agro based industry enjoys
tax holiday. Any investment in this sector will enjoy
similar tax amnesty.
-
Government provides 30%
cash incentive on export of ago-based industrial
products through Export Processing Zones (EPZs)
(decision taken on 5 Sept 04) at the Prime Minister’s
Office. Earlier this incentive was available to export
of the agro-based industrial products outside the EPZs.
It is expected that Foreign Investors would be
encouraged to set up joint ventures with Bangladeshi
companies. Such interest has been already received from
Sri Lanka.
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Prime Minister on 23 Nov
2003 has declared that a special EPZ will be set up at
Ishwardi for a agri-processing industries.
-
Government has reduced the
rate of interest against bank loan for investment in
agriculture from 14% to 10%
-
Bangladesh Bank has opened
an opportunity for Equity & Entrepreneur Fund mostly for
establishing agricultural products processing
industries.
-
Duty rebate facility for
export of agricultural products has been announced
-
Electricity charges for
agro-processing enterprises has been reduced.
-
Investment Promotion
Campaign Abroad: The Executive Chairman of
Bangladesh Export Processing Zones Authority (BEPZA)
undertook aggressive investment promotional campaign in
Sri Lanka and Malaysia to attract more investment in the
agro based sector, both in backward & forward linkage
sectors.
Economic
and Business Factors:
-
This sector unfolds lot of
scope for growth potential for foreign investment. The
growth of Agri-business will accelerate employment and
income of the rural population and stimulate farm and
non-farm activities such as production, agro-processing,
marketing, and business services. The potentials seem to
be promising because of prevailing comparative
advantages in the production of a range of agricultural
commodities, and growing demand for high quality
products in the rapidly expanding local and
international markets.
-
The fragmented small land
holdings of rural areas provide good opportunity through
contract farming to raise income via business
development through value addition. For steady growth of
agribusiness, strong linkages (value chain linkage)
between farmers, traders, processors, and service
providers are key essential elements. These linkages
require specific strategies and an enabling environment.
With the growing urbanization, with growing urban middle
class the need for value added diversified food
products, which meet the requirements of the urban
population are increasing. Opportunity lies in packaged
food for easier preparation, higher food quality, and
longer storability. In major cities, the emergence of
modern agricultural food distribution systems, including
superstores/markets and stop-and-shop outlets, has
started in recent years indicating higher demand for
such commodities. Obviously, the local products have to
face tough competition vis-à-vis the imported products.
-
Agribusiness has achieved
limited success in a few areas, including poultry,
shrimp, fruits, dairy products, vegetables, wheat and
bakery products, medicinal plants, animal feed, flowers
and orchids. Other commodities and products including
rice, tea, sugar, jute and tobacco have been part of the
commercial system of production, but have not shown yet
the required dynamism for agribusiness. The largest
agricultural sub-sector namely rice is still mainly
dominated by a large number of farmers producing for
household food security or producing for a small
marketable surplus. One example is the aromatic rice.
PRAN, a local company is producing aromatic rice.
However, scope remains to improve the milling, packaging
and distribution capacity.
Scope of
Interventions can be at the following levels:
-
Commercialization
of production through new products and commodities, such
as high value crops, livestock, poultry and fisheries
-
Development of forward
linkages through improved services, packaging,
processing, storage, transport, removal of marketing
constraints and opening up of new markets
-
Backward linkages
through the provision of inputs (seeds, fertilizers,
animal feed and agriculture machinery)
Potential
Areas for Exploring Business Opportunity:
This sector
that has been emphasized in PSOM, signed Memorandum of
Understanding (MOU) between Royal Netherlands Embassy (RNE)
and External Resource Division (ERD), Ministry of Finance (MOF),
the Government of Bangladesh (GOB) on 7 May 2005. The
following areas hold business opportunities.
Crop:
Rubber Roller Rice Milling:
3% of rice milling is done by rubber
roller which ensures lower breakage and also bran is gotten
for oil extraction. (95% of rice milling is done by
traditional means of dheki and huller which does not produce
bran for oil extraction and has 35% breakage).
Processing of Potato flakes, daal (pulses) and spices.
Post harvest storage, processing and packaging of fruits and
vegetables.
Production of organic fertilizer and mixed fertilizer:
Only Tk. 50 lac is required for such plants. Currently
chemical fertilizers like TSP (Triple Super phosphate),
Urea, Nitrogen Phosphate (NP), Murete of Potash (MP) is
used. However, organic fertilizer is much emphasized now. In
Khulna, one such organic fertilizer plant has been set up
which produces 14 tons of organic fertilizer from wastes.
Poultry:
Production of vaccines from poultry.
Dairy Feed Manufacturing
using Dutch hardware/technology
Artificial insemination of breed:
Currently on GOB does this and
BRAC (an NGO) has the license.
Modern Slaughter House:
Current slaughter houses are
unhygienic and also wastes valuable raw materials like
leather, hoofs, horns, etc which are raw-materials to
leather and leather goods industry and also the garments
industry.
Fishery:
Processing and Freezing of Prawn in the Coastal Belt:
Currently Bagerhaat, Chakaria, and Shatkhira are the prawn
belt. Lot of scope remains to establish modern freezing and
processing of prawn.
Quality Control Institution:
Bangladesh Standard Testing Institute (BSTI) is not
internationally recognized. Therefore, Bangladeshi
producers/exporters need to get their certificate from
Malaysia and Singapore.
Risks/Constraints:
Specific
to this sector
-
High incidence of
land-lessness and small size firms:
In terms of the commercialization of production, land
resources are limited in both size and suitability. Many
land-holdings are too small to consider a high degree of
diversification and many areas are subject to seasonal
flooding.
-
Lack of access to
credit: Furthermore many
potential producers do not have access to the capital or
credit needed to diversify their production and do not
have the capacity to face the risk that investing in new
crops and commodities might entail. The limited amount
of credit that is available for small to medium
producers tends to be lent to non-agricultural ventures
that are perceived by lenders as less risky.
-
Lack of market
information, technology:
Constraints to the development of forward linkages
include undeveloped markets and inefficient marketing
chains. There is little market information. Moreover,
access to alternative crops and commodities and
knowledge about alternative crops and commodities are
limited and markets for many potential crops or
commodities are undeveloped, as is the marketing chain.
Middlemen reduce profit margins between the buyer and
the end user and there is little access to credit for
potential processors, packagers, transporters or
exporters.
-
Lack of Efficient
Infrastructure: Infrastructure
is not that developed (cold storage facility, port and
air cargo facilities are inefficient) in Bangladesh.
However, this problem is being addressed for exporters
of agro products with the Ministry of Civil Aviation and
Tourism and the Foreign Airlines in Dhaka, Bangladeshi
owned private Airlines, Ministry of Commerce, Export
Promotion Bureau (EPB), Bangladesh Biman and Bangladesh
Fruits vegetables and Allied Products Exporters
Association. The solution partly lies in lifting more
vegetables and fruits of Bangladesh by the foreign
Airlines to different destinations in the middle East
and UK particularly, and reduction in the handling
charge of equipment and storage charges etc. at ZIA for
encouraging private and foreign airlines to bring more
cargo planes here.
-
Inadequate
Quality Control Mechanism:
There are a limited number of institutes for quality and
grading standards. Bangladesh does not have any testing
laboratory that is of international standard and as such
does not have international recognition of its
certification.
Useful
Contacts for further Information
Bangladesh
Agro Processors Association (BAPA)
Contact: Maj.
Gen. (Retd.) Amjad Khan Chowdhury, Chief Executive,
and Mr.
Mozammel Huq, Advisor
Address:
Mohananda, House 39,
Flat 1D, Road 11 new,
Dhanmondi R/A
Dhaka 1209
Ph: 8156353/0175098909
Fax: 880 2 9110055
Email:
mohananda_pro@yahoo.com
Board of Investment (BOI)
Address:
Prime Minister’s Office, Government of Bangladesh,
Jiban Bima Tower, (19 flr), 10 Dilkusha
C/A, Dhaka 1000
Bangladesh
Ph: 880-2-9561430-1
Fax: 880-2-9562312
Website:
www.boibd.org
Bangladesh
Export Processing Zones Association (BEPZA)
BEPZA Complex
House No 19/D, Road 6, Dhanmondi, Dhaka
1205
Ph: 88-2-9670530, 8650058, PABX 8650059
Fax 880-2-6850060
Website:
www.epzbangladesh.org.bd
Export
Promotion Bureau (EPB)
1 Kawran Bazar,
Dhaka 1215
Tel PABX: 880-2-9144821
Fax 8802-9119531
Website:
www.epbbd.com
Bangladesh Poultry
Industrial Association
Address:
115/120 Adamjee Court, Ground Flr.
Motijheel,
Dhaka 1000
Ph:
880-2-9555403, 956413
Fax: 880-2-716
Royal
Netherlands Embassy
Contact
person: Riffat Zaman, PhD,
Advisor,
Economic & Commercial Affairs
House 49,
Road 90, Gulshan 2
Dhaka,
Bangladesh
Tel:
(880-2) 882-2715/8
Fax:
(880-2) 882-3326
Email:
dha-ea@minbuza.nl |
 |
|
Update Telecom
2006
|
|
A Sketch of the
Telecommunication Sector in Bangladesh,
Updated July 2006
Telecom
Sector Organizational set up: The telephone sector was
strictly under Bangladesh Telephone and Telegraph Board
(BTTB) mainly operating in the field of landline
connections.
Currently
there are six cell phone operators and 15 private land phone
operators.
The first
private operator licenses was issued in 1989 to a company
operating as a monopoly till 1997 when telecom market was
opened up to three 15 year GSM mobile license operators.
These are
namely Citycell, Aktel, and Grameen Phone. Later on joined
in Sheba telecom, which sold out to Orascom operating as
Banglalink.
WorldTel Ltd.
was the lone license holder to provide land phone in Dhaka
and were supposed to start operation in March 2006. However,
Bangladesh Telecom Regulatory Corporation (BTRC) cancelled
its exclusive right terming it anti-competitive and volatile
of the Bangladesh Telecommunication Act 2001. WorldTel went
to court. The Appellate Division of the Supreme Court on
August 23, 2005 dismissed WorldTel’s petition for retaining
its four-year co-exclusive right with BTTB to provide land
phone in Dhaka. This paved the way for private companies to
compete for land phone license. There are now fifteen
private companies which obtained license for land phone
operation.
Very recently
Teletalk is providing mobile phone service under BTTB. Warid
Telecom International of Dhabi Group is likely to start
operation this year, 2006.
Teledensity:
0.6% landline phone and 10% mobile phone connection with 12
million covered by cell phone.
Thus,
the country’s telecom sector constitutes of:
Landline:
BTTB:
State-run landline
15 Private
companies received license. These are:
Bangla
Phone, Bashundhara Communication & Networks, Dhaka
Telephone, Dominox Technologies, GEP Telecom, Jalalabad
Telecom (Bijoy phone), National Telecom, Nextel Telecom,
One Tel Communication, Peoples Telecommunication and
Information Service, Ranks Telecom, S. A. Telecom
System, Square Informatix, Tele Barta (Jubok phone),
Westec (Bay phone).
Cell
phone: 5 private companies and one state- run
company.
City cell,
Aktel, GrameenPhone, Banglalink, Teletalk (state), Warid
telecom.
Five of
them use GSM (globalized system for mobile
communication) service in the country while one uses
CDMA (code division multiple access) technology.
Chronology
of Events:
|
>1972 |
: |
since
independence: BTTB landline operation under GOB |
|
>1989 |
: |
mobile
phone license given to Pacific Telecom (City Cell) |
|
>1997 |
: |
market
opened up to three more GSM mobile license
operators:
Grameen Phone (GP), Telekom Malaysia (Aktel), Sheba
Telecom (now Banglalink) |
|
>2002 |
: |
BTRC,
a licensing and regulatory body set up under the
provision of Bangladesh
Telecom Act 2001 came into effective operation. |
|
>2005 |
: |
Fifteen private companies received license for land
phone operation |
|
>2006 |
: |
Teletalk – BTTB started mobile phone service
|
| | |