Amu pledges industrial park for light-engineering firms

Industries Minister Amir Hossain Amu yesterday pledged to set up a manufacturing zone for the promising light-engineering sector, which needs support from the government as a thrust area.

“We will discuss the matter with BSCIC, to see whether we can arrange the corporation's unused land for the purpose. If that is not possible, we will try to allocate government lands,” he said.

Asian countries such as Japan, South Korea and Taiwan have made economic progress by prioritising the light-engineering sector. “We have no alternative to sustainable development of the light-engineering sector, to foster industrialisation.”

The industries minister will also request the central bank to allow the SME Foundation to disburse credit from a Tk 100 crore government scheme.

Amu made the promises in response to the demands raised at a seminar on 'promotion of light engineering industries through import substitute spare parts manufacturing', organised by the SME Foundation in Dhaka.

He urged entrepreneurs in the sector to replace their traditional machinery with modern ones to increase productivity, as well as quality. “Introducing advanced technologies will reduce your working hours, costs and health risks.”

Mikio Hataeda, chief representative of Japan International Cooperation Agency (Jica), said 99 percent of enterprises in his country are small and medium enterprises and 75 percent employees belong to the sector.

“In Bangladesh, the proportion of employment generated by SMEs is a mere 40 percent, which means there is huge untapped potential.”

Referring to automobile giant Toyota, Hataeda said the car maker cannot continue operations without the input and cooperation of as many as 10,000 SMEs. “These unknown SMEs are contributing to manufacture shafts, bolts and nuts for each and every car in a timely manner, thereby enabling Toyota to operate under its unique just-in-time manufacturing system.”

Jica has been promoting SMEs in Bangladesh through various initiatives under its programmes for private sector development, he said.

Citing the soft loan to Bangladesh worth around Tk 330 crore, he said over 300 SMEs obtained medium to long term investment credit of Tk 210 crore from the scheme to enhance their productivity.

Recognising that the finance alone is not enough to advance SMEs in Bangladesh, Jica has been supporting training on bankable business development to prospective SMEs, in collaboration with Bangladesh Bank and International Finance Corporation. More than 800 SMEs received training in the last two years, he said.

Abdur Razzak, president of Bangladesh Engineering Industry Owners' Association, said the central bank received loans worth Tk 500 crore from Japan at a rate of 0.01 percent.

“But the leasing and financing institutions take it from the central bank at 5 percent and lend it out to the light-engineering manufacturers at 18 percent,” he alleged.

Sustainable development cannot be made with such high interest rates, he said. “Apart from a single digit interest rate, we need to focus on training and technological upgradation for the sector.”

“We are also demanding an industrial park so that we can set up at least 200 factories that will manufacture new products,” he said, adding that no repairing plants will be allowed in the zone.

Presenting a keynote paper, Syed Md Ihsanul Karim, managing director of SME Foundation, said the light engineering sector's contribution to GDP stood at 3 percent, which was only 1 percent 15 years ago.

Of around 80,000 light engineering companies, 90 percent are engaged in spare parts repairs, while the rest manufacture new spare parts, he added.