JV to invest $100m in hi-tech park

Bangladesh  Cards Ltd, a joint venture between Japanese, Australian and Bangladeshi  investors, is going to invest $100 million in a local hi-tech park to  manufacture high-end technology products, including smart cards and  specialised security items, to cater to the growing domestic and  international markets.

Seven acres of land were recently allotted  for the project at the Bangabandhu Hi-Tech City in Kaliakair, Gazipur,  where a five lakh square feet manufacturing hub will be set up. The  company aims to construct the factory in line with US Green Building  Council guidelines to gain green building certification.

"We will  make all types of smart cards, such as bank cards, national  identification cards and driving licences at the facility," Abu Sarwar,  managing director of Bangladesh Cards, told The Daily Star.

The  firm, which is owned by a majority of Bangladeshi investors, also wants  to be certified to make e-passports in order to supply to the governments  of various countries.

The company plans to invest the money in the next five years.

"This  investment will give Bangladesh self-sufficiency as an alternative to  importing ICT-related products. After meeting local demand, we will also  export Bangladeshi products to the international market," Sarwar said.

"In  the short term, we want to cut import dependency for such products by  50 per cent and in the long run, we want local manufacturing to  completely cover imports," he added.

The move comes at a time when Bangladesh  has set a target to export $5 billion in IT services and digital devices  by 2025, up from about $1.1 billion now.

In recent months, dozens  of companies have been investing in the high-tech parks, 12 of which  are now operational, to make and assemble semiconductors, digital  devices, medical equipment, automated teller machines (ATMs), smartphones, televisions,  networking devices, security surveillance and other electronics items  thanks to generous incentive packages.

Companies that invest in  the high-tech parks get lucrative tax breaks that include a 10-year tax  holiday, duty-free import of capital machinery, tax waiver on foreign  expats' salaries, and duty-free utility bills while foreign investors  can withdraw their investment anytime.

Other than the incentives, another formidable strength of the company is its connections  around the world, according to Sarwar.

"Almost all of the board  directors of the company are of Bangladesh origin and have been living  abroad and working for top firms around the world while the chairman of  the company is Japanese," he said.

Most of the technology to be used at the unit will come from Japan and Australia.

"And  since we have a big technology partner in Germany, international  standards will be maintained while manufacturing these high-end  technology products," the managing director said.

The company has  formed partnerships with some foreign companies that have over 10  factories around the world, some of which manufacture cards while others  make passports and driving licences, and everything will be integrated  with the Bangladesh factory, he added.

There are currently around  12,500 ATMs in Bangladesh but the number should be  35,000 if the country's total population is taken into account.

"The  price of an ATM machine depends on its functionality and we will offer  prices that will be as much as 25 per cent less than that of imported  ones," Sarwar said.

More than 35 per cent tax is usually levied on the import of ATMs.

"So, we will get a competitive edge thanks to the incentive packages dedicated to local manufacturing," he added.

Another big segment for the company would be making radio-frequency identification (RFID) clothing tags.

International  buyers are increasingly asking local garment makers to include RFID  tags with their products to ensure better tracking and and management.

"And  we will be able to capture this big market since local manufacturers  are mostly import-dependent for such tags," Sarwar said.

Of the  660 employment opportunities to be created by the project, 400 people  will be deployed as skilled technicians and about 99 per cent of the  employed will be locals trained abroad.

"At least $1 billion worth of imports will be cut once we go at full throttle," he added.

Bikarna  Kumar Ghosh, managing director of the Bangladesh Hi-Tech Park  Authority, said this is a big investment and will not only support the  local market, but also diversify the country's export basket.

So  far, 175 companies have been allotted space in the country's high-tech  parks and 148 local startups have been allotted space/co-working space.

The  Bangladesh Hi-Tech Park Authority has so far created skilled manpower  of 36,000 individuals in the ICT sector through various training  programmes considering the demand for manpower in the industry.

The  Bangladesh Hi-Tech Park Authority has created direct employment for  about 22,000 people in the ICT sector as well, Ghosh said.

And to  ensure the fastest and best service to investors, the authority now  provides a total of 148 services through its One-Stop Service portal.

"These  services are easy to get, take short time and are of low cost. Of these,  43 services are being provided online," he said, adding that there will  be over 100 hi-tech parks in Bangladesh by 2030.