GermanBangla signs $90m bicycle making deal
GermanBangla Bicycle Ltd signed a deal worth $90 million last week to make bicycles for a supplier to the mass market in the European Union for the next five years.
In the first year, starting from February next year, the company will produce 1.5 lakh bicycles, and the number will be increased to 5 lakh in the third year, said Sazed Alam, chief executive officer of ZA Group LLC, California, the sales and marketing partner of GermanBangla.
A partnership between Germany's Panther Bike and Bangladesh's Power Trade Group, GermanBangla started its journey in 2008 anticipating a growing demand depending on the rising labour costs and instability in China.
Labour rates in Bangladesh are around 23 to 25 cents per hour, roughly one-third of the costs in China, according to a statement of ZA Group yesterday.
The new order brings some life to the country's bicycle business, as earlier this year Panther had stopped using its Bangladesh factory for entry-level bikes, and later also shifted its remaining production from LÃ¶hne in Germany to a plant in Lithuania.