BTMA urges Bangladesh govt to import gas at the soonest


Bangladesh Textile Mills Association (BTMA) acting president Mohammad Ali Khokon urged the government at the ongoing 15th Dhaka International Textile and Garments Machinery Exhibition to accelerate the process of liquefied natural gas (LNG) import as per plans to overcome the current power crisis that has slowed down investment in the textile sector.

The improvements in the power sector are inadequate for the heavy textile industry, which is also concerned about the huge deficit in the gas sector, Bangladesh media quoted him as saying.

Jointly organized by the BTMA and Yorkers Trade and Marketing Company, the February 8-11 exhibition is hosting 1,100 exhibitors from 36 countries, including Austria, Belgium, Brazil, China, Denmark, France and Germany.

The government and readymade garments manufacturers are jointly working to attain $50 billion export target by 2021, said state minister for finance MA Mannan, who was the chief guest at the inaugural ceremony.

The minister assured the industry representatives about the government’s commitment to do everything possible to boost the textile industry. (DS)


No slowing for commercial, industrial property development


While residential and retail property took a huge knock, Stats SA revealed in September that the star performer during the second quarter of this year has been construction, and this is good news for the commercial and industrial property sector, says John Whall, CEO of Heartwood Properties.

Despite South Africa slipping into a technical recession, activity in the construction sector has increased by 2.3%, mainly due to the rise of non-residential buildings.

“Property prices for commercial and industrial zoned and serviced land seems to be maintaining their value with no notable reduction in prices. Especially zoned and serviced land that is commanding extremely high prices in Cape Town and in the prime areas of Joburg. We noticed that commercial and industrial investment properties with good leases in place are also holding their value in this market,” says Whall.

Delayed impact of land reform

With land reform looming, the country has been unsure about the outcome of the decision and Whall believes that even if certain parts of agricultural land should be converted to zoned serviced land, it will still take up to 10 years to materialise. What might eventually happen is that the risk of holding large portions of agricultural land may even push up the price of zoned land in the future.

As for commercial, the rentals of B and C grade offices have reduced due to higher vacancies but the vacancy levels of A and P grade space remains relatively low. Whall predicts that the ongoing lower vacancies of good warehouse space especially in Cape Town could result in increased rentals for the better properties, even as the economy slows down. This is partly due to the limited supply of new space onto the market.

“We’ve seen a bit of a lag in the Cape Town rental rates when compared to prime warehouse space in Gauteng and KZN and we could expect these rentals to increase above inflation over the next 18 months,” concludes Whall.

This means that things are looking up for this sector and shareholders shouldn’t rush to offload their shares or even their properties just yet. The overall market will react to any increases in interest rate hikes and that could have an impact on the sale prices of investment properties.


Industrial, logistics accommodation growing in strength


According to JLL’s latest report, Trade trends – the impact of trade imports on logistics and warehousing, the inflow of imports, mostly consumer goods, is contributing to increasing demand for storage, logistics and warehousing services in South Africa. A short update on the original research conducted in 2016, the report indicates a clear correlation visible in the trend of wholesale and retail trade sales in comparison to imports

Zandile Makhoba, head of research for Sub-Saharan Africa, JLL, comments: “As the technology economy advances, tertiary sectors – which provide products and services to all other industries in the economy – will continue to dominate. It is this context in which industrial and logistics accommodation is growing in strength.”

Changing development specifications

The report highlights the shifting demand for warehousing and logistics accommodation, and along with it the changing development specifications. For example, historically, industrial buildings required larger office components and needed to host higher employee numbers. In more modern industrial buildings, the office component has reduced significantly, and buildings are made to accommodate increased machinery and technology use as opposed to labour.

Four key factors are on the must-have list for modern industrial occupiers: Location is a big motivator with accessibility and visibility very important. Popularity of buildings in areas such as Jet Park, or Waterfall Estate with its highway frontage and opportunities for outdoor marketing, is evidence of this. Then the development of aerotropolis cities in KwaZulu-Natal (Dube Aerotropolis) and Gauteng (Aerotropolis Ekurhuleni) has also contributed to higher demand for accommodation near the King Shaka and OR Tambo international airports.

Other needs include larger yard space (to accommodate larger trucks and cargo vehicles), high volume maxi-units (occupiers are looking for big boxes, particularly for distribution and logistics use) and security (making access-controlled business parks popular).

No real threat of sharp oversupply

The report confirms that most developments to date have been non-speculative in nature, so there is no real threat of a sharp oversupply in the market. However, developer confidence has seen the rise of speculative developments which cater for more flexible lease terms. These adjusting lease terms are an indication of the increased presence of international occupiers and retailers, and the local market is beginning to align with international norms in the industrial leasing market.

Makhoba concludes, “The expansion of light industrial accommodation is also an indication of the increased pressure on transport infrastructure in South Africa, which is already showing signs of deterioration. The good news is that the public sector is making the necessary investments to improve infrastructure capacity to cope with this growth.”


First phase of revitalised R50m Phuthaditjhaba Industrial Park launched


The newly revitalised Phuthaditjhaba Industrial Park should be used to inspire confidence in the South African economy, Trade and Industry Deputy Minister Bulelani Magwanishe said on Tuesday, 30 October.

We are here on the backdrop of the Investment Summit, which confirmed the confidence that the local private sector and multi-nationals have in South Africa. We therefore need to take advantage of these industrial parks to increase investment and create sustainable employment,” said Magwanishe.

The deputy minister was speaking at the launch of the first phase of the revitalised R50m industrial park held at the Phuthaditjhaba Multi-Purpose Centre in QwaQwa.

Magwanishe also noted that there is hope for the South African economy and that signifies hope for the people.

“As we are to embark on phase two of the revitalisation programme, upon its completion we must be able to tell a story that, we have decreased the vacancy rate which currently stands at 40% and the employment rate which currently stands at 7518 has been hugely increased.”

He said the revitalisation is intended to respond to unemployment in the province and should also be explored to benefit not just the province, but the entire country.

Magwanishe said the province is strategic in many respects, most important being that it connects to six provinces and is the neighbour to the Mountain Kingdom of Lesotho.

Woo other SMMEs to the park

The deputy minister urged the Free State Development Corporation to woo in other small, medium and micro-sized enterprises (SMMEs) to consider setting up shop in the park, thereby helping to “drastically” reduce unemployment which is very high in the area.

Magwanishe also called for the revitalised park to be properly maintained.

“For this year Minister Rob Davies announced that R216m has been set aside for the revitalisation of industrial parks. Phuthaditjhaba is one of the five industrial parks that stand to benefit, as we will be proceeding with the other phases of revitalisation.”

“Today we recognise the completion of the first phase of the programme in this industrial park, which was realised through an allocation of R50m. This launch follows the completion of the first phase of the Botshabelo Industrial Park also here in the Free State,” said Magwanishe.

Work done at the park comprised of the upgrading of the security infrastructure including fencing, street lighting, installation of boom gates, pedestrian gates, installation of CCTV cameras and control room, as well as the refurbishment of high mast lights.

Free State MEC for Economic, Small Business Development, Tourism and Environmental Affairs Limakatso Mahasa urged black industrialists in the province to take up opportunities presented to them by the government.

The MEC also appealed to them to work with government to ensure that much needed jobs are created.

Tuesday’s launch is a collaboration between the dti, Department of Economic, Small Business Development, Tourism and Environmental Affairs (DESTEA), Free State Development Corporation (FDC), as well as the Thabo Mofutsanyane District and Maluti-a-Phofung Local Municipalities.


RAW Industries en route to a greener future


Real African Works (RAW), the first of its kind in South African Automotive Original Equipment Manufacturer (OEM) industry, currently specialising in city buses with a focus on Bus Rapid Transit System (BRT) being rolled out by various municipalities, launched on 21 November at Melrose Arch, Johannesburg. RAW complies with both local and International regulations in the manufacturing of buses.
Industry leader, Dr Vuyelwa Toni Penxa, a black woman entrepreneur, is at the helm of Real African Works (RAW), participating in this notoriously male-dominated, mainstream economic sector.
In 2016, at a time that the traditional transportation sector was moving towards a new era, a vision was born to launch RAW, with the intent of leading the automotive transport manufacturing sector in South Africa to greater heights. RAW is a company with a focus on design, development, manufacturing, marketing and selling of automotive drive-trains focusing on commercial vehicles of three tons payload and above.

Local development of future technologies

RAW engages in the exploration of local development of future technologies, thus ensuring job creation in South Africa. With a mission to provide versatile commercial vehicles, RAW specialises in Diesel Powertrain Systems with the support of the multinational company, Cummins, a global diesel engine manufacturer and ZF, a global leader in transmissions and driving axles. RAW is transforming into a first local company that manufactures city buses for public transport use such as the Gautrain, a mass transportation system operating in Gauteng.

In line with South Africa and the United Nations’ commitment to climate change and reducing carbon footprint, RAW at its core, is driven by sustainability and its quest for zero emissions. It is steadfast to the establishment of commercially viable and environmentally sustainable public transport systems paving the way to a greener future.

In the short term, RAW is focused on delivering on its current contract obligations by utilising Busmark, whilst it is working on its full manufacturing facility within the Gauteng Industrial Zone in Ekurhuleni.

“Over the years, my vision has been a focus on transforming the public transportation industry with a goal to create a system that was on par with leading motoring organisations in the world by identifying new avenues through integrating advanced manufacturing solutions with a priority to meet consumer needs within a sustainable future society.” states Dr. Vuyelwa Toni Penxa.

“I want to acknowledge that the foundation of our business is anchored on a very strong support from the Gauteng Provincial Government, which not only presented an opportunity, but it also incorporated us into their research and enhancement of the 4th Industrial revolution, therefore introducing us to the Council for Scientific and Industrial Research (CSIR), Hydrogen South Africa Infrastructure (HySa), The Department of Trade and Industry (DtI) and The Department of Science and Technology (DST)” adds Dr. Vuyelwa Toni Penxa.

“The legislative framework on local content, preferential procurement, black industrialist programme and other incentives are additional key support measures for the growth of our business.”

“We started by researching the manufacturing of ‘Tuk Tuks’, but today we are proud to say we are in Africa delivering advanced busses that are on par with global standards and in some ways even more advanced.” concludes Dr Vuyelwa Toni Penxa.

Green technologies to flourish at Western Cape SEZ


Speaking ahead of Thursday’s launch, Trade and Industry Minister Rob Davies said the SEZ is designated for the manufacturing of green technologies, alternative waste management, energy efficient technology, alternative building material and many other clean technologies.

“A combined R1.8bn is expected to be invested in the SEZ by 2022, with the creation of 1,200 direct jobs. A total of 24,000 full-time equivalent jobs are also expected to be created in the SEZ’s 20-year lifespan. This is in line with our Industrial Policy and will contribute towards the objectives of the National Development Plan,” said the minister.

SEZs are geographically designated areas of a country that are set aside for specifically targeted economic activities.

Manufacturing hub for green technologies

In 2011, the Western Cape provincial government, in partnership with the City of Cape Town, established a manufacturing hub for green technologies in Atlantis, which attracted large investors even before the designation was official.

“Four of these investors are already operational, with more expected to take occupancy within the SEZ in future once the facility is fully operational. This development will also allow the people of Atlantis to become involved in economic opportunities right on their doorsteps, and play an integral part in growing their economy,” said Davies.

The Atlantis community will be given priority in terms of job opportunities and opportunities for small, micro and medium enterprises (SMMEs).

Green economic hub

Western Cape Premier Helen Zille said the Western Cape Green Economy Strategic Framework serves as the province’s roadmap to becoming the leading green economic hub on the African continent, and the SEZ’s official launch is yet another step forward in this regard.

“We have identified the green economy, together with agri-processing and tourism, as key sectors under the Western Cape’s economic strategy, Project Khulisa. It focuses on sectors that prioritise jobs for young people, has a significant jobs impact in rural areas and opportunities for people with entry-level skills,” she said.

Zille said as a green investment destination, the Western Cape offers an emerging national renewable energy and clean-tech hub; a range of investment incentives in Atlantis Greentech SEZ; as well as major opportunities for investors in, energy services, utility scale solar and wind, waste, water, bio economy and resource efficiency.

Cape Town Mayor Dan Plato said the SEZ will secure major investment into Atlantis and provide solid job opportunities and skills development for surrounding communities for generations to come.

R81m Black Industrialist textile firm set for launch in KZN

A multimillion-rand Black Industrialist textile firm, Africa Bespoke Apparel (ABA), is ready to launch on 22 January 2019 in Verulam, KwaZulu-Natal. A 100% black-owned company operating in the textile, clothing and footwear sector, ABA is the first one amongst the Black Industrialists beneficiaries to create about 450 employment opportunities within four months of its operation.

ABA was approved for grant funding of R35.5 million from the Department of Trade and Industry (the dti’s) Black Industrial Scheme (BIS) and the project is co-funded by KwaZulu-Natal government’s Growth Fund. The BIS is an incentive of the Black Industrialists Programme that aims to unlock the potential within black industrialists operating in South African economy through deliberate, targeted and well-defined financial and non-financial interventions.

“The BIS supported Africa Bespoke Apparel to acquire the new equipment which aimed at simplifying and improving the production process, with increased flexibility and safety, which is combined with the realisation of guaranteed high quality to meet the demands of the modern textiles and clothing sector,” says Deputy Minister of Trade and Industry, Bulelani Magwanishe.

Magwanishe adds that the modern technology installed through the BIS will enable the company to triple its production. He says this manufacturing capability has allowed ABA to be competitive in relation to modern standards of manufacturing in the clothing and textiles sector.

“Through the BIS support the company aims to aims to penetrate a wide range of sub-Saharan African markets future,” adds Magwanishe.

Sihle Zikalala, KwaZulu-Natal MEC for Economic Development, Tourism and Environmental Affairs, says the KwaZulu-Natal government is proud of ABA’s achievements, adding that it augurs well for the provincial government’s programme to revive the textile industry which has not been performing well in the past 20 years.

“Our Black Industrialists Programme is producing handsome dividends. We have funded Africa Bespoke Apparel as the provincial government because we strongly believe that the textile sector can be used as one of the avenues of achieving our radical economic transformation agenda,” he says.


Steady growth in RMG sector


The readymade garments (RMG) sector in Bangladesh is continuing its positive trend in export earnings, fuelled by value-added products, government policy support and completion of 90 per cent of the factory remediation work set by the Accord and Alliance.

Compared to 2017–18, export earnings in the RMG sector have maintained a steady growth of 15.65 per cent in July–December of FY 2018–19,

amounting to USD 17.08 billion. In 2017–18, the total earnings were USD 14.77 billion.

Talking to The Independent, Abdus Salam Murshedy, president of the Exporters’ Association of Bangladesh, said, “We have completed around 90 per cent of the requirement of factory remediation work of Accord and Alliance, which eventually helps

attract buyers of the US and Europe to buy apparel from us.”

“The Western buyers are coming to Bangladesh with a number of work orders as we have been able to gain their confidence and faith,” he added. He said people of the sector should increase their efficiency to keep up the double-digit growth.

The endeavour for factory remediation enhanced workplace safety to a great level, which eventually helps boost the brand image worldwide, he said.

“We’ve invested around USD 4 billion for ensuring workplace safety and occupational health,” he added.

According to the Export Promotion Bureau (EPB), for July–December, the first six months of FY 2018–19, knitwear exports rose by 13.92 per cent to USD 8.65 billion compared to the previous year, which was USD 7.59 billion. Woven garments exports rose by 17.48 per cent to USD 8.43 billion compared to USD 7.17 billion the previous year.

Explaining the reason behind the 15.65 per cent growth rate in the RMG sector, Bangladesh Garment Manufacturers and Exporters’ Association president Siddiqur Rahman told The Independent, “The four months from October to January will be the peak season for the shipment of apparel. So, future prospects are even higher and brighter for garment shipments.”

He added, “We now have the capacity to produce any quantity of garment items as we have expanded our operations over the years.” However, the Chattogram port needs to perform better to boost exports, said business insiders.

According to the Export Promotion Bureau (EPB), for July–December, the first six months of FY 2018–19, exports rose by 2.18 per cent to USD 3.43 billion compared to the previous year.

For July–December of FY 2018–19, the export of agricultural products like tea, vegetables and tobacco registered a growth of 66.8 per cent and fetched USD 517.64 million.

EPB officials said export of leather and leather products fell significantly, with the sector registering a negative growth rate of 14.18 per cent. “About 65,000 people used to work at the tanneries in Hazaribagh before we shifted all the factories to Savar. As a result, many people have lost their jobs and it hit the export of leather goods,” said tannery owner Shaheen Ahmed.

EPB data also shows that the growth rate of jute and jute goods exports has fallen drastically to 26.66 per cent. This sector fetched USD 421.02 million in the first half of FY 2018–19.

The tax at source in the export-oriented RMG sector was reduced to 0.25 per cent from the existing 0.6 per cent in a bid to enhance the competitive edge of the RMG sector.

The National Board of Revenue (NBR) issued a statutory regulatory order (SRO) on Thursday in this respect, which will be effective from January 1 this year.

With the latest reduction, the tax at source for exports in the RMG sector has been reduced for the second time in the current fiscal year.

Earlier, on September 5 this year, the tax at source for exports in the RMG sector was reduced to 0.6 per cent from 1.0 per cent.

According to the latest survey by Asia Inspection (AI), a Hong Kong-based global inspection and accreditation body, Bangladesh is becoming a more popular apparel sourcing destination for Western retailers because of the ongoing US-China trade war.

The US-China trade war has forced many US fashion companies to look for alternative supply sources beyond China, creating a big opportunity for Bangladeshi apparel exporters.

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Bangladesh economy to enjoy happiest year in 2019: GEF


The Global Economist Forum (GEF) has said the Bangladesh economy will enjoy one of the happiest years in 2019 in respect to economic freedom, which will help achieve above 7.5 GDP growth. FEF, a Special Consultative Status development and policy organisation of the United Nations Economic and Social Council (ECOSOC), has released their worldwide economic prediction for 2019, including Bangladesh.

According to the prediction, Bangladesh exports will be significantly increased due to the US-China trade war. Bangladesh could be able to tap huge amount of foreign direct investment (FDI), especially in the special economic zones.

The revenue collection will face short of target due to poor business gain and slow growth in the private sector. But the public sector, especially power sector, will fetch huge investment, it said.

The power transmission sector could gain investment worth Tk 22,000 crore in 2019. The government debt to the GDP could be increased to 30 percent.

According to GEF President Dr Enayet Karim, the actual balance of trade will be minus Tk 175 billion due to the huge quantity of import against export.

As per the prediction of Dr Mohammad Haider Ali Miah, President of Bangladesh chapter of GEF, the poverty will significantly be reduced and it will stand at 21.8 percent due to equal distribution of resources.

Secretary General of Bangladesh chapter of GEF Dr Mamun-Ur Rashid said, “The inward remittance may not increase due to huge job cut in Saudi Arabia, the main labour market of Bangladesh, but new job markets will be invested and wages would be increased.”

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Local toys acquire finesse


The local toy-makers have gradually occupied 60 per cent of the market, helping to reduce the country’s dependence on imported toys, thanks to an increase in local and foreign investment, production of high-quality toys and government policy support.

Bangladesh Toy Merchants, Manufacturers and Importers’ Association (BTMMIA) president and managing director of Everest Toys Industry Ltd, Shajahan Mozumder, told The Independent that local toy producers had occupied 60–70 per cent of the market. In 2010, only around 25 small manufacturers used to manufacture toys in Bangladesh. But at present, that number had risen to nearly 150.

About quality, he said around 15–20 factories produced high-quality toys. Such manufacturers included the Hakkani Hark Group, Kabir Garden Industries, Aman Plastic Industries, Sabbir Plastic Industries and Sumon Plastic Industries, said Mozumder.

Toys worth Tk 5,000 crore were imported 8–10 years back but the volume had came down to Tk 2,000–3,000 crore at present, added Mozumder.

The size of the local market is worth Tk 7,000 crore; in that, Tk 4,000 crore worth of toys are being manufactured by the local toy-makers and the rest is imported, said BTMMIA president.

Comparing the local toys with the foreign products, he said the quality of the local brands was improving day by day and local manufacturers were taking over the market. “So, our toys will replace the Chinese toys very soon,” he said.

“Currently, our import has been gradually shifting towards raw materials, indicating that we are moving towards enhancing toy manufacturing,” he added.

Replying to a question, he said that three foreign factories, located in Chattagram, Comilla and Lalmonirhat, had started manufacturing high quality toys. They export products to countries such as the USA, European nations, China and Denmark.

These three factories were doing business worth Tk 200–250 crores annually, informed Mozumder.

About employment generation by this sector, he said that around two lakh people were directly employed directly and 20 lakh indirectly in this sector.

Zahid Enterprise, a toy manufacturing company in Bangladesh, has been in the business for many years.

Talking to The Independent, the owner of Zahid Enterprise, Zahidul Haque Zahid, said just six to seven years back, Bangladesh imported nearly 90 per cent of its toy products, but now that figure was down to around 35–40 per cent. The local market, according to him, was growing at the rate of about 15 to 20 per cent per year.

All types of toys—remote-controlled cars, binoculars, plastic dolls and lego—were being currently produced by the local manufacturers. “In our factory, we produce 400–500 types of toys,” he said.

Our yearly production capacity is 8–10 lakh pieces and the turnover is Tk 8–10 crore, said Zahid.

Talking about employment generation, he said huge employment opportunities could be created in this sector because the demand for local and global toys was increasing steadily.

“When I started my business, there were only 15 to 20 employees; now, nearly 200 employees are working for my company, and the number will increase in the near future,” he said.

Zahid also sounded optimistic about the future. “Once, Japan was the sole toy-producing and sourcing country in the world. Then, China occupied the market for many years. Eventually, China started shifting their businesses to high-tech industries. So, there is an ample opportunity for us to capture the global market.”

Pointing to a drawback, he said, “We have still not been able to produce quality moulds. So, this is definitely our biggest limitation, and it needs to be addressed.”

“We need land and more infrastructural support to increase production and export activities,” he added.

“We are also lack some of the latest machines and trained workers as well,” he added. Citing an example, he said that fitting machines and colour machines, which puts colours on toys, are not widely available in our country.”

When asked about the exports, he said we don’t export toys but we produce toys to meet the local demand. But Bangladesh toys are already available in the Netherlands, Spain, Germany, Russia, Japan, Australia, the US, and other countries.

“We have the ability to export our toys abroad but we are unable to do so without the government’s support,” say industry insiders.

When asked about toxic toys that harm the environment, Zahid said, “Plastic toys that are cheap and of low quality are harmful for the environment. But we follow proper regulations and guidelines while making toys.”

By enhancing their capacity, toy manufacturers were keen to enhance their skills with the help of foreign technologies, especially from countries which were good at it, he added.

When asked about the local market size, he said it was worth about Tk. 7,000-8,000 crore, and nearly 6,500 retail shops were selling toys across the country.

About the challenges, he said that 50 per cent of the toys were being locally manufactured but 20 per cent of the toy parts and accessories, such as remote controls, electric and non-electric motors and gear boxes were still being imported.

“So, we should produce more parts and accessories locally in order to reduce import dependency,” he said.

Mozumder pointed to the challenges posed by inadequate infrastructure. “We need land along with infrastructure facilities inside an economic zone to build separate factories for toys, parts and accessories.”

Sounding a note of optimism, he said, the dependency on imported toys, toy parts and moulds is falling, because, despite a small range, the local toy-makers were making toy parts with innovative designs and technical initiatives.

Citing an example, he said, “Once China used to control 90 per cent of the world toy market. In 2010, we imported toys worth around Tk. 5,000 crore from China, but in 2018 this value has already come down to Tk. 2,000 crore. Thus, the reliance on imported toys is diminishing.”

When asked whether Bangladesh exported toys, he said the country had started doing so, though the scale was still very small. At present, only three factories were exporting toy products to European countries.

The most important products of local makers were tricycle baskets, relax baby chair, toy furniture sets, toy guns and dinky cars, he said.

Yeasin Alam, a shopkeeper from ‘Toy World Store’ in New Market, told The Independent, “People are purchasing Chinese toys more than before. But local toy-makers have changed their marketing strategy and are producing quality toys at affordable prices. In the last two to three years, our sales have gone up more than in any preceding period,” he said.

Locally made ‘Lego’ was the highest selling product so far, he said.

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