Investment Opportunities in the EPZs Of Bangladesh

Presentation By Major General A T M Shahidul Islam, ndu, psc Executive Chairman

BANGLADESH EXPORT PROCESSING ZONES AUTHORITY (BEPZA)

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Definition of EPZ

An export processing zone is defined as a territorial or economic enclave in which goods may be imported and manufactured and reshipped with a reduction in duties / and/or minimal intervention by custom officials (World Bank 1999)

Mission Of BEPZA
TO STRENGTHEN THE ECONOMIC BASE OF BANGLADESH BY:

PROMOTING INVESTMENT &

GENERATION OF EMPLOYMENT

Objectives Of BEPZA
PROMOTION OF FOREIGN (FDI) & LOCAL INVESTMENT EMPLOYMENT GENERATION & POVERTY ALLEVIATION

TRANSFER OF TECHNOLOGY
DEV. OF BACKWARD & FORWARD LINKAGES PROMOTION OF EXPORT

Background & Development Of BEPZA

BEPZA Act, 1980 & Foreign Private Investment Act, 1980 1st EPZ 2nd EPZ : Chittagong became Operational in 1983 : Dhaka starts in 1993 Adamjee & Karnaphuli.

Then 6 EPZs : Mongla, Comilla, Ishwardi, Uttara (Nilphamari),

Management
BOARD OF GOVERNORS
CHAIRED BY THE HONBLE PRIME MINISTER

EXECUTIVE BOARD
EXECUTIVE CHAIRMAN, MEMBER (IP), MEMBER (ENG), MEMBER (F)

EPZ
HEADED BY GENERAL MANAGER

EPZs Of Bangladesh
UTTARA- EPZ DHAKA- EPZ

INDIA

ISHWARDI- EPZ

COMILLA-EPZ

ADAMJEE-EPZ

INDIA

INDIA
MONGLA-EPZ

CHITTAGONGEPZ

BAY OF BENGAL MYANMAR

KARNAPHULI-EPZ

Investors From 37 Countries

TYPES OF INVESTMENT (UPTO July, 2012)
A 100% FOREIGN OWNERSHIP 230 57%

B
C

JOINT VENTURE
100% LOCAL VENTURE In Operation Under implementation (LA) Sanctioned Industry Total

62
115

15%
28%

407 100% 62 77 546

Why You Should Invest In EPZs

BETTER LAW & ORDER SITUATION GOOD INFRASTRUCTURE FACILITIES

REDUCTION OF LEAD TIME

LESS COST OF DOING BUSINESS FRIENDLY POLICY OF THE GOVERNMENT ATTRACTIVE INCENTIVES (FISCAL & NON-FISCAL) WIN WIN VENTURES

SUCCESS STORY

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Legal Protection For The Investors

Signatory of MIGA (Multilateral Investment Guarantee Agency)

ICSID (International Centre for Settlement of Investment Dispute)

Member of WIPO (World Intellectual Property Organization) OPIC (Overseas Private Investment Corporation)

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Infrastructure Facilities
Fully Serviced Plots (Avg Size 2000 SQM) Factory Building Available on Rental Basis

Business Support Services: Courier ,Banks, C & F Agent, Shipping Agent, etc.
Administrative Support Services : Commissariat, Health Club, Investors Club, Medical Center, Sports Complex, etc.

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Reduction Of Lead Time

1. 2. 3. 4. 5. 6. INTRA & INTER ZONE EXPORT- IMPORT ALLOWED DA BASIS IMPORT SIMPLIFIED IMPORT EXPORT PROCEDURE IP & EP ISSUED WITHIN THE SAME DAY IMPORT OF RAW MATERIAL FROM DOMESTIC TARIFF AREA (DTA) SUB-CONTRACTING ALLOWED BOTH INSIDE & OUTSIDE EPZ

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Incentives (Non-Fiscal)
1. 2. 3. 4. 5. 100% FOREIGN OWNERSHIP PERMISSIBLE ENJOY MFN (MOST FAVORED NATION) STATUS NO CEILING ON FOREIGN INVESTMENT FULL REPATRIATION OF CAPITAL & DIVIDEND BEPZA ACCORDS RECOMMENDATION FOR RESIDENTSHIP / CITIZENSHIP

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Incentives (Fiscal)
1. 2. 3. 4. 5. TAX HOLIDAY DUTY FREE EXPORT & IMPORT EXEMPTION FROM DIVIDEND TAX GSP FACILITY AVAILABLE DUTY & QUOTA FREE ACCESS TO EU (EBA), CANADA, NORWAY, AUSTRALIA & USA UNDER PROCESS

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Support Service Facilities

WORK PERMITS ISSUED BY BEPZA IP & EP ISSUED WITHIN THE SAME DAY NO UD (Utilization Declaration), IRC (Import Registration
Certificate),

ERC (Export Registration Certificate) &

RENEWAL OF BOND LICENSE REQUIRED IMPORT & 10% SALE TO DTA (LOCAL

MARKET) ALLOWED
CUSTOMS CLEARANCE AT FACTORY SITE INTRA / INTER ZONE SUB-CONTRACTING & TRANSFER OF GOODS ALLOWED AVAILABLE WORKFORCE

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Asias Most Competitive Production Base

Comparative Monthly Minimum Wages

$48

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Service Charge - Rent

Ishwardi- EPZ

ZONE
CHITTAGONG, DHAKA COMILLA, ADAMJEE, & KARNAPHULI EPZ MONGLA, ISHWARDI & UTTARA EPZ

LAND (US$ / SQM / YEAR)

2.20

SFB (US$ / SQM / MONTH)

2.75

1.25

1.60

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Service Charge - Utilities

COMILLA EPZ ADAMJEE EPZ KARNAPHULI EPZ UTTARA EPZ

Name of the EPZ Chittagong EPZ Dhaka EPZ Comilla EPZ Karnaphuli EPZ

Electricity (Per KWH)

Water (Per CUM) Taka 22.43 US$ 0.27 (approx.) Taka 22.43 US$ 0.27 (approx.) Taka 22.43 US$ 0.27 (approx.) Taka 22.43 US$ 0.27 (approx.)

Gas (Per CUM) Taka 6.45 US$ 0.08 (approx.) Taka 6.45 US$ 0.08 (approx.) Taka 6.45 US$ 0.08 (approx.) Taka 6.45 US$ 0.08 (approx.)

Adamjee EPZ Ishwardi EPZ Mongla EPZ Uttara EPZ

Taka 6.49 US$ 0.08(approx.) Taka 6.49 US$ 0.08(approx.) Taka 6.49 US$ 0.08(approx.) Taka 8.89 (peak) US$ 0.11 (approx.) Taka 5.68 (off peak) US$ 0.07(approx.) Taka 6.49 US$ 0.08(approx.) Taka 6.49 US$ 0.08(approx.) Taka 6.49 US$ 0.08(approx.) Taka 6.49 US$ 0.08(approx.)

Taka 22.43 US$ 0.27 (approx.) Taka 22.43 US$ 0.27 (approx.) Taka 22.43 US$ 0.27 (approx.) Taka 22.43 US$ 0.27 (approx.)

Taka 6.45 US$ 0.08 (approx.) Taka 6.45 US$ 0.08 (approx.) Taka 6.45 US$ 0.08 (approx.) Taka 6.45 US$ 0.08 (approx.) 19

*Tariffs are subject

to change in future

Investment
YEAR
1994-1995 1995-1996 1996-1997 1997-1998

INV ($m)
35.93 30.58 53.90 68.83

1998-1999
1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 (July,12)

71.61
34.98 48.41 55.61 102.63 115.04 118.52 112.89 152.37 302.19 148.03 221.99 313.23 339.26 21.95

TOTAL ACTUAL INVESTMENT= $ 2,478.90 m

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Export
YEAR
1994-1995 1995-1996 1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 (July, 12)

EXP ($m)
228.26 337.02 462.77 636.05 711.69 890.81 1067.87 1077.02 1200.00 1354.00 1548.68 1836.18 2063.67 2429.58 2581.70 2822.54 3697.62 4210.80 433.05

TOTAL EXPORT: US$30,000.78m

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BEPZAs Contribution To National Export

YEAR TOTAL EXPORT OF BANGLADESH (US$m)
3882 4418 5161 5313 5752 6467 5986 6548 7603 8655 10526 12178 14111 15560 16250 22924 24,41 0

TOTAL EXPORT OF EPZs (US$m)

337 463 636 712 891 1068 1077 1200 1354 1549 1836 2064 2429 2582 2822 3698 4210

BEPZAs CONTRIBUTION (%)

8.68 10.48 12.32 13.40 15.49 16.51 18.00 18.33 17.80 17.90 17.44 17.00 17.22 16.60 17.36 16.13 17.24
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1995-1996 1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

Employment
YEAR
1994-1995

No of EMPL
6,141

1995-1996
1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 (July, 12)

10,706
12,773 14,049 14,059 9,890 16,020 8,764 10,167 10,071 15,802 23,021 23,360 17,130 16,394 28,064 43,666 33,598 1,323

Male -36% 1,22,884

Female Male

Female -64% 2,18,460

TOTAL EMPLOYMENT: 3,41,344nos.

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Country Wise Enterprises

SL Country Enterprise (Nos.) 115 69 45 Investment (US$m) 578.333 526.815 315.799 Employment (Nos.) 74,012 84,204 55,959 SL 20 21 22 23 24 25 26 27 28 29 30 31 Country SINGAPORE BELGIUM UKRAINE DENMARK PANAMA SPAIN 1 2 3 BANGLADESH S. KOREA CHINA *

(Upto July,12)
Enter. (Nos.) 3 2 1 3 1 1 1 1 1 1 1 1 407 Invest. (US$ m) 8.202 5.041 4.288 3.339 2.886 2.395 20.305 2.295 0.258 0.590 0.026 5.900 2,478.90 Emp. (Nos.) 1,965 452 528 1,134 2,357 150 433 29 408 296 62 967 3,41,344

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5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

JAPAN
TAIWAN, CHINA INDIA U.S.A UK MALAYSIA PAKISTAN GERMANY CANADA NETHERLAND SRILANKA BR. VERGIN IS. ITALY SWEDEN INDONESIA SWITZERLAND

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25 20 15 15 11 7 6 5 6 8 4 5 1 2 1

223.497
191.016 41.900 70.873 71.912 121.964 9.860 20.736 39.042 56.881 50.671 39.940 35.948 13.303 8.342 6.546

9,445
14,303 9,927 15,645 18,263 4,884 2,563 5,345 3,913 4,511 13,109 6,641 3,172 4,668 1,918 81

MARSHAL ISLAND

IRELAND THAILAND UAE AUSTRALIA OTHERS TOTAL

OTHER COUNTRIES:31. PORTUGAL 32. TURKEY 33. KUWAIT 34. MOURITIUS 35. FRANCE 36. RUMANIA 37. MALTA

*HONGKONG INCLUDING IN CHINA

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Product Wise Enterprises (Upto July, 12)

Sl 1 2 3 Product GARMENTS GARMENTS ACCS. KNIT & OTHER TEXTILE Enterprise (Nos.) 101 70 44 Investment (US$ m) 816.800 297.533 212.840 Employment (Nos.) 1,94,489 16,784 38,512

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5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

TEXTILE
ELEC & ELECTRONICS FOOTWARE & LEATHER CAPS TENT TERRY TOWEL METAL PRODUCT PLASTIC GOODS PAPER PRODUCT FISHING REEL & GOLF ROPE SERVICE ORIENTED INDUSTRIES AGRO PRODUCT FURNITURE POWER INDUSTRY Chemical Sports Goods MISCELLANEOUS Gr. Total

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17 25 5 8 18 13 11 2 1 2 6 7 3 2 5 1 25 407

480.811
92.174 141.609 50.031 50.850 62.727 28.726 27.170 1.316 32.419 6.476 32.950 2.624 28.560 45.124 3.367 1.245 63.061 2,478.90

22,583
4,464 19,840 7,826 8,260 7,063 1,283 2,873 100 607 565 916 309 1,613 99 73 319 12,566 3,41,344

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Zone Wise Statistics (upto July, 12)

EPZ Industry In Op. (No.) CEPZ DEPZ AEPZ COMEPZ KEPZ 167 102 36 32 38 U/Impl. (No.) 12 09 31 29 16 968.421 866.063 168.945 157.231 221.001 15,272.73 12,729.37 580.41 726.67 520.11 1,76,993 84,503 21,381 12,820 27,637 Investment (US$ m) Export (US$ m) Employment (No.)

IEPZ
MEPZ UEPZ Total

11
12 09 407

17
16 09 139

68.027
5.362 23.85 2,478.90

87.86
134.95 26.65

7,958
1,522 8,530 3, 41,344

30,078.74

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Global Ranking 2011-12 by FDI Magazine

TOP 10 FREE ZONES OF THE FUTURE 2012/13 OVERALL.
RANK NAME OF ZONE 1 Dubai Airport Free Zone 2 Dubai International Financial Centre COUNTRY UAE UAE China

3 Shanghai Waigaoqiao Free Trade Zone

4
5

Iskandar
DuBiotech

Malaysia
UAE Morocco Latvia Philippines Bangladesh UAE
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6 Tanger Free Zone 7 Free port of Ventpils 8 The Clark Freeport Zone 9 Chittagong Export Processing Zone 10 Dubai Media City

Global Ranking 2010-11 by FDI Magazine

TOP 10 BEST COST EFFECTIVENESS
RANK NAME OF ZONE 1 Clark Freeport 2 3 Togo Export Processing Zone Chittagong Export Processing Zone COUNTRY Philippines Togo Bangladesh

4
5 6 7 8 9 10

Free Port of Ventspils

International Media Production Zone Rezekne Special Economic Zone San Luis Potosi Mauritius Freeport Industrial Estate of Thailand Starachowice Special Economic Zone

Latvia
UAE Lativa Mexico Mauritius Thailand Poland
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Global Ranking 2010-11 by FDI Magazine

TOP 10 BEST ECONOMIC POTENTIAL
RANK NAME OF ZONE COUNTRY

1
2 3

San Luis Potosai

Industrial Estates of Thailand Jebel Ali Free Zone

Mexico
Thailand UAE

4
5 6

Chittagong Export Processing Zone

Jubail Industrial City II Amata Nakorn Industrial Estage

Bangladesh
Saudia Arabia Thailand

7
8 9

Clark Freeport
Aqaba Special Economic Zone Jazan Economic City

Philippines
Jordan Saudia Arabia

10
11

Masan Free Trade Zone

Rakia Industrial Zone

South Korea
UAE
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Brand Products

NIKE, REEBOK, LAFUMA, H & M(SWEDEN), GAP, BROUKS, J.C. PENNY, WALMART, KMART, OSPIG(GERMANY), MOTHER CARE (UK), LEE, WRANGLER, DOCKERS, NBA, TOMMY HILFIGER, ADIDAS, FALCON(USA), EDIE BAUYER, EAGLE, RELEIGH(UK), EMMILEE, FREE SPIRIL(UK), MILES(GERMANY), AMERICAN EAGLE, HI-TECH(UK), PHILLIPMAURICE(UK), WINS MORE, DECATHLON. LL CAMERA LENS (IO PARTS) GOLF SHAFTS MOBILE PARTS AUTOMOBILE PARTS KONIKA, MINOLTA, NIKON, FUJI, OLYMPUS. ABU GARCIA SONY ERICSSON NISSAN, MITSUBISHI, HINO,TOYOTA.
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Conclusion
ASIAS MOST COMPETITIVE PRODUCTION BASE A BONANZA FOR INVESTMENT

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