Number of JVs to produce high-end products rising

FE Team | Published: October 22, 2013 00:00:00 | Updated: February 01, 2018 00:00:00

Shamsul Huda More and more local and foreign firms are forming joint ventures (JVs) in different sectors with the objective of manufacturing high end products. The newly-formed JVs remain specially focussed on the issues relevant to becoming competitive in export and domestic markets, sources said. The local entrepreneurs are inviting foreign counterparts to harness technology of the latter in helping manufacture of world class products. This partnership is taking place mainly in apparel, construction, information technology, logistics, real estate, leather, electronics, chemicals, power generation, pharmaceuticals and service sectors. A Board of Investment (BoI) official said as per its registration book joint venture firms have grown by 9.0 per cent this year. He said in the first nine months of the last calendar year a total of 78 JV firms were registered with the BoI and until September of the current calendar year the number was 85. The BoI source said, "Many JV firms in textiles and apparel, BEPZA and other sectors do not register with our office. So the overall growth of JVs in the country is likely to be higher than our estimates." BoI Deputy Director Ariful Haque said the entrepreneurs are encouraged to diversify their businesses through the deployment of foreign technology to meet the buyers' required quality of products, the BoI official said. He said currently JV partnership is increasing with cent per cent local as well as with foreign direct investment (FDI) firms. The participating foreign firms are mainly from China, South Korea, Taiwan, Malaysia, Thailand, Japan, India, the US, Denmark, Norway and some other European countries. President of the Foreign Investors' Chamber of Commerce and Industry (FICCI) Syed Ershad Ahmed said currently FICCI has at least 30 JV member companies. He said in joint venture business, foreign finance and technology strengthens the muscle of local entrepreneurs and help produce quality goods. He said following foreign firms' participation some local products have already attained global standards, which is helping increase country's export volume. A source in the BEPZA said at least 61 JV companies are there in the EPZs across the country. She said though in most cases partnership investments are in existing businesses, fresh investments involving foreign firms' technical assistance are also taking place. Former BGMEA President Abdus Salam Murshedy said joint venture investments are good for the country as it is replacing old manufacturing trends by introducing new technology. He said, "We need more joint venture investments in textile sector as a major percentage of top quality fabrics are still being imported for export purposes." According to a Bangladesh Association of Software and Information Services (Basis) source currently more than 40 joint venture firms are engaged in developing software and IT enabled services. He said the partnering IT firms are producing global standard products as per buyers' requirements. It was not possible by the local firms as they are still lagging behind in technology implementation, he added. "To do export based business, foreign-local joint ventures are a must to thrive in the competitive market," a software developer said. He said, "I myself develop software as per my outsourced orders with the technological assistance from a Danish firm." He said JVs are helping earn foreign currency and it is also bringing in new technology to the local IT firms. A construction entrepreneur said, "We have formed JV with a Chinese company. Now with our experts we can vie for any kind of project." He said, "Earlier, we had to pay a large amount of money as consultancy fees and for employing foreigners. Under JV, such payments are not necessary". Former President of Bangladesh Association of Pharmaceuticals Industries (BAPI) Md. Shafiuzzaman said local-foreign partnership in medicine sector is still insignificant. Two companies have formed joint ventures in manufacturing high tech insulin and medicines. So a new trend has just begun in the pharmaceuticals sector, he said. He said to manufacture export based high tech products some are thinking of going into partnership with foreign firms for their finance and technology. The former BAPI president said entrepreneurs are looking forward to achieve such technology based manufacturing both for local and export markets. Former Chairman of Bangladesh Leather Exporters' Association Tipu Sultan said, currently some local firms are manufacturing leather goods under joint ventures with Italian and Japanese firms. He said though there are some JV companies in the export processing zones (EPZs) but due to space constraints such investments in leather sector is taking place outside the EPZs. Mr. Sultan said to meet buyers required quality and design, local entrepreneurs are forming joint venture with their foreign counterparts for their technical know how, design and marketing strategy. He said a good number of partnership businesses are also in the pipeline to bring in technology, design and marketing strategy to strengthen export market.