South Korean investors are aiming to shift their industrial units from other Asian countries to Bangladesh to take advantage of the country's favourable investment climate, cheap labour and growing economy, officials said.
"Bangladesh will witness a fresh flow of investments worth millions of dollars from South Korea over the next six months as a good number of investors are bringing businesses here from China, Vietnam and other Asian countries," South Korean Ambassador to Bangladesh Mr Suk-Bum Park told the FE recently.
He said South Korean investors are keen to invest in Bangladesh's flourishing shipbuilding, booming garment and prospective housing sectors.
South Korean STX Shipbuilding Company Ltd has already signed an agreement with local Meghna Ship Builders and Dockyard to set up a shipyard at Meghnaghat in Naryanganj aiming to build ocean-going vessels, said Mr Park.
STX Shipbuilding has the capacity to build a wide range of quality products including large container ship and liquefied natural gas (LNG) carriers, he said adding his country is renowned for its shipbuilding capability and high quality products.
The ambassador said escalating manufacturing and labour costs in East and Southeast Asia are also forcing South Korean investors to shift businesses and look for new destinations in Bangladesh.
South Korea has so far invested around US$ 1.0 billion in Bangladesh, of which $320 million has been invested in industries inside the export processing zones (EPZs) and $626 million outside the EPZs.
To capitalise on Bangladesh's cheap labour South Korean companies have also started recruiting manpower for their labour-intensive industries, the ambassador said.
Some 4,000 Bangladeshi workers are likely to enter Seoul this year after being selected through Korean language test under the recently introduced merit-based Employment Permit System (EPS), he said.
He said some 2600 Bangladeshis passed medial and Korean language tests in the first ever EPS recently and among them, some 1300 workers are likely to get jobs in South Korea, he said.
Over 200 Bangladeshi workers recruited under the EPS reached Seoul a couple of weeks ago.
South Korea will require around 50,000 foreign workers in small and medium enterprises, construction sites and service sectors and Bangladesh can grab a major share if it can meet the requirements of Korean companies that include proficiency in Korean language under the merit-based EPS.
The Korean government introduced EPS in August 2004 to ensure recruitment of foreign workers in an efficient and hassle-free manner.
"No middleman is required under the system as the Korean recruiters recruit the workers directly from the merit list of those who come out successful through the EPS," the South Korean Ambassador said.
Farmers, plumbers, carpenters, electricians and masons have higher demand in the Korean job markets where minimum wage is US$900, Park said.
Regarding bilateral trade, Mr Park said the trade is now in favour of South Korea, but Korean export to Bangladesh is on a declining trend.
In fiscal 2007, South Korea exported goods worth US$612 million to Bangladesh, while its imports were worth $142 million, he said.
Bangladesh imports petrochemical items, paper products, machinery, high-quality fabrics and electronic items from South Korea, while it exports frozen foods, garment products and naphtha.
Bangladesh is benefiting from duty-free access of some goods in South Korean market, South Korean ambassador said.
In 2007, South Korean export to Bangladesh dropped by 5.7 per cent compared to that of the previous fiscal, while Bangladesh's export to South Korea rose by 106 per cent, Mr Park added.
