BD businessmen now focus on JVs with foreign investors

A good number of local entrepreneurs have now shifted their focus on business expansion through joint ventures (JVs) with foreign investors, especially for building their capacity through adopting modern technologies, insiders said.
According to them, the ever-growing global competition has prompted many local companies to initiate plans for both expanding and diversifying their activities in order to enhance competitiveness.
Official data revealed that as many as 74 investment proposals involving US$ 2.27 billion - both in the form of reinvestment and fresh ones - were registered with the Board of Investment (BoI) in the first eight months of the current fiscal year (FY).
A senior BoI official said following a growing competition in the global market, a good number of the business houses now intend to expand their activities.
Some of them are planning to enhance their production capacity in the wake of growing demand for quality products both in the domestic and international markets, he said.
The official said the local entrepreneurs are going to diversify their businesses and introduce the latest technologies for meeting the international buyers' requirement of high quality products.
The local-foreign partnership is taking place mainly in sectors like textile, light engineering, home textile, ICT, software development, ITES, jute and jute goods, pharmaceuticals, hospital and medical equipment, tourism, infrastructure development, food processing units and rubber products, he added.
Bangladesh is attracting investment from both Western and Asian countries like the United States, the United Kingdom, Malaysia, Singapore, Hong Kong, Egypt, Canada, the Netherlands and the United Arab Emirates, the BoI data shows.
Speaking on the issue President of Foreign Investors' Chamber of Commerce and Industry (FICCI) Rupali Chowdhury told the FE: "Bangladesh is a lucrative place to the foreign investors as a large number of entrepreneurs want to come here."
She said the country's skilled manpower and low labour cost are attracting the foreign investors.
She said until now many foreign investors are closely observing political developments. If the situation improves, then more and more such investors will come here.
An official of the ministry of industries told the FE that the Japanese Honda Motor Co has formed a joint venture company in Bangladesh to assemble motorcycles, as production cost had increased in other countries.
He said within five years the company will be able to go for full-scale motorbike manufacturing.
Honda has formed the JV plant with the state-owned Bangladesh Steel and Engineering Corporation (BSEC), he added.
International dairy giant Arla Foods and local Mutual Foods Ltd are going to start joint venture business in Bangladesh.
Chairman of Mutual Foods Ltd Azim Uddin Ahmed said recently that the Arla Foods amba has now found its confidence to start their business jointly with a Bangladeshi company.
He said the Arla Foods operates joint ventures only with Vietnam and Indonesia, and Bangladesh is the third country in Asia that they have chosen.
The Arla Foods amba is one of the world's largest milk producers with an annual turnover close to $ 13.5 billion, he added.
President of Exporters' Association of Bangladesh (EAB) Abdus Salam Murshedy told the FE: "A good number of investors from countries including India and China were interested to invest in the country's RMG (readymade garment) sector. But they were not allowed to come here as the local entrepreneurs have proved their capability after much hardship".
He said the country needs investment in those segments where they could not yet build leadership through investment. So, they want a policy for the overseas investment in the RMG sector.
President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Atiqul Islam told the FE: "The country needs a large amount of fresh investments in the backward linkage industry including spinning and woven textile segments to stabilise the supply chain of the RMG industry."
Deputy General Manager (DGM) of Dhaka Hide and Skin Ltd Mohammad Rezaul Karim told the FE that to fulfil the increased demand in international market many leather units have turned to production of high-value goods.
He said the country's high-value leather goods have been fascinating the overseas fashion lovers thanks to their innovative designs and competitive prices.