Dearth of land in BD redirects FDI

Disappointed at high land prices and its shortage in Bangladesh, top Asian industrial giants are now considering relocating their factories to Myanmar, Vietnam and some other countries, sources said.
Faced with higher worker wages at home, industrialists were seeking to relocate their factories to Bangladesh.
But high prices and shortage of land-apart from some other hurdles-made them rethink their decision. And, finally, many of them are considering shifting to other countries.
According to the sources at the Board of Investment (BoI), top Asian conglomerates like Korean Samsung, Daewoo, and KANANN Group, Japanese Velbon Corporation and Jotye Auto, Indian Raymond, and Chinese 3G Group and Great Wall are among the regional big names that seek to expand footprint in the country.
But many of them have at last registered with investment authorities of neighbouring countries and some other destinations.
"We had been receiving lots of big investment proposals from the world's leading electronics, automobiles, garment, footwear and other technical products makers till 2012. The flow of such proposals now is lower than before," a director of BoI told the FE, preferring anonymity.
He said the big investors like Samsung, KANANN Group, Velbon Corporation 3G Group were hammering them to manage plots in EPZs or to buy lands within the proximity of Dhaka-to-Chittagong belt.
They failed to manage.
"Persuasion of the industrial giants to manage industrial plots in Bangladesh has nowadays slowed down. So far as our information, at least five of those big investors have now got enlisted with the investment authorities of Myanmar and Vietnam and some other with others," he informed.
AZM Azizur Rahman, General Manager with the Bangladesh Export Processing Zones Authority (BEPZA), said he used to face a number of foreign investors every day to allocate plots, mainly in the EPZs of Dhaka and Chittagong.
But, due to the scarcity of plots they could not commit allotment.
"Although the size and quality of many investments have taken us by surprise, we can't commit plot allotment," he lamented over the missed chances.
BEPZA officials said Samsung sought 500 plots, KANANN Group 150, Daewoo 30, and Raymond 20 plots in the Export Processing Zones (EPZs) in Chittagong or Dhaka.
According to him, many international conglomerates from both traditional and non-traditional sectors have been knocking them regularly for allotment of plots though almost all the zones under it have no empty plots.
Juny Park, managing director of Korea-based aluminium bar producer Chu Kin Zun, who has long been trying to invest in Bangladesh, said he could neither avail plots in export-processing zones nor could manage land outside the areas due to scarcity and sky-rocking prices.
"I have been trying to manage land for shifting my factory from Korea but could not manage it in or outside the EPZs, which made me to rethink for alternatives," Park told the FE.
However, executive chairman of the BoI Syed A Samad said that the government is actively working to remove the barriers to investment.
He also said that the country is eager to reshape its future as a new manufacturing hub for mobile phones, high-end electrical, electronic and home appliances, automobiles and some other world-renowned high-end products by ensuring easy access to investment in Bangladesh.
"We are now actively trying to implement Special Economic Zones (SEZs) as soon as possible. Land acquisition of SEZs almost completed. Government is now moving forward to complete other necessary works," Mr Samad added.
He billed the present situation of completion of preparing SEZs as satisfactory. "We hope the bottleneck of investment would be cleared soon."
Meanwhile, former adviser of a caretaker government Dr. Akbar Ali Khan said that the low-cost workforce, preferential facilities like generalised system of preferences (GSP) in export of locally produced goods helped lure overseas investors, but unfavorable business environment of the country is disappoint them.
"There is no other option but to activate 'SEZs' for revolutionizing industrialization in the country," he said.
He urged the government to take an immediate action plan to activate 'SEZs'.
BEPZA data show that 405 existing and new companies in EPZs together invested around $365.26 million in the FY 2013-14 and 54 other local and foreign investors signed lease agreements on investment worth $640 million with BEPZA.
According to BoI data, more than 1,735 local and foreign investors had proposed to invest around $5.41 billion during last fiscal, which was around $6.521 billion a year ago.

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