Swiss companies keen to invest, says envoy
Friday, 29 January 2010
A Z M Anas
Swiss investors are keen to invest in Bangladesh but they believe key framework conditions in infrastructure, financial and legal systems are still not there, ambassador of Switzerland in Dhaka Urs Herren said Wednesday.
He said energy and power shortages are seen as a crucial inhibiting factor by the investors' community looking at Bangladesh as the next frontier of investment.
"Energy and infrastructure are big issues our investors are looking at," Mr Herren said in an interview at his office.
Switzerland-based companies are the major investors in emerging economies, with particular focus on infrastructure, engineering and power.
After two years of caretaker regime and the new government in place, the Swiss companies and investors are "carefully studying" the Bangladesh situation before working on fresh investment proposals, he said.
As Bangladesh continues to coax foreign investors for electricity generation, Mr Herren said the Swiss engineering titan ABB Group is "actively looking at options" for investments in the power sector.
In a frantic bid to woo foreign investors, the present government is organising roadshows in multiple global financial capitals seeking US$ 5.0 billion investment for nine power projects of over 3200 MW capacity plus a liquefied natural gas (LNG) terminal to import canned gas.
But the ambassador noted that inefficiency in the legal and banking systems could also be real deterrents.
"If you get entangled in complicated and lengthy legal procedures, you'll be less willing to invest," the envoy said.
Higher lead time and inefficiency at Chittagong port also hampers delivery of goods, tainting its image as the country's prime sea port, he said.
He said the lack of country promotion has also fuelled misconceptions among foreign entrepreneurs about the potential of Bangladesh, which is still struggling to prove itself on the world stage.
The envoy said, Swiss giants, Nestle, Novartis, Holcim and Syngenta, are active in Bangladesh market for over three decades and have so far invested $150 million, generating 2'500 jobs.
Other than big names, 100-odd smaller firms are also operating in Bangladesh and the ambassador said more are exploring ways to trade or invest in the country, sensing its economic opportunities.
He said among his mission's priorities is the support to the potential Swiss companies and investors in Bangladesh, whose economy managed to attain a growth of 5.9 per cent in 2009 financial year while navigating the worst recession in generations.
Besides investments, the envoy said the two-way trade between Bangladesh and Switzerland has been growing 20 per cent a year since 2003 to reach $280 million in 2008.
"Trade is currently quite balanced. But still, the figures are not that impressive," he said.
He said that Swiss exports, the bulk of which is textiles machinery and chemicals, fell by 30 to 40 per cent in 2009 as Bangladeshi textiles makers struggling through the global recession spent gingerly on new plants or expansion.
He is, however, hopeful about a rebound in textile machinery imports by Bangladeshi entrepreneurs this year as the world's major economies, including the United States and China are snapping out of economic stupor.
By contrast, the Swiss envoy said Bangladesh's exports to Switzerland continue to power ahead this year, helped by low-end garments that make up more than 90 per cent of Bangladeshi merchandise shipment.
Bangladesh's exports to Switzerland amounted to $120 million until last September, he said, suggesting the figures would rise by year-end.
He said Bangladeshi exporters can break into pharmaceuticals, information technology, ceramic and shrimp markets of Switzerland without jeopardising traditional garments exports.
"Today, Brazil and Vietnam are leading fish exporters to our market. You can also grab a slice of it by maintaining quality and food safety," the Ambassador said.
"It's a tricky market. Our consumers are even ready to pay higher when it comes to quality products," Mr Herren said, adding the Swiss retailers also adhere to international labour standards at the supply end.
Swiss investors are keen to invest in Bangladesh but they believe key framework conditions in infrastructure, financial and legal systems are still not there, ambassador of Switzerland in Dhaka Urs Herren said Wednesday.
He said energy and power shortages are seen as a crucial inhibiting factor by the investors' community looking at Bangladesh as the next frontier of investment.
"Energy and infrastructure are big issues our investors are looking at," Mr Herren said in an interview at his office.
Switzerland-based companies are the major investors in emerging economies, with particular focus on infrastructure, engineering and power.
After two years of caretaker regime and the new government in place, the Swiss companies and investors are "carefully studying" the Bangladesh situation before working on fresh investment proposals, he said.
As Bangladesh continues to coax foreign investors for electricity generation, Mr Herren said the Swiss engineering titan ABB Group is "actively looking at options" for investments in the power sector.
In a frantic bid to woo foreign investors, the present government is organising roadshows in multiple global financial capitals seeking US$ 5.0 billion investment for nine power projects of over 3200 MW capacity plus a liquefied natural gas (LNG) terminal to import canned gas.
But the ambassador noted that inefficiency in the legal and banking systems could also be real deterrents.
"If you get entangled in complicated and lengthy legal procedures, you'll be less willing to invest," the envoy said.
Higher lead time and inefficiency at Chittagong port also hampers delivery of goods, tainting its image as the country's prime sea port, he said.
He said the lack of country promotion has also fuelled misconceptions among foreign entrepreneurs about the potential of Bangladesh, which is still struggling to prove itself on the world stage.
The envoy said, Swiss giants, Nestle, Novartis, Holcim and Syngenta, are active in Bangladesh market for over three decades and have so far invested $150 million, generating 2'500 jobs.
Other than big names, 100-odd smaller firms are also operating in Bangladesh and the ambassador said more are exploring ways to trade or invest in the country, sensing its economic opportunities.
He said among his mission's priorities is the support to the potential Swiss companies and investors in Bangladesh, whose economy managed to attain a growth of 5.9 per cent in 2009 financial year while navigating the worst recession in generations.
Besides investments, the envoy said the two-way trade between Bangladesh and Switzerland has been growing 20 per cent a year since 2003 to reach $280 million in 2008.
"Trade is currently quite balanced. But still, the figures are not that impressive," he said.
He said that Swiss exports, the bulk of which is textiles machinery and chemicals, fell by 30 to 40 per cent in 2009 as Bangladeshi textiles makers struggling through the global recession spent gingerly on new plants or expansion.
He is, however, hopeful about a rebound in textile machinery imports by Bangladeshi entrepreneurs this year as the world's major economies, including the United States and China are snapping out of economic stupor.
By contrast, the Swiss envoy said Bangladesh's exports to Switzerland continue to power ahead this year, helped by low-end garments that make up more than 90 per cent of Bangladeshi merchandise shipment.
Bangladesh's exports to Switzerland amounted to $120 million until last September, he said, suggesting the figures would rise by year-end.
He said Bangladeshi exporters can break into pharmaceuticals, information technology, ceramic and shrimp markets of Switzerland without jeopardising traditional garments exports.
"Today, Brazil and Vietnam are leading fish exporters to our market. You can also grab a slice of it by maintaining quality and food safety," the Ambassador said.
"It's a tricky market. Our consumers are even ready to pay higher when it comes to quality products," Mr Herren said, adding the Swiss retailers also adhere to international labour standards at the supply end.