Prime Minister Sheikh Hasina on Wednesday announced ‘light engineering’ as the product of the year
Favourable policy support and interest-free loans for upgrading technology can help the country boost export earnings from its light engineering products.
The potential sector is gradually becoming a great alternative source for machinery supply for many industries including apparel, agriculture, automobile, pharmaceuticals, food industries and ship-building.
Product quality and lower prices are the driving factors behind the popularity of local light engineering products in the economy, industry people say.
According to Export Promotion Bureau (EPB) data, in the last fiscal year, the country earned $394 million exporting light engineering goods, while in July-November of the current fiscal year the receipts stood at $142.37 million.
Prime Minister Sheikh Hasina on Wednesday announced ‘light engineering’ as the product of the year (for 2020) at the inauguration of the 25th Dhaka International Trade Fair 2020 in Dhaka.
Pharmaceutical and leather products were declared products of the year in 2018 and 2017 respectively.
"I think we’ll be able to earn more foreign currencies by exporting various types of products under the light engineering sector," said Hasina.
The sector currently produced bicycle, motor cycle, auto parts, electric and electronic items, accumulator battery, solar photo-vaulting module and toys, she added calling for more investments in the sector.
“This year, we have got recognition of our hard work and contribution as the prime minister has declared light engineering the product of the year for 2020,” Bangladesh Engineering Shilpa Malik Samity President Md Abdur Razzaque told Dhaka Tribune.
But the only declaration would not bring benefits to the sector unless the government provided policy support and offered flexible tax policy, added Razzaque.
In upgrading technology to produce international standard products, the sector needed low cost fund from the government, he added.
“If the government creates a fund and provides interest-free loans for 10 years, the exports will double in the next couple of years," said Razzaque, also owner of M/S Sunrise Engineering.
Bangladesh Chamber of Industry (BCI) President Anwar-ul Alam Chowdhury Parvez said the country’s export was disproportionately dependent on apparel sector.
To diversify product line, focus on light engineering was a good move as it would create enough jobs in the economy, he observed.
But the sector lacked development in entrepreneurship, faced shortage of skilled workforce, and absence of technological upgradation, said Parvez.
He also urged the government to support the sector by purchasing locally-made engineering products for its development projects and making industry-friendly customs policy.
He demanded withdrawal of VAT on capital machinery produced locally.
For the development of the promising sector, venture capital or low cost fund was badly required, he added.
The sector people also called for the quicker implementation of industrial park dedicated for the sector as the sector was scattered in different parts of the country.
The government took initiative to set up an industrial park on 25 acres of land in Munshiganj for this sector in 2016.
Currently, there are 40,000 light engineering factories in the country, employing around 10 lakh people directly, according to a recent study of the BCI.
Domestic demand for light engineering products is about $8.2 billion, of which products worth $3.1 billion is met locally, it adds.
There is a huge opportunity to grab the global export market of light engineering products worth $7 trillion, the report says further.
Currently, sector people are manufacturing 10,000 types of machinery and spare parts.
Exports products of light engineering include agricultural machinery, engineering equipment, bicycle, stone crusher and construction machinery.