How Bangladesh rose to become a mobile manufacturing hub

[UKBengali]

What are the 2021 numbers?

14-15 million US dollars.

The reason it is going up so rapidly is that they have only been given regulatory approval over the last 1-2 years to start exporting to the first developed Western countries. As they obtain approval in more and more countries and launch more products then exports increase rapidly.

While I think 3 billion US dollars of exports by 2025 is optimistic, they must have valid reasons why they think they can get to such a large number from only around 100 million US dollars this year. 2-3 years ago they targeted just 1 billion US dollars in exports by 2030

 

[Wood]

14-15 million US dollars.

The reason it is going up so rapidly is that they have only been given regulatory approval over the last 1-2 years to start exporting to the first developed Western countries. As they obtain approval in more and more countries and launch more products then exports increase rapidly.

While I think 3 billion US dollars of exports by 2025 is optimistic, they must have valid reasons why they think they can get to such a large number from only around 100 million US dollars this year. 2-3 years ago they targeted just 1 billion US dollars in exports by 2030

$15 to $100 million is meteoric rise. Wonder if we will see these goods in Canadian shores. Good luck.

 

[UKBengali]

$15 to $100 million is meteoric rise. Wonder if we will see these goods in Canadian shores. Good luck.

Not sure about Canada but Walton already exports smartphones under OEM label to smartphone makers in the US.

While I have been following this company for many years and hoping that it will deliver, I am a little shocked at just how far it has managed to get to already.

If BD can even get one true multi-national global brand like Walton by 2030 then it would really change the image of BD from an impoverished overpopulated marshland to one of a technological society along the lines of South Korea or Taiwan.

 

[Bilal9]

Not sure about Canada but Walton already exports smartphones under OEM label to smartphone makers in the US.

While I have been following this company for many years and hoping that it will deliver, I am a little shocked at just how far it has managed to get to already.

If BD can even get one true multi-national global brand like Walton by 2030 then it would really change the image of BD from an impoverished overpopulated marshland to one of a technological society along the lines of South Korea or Taiwan.

What many of the doubters, detractors and naysayers do not realize is that Walton (and in fact all Bangladesh cellphone mfr/assemblers) labor cost (which is a large component of electronics assembly and manufacture) is lower than everyone (including India, by about half). This labor cost differential will stay this way for the foreseeable future.

So - while we have BIMARU semi-educated fascist cockroaches coming in here putting in jealous "Ha-ha" reacts (not that anyone really cares), the basic economic facts of a manufacturing economy are like a hard slap in their face.

Their head honcho Mahant Aditya meanwhile is begging Bangladeshi mfrs. to invest in his BIMARU state.

 

[UKBengali]

What many of the doubters, detractors and naysayers do not realize is that their labor cost (which is a large component of electronics assembly) is lower than everyone (including India, by about half). This labor cost differential will stay this way for the foreseeable future.

So - while we have BIMARU semi-educated fascist cockroaches coming in here putting in jealous "Ha-ha" reacts (not that anyone really cares), the basic economic facts of a manufacturing economy are like a hard slap in their face.

Their head honcho Mahant Aditya meanwhile is begging Bangladeshi mfrs. to invest in his BIMARU state.

While BD labour cost is still lower than India by around a 1/3rd to 1/2, do not expect there to be much of a gap in 2030.

BD will compete then on quality and productivity as there is no future in a low-wage economy.

 

[Wergeland]

BD used to be a shipbuilding powerhouse.
If that industry can be raised back to old time highs, that alone will create hundreds of thousands of jobs, if not millions. Bringing in altleast 100 billion dollar in exports alone from this sector by 2040.

 

[BananaRepublicUK]

BD needs to focus like a laser on a few labour intensive sectors.

It will be a big mistake to spread investment and skills too thinly.


At this point of GDP per capita - labour intensive industries are more important than knowledge based industries.

Countries get to mid income through labour intensive industries then gradually transition to knowledge based industries.

By that point you have a smaller labour pool due to falling birth rate and ageing.

Hence transitioning to knowledge based industries is less painful.

U.K. and USA transitioned to knowledge based economy too fast - resulting in industrial strife and massive poverty and unemployment.

Germany and France by contrast went on a slower path and avoided the mass unemployment and Mac jobs of the US/U.K.

 

[UKBengali]

BD needs to focus like a laser on a few labour intensive sectors.

It will be a big mistake to spread investment and skills too thinly.


At this point of GDP per capita - labour intensive industries are more important than knowledge based industries.

Countries get to mid income through labour intensive industries then gradually transition to knowledge based industries.

By that point you have a smaller labour pool due to falling birth rate and ageing.

Hence transitioning to knowledge based industries is less painful.

U.K. and USA transitioned to knowledge based economy too fast - resulting in industrial strife and massive poverty and unemployment.

Germany and France by contrast went on a slower path and avoided the mass unemployment and Mac jobs of the US/U.K.

Good point.


Garments will make up the backbone of the BD industrial sector till 2035-2040 and then others like electronics, pharma, IT and maybe shipbuilding can take over.


There is no need for BD to spread itself too thin and try to create too many industries. It is not the size of either China or India.

 

[BananaRepublicUK]

Good point.


Garments will make up the backbone of the BD industrial sector till 2035-2040 and then others like electronics, pharma, IT and maybe shipbuilding can take over.


There is no need for BD to spread itself too thin and try to create too many industries. It is not the size of either China or India.

I don’t understand this fetish with knowledge based / service economy.

Yes, it creates a larger middle class and thousands of billionaires. But at the expense of the mass!

Transition too soon and you end up like India and Sri Lanka.

Loads of millionaires and billionaires but the poor cannot even afford a decent funeral. They have to resort to chucking bodies into rivers off bridges!

BD should not transition to a knowledge based economy for another 20-25 years. By that time we would have met the underwear needs of the world.

And of course we still need to learn to make sewing needles!

 

[Bilal9]

BD used to be a shipbuilding powerhouse.
If that industry can be raised back to old time highs, that alone will create hundreds of thousands of jobs, if not millions. Bringing in altleast 100 billion dollar in exports alone from this sector by 2040.

Shipbuilding is a cyclical industry just like real estate, dependent on the vagaries of economic ups and downs, and the demand of ships generated by older ships being put to pasture (most of them in our country around Patenga, Chittagong).

The other factors generating demand for new ships are expansion of int'l trade, which was slowed by Covid, but is picking back up again.

Bangladesh is in a special situation, in that we don't build ships above 10,000 DWT - limited by the size of local yards. That is the domain of inland container and bulk carriers, or coasters going from one country to another via coastal routes.

That said, the engg. and research capabilities found locally will take a back seat to no country, even some EU ones. Larger Bangladeshi yards are as automated and CAD/CAM equipped design/mfg. wise as most Eastern European yards, and are probably better in that area, in addition to having low labor costs (much lower than any semi-industrialized nation). They can turn out vessels as fast as any yard globally.

To compete with the big yards like in Korea and China in building medium sized (30,000 DWT) and medium to large sized (50-70,000 DWT) ships, you need hundreds of Billions in investments in new yard handling equipment and also generous financing from banks which is a pre-requisite. There have been large bank defaults in that sector in Bangladesh with some shady yard operators, who have also sullied our good name as a sourcing country. I know who they are.

Note here that I am not even talking about competing with the largest South Korean (ex: Hyundai) and Chinese shipbuilding yards, who routinely build Supertankers and Super-Panamax container carriers in the 100,000+ DWT range.

Bangladesh shipbuilding industry lacks clear direction as our shipping minister is just happy enjoying the flow of graft and do not feel the need to travel overseas (namely - South Korea) to benchmark their govt. policies and operations (or even have their underlings do so). Setting up clear bank financing policies and guarantees are a definite prerequisite to have a resilient industrial sector.

These burbak gadhas will not even think about setting up a plan to turn Chittagong Patenga coast into a shipbuilding hub, when all the ingredients are right there and times-a-wastin'. You can hire all kinds of consultants and shipbuilding companies like DAMEN - who have already been to Bangladesh many times. There is no concerted plan - I mean a "plan" does not even need a lot of money or cash outlay.

Talking about which - the planned cooperation with Turkish and Chinese yards to bring in ToT and build vessel subassemblies is also not going anywhere.

The people we have at the helm of govt. leadership in Bangladesh as shipping minister and his team could not even serve as ardalis when it comes to being knowledgeable about the industry. Very sad.

In this respect our IT minister Palak has done far better, though we bad mouth him all the time. He is actually actively working with the likes of Infosys, TCS and other companies to get offshoring of IT to Bangladesh.

 

[damiendehorn2]

I'm going to highlight 3 things:

1. Currently RMGs is the bulk of our exports, its essentially low to semi skilled work, combined with being labour intensive. Bangladesh is the 2nd largest exporter of RMGs with export value roughly $40bn behind China with over $150bn in exports. Labour costs in China are over 5 times what it is in Bangladesh, hence in the next decade you will see china moving out of the RMGs mass production and staying in he high value niche sector.

Two countries are therefore best placed to attract that shift out of China, that being Bangladesh and Vietnam. RMGs sector will continue to grow for several decades in Bangladesh before it moves to Africa (just as it moved from Europe to China, it will move from China to Bangladesh and then from Bangladesh to Africa.) Therefore Bangladesh RMGs industry will continue to grow to over $75bn-$80bn in the coming decades.

2. The main sector that will grow in the next decade is leather. Its a $211bn export market, and like RMGs its a low to semi skilled industry and its labour intensive. So, how big could it be for Bangladesh? Well not not as big as the RMGs market, but $25bn-$30bn by the time it matures.

3. The third big sector that is likely to grow fast in the coming decades is what's known as the white goods market, think kitchen equipment, home appliances, etc. Your already seeing small moves in this sector to move from the local market to the export markets.

So the moral of this article is if you want to see what future holds for Bangladesh, look closely at how the economies of other South East Asia evolved, namely South Korea, Taiwan, Thailand, and to a lesser extent China.

 

[HydraChess]

Over Tk15,000 crore worth of handsets are yearly sold in the country, say industry insiders.

Thats about 1.75 billion dollars worth of handsets sold. (Tk 15,000 Carore is Tk 150 billion = 1.75 billion usd)

India for a comparison had (2836 billion inr) 37 billion dollars worth of headsets sold. (https://www.indiatoday.in/technolog...2021-xiaomi-was-top-winner-1906831-2022-01-31)

And then @UKBengali and @Bilal9 type people think that Bangladeshi are richer than India.

BD population is 164 million, India 1380 million, about 8.5 times.

 

[HydraChess]

Yes, it creates a larger middle class and thousands of billionaires. But at the expense of the mass!

Actually, its like this. This industry does not pollutes environment. Does not require any massive public infrastructure. Does not require any major government spending. Even the universities in India are funded by the private people, ie, government does not need to pay massive funds. It is self financed.

Even the funding of new startups come from foreign money. So these industries do not even compete with low-skilled industries for capital too.

So NOT building this industry is leaving money on table. To be honest government does not need to do anything but just not impede the industry by banning it outright.

Knowledge based and IT based service industry is something that only gives.

NOT promoting low-skilled industry is a failure totally independent of this industry (successful or unsuccessful).

 

[Indos]

Actually, its like this. This industry does not pollutes environment. Does not require any massive public infrastructure. Does not require any major government spending. Even the universities in India are funded by the private people, ie, government does not need to pay massive funds. It is self financed.

So India doesnt have state owned universities ????

In opposite of India, Indonesia has large state owned universities and our state owned universities quality is above private own ones. There are around 86 state owned universities in Indonesia and all are very good compared to private ones.

Even the best high schools in Indonesia and Madrasah are 80 % own by government including the the best 1,2, and 3. Within top 10 Highschools in Indonesia, 80 % are state owned ones/public schools. The best highschool in Indonesia is actually state owned Madrasah

 

[HydraChess]

So India doesnt have state owned universities ????

Compared to Private colleges? VERY VERY VERY FEW. And they charge a good amount of fee. And part of those which that train Knowledge oriented profession, is even minuscule. Eg. There are about 500-600 public universities. There are 443 private universities. HOWEVER, there are 42 thousand private colleges in India in compared to 500-600 govt colleges associated with those universities.

In engineering, if there are 60 seats in a semester for Computer science or IT, there will be 600-800 seats in total for engineering.