Interview with Mr Abdul Latif Siddique

Mr Abdul Latif Siddique
Mr Abdul Latif Siddique
Ministry of Textiles & Jute, Bangladesh
Ministry of Textiles & Jute, Bangladesh

One more point comes to my mind herewith is: Labour agitation / problems- a major concern for sector as they can reduce confidence of buyers. How to tackle this major issue to gain the confidence of the industry players?

The Primary Textile Sector (PTS) of Bangladesh is not facing mentionable problem due to labour agitation since the beginning of its growth from early Eighties. The Export-oriented Garment industry also did not face labour agitation until 2007. But during the last few years the workers association have raised certain issues in respect of social accountability and labour safeguard measures as per ILO regulations. Many of the issues of the ILO regulations have since been satisfied during the last few years. But due to delay in payment of salaries and bonuses, non -issuance of job contract, delay in payment of overtime etc. are some of the issues which some times create misunderstanding between the workers and employers of a very few industries. These types of situation, sometimes escalates to the neighboring factories creating temporary problem in the area. All of these situations have been resolved with mutual understanding and the labour agitation in the Textile and Garment industry of Bangladesh do not apprehended to be a recurring situation as the Government and the Associations representing the Textile and Garment Industries are always in favour of satisfying the genuine demand and grievances of the workers of Textile and Garment industries of Bangladesh.

The labour agitation or problem as stated in the garment industry of Bangladesh does not seem to be a major concern as the concerned stakeholders are well aware of the probable consequences on the export market so to say the foreign buyers of Garment. All possible measures have been initiated by the Government and other stakeholders so that industrial peace and lawful order can be ensured. The Garment industry have in the meanwhile complied many of the compliance requirements of the foreign buyers.

Good to know this. Sir, we have large visitor base from global core industry, amongst which major are decision makers / investors. They would love to hear on the incentives & investment opportunities available in Bangladesh. Shall we close the talk with a message that you may wish to convey them?

There is huge demand-production gap of textile products to meet the domestic demand, export through garment industry and direct export. To attain the planned production target for fabrics and yarn by 2014-15 assuming self reliance to the extent of 78%, Bangladesh will need to set up a large number of new spinning, weaving, knitting and fabric processing mills in the private sector.

The estimated investment requirement for setting up of the new primary textile industry is approximately US$ 7 billion. It would be very difficult for a country like Bangladesh to mobilize such a huge investment from its domestic sources.

In view of the growing demand for textile products in the domestic and export markets and the urgent necessity for creation of new capacity in the primary textile sector the Government of Bangladesh has declared textiles as a "Thrust Sector" for its rapid development and various incentive packages are allowed to attract local and foreign investment in textile sector.

The entrepreneurs of overseas countries may find investment in the Primary Textile Sector (PTS) of Bangladesh more attractive as Bangladesh has the following positive advantages over those of other competing countries:

•Abundant cheap skilled and trainable labour,

•Availability of low cost infrastructure facilities,

•Various incentive packages are allowed particularly for Foreign Direct Investment and Joint-venture projects.

•Investment in the textile sector of Bangladesh would be very lucrative either on 100% foreign participation or on Joint-venture basis. The investment may take place for setting up of new textile mills with state-of-the-art technology in the suitable private land or in the Industrial Parks or Export Processing Zones (EPZs) of the country.

At present there are about 50-60 old textile mills under public and private sectors of Bangladesh. These mills are either closed or have been running on loss due to age-old technology, but these mills have ready infrastructure facilities such as land, buildings, power, gas, water etc. The overseas investors will find it more feasible to set up new mills in the premises of existing old textile mills by replacing the existing old machinery. Investment in the existing old textile mills will be more profitable due to lower investment outlay and shorter gestation period than setting up of textile mills in the new sites.

Incentives/facilities Allowed for Foreign Investment in Bangladesh:

As per existing policy of the government, the investors particularly foreign investors in the textile sector is eligible to the following incentives/facilities:

•non-discriminatory treatment between foreign and local investment

•protection of foreign investment from expropriation by the state

•ensured repatriation of proceeds from sale of shares and profits

•no limitation pertaining to equity participation by the foreign investors

•repatriation of capital along with profits and dividends

•duty free import of capital machinery and spare parts

•bonded warehouse and back-to-back letter of credit will continue for export-oriented industry

•various other incentive packages are also allowed

It is an honor carrying this message Mr Siddique! Thanks for the opportunity.

My Pleasure.

Published on: 12/10/2009

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of

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