Light engineering may thrive on bike components
There is huge potential in the country's light engineering sector to exploit the neighborhood market for motorcycle components, according to speakers at a webinar yesterday.
"The annual demand for motorcycles reached 550,574 units typically in 2019 while it was 207,835 units in 2015, for which around Tk 2,100 crore worth of extra parts is required," said Ihsanul Karim, director of Bangladesh Industrial Technical Assistance Centre (Bitac).
Of the total requirement for spare parts, local suppliers provides only that worth Tk 20 crore. So, there is a huge scope to grab the marketplace in the light engineering sector, he added.
Karim made these comments while presenting the keynote paper at a webinar styled "Light engineering sector: backward linkage production perspective" organised by SME Foundation.
"If you want to create employment and save forex through local manufacturing, we must develop the light engineering sector," said Abdur Razzak, president of the Bangladesh Engineering Sector Owners Association (BEIOA).
The two-wheeler industry and light engineering sector are related to one another therefore, developing quality spare parts through local vendors is important, he said.
Parent companies usually do not manufacture most the components within their products. Rather, they source market standard extra parts from localized light engineering sectors, he added.
Over the last 2 yrs, the federal government introduced value added tax on capital machineries despite the fact that there is absolutely no custom duty on the imports, Razzak said.
This kind of decision creates an obstacle for the production of the light engineering sector. Additionally it is incompatible with the government's intension to improve the sector, he said.
The BEIOA chief also said it had been possible to build up the light engineering sector through the provision of low-cost funds, an professional park and policy support.
KM Ali Azam, secretary for industry, assured that the federal government would supply the necessary policy support for the sector's development.
He asked SME foundation to submit a recommendation of the webinar to the ministry to have initiatives according to the recommendations.
Azam also urged for discussions between all stakeholders to identify the barriers and potentiality for backward linkage industries.
Developing light engineering is definitely very important to industrialisation, the sector could be incentivised through legal and insurance policy support, he said.
Azam believes the backward linkage sectors of the motorcycle sector ought to be developed for further developing the economy.
Hafizur Rahman Khan, president of the Motorcycle Producers and Exporters Association of Bangladesh, said a good circular from the National Board of Revenue (NBR) issued found in 2011 has helped the motorcycle industry.
Even so, the NBR circulars which were issued soon after were in conflict with each other and creating barriers to growing the sector. It isn't conceivable to develop the neighborhood motorcycle market without the improvement of localized spare parts suppliers, Khan added.
He likewise urged the government to create a tests institute for motorcycles to help ease their exports.
Selim Uddin, additional secretary to the industries ministry, said they would finalise the auto policy by the following month, which would help the market develop further.
Tax plan support is required from the NBR as well, he said.
"Investments from big professional groups is required found in the light engineering sector to look at large technology and sector advancement to develop our very own car brand," Uddin added.
Masudur Rahman, chairperson of SME foundation, said Bangladesh's industrial sector spends around Tk 70,000 crore every year and local makers could focus on the whole amount.
"Industrialisation will not be expedited if the backward linkage industries aren't improved," he said.
Rahman also expressed intension to utilize the private sector to utilise the potentiality of the light engineering sector.
Anwar Hossain Chowdhury, director basic of the Bangladesh industrial Technical Assistance Centre (BITAC), sought cooperation from all stakeholders to develop the light engineering sector and implement the plans.
He underscored adaptation of high technology for speedy improvement along with skill advancement of technicians.
Chowdhury informed that Bitac would organise training to utilise superior technology.
Syed Golam Kibria, person in the NBR, said these were sincere towards helping the light engineering sector with regard to the import of capital machineries.
He asked to go over with the conference participants with proposer proposals to remove inconsistencies in several circulars of the NBR.
