Local production cools down AC prices
Ac units (ACs) were once regarded as luxury items that are only enjoyed by the elite, but their prices have observed a drastic fall in the recent years because of increased local production and assembly.
Jhimi Chakma, a lecturer of the philosophy division at Dighinala Degree College found in Khagrachhari, has been by using a locally manufactured 1.5-tonne inverter AC for days gone by one year with no disruption.
According to him, it could cost at least Tk 90,000 for an international brand unit even while he spent only Tk 65,000 for pretty much the same service.
Like Chakma, Iqbal Hossen, the official of the Central Procurement Complex Unit, said he in addition has been by using a 1.5-tonne non-inverter device of a local brand for around two years.
Hossen said he is happy with the air conditioning equipment that cost him simply Tk 55,000, just as he has also been provided with great aftersales services simply by the local company.
The demand for affordable residence cooling systems is growing fast, said Ruhul Alam Al Mahbub, chairman of Fair Group.
"To meet up the rising local demand, Good Electronics yesterday launched a new manufacturing facility for Samsung ac units in Shibpur upazila of Narsingdi district."
The factory will not only create employment opportunities, but also bring foreign currency to the united states through exports, Mahbub added.
"The local production of Samsung's products can help in gaining self-assurance of the foreign investors, specifically the hi-tech companies," Zunaid Ahmed Palak, status minister for ICT, explained while inaugurating the brand new unit.
"This would enhance our employment opportunities. So we ensure our continuing support for Samsung, Fair Consumer electronics and all the hi-tech industries."
Palak said he hopes the factory will start adding to the country's exports soon.
Presently, Walton, MyOne, Unitech, Transcom Digital, Vision, Jamuna and Butterfly either locally manufacture or assemble ac units.
However, the value addition in assembly isn't significant compared to local production.
The producers and assemblers import around 70 per cent of the parts needed to make an AC, like the compressor and different technical components, industry insiders say.
Local production caters to around 70 per cent of the country's total demand, that was valued at about Tk 4,500 crore on 2019, up from Tk 3,500 crore the entire year before.
The demand for ACs features increased at typically over 15 per cent annually since 2014, which encouraged global brands to set up their own plants in Bangladesh, they added.
Saikat Azad, deputy general manager for advertising at Transcom Digital, said the customers were definitely the beneficiaries of such advancements as they is now able to purchase reliable products at competitive prices.
International brands are buying their own manufacturing or assembly plants on the united states through partnerships with native companies, who are also getting benefitted from the shared technology.
This helps the neighborhood manufacturers and assemblers build-up their capacity to ensure quality products at competitive prices, Azad said.
The deputy general supervisor of Transcom Digital continued to state that his company would soon begin assembling the ac units of Japanese brand Daikin under its base manufacturer in Bangladesh, Whirlpool.
The business is taking the step at the same time when the federal government is discouraging imports of gadgets in order to inspire local production, he added.
Tanvir Rahman, CEO of Walton AIR CONDITIONING EQUIPMENT, said the price of air conditioners has become more reasonable because of local production.
"For this reason, the growing middle-class right now prefers using ACs of local brands," he said.
Just 10 years before, the marketplace was completely dominated simply by multinational companies just like General, Hitachi, Panasonic, Samsung and LG, based on the CEO.
Back then, ACs were regarded as luxury products to be only used by the affluent people.
If local companies didn't take risk of buying manufacturing, the price would be high, Rahman added.
Global brands emphasise in non-inverter technology to keep the prices low instead of introducing modern tools in Bangladesh while native companies give more give attention to inverter technology because it consumes less electricity, he said.
Around 4.2 lakh systems of air conditioners were sold in 2019 while the demand came right down to 1.20 lakh in 2020 as a result of Covid-19 fallout.
The demand for ACs can be increasing in rural areas thanks to the availability of electricity and spiralling purchasing power of the middle-class, he added.
The increasing number of manufacturing facilities in the united states has made the local consumer electronics and home appliances market more competitive, Raziur Rahman, senior manager for marketing communication at Singer Bangladesh, told The Daily Star.
"When a market becomes competitive, customers become the ultimate gainers regarding value for his or her money."
The making facilities of Singer, a respected consumer electronics and home appliance manufacturer and marketing expert, have given the brand leverage in customising products according to the needs, trends, taste and affordability of unique segments of buyers in the country, he said.
Presently, Singer is manufacturing refrigerators, LED TVs and air conditioners at their plants.
"Our local production accounts for more than 60 per cent of our gross annual sales revenue."
