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1 September, 2019 12:47:50 AM
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Smooth run of bicycle exports

Entrepreneurs ask for govt support to exploit tremendous export potential
SHARIF AHMED, Dhaka
Smooth run of bicycle exports

Bangladesh started exporting bicycles to the European market way back in 1999. The exports fetched around USD 10 million the following year.

But things have scaled up considerably over time. After 20 years, the annual export of bicycles to 26 countries has risen to USD 84.24 million.     

Entrepreneurs say Bangladesh has the capacity to easily increase its market share in the global bicycle exporting trade by making domestic preparations.

The investors need support, especially a conducive environment for the growth of the sector, they note.  

They also say that the country can earn nearly Tk. 1,000–1,200 crore from bicycle exports within a couple of years if the import duty on raw materials is reduced.

The global bicycle market is around USD 62 billion a year at present.

Bangladesh manufactures around 20 lakh bicycles every year. Nearly 12 lakh of them are exported.

In FY201–19, Bangladesh earned nearly Tk 716 crore by exporting bicycle, especially to the European Union (EU) market

Kamruzzaman Kamal, marketing director of Pran-RFL Group, told The Independent: “Our company has set up two manufacturing plants in Habiganj district under Sylhet division. One plant manufactures local products, while the other is engaged in producing export-oriented bicycles.”      

Both plants can produce 50,000 units of bicycles with two production lines a month, he said.  

“After meeting the domestic requirements, Bangladesh produces high-quality bicycles to meet the export market's demands," he mentioned.

Talking about one of the most favourite Bangladeshi brands, Kamal said: “We started producing bicycles named ‘RFL Duranta’ in 2014. Now, we export ‘Duranta’ to countries like the UK, Germany, the Netherlands, Canada and other European countries.”         

"Prices in the export market vary in keeping with the buyer’s demand. But the price is between Tk. 5,000 and Tk 15,000 in the local market, depending on specific models," he added.       

Elucidating some obstacles, Kamal said: “Seventy per cent bicycles are imported and only 30 per cent are manufactured locally. So, the market is still import-dominant. Most of the cycles come from China and India. Besides, higher import duty on raw materials is a serious barrier. Previously, it was 10 per cent. It has increased to 25 per cent from this year."

The RFL manufactures 65 per cent of the raw materials like the frame, tyre, rim and spoke. As much as 35 per cent of them sourced from abroad.  

“The bicycle industry is growing. We can produce high-end bicycles for the local market. But the demand is not very high for such products here,” he added.

Currently, more than 1,000 workers are employed in factories that export bicycles, he said.

Mizanur Rahman, former president of the Bangladesh Bicycle Merchants' Assembling and Importers' Association, said accessibility of low-cost labour and latest technology provided Bangladesh with a competitive advantage over its competitors like Taiwan, China, and Europe.

Higher wages in China, which has been the largest bicycle-sourcing country, has shifted the balance in favour of Bangladesh. “So, this is an opportunity for us to explore the global market. We need consistent policy support for that,” said Rahman.

Bangladesh’s bicycle industry, an emerging export sector, has huge potential in the global market as export earnings are growing by around 5 per cent a year.

According to the Export Promotion Bureau (EPB), during the first month (July) of FY2019-20, Bangladesh earned nearly USD 10.06 million by exporting bicycles, especially to the EU market. During the same period in the 2018–19 financial year, the earnings totalled USD 5.70 million. The growth rate is approximately 76.49 per cent compared to the previous year.

Rahman said the growth rate of bicycle use in the domestic market had been 30–35 per cent in recent years. The demand has increased in the local market to 12–15 lakh bicycles a year.     “Bangladesh cannot produce all types of parts needed for manufacturing a complete bicycle. The country has to import parts and raw materials,” he added.

Citing an example, Rahman said raw materials like the frame, tyre, rim and spoke were all manufactured locally, while Derailleur gears, known as cycle gears, were imported.

He also said the industry had been facing challenges like higher import duty on cycle components, infrastructure problems and a dearth of foreign investment. Besides, an investment-friendly atmosphere for local investors must be ensured for accelerating growth in the industry, he observed.

Explaining the obstacles, Rahman said import duty of a kg of raw materials had increased to USD 1.5 from USD 1, which will definitely affect the price of the bicycle. “We import most of the bicycles from India and China,” he added.                                     

When asked about the price, Rahman said it ranged from Tk. 8,000 to Tk. 9,000.     

Bangladeshi bicycles are exported to 18 countries including the UK, the Netherlands, Germany, Italy, Greece, Ireland, Belgium, Denmark, Australia and Portugal. Bicycles are an eco-friendly mode of transportation. "Import tariff on bicycles should be reduced to encourage the environment-friendly two wheelers," urged Rahman.

Electric bicycles will be the future mode of transportation with the adoption of more environment-friendly approaches, he said.

“We need massive investment in this sector in order to be self-reliant in parts,” he also said.        

"The Meghna Group first began exporting bicycles. Now, a couple of companies are engaged in bicycle manufacturing, targeting both exports and local markets,” said Habibul Islam Jahid, distributor and owner of Cycle Heaven.  

"Velco and Prince bicycles have the most demand in the market at present. Their prices range from Tk. 3,600 to Tk. 32,000," he added.    

He also said: “The use of bicycles has been increasing rapidly in Bangladesh because of traffic snarls in the capital and increased awareness about maintaining a healthy lifestyle. Bangladesh basically depends on import of raw materials to produce essential parts of bicycles."

“So, we have the capacity to produce around 60 per cent of the parts to make an entire bicycle. Higher import duty is the main obstacle at present,” he added.      

Jamshed, a sales representative of ‘Tayeeba Cycle’, said: “We are one of the biggest wholesalers and retailers of the bicycle market. All types of cycles are available at our store. They range from Tk. 11,500–Tk 19,500.”        

According to Export Promotion Bureau (EPB), the UK imported the highest number of bicycles worth USD 5.28 million, while Germany imported bicycles worth USD 2.80 million, followed by Denmark worth USD 5, 14762, India worth USD 121,463 and Belgium worth USD 60,250 during July this year.

EA

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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