GLOBAL / COUNTRY STUDY REPORT BANGLADESH SUBMITTED TO. Gujarat Technological University

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1 A GLOBAL / COUNTRY STUDY REPORT ON BANGLADESH SUBMITTED TO Gujarat Technological University IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION [Batch : ] MBA SEMESTER III & IV Shri Jairambhai Patel Institute of Business management and Computer Applications, Gandhinagar GTU CODE NO:769

2 IGLOBAL COUNTRY REPORT ON BANGLADESH (SEMESTER III AND IV) INST CODE: 769 SHRI JAIRAMBHAI PATEL INSTITUTE OF BUSINESS MANAGEMENT AND COMPUTER APPLICATIONS,GANDHINAGAR SUBJECT CODE_: MBA PROGRAMME Sr. no Name of the Student Enrolment.No. Title of work carried out in Sem IV for GCSR 1 Sharma Anand Omprakash Broadband and Wimax Industry of Bangladesh 2 Rushika Arunbhai Donga Ready-Made Garments Industy of Bangladesh 3 Sumit Kumar Broadband and Wimax Industry of Bangladesh 4 Patel Bhaumik Rameshbhai Exploring Tourism opportunities in Bangladesh With Special Emphasis To MEETING, INCENTIVES, CONFERENCES, EXHIBITIONS (MICE) 5 Patel Sachinkumar Dhaneshbhai Exploring Business Opportunities for Establishing Exclusive Indian Sweets and Namkeen Outlet Rosh Milan in Major Cities of Bangladesh 6 Bhatt Jaykumar Rameshchandra Medical Tourism of Bangladesh 7 Joshi Umesh Ajitrai Denim Industry of Bangladesh 8 Vishwa Arunbhai Malvania Denim Industry of Bangladesh 9 Dodhiya Bhaumik Kishorebhai Overview of Cement Industry of Bangladesh 10 Chatterjee Soumya Sukhmay Real Estate Industry in Bangladesh 11 Desai Krutik Yogeshkumar Broadband and Wimax Industry of Bangladesh 12 Ailani Dinesh Tarachand Overview of Cement Industry of Bangladesh 13 Manishkant Mahto Overview of Cement Industry of Bangladesh 14 Shah Ruchita Ashokbhai Broadband and Wimax Industry of Bangladesh 15 Padhya Dhavalkumar Priyakant Overview of Cement Industry of Bangladesh Broadband and Wimax Industry of 16 Shah Ronil Paresh Bangladesh 1

3 17 Bhatia Bhavika Kishorkumar Real Estate Industry in Bangladesh Exploring Tourism opportunities in Bangladesh With Special Emphasis To MEETING, INCENTIVES, CONFERENCES, EXHIBITIONS (MICE) Agrawal Manali 18 Bharatkumar Mehta Parth Umeshbhai Medical Tourism of Bangladesh Exploring Tourism opportunities in Bangladesh With Special Emphasis To MEETING, INCENTIVES, CONFERENCES, EXHIBITIONS (MICE) 20 Shah Paras Narendrabhai Ready-Made Garments Industy of 21 Khandhedia Ami Satishbhai Bangladesh Economic Overview & Potential Mapping 22 Bhirud Vivek Kishorbhai for Dairy Industry in Bangladesh Exploring Business Opportunities for Establishing Exclusive Indian Sweets and Saumya Unnimadhavan Namkeen Outlet Rosh Milan in Major Cities 23 Nair of Bangladesh Exploring Tourism opportunities in Bangladesh With Special Emphasis To MEETING, INCENTIVES, CONFERENCES, 24 Lalwani Deepak Ramesh EXHIBITIONS (MICE) 25 Mehta Dulari Hareshkumar Dyes and Chemical Industry in Bangladesh 26 Trivedi Shalin Rohitkumar Denim Industry of Bangladesh Exploring Business Opportunities for Establishing Exclusive Indian Sweets and Namkeen Outlet Rosh Milan in Major Cities 27 Nair Darshana Murali of Bangladesh Exploring Business Opportunities for Establishing Exclusive Indian Sweets and Namkeen Outlet Rosh Milan in Major Cities of Bangladesh 28 Siddiqui Farhan Mohiuddin Gadhiya Niravkumar Economic Overview & Potential Mapping 29 Atulbhai for Dairy Industry in Bangladesh Soni Kirankumar Economic Overview & Potential Mapping 30 Vinodkumar for Dairy Industry in Bangladesh Economic Overview & Potential Mapping 31 Trupesh Rameshbhai Naila for Dairy Industry in Bangladesh Ready-Made Garments Industry of 32 Patel Akash Navinkumar Bangladesh Ready-Made Garments Industry of 33 Savjani Deep Harish Bangladesh 34 Pensuria Milap Kirankumar Dyes and Chemical Industry in Bangladesh 35 Makwana Mayurkumar Shiva Economic Overview & Potential Mapping for Dairy Industry in Bangladesh 36 Mit Girishkumar Padalia Real Estate Industry in Bangladesh 37 Gohil Jay Arvindbhai Dyes and Chemical Industry in Bangladesh 38 Chabhad Uday Bhikhubhai Medical Tourism of Bangladesh 2

4 39 40 Mukheshkumar Virjibhai Chaudhary Medical Tourism of Bangladesh Khandavi Priten Chandrakantbhai Medical Tourism of Bangladesh Exploring Business Opportunities for Establishing Exclusive Indian Sweets and Namkeen Outlet Rosh Milan in Major Cities of Bangladesh Khitoliya Manish 41 Bharatbhai Kuvadiya Jignesh Danabhai Denim Industry of Bangladesh 43 Mistry Yash Arvindbhai Charola Jashmine Dhirajlal Vishavadiya Sameer 45 Mukeshkumar Exploring Tourism opportunities in Bangladesh With Special Emphasis To MEETING, INCENTIVES, CONFERENCES, EXHIBITIONS (MICE) Ready-Made Garments Industy of Bangladesh Ready-Made Garments Industy of Bangladesh Exploring Tourism opportunities in Bangladesh With Special Emphasis To MEETING, INCENTIVES, CONFERENCES, EXHIBITIONS (MICE) 46 Gadhvi Hiren Jaydevbhai Makwana Pinkeshkumar 47 Mansukhlal Real Estate Industry in Bangladesh 48 Visana Riya Pratapbhai Real Estate Industry in Bangladesh Exploring Business Opportunities for Establishing Exclusive Indian Sweets and Nandha Ravikumar Rajeshbhai Namkeen Outlet Rosh Milan in Major Cities of Bangladesh Rajpal Deval Rameshchandra Dyes and Chemical Industry in Bangladesh Koradiya Laljibhai Kanajibhai Dyes and Chemical Industry in Bangladesh Solanki Hardikkumar 52 Mansukhlal Patel Akash Punjabhai Denim Industry of Bangladesh 54 Kothiya Ravikumar Keshubhai Economic Overview & Potential Mapping for Dairy Industry in Bangladesh Broadband and Wimax Industry of Bangladesh 55 Soniya Zutshi Overview of Cement Industry of Bangladesh 56 Shah Vidhi Dhanendrabhai Denim Industry of Bangladesh 57 Swapna K. S Overview of Cement Industry of Bangladesh 3

5 CHAPTER 1 DENIM INDUSTRY OF BANGLADESH INTRODUCTION TO INDIAN TEXTILE INDUSTRY The Indian textile industry is one of the major sectors of Indian economy which contributes towards the growth of the country's industrial sector and overall economic growth. The Indian textile industry can be separated into a number of segments such as cotton, silk, woolen, denim, jute and handicraft. Review of Indian textiles and Clothing Industry The textiles and garments industry is one of the largest and most important sectors of Indian economy, in terms of output, foreign exchange earnings and employment generation. Indian textile industry is based on multi-fiber, using cotton, jute, wool, silk and manmade and synthetic fibers. In the spinning segment, India has an installed capacity of around 40 million spindles (23% of world), 0.5 million rotors (6% of world). In the weaving segment, India is equipped with 1.80 million shuttle looms (45% of world), 0.02 million shuttle less looms (3% of world) and 3.90 million handlooms (85% of world). The organized mill (spinning) sector has recorded a significant growth during the last decade, with the number of spinning mills increasing from 873 to The organized sector accounts for production of almost all of spun yarn, but only around 4 percent of total fabric production. In other words, there are little over 200 composite mills in India leaving the production of fabric and processing to the decentralized small weaving and processing firms. Current Scenario of Indian Textile Indian textile industry largely depends upon the textile manufacturing and export. It also plays a major role in economy of the country. India earns about 27% of its total foreign exchange through textile exports. Further, the textile industry of India also contributes almost 14% of the total industrial production of the country. India textile industry is also the largest in the country in terms of employment generation. It not only generates jobs in its own industry, but also opens up scopes for the other ancillary sectors. Indian textile industry currently generates employment to more than 35 million people. 1

6 SWOT Analysis of Indian Textile Strengths Location Advantage Composite Mills Skilled labour is available in plenty. Infrastructure facility Largest Producer of Cotton Presence of supporting training and skill development Institute Textile Clusters Weakness Monsoon Dependence Research & Development Textile manufacturing extremely fragmented industry. Technology obsolescence Anti-Dumping Duty Rigid labour laws & Pollution Laws Opportunities Elimination of Export Quotas. Elimination of Ginning Regulations. Special incentives for Handlooms sector under new FTP MOU in Vibrant Gujarat 2011 Summit Thearts Lack of Support Infrastructure in Unorganized sector Threat from China 2

7 Fragmentation of Indian Textile Exports Wool And Woolen textiles 2% India's Textile exports% FY 2012 Others 2% Handicrafts 3% Silk & Handloom 16% Denim 39% Man made textile 16% Cotton Textile 22% GUJARAT TEXTILE INDUSTRY Gujarat is one of the leading industrial states in India and textile industry in particular had contributed in a big way to the industrialization of the State. In fact, development of many industries likes, Dyestuff, Chemicals, Engineering/Foundry and Cotton farming is solely dependent on this sector. The State is famous for development of High-breed Cotton, Ginning, power looms, composite mills, spinning units and independent processing Houses. BANGLADESH TEXTILE INDUSTRY While agriculture for domestic consumption is Bangladesh s largest employment sector, the money gained from exporting textiles is the single greatest source of economic growth in Bangladesh. Exports of textiles, clothing, and ready-made garments accounted for 77% of Bangladesh s total merchandise exports in Only 5% of textile factories are owned by foreign investors, with most of the production being controlled by local investors. 3

8 History of textile production in Bangladesh Immediately after the founding of Bangladesh, tea and jute were the most export-oriented sectors. But with the constant threat of flooding, declining jute fiber prices and a significant decrease in world demand, the contribution of the jute sector to the country s economy has deteriorated. The garment industry in Bangladesh became the main export sector and a major source of foreign exchange starting in 1980, and exported about $5 billion USD in The Demand-Supply Gap The growth of domestic consumption depends upon a set of complex factors that include among others, the growth of population, per capita income, growth of foreign exchange remittance, change of tastes etc. Some of these are not well graspable factors for future demand estimation through dependable prediction models. Similar is the case with the export-oriented RMG growth, which is more complicated as access to international market depends not only upon the scale of demand or competitiveness but also on global trade policies, regional treaties, bilateral relations, non-tariff barriers, image of exporters, etc. Impact of global changes on textile industry of Bangladesh Introduction Textile sector is one of the most important sectors for the economy of Bangladesh. Due to the changing environment this sector is facing challenges. The phasing out of MFA by 2004 and the withdrawal of quota protection in coming years will surely affect the RMG export earnings. To survive the intense pressure from other countries as well as to receive facilities, Bangladesh textile needs to build backward linkage industry. Manufacturing of all the inputs like the fabric and yarn, for RMG is absolutely necessary to increase and strengthen the much talked about backward linkage industry for the survival of the RMG sector of this country. COMPARATIVE STUDY OF BANGLADESH AND INDIA India is an immediate neighbor of Bangladesh and surrounds it on all sides except for a small portion which the latter shares with Myanmar to the south. Bangladesh shares a long historical, cultural and geographical linkage with northeast India, which has more association with Bangladesh than to its mainland. Bilateral relations between India and Bangladesh have never been free from impediments that have hindered the expected economic and cultural association 4

9 and transportation network whereas Pakistan and China have been enhancing their economic relations with Bangladesh. INDIA-BANGLADESH ECONOMIC AND COMMERCIAL RELATIONS Bangladesh is an important trading partner for India. The two-way trade in FY was US$5.099 billion with India's exports to Bangladesh accounting for US$ billion and imports US $ million. The trade between the two countries in the last 5 years is as follows: India sexports (upto Mar2012) India simports (upto Dec2011) TotalTrade BANGLADESH IMPORT REGULATIONS Acceleration of production and expansion of trade result in growth of national wealth.increased production in export sectors may become the prime mover in the development cycle in a densely populate of Bangladesh like our as this will generate employment opportunities which in turn will generate savings and investment on consequent flow of capital. The prime national objective of poverty alleviation will thus be materialized. As a first step towards reaching this goal we need to look at the country's production infrastructure. Our export trade is featured by the dominance of a few commodities in a narrow market. Such dependence on a limited number of export items targeted a limited market is not desirable for economic development. We must, 5

10 therefore, aim both at product and market diversification or else our export trade will become stagnant in the near future. Our export trade must keep pace with the projected GDP 7% and make due contribution through increased export earnings. In this exercise it is imperative to identify new thrust sectors, increased export of higher value added items, diversify product wise, ensure products quality, improve packaging, attain efficient productivity. We should aim at marketing quality products at competitive price at the correct time. The Export Policy has been designed to operate in the imperatives and opportunities of the market economy with a view to maximizing export growth and narrowing down the gap between import payment and export earning Import Duties Measures of import protection in Bangladesh currently include non-tariff barriers or quantitative restrictions, tariffs, and "secondary tariffs" such as VAT and supplementary duties, and other taxes. Several issues deserve attention concerning tariffs for different components of the "textile cluster." These are levels of tariffs, dispersion of tariffs across tariff lines for a product group or chapter of the Harmonized System, the pattern of tariff escalation, and tariff rates for different product groups which are substitutes, for instance, cotton products and products made from synthetic products. Payment Methods in Export Import Trade 1. Clean Payments Advance Payment Open Account 2. Payment Collection of Bills in International Trade There are two methods of collections of bill: Documents against Payment D/P Documents against Acceptance D/A 6

11 3. Letter of Credit L/C Various types of L/Cs are: Revocable & Irrevocable Letter of Credit (L/C) Sight & Time Letter of Credit Confirmed Letter of Credit (L/C) EXPORT PROCEDURE IN INDIA For clearance of export goods, the exporter or his agents have to undertake the following formalities:- Registration Processing of Shipping Bill There are 5 types of shipping bills: - Shipping Bill for export of duty free goods. This shipping bill is white colored. Shipping bill for export of goods under claim for duty drawback. This shipping bill is green colors. Shipping bill for export of duty free goods ex-bond i.e. from bonded warehouse. This shipping bill is pink colure. Shipping Bill for export of dutiable goods. This shipping bill is yellow color. Shipping bill for export under DEPB scheme. This shipping bill is blue in color. The Bills of Export are:- Bill of export for goods under claim for duty drawback Bill of export for dutiable goods Bill of export for duty free goods Bill of export for duty free goods ex-bond 7

12 EXPORT FINANCE AND DOCUMENTATION The following is a list of documents often used in international trade: Air Waybill Bill of Lading Certificate of Origin Combined Transport Document Draft (or Bill of Exchange) Insurance Policy (or Certificate) Packing List/Specification Inspection Certificate INDIA S TEXTILE EXPORTS POTENTIAL Exports of textiles and clothing products from India have increased steadily over the last few years, particularly after 2004 when textiles exports quota stood discontinued. An export of Textiles & Clothing grew from USD billion in to USD billion in and has touched USD billion in In the current financial year i.e , exports of textiles and clothing, as per latest available data covering April- December, 2011, has grown by 23.87% over the corresponding period of OTHER BUSINESS OPPORTUNITIES FOR GUJARAT TO INCREASE BUSINESS WITH BANGLADESH Gujarat Factor Conditions Specific Incentives Fiscal Incentives 20 per cent credit- linked subsidy for setting up power-looms 5 per cent interest subsidy under TUF Capital subsidy of 10 per cent in processing sector Interest subsidy of 3 per cent p.a. to a new unit in the textile sector Interest subsidy of 3 per cent p.a. on purchase of capital equipment under TUF 8

13 Government Initiatives -: Margin money subsidy at 20% to power loom units on investment in TUF compatible specified machinery subject to a capital ceiling of INR 200 laths. 25% capital subsidy on purchase of new machinery and equipment for pre-loom and post-loom operations, handlooms/up gradation of handlooms, testing and quality control equipment s for handloom production units. Financial Feasibility Project Brief Proposed Capacity The proposed capacity of the unit is 1000 Denim per day. Total project cost The cost of project has been estimated as Rs million including machinery and office equipment. Projected Investment Project return BANGLADESH DENIM MARKET:- Bangladesh is one of the most important centers for denim apparel production and export around the world. In fact, it has come up as the third most important exporter of denim apparel to US after Mexico and China and second highest to EU after China. With thousands of small and big garment units in Bangladesh, it is also one of the cheapest production centers for apparel around 9

14 the world. Also, it is the world s most concentrated cluster of apparel production with most of the units centered in and on the city of Dhaka and some around Chittagong. Export denim Scenario There are jeans manufacturers in Bangladesh who were sourcing their fabrics from China. With China is unable to meet their requirements, these manufacturers are looking towards India as the next preferred sourcing option. Similarly for companies which were sourcing denim from the US, with the cut down in Denim production in US, some of their orders are expected to come to India. These extra export orders will certainly prove to be a boon for the capacity expansion which has been going on. SWOT ANALYSIS OF DENIM: Strength There is a readymade market for this product. Relatively low labor costs Ample available work force. Well-situated industrial estate with all major facilities available. Weakness The requirement of credit and/or delay of payments from customer side might cause disturbance in the cash cycles. Very small base of available skilled machinists. Lack of trained technicians and line / middle management. Uncertain investment climate 10

15 Opportunities WAPDA/KESC will provide off peak hour rates and bulk rates for industrial consumers to lower the electricity cost of manufacturing. Manufacturers-cum-exporters are allowed to import samples of each kind or quality having value up to US$ 100 at zero duty rates. Two special export zones focusing on textile sector particularly in dyeing, processing and finishing sectors will be established at Karachi and in one of the industrial cities of Punjab. Threat Skilled operators in the denim garments are quite unorganized. Stitching expertise is not available at the best possible level. This restricts the industry to the basic garments and only limits the entry into the manufacturing of high quality garments. Cost of doing business may increase as the energy, raw material prices, wages and mark up rates may rise. Benefits to Gujarat Background The textile Industry is one of the oldest and the most important sectors of the Indian economy. Gujarat s textile industry contributes in a big way to the industrialization of the State. About 33 percent of cotton production in the country is from Gujarat and the State contributes to about 35 percent of the woven fabrics from the organized sector in India. The city of Surat alone contributes to 40 percent of art silk fabric produced in India and is the largest production base for man-made fabrics. Further, 23 percent of the State GDP comes from textiles. Gujarat contributes around 20 percent of textile exports from India and 6 percent of garments export in India. In the early 1990s, Gujarat saw a dramatic change in the textile industry scenario with the entry of denim manufacturing. Arvind Mills, Soma Textiles, Modern Denim started manufacturing denim in Gujarat, and soon the State was known as India s land of denim. Enablers Large availability of raw material like cotton has significantly contributed to the growth of textile sector in Gujarat. Proximity to ports and other mode of transport, liberal labour 11

16 policies, cheap raw material and well developed textile machinery industry is attracting companies to set up units in Gujarat. In recent times there has been a shift of the textile hub from Mumbai to Gujarat, largely due to lower cost of real estate in Gujarat. The State is also supporting development of SEZs by giving tax incentives. Constraints Even though the textile industry is among the largest sectors in the State, it is highly unorganized and fragmented. The unorganized industry dominated by small traders and merchants serve as hindrances in the growth of the retail sector and industry exports. Although, Gujarat houses some of the leading organizations like Arvind Mills and Soma Textiles the apparel segment is not well developed. The State contributes to only 6 percent of garments export in India. Imperatives Technology is the key to success in the textile industry. Thus, the Government must aim to develop processing capacity and encourage technology up gradation funds. This will give more opportunities to the existing players and encourage new players to start their venture in the State. The retail boom is catching on fast across the country. The State should, thus focus on building retail opportunities in textiles & garments to meet the growing demand in the country. Marketing Plan We would like to include our product, price, place and promotion strategy with segmentation, targeting and positioning strategy in our marketing plan. Product: Our product is denim with different textures. Price: We have analyzed Bangladesh market for denim industry and found that there are few good players with good market share. We have to compete with them to establish our market. Also price is the most considered factor during the purchase of product like denim. So, we would choose economy pricing for our product. 12

17 Place: The main market for our product would be the bigger cities of Bangladesh like Dhaka and Chittagong. They are more advanced cities of Bangladesh. They are having more population of youth who would like to wear denim in routine life. Again these cities are economically stronger than other cities of Bangladesh. This thing would help to get more new customers to try our product. Promotion: We would use Business to business selling strategies as our promotion strategies. We are going to arrange exhibition in major cities like Dhaka and Chittagong. Advertise on Denim Club India Distribution: We are going to export the denim material from India to Bangladesh. We would mainly have our agents at Bangladesh as our trading partners. We would send the goods to them and they then sell the goods in the market. The end user would be Ready Made Garment manufacturing companies. Manufacturer Agent Wholseller RMG Manufacturer Segmentation Our segmentation would be based on geographic segmentation. We would target big cities of Bangladesh like, Dhaka, Chittagong, etc. 13

18 Targeting: The main aim of target marketing is that a company can never sell to everyone successfully. The needs, wants, beliefs and habits of people are so varied that it is nearly impossible to make a product or service that is truly universal to everybody. Focusing efforts on just one or a handful of groups, therefore, is necessary to connect with customers and complete sales. Main Target of our company would be manufacturers and wholesaler of denim in cities like Dhaka and Chittagong. Positioning: Positioning is an effort to influence consumer perception of a brand or product relative to the perception of competing brands or products. Its objective is to occupy a clear, unique, and advantageous position in the consumer's mind. We would position our different products with different positioning statements like positioning as rough and tough look, smooth texture, attractive, etc. CRITICAL FACTORS THAT NEED ATTENTION Though India is one of the major producers of cotton yarn and fabric, the productivity of cotton as measured by yield has been found to be lower than many countries. The level of productivity in China, Turkey and Brazil is over 1 tonne / ha. while in India it is only about 0.3 tonne / ha. In the manmade fiber sector, India is ranked at fifth position in terms of capacity. However, the capacity and technology infusion in this sector need to be further enhanced in view of the changing fiber consumption in the world. It may be mentioned that the share of cotton in world fiber demand declined from around 50 percent (14.7 man tons) in 1982 to around 38 percent (20.12 man tons) in 2003, while the share of manmade fiber has increased from 44 percent (13.10 man tons) to around 60 percent (31.76 man tons) over the same period. Apart from low cost labour, other factors that are having impact on final consumer cost are relative interest cost, power tariff, structural anomalies and productivity level (affected by technological obsolescence). A study by International Textile Manufacturers Federation revealed high power costs in India as compared to other countries like Brazil, China, Italy, Korea, Turkey and USA. Percentage share of power in total cost of production in spinning, weaving and knitting of ring 14

19 and O-E yarn for India ranged from 10 percent to 17 percent, which is also higher than that of countries like Brazil, Korea and China. Percentage share of capital cost in total production cost in India was also higher ranging from 20 percent to 29 percent as compared to a range of 12 to 26 percent in China. STRATEGIES AND RECOMMENDATIONS Cost competitiveness in Indian denim sector has been restrained by limited scale operations, obsolete technology and reservation under SSI policies. While retaining its traditional cost advantages of home grown cotton and low cost labour, India needs to sharpen its competitive edge by lowering the cost of operations through efficient use of production inputs and scale operations. Besides, there are needs for rationalization of charges, levies related to usage of export logistics to remain cost competitive. Conclusion Bangladesh majorly imports denim apparels from India India and Gujarat has the great potential to export good quality textiles and denims to Bangladesh. Technology is the key to success in the denim industry. The Government must aim to develop processing capacity and encourage technology up gradation funds. Gujarat government is already helping the people by giving subsidies. With the help of Vibrant Gujarat Summit Gujarat Government is making business tie ups with various countries. In the 2013 summit Gujarat Government should eye on Bangladesh because there is great potential market for Indian Garments and textiles in Bangladesh This will give more opportunities to the existing players and encourage new players to start their venture in the State. The retail boom is catching on fast across the country. The State should, thus focus on building retail opportunities in textiles & garments to meet the growing demand in the country and abroad. Gujarat has large availability of both natural and man-made fibers as basic raw materials and non-woven fabric manufacturing base, which is the key for developing technical textiles. 15

20 Thus, the State must leverage on available resources and should focus on expanding the portfolio of technical textiles. Increasing exports from Gujarat and India can help enhance the Indian Economy. The future of textile industry in Bangladesh The textile industry in Bangladesh has grown in an unplanned manner and a critical demandsupply gap has arisen for both yarn and denim fabric. The crisis will naturally deepen unless appropriate backward linkages, the incorporation of the fundamental steps in the textile industry all through to the denim industry, can be built to meet the rapidly approaching challenges in the global textile market. As the population is growing and the standard of living is increasing in Bangladesh, the demand for textiles is increasing rapidly. This presents an urgent need to dramatically increase capacities in spinning, weaving, knitting, and dyeing, printing, and finishing sub-sectors. This will require the adoption of the most modern and appropriate technology to ensure quality products at competitive prices. The possibility of increased yarn production in Bangladesh is an issue that has been looked into extensively by many researchers. These investigations have revealed the country actually has a comparative advantage over all competitors in terms of the expense of yarn production. However, in regards to the total yarn cost, Bangladesh's advantage over India and Pakistan disappears, even though it remains competitive with other producers. This is essentially a result of the higher cost of raw materials in Bangladesh, as most need to be imported. ************** 16

21 CHAPTER 2 MEDICAL TOURISM OF BANGLADESH Traveling abroad for health is not a new phenomenon. Medical tourism is actually thousands of years old. In ancient Greece, pilgrims and patients came from all over the Mediterranean to the sanctuary of the healing god, asklepios; the god of healing was located at Epidaurus. In roman Britain, patients took the waters at a shrine at bath, a practice that continued for 2,000 years. During 18th century wealthy Europeans used to visit health resorts in North Africa. But in the past seven years or so, the movement has accelerated sharply. It is growing rapidly and turning out to be an immense business opportunity for nations which have the strategic advantage of having resources in terms of medical technology, infrastructure and right human resources. Cross-border travel for health reasons is a $40 billon market and growing at over 15% a year throws up huge opportunities for anyone smart enough to tap it. Broadly defined as a collaboration of medical services with the tourism industry, healthcare tourism offers cost effective medical services for individuals who cannot afford these services in their country due to high costs or to people who are tired by long waiting times. Also patients from countries, where treatment is not available, can avail the benefits of healthcare tourism. Countries that are actively promoting healthcare tourism include Belgium, Singapore, Malaysia, India, Thailand, Cuba, Costa Rica, Hungary, and Poland. Greece and South Africa are also emerging as new destinations. India is the latest entrant in the field of health tourism. The WTO identified four modes that will help boost trade in health care services worldwide. Medical travel is the most visible face of the increasing global trade in health care services. The other three models are, Cross border delivery of trade The setting up of hospitals, clinics and diagnostic centers The movement of health personnel 17

22 Health care insurance companies within industrialized nations have begun considering medical tourism as a potential cost-saving measure, and have discussed providing round trip airfare and tourist excursions as "consumer incentives" to help encourage this kind of travel. Medical tourism holds the promise of reducing health care costs for individuals, companies, and governments, as the latter will likely offer discounts and/or rebates to their employees and constituents to prompt them to chose the medical tourism option and, in turn, reduce the insurer's and self-insurer's growing costs of providing quality health care. There are also many companies that can help arrange patients' surgeries, travel arrangements and tours. Many of these companies partner with specific hospitals, thereby arranging a cheaper price for their patients than one could arrange on their own through the hospital directly. The emergence of a private sector that thrives by servicing a small percentage of the population that has the ability to "buy" medical care has changed the character of the medical care sector. Corporate run institutions are seized with the necessity to maximize profits and expand their coverage. In this background, corporate interests in the medical care sector are looking for opportunities that go beyond the limited domestic "market" for high cost medical care. This is the genesis of the "medical tourism" industry. The private sector stool stands on three legs 18

23 1. Quality 2. Affordability 3. Ethical practice with tight fiscal controls resulting in reasonable profit. You might go for medical tourism if 1. You want to save up to 90% on world class medical treatment. 2. Insurance cover for you does not exist or is unknot sufficient. 3. Procedure advised to you is not offered in your country. 4.Insurance company does no cover procedure you plan to undergo. Benefits 1. Cost savings. 2. Better-quality care. 3. Excluded treatments. 4. Unique Procedures. 5. No waiting. 6. Sufficient stay: 7. Attraction of the new and different. Medical Tourism Statistics More and more countries are becoming medical tourism destinations. Medical tourism statistics revealed an anticipated growth of the industry from about $40 billion in 2004 to $100 billion by the year The estimate was made by the Confederation of India and the McKinsey Company. Another report disclosed that an estimated 750,000 Americans seek treatment abroad in It was also estimated that a million and a half Americans sought healthcare outside the US in

24 the Indian segment is still a sliver of the US$60-billion global medical tourism market, the consultancy firm Deloitte estimates the country's business will grow at a robust clip of 27 per cent each year. The reason for its attraction for Indian industry and tourism is not far to seek. According to the Ministry Of Tourism, as against an ordinary vacationer per-capita spend of US$3,000 per visitor, the average medical tourist in India puts out more than $7,000 per visit. India's abysmal spend of 4.9 per cent of its GDP on healthcare -- as compared to America's 15.3 percent, Switzerland's 11.3 percent or France's 11.1 percent the country is well poised to become a frontrunner in the global medical tourism market. Various Competitors and participants in this market. Affordable Medical Tourism The Mediator Prime India Indi Smile Medical Network Unhealthy Consultancy Private Limited Modi Healthcare and Tourism Corporation 20

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26 Many hospitals in India are accredited by international institutions and are offering world-class treatment at that cost which is comparatively 40-50% less than that of any European country. Year Revenue (In Billion US $) 2004 : : : :-100 Source:- Development Act 1951 to grant it the status of an industry and to promote accommodation sector, so that every segment of tourism industry including hotels throughout the country can avail various benefits under the Industrial Policy of the respective state governments like Land banks for budget hotels, Exemption of duty on stamp paper, Exemption in VAT and Sales Tax, and Single window clearance for new hotel projects etc. Medical tourism policy is important to know how the tourism works in medical sector so that we add brief tourism policy in this report. Medical tourism (also called medical travel, health tourism or global healthcare) is a term used to describe the rapidly-growing practice of travelling across international borders to seek healthcare services. Services typically sought by travelers include elective procedures as well as complex surgeries, etc. 22

27 India is touted as the best destination for medical health tourism. The opportunities are tremendous and every sector of tourism are exploring this burgeoning growth industry, from the Government of India, travel agents, hotel companies, India s State tourism boards and most of the hospitals, including all private hospitals. They re seeking to combine both leisure tourism with medical tourism and capitalize upon just how inexpensive the same quality and sometimes better quality medical care costs are in India compared to the United States soaring medical costs. After this basic intro of medical tourism policy We add step by step process or say guidelines for the international patients regarding to how medical tourism works in India. Travelling overseas for surgery or any other medical treatment is an important decision. Taking the right steps and following a systematic approach can make this choice a truly rewarding experience. This guide is aimed at helping patients understand the complete process from the point he/she wish to evaluate the options till he/she actually come back home after visiting India for medical treatment. Patients who go to the another state for the medical treatment, cost related to that treatment is very much important for the patients so that patients can take a right decision for their treatment so that on the basis of that We do cost comparisons of various state with India in relevant to different -different diseases. India has no parallels in healthcare when it comes to cost effective treatments in comparison with other countries. Significant cost differences exist among US, UK and South Asian countries. Add to it, the waiting time which is almost nil in case of India. After all, your health cannot be put at stake due to long waiting lists. After all this We find out the growth of medical tourism in India and also work on and search reason behind the successful growth of medical tourism in India and also finding out advantage and limitation of it in relevant to India. 23

28 In recent time there are many factors which may affect medical tourism and main factors which factors are as follows. 1. Low cost of medical treatment 2. Experienced and talented pool of Medical Professionals 3. Strong Private Hospital Infrastructure 4. Experience in Medical Tourism 5. Medical decisions by Doctors, not by rules made by Non-Medicos 6. Familiarity of Western Patients with Indian Doctors To summarize it, the future of Medical Tourism in India is very bright. In the next few years, Hospitals in India are going to expand and new hospitals will open. Medical Tourism Corporation facilitates medical treatment to top Hospitals in India. Request a quote using the form on this page for more information. Marketing Mix:- Marketing mix is the set of controllable variables that an organization uses to influence the target market. The four Ps have long been the basis for marketing strategy in most industries and are increasingly being considered by healthcare organizations. Below follows the implementation of 4 Ps to health services. 24

29 CHAPTER 3 OVERVIEW OF CEMENT INDUSTRY OF BANGLADESH INTRODUCTION OF CEMENT INDUSTRY Bangladesh has a high need for basic infrastructure, housing, and services, and therefore a robust growth in the demand for cement. The cement industry enjoys the participation of the top four global cement producers with Lafarge opening a new integrated works in However, capacity far exceeds demand so producers are now looking at ways to tap new export markets. The Bangladesh cement industry enjoys the participation of the top four global cement producers: Lafarge, Holcim, Cemex and Heidelberg Cement. The country has two integrated cement works but domestic capacity mainly comprises a total of 63 grind-plants. That said, some of these have very small capacities and produce cement intermittently. Bangladesh cement industry is the 40th largest market in the world. Currently capacity of the industry is about 20 mn tons (MT). Top 13 players are alone controlling over 78% of the total industry capacity. However, the balance capacity still remains quite fragmented. Per capita consumption remains poor when compared with the world average; only 65 kg (FY2009) while our neighboring countries, India and Pakistan, have per capita consumption of 135kg and 130kg respectively. This underlines tremendous scope for growth in the Bangladesh cement industry in the long term. 25

30 Cement, being a bulk commodity, is a freight intensive industry and transporting it over long distances can prove to be uneconomical. For that reason, industry is regional in nature. It s also seasonal in nature, during Monsoon industry suffers from low demand. Four major costs are associated with the production of cement as provided. The pricing of cement of various players in the industry are very close to one another. The factories which would be using captive power (which is cheaper and more reliable than grid power) and backed by uninterrupted clinker supply at competitive price, are likely to be more cost efficient to emerge as the market leader. Currently, the standard price of one bag of cement produced by the multinational cement companies ranges within BDT 370 to BDT 390 per bag. On the other hand, price of one bag of cement produced by the local companies ranges within the price bracket of BDT 340 to BDT 365. The common technology which is widely used in our industry from the year 2003 is Portland Composite Cement (PCC) which is made following European Standard Methods (ESM). Earlier, Ordinary Portland Cement (OPC) had been used which was made following the American Standard Method (ASM). PCC gives equal strength and durability like OPC. The basic difference between them is in the manufacturing technology. Only 65%-80% of clinker is required to produce PCC while 95% of clinker is required to produce OPC. So, worldwide PCC has become popular which requires less clinker. Currently, Heidelberg, Holcim and Lafarge are the leaders among multinational cement manufacturers and Shah and Meghna are the leading domestic manufacturers. Shah cement is the market leader with close to 14.20% of the market share, followed by Heidelberg with about 9.30% of the market share. During the 2010, many small local manufacturers like Premier, Seven Circle, Crown, Fresh and King cement increased their sales drastically riding on their benefits of economies of scale, backward linkage and aggressive marketing effort. 26

31 In Bangladesh, cement consumers are categorized as follows: 1. Individual home makers (25%) 2. Real estate developers (35%) 3. Govt. organizations, i.e., LGED, RHW etc. (40%) Cement consumption has steadily been rising. It is expected that cement companies will enjoy a good growth of margin over the next 3 years. Because, in next couple of years when large capacities are expected to come on-stream, pass through of input cost will be easier and clinker (main raw material of cement) price is expected to remain stable at $53-$58. Currently, multinational cement companies are facing intensive competition with local companies. Local manufacturers have been pursuing more innovative and aggressive business strategy compared to multinationals. Local manufacturers seek to seize large market by reaching mass people through economies of scale while multinationals cater the needs of specific group of customers by charging high price through superior brand value and quality. In addition, another basic trend in cement industry is smaller companies are shutting down and the bigger companies are becoming bigger. Private sector may get interested to invest in real estate for getting tax advantages of their undisclosed funds. Good number of large infrastructure construction projects (Padma Bridge, Flyovers, and highways) is on the pipeline. There is no Substitute for Cement. Steel can be used in construction but in limited extent due to its high cost. Considering the Life cycle of the industry, currently cement industry of Bangladesh is in the growth stage. Sales of cement are increasing due to growing demand for cement in both the local and foreign markets. 27

32 OVERVIEW OF CEMENT INDUSTRY Overview of Cement Industry Total Production capacity (mn MT) 20 Industry average utilization rate 70% Actual capacity excluding obstacles (mn MT) Local consumption (mn MT) Per capita consumption (FY2010) 84.5 Kg Total factories registered 123 Factories started operation 63 Currently plants in operation 32 Factories exporting cement to India 8 Size of export in FY2010 (K MT/year) 260 Construction % of GDP 10% Construction sector growth in FY2010 (according to BBS) 8% Industry consumption growth in FY % Expected industry growth rate in next 5 years 25% / year Largest 13 cement companies hold (market share) 78% Source: BCMA & IDLC research INDUSTRY CHARACTERISTICS Seasonality and cyclicality of the industry Bangladesh cement industry is known for its seasonality which can be as high as 50%. Cement demand declines during the monsoons due to a slowdown in construction activities. On the other hand, though the yearly capacity of the industry is saturated with overcapacity, market demand gets matched or cross the effective capacity during the first 5 to 6 months of the year. In addition, the cement industry, like most capital-intensive commodity industries, is cyclical in nature with respect to supply. Given the high gestation period of months, there is a time lag between capacity build-up and cement demand. 28

33 Cement demand is closely linked to the growth of the construction sector. Hence, when the construction sector is strong, demand increases. As a result, the profitability rises, leading to capacity additions by existing players and the entry of new players. However, since it takes years to build a cement plant, it is likely that before completion, demand could decrease or stagnate, or the capacity additions could exceed demand. This can lead to a fall in cement prices, and the industry could face a downturn, leading to reducing operating rates or shutting down capacities. CEMENT INDUSTRY REGIONAL IN NATURE Cement is a high-volume, low-value commodity. Transporting over long distances adds to the cost, resulting in lower margins to the players. This makes cement a regional commodity where lower distribution cost makes it remunerative to producers. Cement consumption varies region wise because the demand-supply balance, per capita income and level of industrial development differ in each region. In Dhaka, Chittagong and Mongla account for 91% of total consumption Supply. At present, the demand-supply situation is tightly balanced with the latter being marginally higher. As the cement industry is dependent on few companies production, more expansion will be needed to meet the large demand of govt infrastructures. Demand Housing sector acts as the principal growth driver for cement. However, recently industrial and infrastructure sectors have also emerged as demand drivers. Barriers to entry High capital costs and long gestation periods. Access to cheap source of clinker supplier also acts as a significant entry barrier. 29

34 BARGAINING POWER OF SUPPLIERS cement industry depends on imported raw materials. Currently international price of clinker is stable. But any kind of volatility in its price remained a concern. BARGAINING POWER OF CUSTOMERS End users of the product get benefited if they are near to the distribution plant of the company. But when their positioning is at distance from the distribution plant, companies used to charge premium. Moreover, brands used to charge premium on account of better quality perception also. Competition Intense competition among players regarding price due to homogeneous product. PRICING STRUCTURE The pricing of cement of various players in the industry are very close to one another. Due to the presence of homogeneous products in the market, price war is a sensitive issue in this industry which exists from time to time in the cement market. Cement prices have been on an upward trajectory since 2007 in line with steady increase in clinker costs. However, the large capacity expansions are expected to weigh down on price realizations by cement companies due to increasing availability of product. Moreover, cement prices, like all commodity prices, are influenced by demand-supply dynamics. Seasonal factors like weak demand during monsoon in most areas also put pressure on prices. 30

35 As the freight cost accounts for a substantial proportion of sales price, the ruling market price of cement becomes different in different regions. Currently, the standard price of one bag of cement produced by the multinational cement companies ranges within BDT 370 to BDT 390 per bag. On the other hand, price of one bag of cement produced by the local companies ranges within the price bracket of BDT 340 to BDT 365. The quality of cement, brand image, export potential, price of cement in international market, anti- dumping position of cement manufacturer, future tariff policy etc. will have an impact on price of cement in future. PRODUCT AND TECHNOLOGY 1. ORDINARY PORTLAND CEMENT (OPC) AND PORTLAND COMPOSITE CEMENT (PCC) Till 2002, only one type of cement was available in Bangladesh was Ordinary Portland Cement (OPC) which is made following the American Standard Method (ASM). Portland Composite Cement (PCC) which is made following European Standard Methods (ESM). Holcim (Black Cement) was the first company to launch this type of cement in the market. Currently ratio of production of PPC and OCC is 95:5. PCC gives equal strength and durability like OPC. The basic difference between them is in the manufacturing technology. Only 65%-80% of clinker is required to produce PCC while 95% of clinker is required to produce OPC. So, worldwide PCC has become popular which requires less clinker. 31

36 TECHNOLOGY The manufacture of cement is a two-phase process. Firstly, Clinker is produced. Most common methodology of producing clinker is to mix up calcareous minerals such as chalk, limestone containing silica and alumina and heat upto1450 degree C. After cooling it, clinker is formed. Secondly, the clinker is ground with calcium sulphates and with industrial processes wastes such as blast furnace slag, limestone and fly ash to produce Portland cement. Two basic types of clinker production processes exist, depending on the way the raw materials are prepared before entering the kiln system: Wet method (use in Bangladesh) Dry method In the wet method, water is added to form wet thick slurry and dry process is based on drying the bulk materials to form a dry powdered meal. The choice of process depends on moisture content of the available raw material. When wet raw materials (moisture content over 20%) are available, the wet process can be preferred. However, in Europe, today s new cement plants are all based on the dry. Bangladesh has adopted EN197-1:2000 as Bangladesh Standard, titled BDS EN 197-1:2003. Under this Standard there are 27 products in the family of common cements, which are grouped into five main cement types as follows: CEM I Portland cement CEM II Portland- composite cement CEM III Blast furnace cement CEM IV Pozzolanic cement CEM V Composite cement 32

37 PRODUCERS AND CONSUMERS OF THE INDUSTRY 1. MAJOR PRODUCERS OF THE INDUSTRY The largest 13 cement manufacturers hold 78% of the market share. Heidelberg, Holcim and Lafarge are the leaders among multinational cement manufacturers and Shah and Meghna are the leading domestic manufacturers. Shah cement is the market leader with close to 14.20% of the market share, closely followed by Heidelberg with about 9.30% of the market share. During the 2010, many small local manufacturers like Premier, Seven Circle, Crown, Fresh and King cement increased their sales drastically riding on their benefits of economies of scale, backward linkage and aggressive marketing effort. 2. MAJOR CONSUMERS OF THE INDUSTRY In Bangladesh, the main cement consumers are: 1. Individual home makers 2. Real estate developers 3. Govt. organizations, i.e., LGED, RHW etc. VALUE CHAIN Supply chain of the industry primarily comprises raw material suppliers, cement manufacturers, distributors and end-users. The primary distributors in the supply chain are wholesalers (large traders with a margin of BDT 5-7 per bag) and retailers (small traders with a margin of BDT per bag). Wholesalers-cum-retailers operate in rural areas. 33

38 EXPORT OF CEMENT: SIZE OF EXPORT IS 260 K MT/YEAR Cement industry started export from FY2007. Currently, companies exporting cement to north-eastern states of India are as below. All these companies are exporting in very low quantity to the neighboring countries (India and Myanmar) which are easily accessible through water transportation such as ships and mother vessels. Transportation cost is major concern to export cement. Thus exporting this product to countries which are reachable through connecting water bodies is much more feasible in terms of cost and accessibility. High duty charge is one of the main stumbling-block of cement export. Cement manufacturers in our country produce cement by importing clinker from China and Indonesia (mainly) at a high rate of shipping cost and duties which make the present cost structure impracticable to tap the export potentials for cement. If the government make the duty structure more industry-friendly by exempting some duties on exportable cement and granting cash incentives, cement exporting to Sri Lanka, Nepal, Bhutan and the Middle Eastern (ME) countries will be feasible in future. CURRENT SCENARIO OF THE INDUSTRY 1. DOMINANCE BY LOCAL COMPANIES Currently, multinational cement companies are facing intensive competition with local companies. Lafarge, Cemex, Holcim and Heidelberg are among the top ten cement companies in the world, but together they make up only around 27% of the Bangladesh market. 34

39 Scan cement of Heidelberg Group is the biggest among the foreign companies, but its market share is around 9.3% despite it has been in Bangladesh for nearly a decade. Holcim's market share is around 6.4% despite it bought three plants in quick succession more than half a decade back as it planned to emerge as the top player in the country. Multinationals bear high overhead costs regarding salary, infrastructure, quality control etc. On the other hand, local companies are more focused to keep the only concentrating in providing high quality products. But local companies are concentrating in offering quality product with additional benefits like home. 2. INDUSTRY SURVIVORS: LARGE COMPANIES During last five years almost 32 cement companies have been shut down due to inadequacy of raw materials. It s too difficult to the small manufacturers to survive in the industry due to the shortage of raw materials since small companies face difficulties to arrange the raw materials in competitive price. Currently, the basic trend in cement industry is smaller companies are shutting down and the bigger companies are becoming bigger. Only companies are holding 80% of market share. STRENGTHS FOR CEMENT EXPORTS Indian cement exporting companies have established strong presence in SAARC Countries, West Asia and some countries in Africa. 35

40 Indian cement industry, 2 nd largest in the world only after China has 90% of the plants producing well over 100% of the capacity. The cement industry can boast of having most modern state-of-the-art technology cement plants at par with the best in the World. Energy consumption both thermal and electrical is as low as compared to best elsewhere in the World. The Indian cement industry comprising of 130 cement units mostly having capacity over million 36ones per annum spread across the country. These plants are manned by highly skilled team of personnel trained and experienced having stood test of the time. The industry is fully supported by availability in abundant quantity of its main raw material cement grade limestone. Cement production is not only sufficient to meet the domestic demand in full but also export in large quantities. The industry is gearing itself to put in huge investments in next five years to meet the growing demand WEAKNESS FOR CEMENT EXPORTS Indian cement industry in the past and also at present is confronted with various problems in exploiting export potential in full. High costs due to heavy taxation. 36

41 Sr No. Item Rs/t. Of cement (Avg) 1 Royalty and cess on 69 limestone 2 Royalty on coal 22 3 Royalty on gypsum 1 4 Duties on power tariff 27 5 Sales tax on stores & spares 15 for cement production Indian Costs Compared to competing Countries 1 Interest on export credit 53 2 Power tariff Port charges 150 TOTAL 383 Overall Impact 517 The major raw material required for clinker/cement production is limestone which is available in adequate quantity. Limestone along with other inputs such as silica sand, laterite, bauxite etc. are to be procured by paying considerable royalty to State/Central Government. Similarly, power tariff & duties on power tariff, VAT on stores &spares and heavy port charges make Indian exporters less competitive in export market. The Cement Industry, therefore, has a disadvantage of about USD 11.5 per 37one of cement exported as compared to its competitors. Lack of infrastructure facilities both for movement of cement from land locked cement units and also at ports adds to cost for cement exports. There is not even a single dedicated berth for handling cement at any of the Indian ports. Exporters have to incur additional cost due to non availability of berths at ports by way of heavy wharfage charges to Shipping companies. Another component that adds to the cost 37

42 is heavy inland freight incurred by the land locked plants to move cement from the plants to the ports. Loading facilities at ports are very poor. Best loading rate of 2,500 tonnes per day, which is far low compared to international levels of 12,000-15,000 tonnes per day. Taxation in most of the countries is rationalized and a single point value added tax is charged. In China, it is 17% of the F.O.B. value. DGFT, in May 2005, have restricted import of duty-free inputs to the levels of actual consumption. In other words, efficient cement exporting units are being penalized for their efficiency. Standard input/output norms once approved by Government should continue to be allowed. China has enormously improved its export performance from 5 mn.t in 2004 to over 21 mn.t. in This has been possible because of the low rate of taxation and high level of improved infrastructure facilities for handling & transportation of cement. It has been reported by China Cement Association that 60% of total cement in manufacture and dispatch chain is covered by low cost Inland waterways. It is of paramount importance that the Government and industry look at the cement exports strategically. Government should create a level playing field for the industry to increase exports as envisaged. 38

43 CONCLUSIONS AND SUGGESTIONS With cement industry adding over 118 mn.t capacity, timely and adequate wagons availability needs to be ensured Through a long- term transport agreement. Cement industry specific long-term policy. To encourage transportation of cement by railways, appropriate incentive schemes should be worked out on long-term basis, besides making the existing schemes effective and user friendly. The present rate of concession of 15% for loading cement in open wagons should be suitably increased and extended to clinker also. Railways may initiate the process of supervising weighment of wagons at loading point and avoid re-weighment enroot or at destination. This will not only ease the additional financial burden on the industry but also help increasing the rail co-efficient for cement. Railways need to improve the facilities at the major terminals by providing proper platform, sheds and facilities for loading and unloading. Railways should also set up new terminals in a time bound manner so as to be operational. The classifications of fly ash for freight charges prevailing earlier should be restored with a view to encourage more use of fly ash. A freight rebate, as is given for bulk movement of cement, should be given for movement of fly ash in special purpose wagons. The Railway Board has been providing such rebates for bulk movement of cement on the Malkhed-Bangalore and the Wadi-Kalamboli routes. 39

44 The rebate needs to be extended till the life of the wagon, i.e. 35 years, so as to make investments in special purpose wagons a viable proposition. Railways should provide land near railway goods sheds on long-term lease to cement companies for setting up cement bulk terminals. Govt. should permit setting up of port based bulk terminals for bulk transportation of cement. Cost of setting up of a bulk cement terminal of 1 mn.t. Capacity is around Rs. 80 crore. Since the payback period is long, a rebate in excise duty for a specified period should be given for cement dispatched from cement plants to the bulk terminals. The State Governments are authorized to grant environmental clearances to the stand alone grinding units. For the purposes of environmental clearances, port based/inland bulk handling terminals should be treated at par with the stand alone grinding units and State Governments should be authorized in this regard. The RMC is subject to VAT whereas the same ingredients (sand, cement and aggregates) when used for site mix are not subject to VAT. To promote RMC and provide for a level playing field, the State Governments should be persuaded to withdraw VAT/Sales Tax on RMC. Government needs to facilitate setting up of at least a terminal each on the east and west coasts for exports. Cement manufacturers should be encouraged to explore the possibilities of markets and consultancy business in Asia, Europe, and Africa etc. Though export of cement is limited, concerted efforts are required to protect the existing export markets in view of increasing competition from China. In this regard following steps are required: Reduction of taxes and levies. 40

45 Making available power and other inputs at international prices. Reducing port and bunker charges. Including cement and clinker in the focused products for the purposes of exports. Cement /Clinker should be included for preferential treatment in FTA with Bangladesh Required infrastructure should be developed by providing suitable connections from landlocked cement plants to the river systems. Dedicated terminals with proper loading/unloading system should be established to facilitate multi-modal transportation and facilities for night navigation. At present, incentive of 20 paise per tonne per km. for moving cargo through national waterways is subject to the following conditions: The scheme is applicable for movement of cargo for at least 100 km. in NW-1 and NW-2 in one trip one way by mechanized vessel registered under the Inland Vessel Act, In NW-3, the scheme is applicable for movement of more than 50 km. one way by any mechanized vessel registered under the Inland Vessel Act. The scheme is not applicable for exclusive movement between the route of Haldia and Kolkata where infrastructural facilities are fully developed. Government should consider for relaxation/withdrawal the above conditions. Dedicated terminals need to be developed on the three national waterways for loading and unloading of Cement. 41

46 CHAPTER 4 EXPLORING BUSINESS OPPORTUNITIES FOR ESTABLISHING EXCLUSIVE INDIAN SWEETS AND NAMKEEN OUTLET (ROSH MILAN) IN MAJOR CITIES OF BANGLADESH The country s population is almost evenly distributed throughout its 64 districts except for the three Hill Tracts districts which are rather sparsely inhabited. Regionally, the eastern districts have a slightly higher density than the western ones. On average, a district has a population of about 1.8 million, a thana 230,000, a union 25,000 and a village 2,000. There are 490 thanas, 4,451 unions and 59,990 villages. The number of households is about 20 million. On average, a household consists of 5.6 persons. The tribal people, who lead a simple life, are generally selfreliant, producing their own food and drinks and weaving their own clothes. There are 4 metropolitan cities and 119 municipalities in the country. The level of urbanization is low at 20%. This leaves 80% of the country s total population of about 126 million to live in the rural areas which primarily depend on a poorly developed agriculture for livelihood. The capital city of Dhaka has an estimated population of 8.58 million. So, we choose Dhaka city for starting out business because it has very large population and as it is capital city travelers are also visiting this city most often. Bangladesh is now trying to establish itself as the next rising star in South Asia for foreign Investment. The government has implemented a number of policy reforms designed to create a more open and competitive climate for private investment, both foreign and local. The country has a genuinely democratic system of government and enjoys political stability seen as a sine qua non for ensuring a favorable climate for investment and sustained development. Bangladesh has been quick to undertake major restructuring for establishing a market economy, with the major thrust coming from the private sector. The country enjoys modest but steady economic growth. Its current development strategy is based on the premise that the creation and distribution of wealth occurs through the acceleration of growth driven by competitive market forces, with the government facilitating growth and making a clean break from the practices of a controlled economy where private investment is constrained. With this end in view, the government has been gradually withdrawing its involvement in this industrial and infrastructure sectors and promoting private sector participation. The government has moved speedily to translate its policy pronouncements into specific reforms. It has been consistently pursuing an open-door investment 42

47 policy and playing a catalytic rather than a regulatory role. Regulatory controls and constrains have been reduced to a minimum. The government has steadily liberalized its trade regime. Significant progress has been achieved in reducing non-tariff restrictions on trade, rationalizing tariff rates and improving export incentives. The introduction of VAT has helped rationalization of the import tariff and domestic tax structures. The tariff structure and the import policy are kept under constant review to identify areas where further improvements are called for. On the legal and administrative front, the government has initiated measures to give greater autonomy and independence to the judiciary - a pre-requisite as viewed by investors, for the restoration of confidence in the judicial system. A permanent Law Reform Commission has already been set up to ensure greater transparency and predictability in the way rules and regulations are made and implemented. An Administrative Reform Commission to rationalize existing rules, regulations and procedures has also been set up. The Company Law has been updated and modernized. In order to entice investors, the government has put in place an extensive programme of incentives, which include : no ceiling on investment; tax-exemption and duty-free importation of capital machinery and spare parts for 100% export-oriented industries; residency permits for foreign nationals; capital, profit and dividend repatriation facilities; hundred percent foreign equity allowed; exemption of income tax up to three years for expatriate employees; term loans and working capital loans from local banks allowed; reinvestment of repatriable dividends treated as new investment; double-taxation avoidance, as per bilateral agreements already concluded; tax exemption on the interest payable on foreign loans and on royalties and technical know-how fees; open exchange controls; multiple-entry visas for foreign investors; The Country also offers : extremely competitive labor costs, perhaps the lowest in Asia, easily trainable workforce of 56 million; a large domestic market, with disposable income growing especially among the middle class; strategic location as the bridge between South and East Asian highgrowth regions as well as links with other markets e.g. India, Pakistan, Malaysia, Singapore etc; low land and energy costs; good road/bridge/rail infrastructure, which are being improved; two sea-ports being further developed; enjoys Most Favored Nations status; legal protection to foreign investment against nationalization and expropriation; equitable treatment with local investors regarding indemnification, compensation etc. 43

48 Foreign Trade in Bangladesh Bangladesh has been pursuing a liberal trade policy in keeping with global market economy. To this end, Government in the light of limited productive policy to the extent possible for the sake of health, security and religious considerations adopted the policy for the further liberalizing the export and import regimes including reduction of tariff rates. A five-year (1997 through 2002) import policy became effective from June 14, In the new Import policy, BEPZA, BSCIC and Board of Investment have been treated as sponsors of the concerned industry. It will ensure smooth coordination between industrial and import policies and reduce administrative complexities relating to prior approval from different Ministries dealing with industry and commerce. In the new import policy, the system of quality control has been strengthened. In the of report-oriented industries enjoying bonded warehouse facilities, country of origin restriction has been withdrawn in the new policy for import of raw materials. As a result, import of raw materials for 100 percent export industries has been made easier which will help expansion of export industries. The maximum rate of import duty of 42.5% in 1997/98 has been reduced to 40% in 1998/99. Tariff slabs have also been reduced to 6 from 7 and integrated. In order to normalize and stabilize prices of essential commodities, steps have also been taken to withdraw/reduce duty on soybean oil, dry chilies and onion and rationalized tariff on different commodities and materials. In the perspective of this measures, average nominal rate of protection fell to 20.3% during the current year from 20.7% in the preceding year and the corresponding import weighted average nominal protection rate declined to 14.1% from 16.0%. Taxation System in Bangladesh a. Income Tax Department The income tax department under the National Board of Revenue (NBR) is responsible for the administration of the direct taxes like Income Tax, Advertisement Tax etc. A commissioner of Taxes heads a zone. There are 14 taxes zones. Three more new zones have been created this year. 44

49 A zonal organization set up is shown below: The Customs and Excise department under the NBR is the administrating authority of the indirect taxes. These include the Value Added Tax (VAT), Turnover Tax, Customs Duty, excise duty, supplementary duty etc. The department is divided into nine commissionerates. The organogram of a commissionerate is shown below: c. Land Revenue Collection structure The Ministry of Land administers the collection of land(ldt) revenue. The land revenue collection structure is shown below: 45

50 d. Department of Registration Department of Registration administers the stamp duty and registration fee. This set up is as follows: e. Bangladesh Road Transport Authority(BRTA) collects the road tax, vehicle license fee etc. The set up is; f. Local Government (City Corporation, Municipalities, Union Parisads) Holding tax, revenues of public utility(power, gas, phones, water), Chowkidari tax etc. This does not go to the national exchequer but is spent in meeting their own expenses. The local government bodies however can meet only 40% of their requirement while the rest is subsidized by the government (Zafrulla, Taslim and Chowdhury, 1995). There are also other sources revenues of public utility like power, gas, phones, water etc. Recent reforms of Tax and Customs Administration i) Assessment procedures were simplified and measures were taken to improve accountability and organizational structure in customs administration. ii) Introduction of unique tax payer identification number(tin). iii) The establishment of Large Taxpayer Unit(LTU). iv) Placement of voluntary PSI system by mandatory PSI(pre-shipment Inspection). 46

51 Indian sweets and namkeen Indians are fond of sweets and there are many varieties of sweet preparations. Sweets are eaten round the year and their consumption goes up during festivals and religious and social functions and ceremonies. Certain items are eaten fresh and hot whereas items like rosogolla, gulab-jamun, rasamalai etc. can be canned as well. This note primarily considers canned rosogollas but the promoters can work out a judicious product mix. This is not a location specific product and states like Bihar, Uttar Pradesh and Maharashtra are preferred locations. Rosogolla is a very popular and delicious sweet preparation made from cow milk. It is a typical Bengali preparation but over a period of time it has become very popular across the country. Demand and Supply Indian diet provides several varieties of sweets and many of them are prepared from milk. Demand for these products is more or less steady round the year but it goes up during festivals, marriage season and religious celebrations. Majority of the products are available in fresh form but with growing urbanisation, increase in the disposable incomes and preference. List of Indian sweets: As the ethnic foods category is growing, cash-rich companies make a beeline for a share of the salty snacks market. Around 1,000 snack items are sold in India spanning various tastes, forms, textures, aromas, bases, sizes, shapes and fillings. Some 300 types of savories sell here and the overall snack product market (inclusive of sweetmeats) is estimated at Rs.25,000 crore. The branded salty snacks market (size: 1200 Crores) is 40% of the total market (size: 3000 Crores), it's bustling nevertheless. The branded segment is increasing at the rate of 25% per annum whereas the entire market is increasing at the rate of 7%. In the past 2-3 years the unbranded sector has witnessed a decline of 5% per annum. Indians seem to be snacking on ethnic foods with a vengeance. This is good news for the corporate sector, given that the past few years have seen a perceptible shift towards the branded sector at the cost of the unbranded segment. 47

52 Bangladesh sweets and namkeen Bangladeshi cuisine has a rich tradition of sweets. The most common sweets and desserts include: Rasgolla - A sweet made with channa (posset/curdled milk) and sugar syrup. Chhanar Mithai- A sweet made of channa and sugar/jaggery/molasses. Now there are various types of Chhanar Mithai available made by mithaiwalas all across Bangladesh. Pitha - There are more than 200 types pitha made with rice flour, jaggery, coconut & kheer Mitha Doi - sweetened homemade creamy yogurt. Naru- It is usually home-made and used as offerings in Hindu rituals of praying to their Gods. Rash-malai - small rashgollas in a sweetened milk base; Comilla is famous for its Rashmalai. Khaja - Deep fried sweets made with wheat flour and ghee, with sugar and sesame seeds coating. Mua - cooked with rice flakes with jaggery. Hawai Mithai - made with sugar & given various forms. Rasgolla is one of the most widely consumed sweets. The basic version has many regional variations. Phirni or Kheer is a common Bangladeshi sweet dish. Phirni, together with Zarda, is also typical during Shab-e-Barat and Eid. It is cooked with dense milk, sugar/jaggery, & scented rice (kalajira rice). Though it takes a lot of time to cook it is one of the main features of Bangladeshi desserts. A thicker version of kheer is used as filling in pitha. Zarda is a dish of rice that is prepared by sweetening and natural colouring. It is garnished with small gulab jaam and thick kheer. Chômchôm Chômchôm, (originally from Porabari, Tangail District in Bangladesh) goes back centuries. The modern version of this oval-shaped sweet is reddish brown in colour and has a denser texture than the rôshogolla. It can also be preserved longer. Granules of maoa or dried milk can also be sprinkled over chômchôm. Semai is vermicelli prepared with ghee or vegetable oil. It is sometimes an ingredient in faluda. Piţha have many varieties (Pakan, Pati Shapta etc.) In Bangladesh, the tradition of making different kinds of pan-fried, steamed or boiled sweets, lovingly known as piţhe or the "pitha", 48

53 still flourishes. These little balls of heaven symbolizes the coming of winter, and the arrival of a season where rich food can be included. The richness lie in the creamy silkiness of the milk which is mixed often with molasses, or jaggery made of either date palm or sugarcane, and sometimes sugar. They are mostly divided into different categories based on the way they are created. Generally rice flour goes into making the pithe. Piţhas are usually fried or steamed; the most common forms of these cakes include bhapa piţha (steamed), pakan piţha (fried), and puli piţha (dumplings), among others. The other common pithas are chandrapuli, gokul, pati shapta, chitai piţha, aski pithe, muger puli and dudh puli. The Pati Shapta variety is basically a thin-layered rice-flour crepes with thick kheer filling. Bangladesh import policy Government is sincerely committed to fostering a gradual development of free market economy in the light of GATT agreement. In the interest of export promotion & investment in the country it is necessary to have a long term, stable, facultative & liberal Import Policy. With this and in view the present democratic government has taken steps to extend the duration of the Import Policy from two years to five years. Efforts have been made to make the Import Policy easier and more liberal by relaxing or rescinding the regulatory provisions of the previous Import Policy. Provisions have already been made to allow import of capital machinery and industrial raw materials on consignment basis without the cover of the Letter of Credit. Government has taken steps for quality control in the import of cement, fertilizer etc. In order to protect the interest of the consumers Steps are afoot to ensure that in future all imported consumer items conform to a specified standard of quality. In the present Import Policy Order second hand/reconditioned machinery are importable subject to fulfillment of certain conditions. Gradually efforts will be made to classify that machinery under H.S. Code. General Provision for Import 1) Freely Importable Items: Unless otherwise specified, any item, which does not appear either in banned or in restricted list shall be freely importable; 2) The concerned sponsoring authority/tariff commission shall strictly monitor production of the industrial unit which is being afforded protection by the ban. The ban may be revoked on the recommendation of the concerned sponsoring authority/tariff Commission if the quality of products deteriorates and the price of the product is not maintained at satisfactory level or if 49

54 production level fails leaving unutilized capacity. Such of the protected units as are now primarily engaged in assembly type activities shall actively and expeditiously move towards progressive manufacture. 3) The sponsoring authority concerned and Tariff Commission shall continuously monitor the prices of the items covered by such ban to guard against undue increase of price. If the price of any item is increased except for factors like rise in the price of raw materials or decline in the rate of exchange or if the increase in the price of the item is disproportionately higher compared ot the rise in the price of the raw material, the ban may be revoked on the recommendation of Tariff Commission/sponsoring authority. 4) Whoever feels aggrieved by any decision regarding ban or restriction on import of any item can represent his case to the Tariff Commission. The Tariff Commission will duly examine such a representation and furnish as early as possible its recommendation (s) to the Ministry of Commerce for latter's consideration. 5) General Conditions of Import of goods: Import Trade Control schedule Numbers. For import purpose, use of new ITC Numbers (H. S. Code) with at least six digits corresponding to the classification of goods as given in the Import Trade Control Schedule 1988, based on the Harmonized Commodity Description and coding System, shall be mandatory. But in cases where a particular item has been classified under an H. S. Code Number with more than six digits, in those cases it shall be mandatory to use that specific Code Number (having more than six digits). The seven Digits H. S. Code published by Bangladesh Bureau of Statistics may also be mentioned in the L. C. A. From, L/C and other relevant paper within a bracket in addition to normal H. S. Code as mentioned above. No bank shall issue L. C. Authorization from or open L/C without properly mentioning I.T.C. number (H. S. Code) thereon. 6) NOC On the basis of ROR (Right of Refusal) (a) No Objection Certificate on the basis of Right of Refusal (ROR) from any authority shall not be required for import of any freely importable item by any Public Sector agency. However, in cases where a public sector agency is required to import banned/restricted items included in the Control List Prior permission of the Ministry of Commerce shall have to be obtained on the basis of ROR issued by the Ministry of Industries or by the Sponsoring Ministry/Division, or by both as the case may be. 50

55 (b) In case of import of banned/restricted items for approved projects financed under foreign aid the concerned Government Department/Agency will approach the Chief Controller of Imports and Exports directly for necessary permission together with a list of items duly certified under proper seal and signature giving description, quantity/number, price and H. S. Code Number against each item required to be imported. The details about the aided project and specific provision of the relevant contract and other necessary information shall also have to be furnished along with the list of items. The chief Controller shall issue permission/permit on the basis of above documents. 7) Pre-shipment inspection: Unless otherwise specified, pre-shipment inspection of imported goods shall not be obligatory in case of import by the private sector importers. 8) Shipment of Bangladesh Flag Vessels: Subject to waiver specified below shipment of goods shall normally be made on Bangladesh flag vessels : (a) Import of goods up to maximum twenty metric tons in case of single individual consignee or up to maximum 100 (on hundred) metric tons in case of group import may be made in non Bangladeshi flag vessels. However the Director General of Shipping may notify general waivers in the following cases, such as (1) shipment of goods from foreign ports which are not visited by Bangladeshi Vessels, and (2) import of goods on the basis of specific agreements which provide for C & F contract. In all other cases a certificate of waiver shall be obtained from the Director General of Shipping for importation of goods in non-bangladeshi flag vessels. If there appears to be no possibility of any Bangladeshi flag vessels, Visiting a port within next seven day, waiver shall be given within twenty-four hours of application for waiver. Otherwise, it will be considered that waiver has been given. However, the preceding condition of compulsory shipment of goods on Bangladeshi flag vessels, or the condition of obtaining certificates of waiver form the Director General of Shipping shall not apply in cases of import under such foreign aids, loans or grants which contain specific provisions regarding shipment of goods. (b) In case of import and export of goods by export oriented industries, shipment may be made in non-bangladeshi flag vessels. 9) Import at competitive rate: (a) Import shall be made at the most competitive rate and the importers may be required, at any time, to submit documents regarding the price paid or to be paid by them. 51

56 (b) In case of import under United Commodity Aid in the private sector, goods shall be imported at the most competitive rate by obtaining quotations from a minimum three-suppliers/indentors representing at least two countries abroad. This condition shall, however, not apply for opening of L/C up to TK. One lac. For import at the most competitive rate by the Public sector importers the conditions mentioned at para 27(8) of this Order shall apply. 10) Import on C & F and FOB basis: All imports by sea, air and land route shall be made either on C & F or FOB basis. However in case of import on FOB basis the concerned importer shall have to properly comply with the circular issued by Bangladesh Bank in this regard. Before opening of L/C necessary insurance cover note shall have to be purchased from the Sadharan Bima Corporation or any other Bangladesh insurance company. Unless there is specific provision in the relevant loan agreement/project agreement concluded with the foreign donors for import on CIF basis, no import shall be allowed on CIF basis without prior approval from the Ministry of Commerce. However, Bangladesh nationals, living abroad, for sending goods against their earned foreign exchange and foreign investors, for sending capital machinery & raw materials against their equity share portion shall be allowed on CIF basis. 11) Import by mentioning "country of origin" - In all cases of import, "country of origin" shall be mentioned clearly on goods package/container. A certificate regarding "country of origin" issued by the concerned Government agency/approved authority/organization of the exporting country must be submitted, along with import documents to the customs Authority at the time of release of gods. However, the provisions of "country or origin" shall not be applicable to coal and export oriented garments industries. In case of cotton import it shall not be required to mention country of origin on each bale. But "country of origin" shall be mentioned in the photo sanitary certificate. Besides, 100% export oriented industries, which are recognized by the Customs Authority, shall be waived from the restriction of "country of origin" subject to the conditions imposed by the Foreign Exchange Regulation Act Bangladesh Bank and Commercial banks. Fees regarding import Registered commercial importers and industrial consumers have been classified into six categories on the basis of their value ceiling of overall annual import for the year to Their Registration (IRC) and renewal fees have been re-fixed as under 52

57 Finance Finance is the study of funds and management. Its general areas are business finance, personal finance, and public finance. It also deals with the concepts of time, money, risk, and the interrelation between the given factors. It is basically focused on how the money is spent and budgeted. It is one of the most important aspects in handling business. Finance addresses the methods wherein business entities used their financial resources on a certain period of time. It is the application of a set of techniques used by organizations in managing their financial affairs. The income and expenditure are emphasized in finance and its differences can easily be indicated. Financial capital is a monetary resource allows businesses to purchase items that will create goods for production and other services. The budget is the documentation of the entire entrepreneurship. The outline includes the objectives of the business, the target sets, resulting costs, required investment, planned sales, growth, financing source, and financial results. It can be directed on long term or on a short term basis. The capital budget is mainly concerned with the proposed fixed asset requirements. The financing of the expenditure is also indicated in the capital budget. A detailed plan of all the sources and cash usage is emphasized in the cash budget. It has six main sections such as the beginning cash balance, cash collections, cash disbursements, cash excess, cash deficiencies, financing, the ending cash balance, and the management of current assets. A credit comes in various forms such as of open accounts, installment sales, credit cards, and supplier credits. The advantages of a credit trade are gaining loyalty and goodwill amongst costumers, drawing in more customers than cash trades, stimulates agricultural and industrial production, and increases rates. But there are also disadvantages to credit trades as well such as risks of bad debt, high administration expenses, necessitates more working capital, risks of bankruptcy declaration, and leading to purchasing nonessential items. An effective credit control may lead to increase in sales, increase in profits, reduces bad debts, 53

58 builds costumer loyalty, and increases company capitalization. The information on creditworthiness is acquired through credit agencies, bank references, credit agencies, chambers of commerce, and credit application forms. Taking legal actions is one part of the many duties of the credit department. We have prepared estimated financial statements and cost sheet of our products. We have mentioned each detail on how we will avail our finance and utilize it in our business. It also contains the details of equipment required by us and how we will control our cost. Indian EXIM department Imports and exports are the two important components of a foreign trade. Foreign trade is the exchange of goods and services between the two countries, across their international borders. 'Imports' imply the physical movement of goods into a country from another country in a legal manner. It refers to the goods that are produced abroad by foreign producers and are used in the domestic economy to cater to the needs of the domestic consumers. Similarly, 'exports' imply the physical movement of goods out of a country in a legal manner. It refers to the goods that are produced domestically in a country and are used to cater to the needs of the consumers in foreign countries. Thus, the imports and exports have made the world a local market. The country which is purchasing the goods is known as the importing country and the country which is selling the goods is known as the exporting country. The traders involved in such transactions are importers and exporters respectively. In India, exports and imports are regulated by the Foreign Trade (Development and Regulation) Act, 1992, which replaced the Imports and Exports (Control) Act, 1947, and gave the Government of India enormous powers to control it. The salient features of the Act are as follows:- It has empowered the Central Government to make provisions for development and regulation of foreign trade by facilitating imports into, and augmenting exports from India and for all matters connected therewith or incidental thereto. The Central Government can prohibit, restrict and regulate exports and imports, in all or specified cases as well as subject them to exemptions. 54

59 It authorizes the Central Government to formulate and announce an Export and Import (EXIM) Policy and also amend the same from time to time, by notification in the Official Gazette. It provides for the appointment of a Director General of Foreign Trade by the Central Government for the purpose of the Act. He shall advise Central Government in formulating export and import policy and implementing the policy. Under the Act, every importer and exporter must obtain a 'Importer Exporter Code Number' (IEC) from Director General of Foreign Trade or from the officer so authorised. The Director General or any other officer so authorised can suspend or cancel a licence issued for export or import of goods in accordance with the Act. But he does it after giving the licence holder a reasonable opportunity of being heard. As per the provisions of the Act, the Government of India formulates and announces an Export and Import policy (EXIM policy) and amends it from time to time. EXIM policy refers to the policy measures adopted by a country with reference to its exports and imports. Such a policy become particularly important in a country like India, where the import and export of items plays a crucial role not just in balancing budgetary targets, but also in the over all economic development of the country. The principal objectives of the policy are:- To facilitate sustained growth in exports of the country so as to achieve larger percentage shares in the global merchandise trade. To provide domestic consumers with good quality goods and services at internationally competitive prices as well as creating a level playing field for the domestic producers. To stimulate sustained economic growth by providing access to essential raw materials, intermediates, components, consumables and capital goods required for augmenting production and providing services. To enhance the technological strength and efficiency of Indian agriculture, industry and services, thereby improving their competitiveness to meet the requirements of the global markets. To generate new employment opportunities and to encourage the attainment of internationally accepted standards of quality. 55

60 Marketing The following areas of the marketing communications mix will all be looked at to consider the relative strengths and weaknesses and if and how they will be applied in our case. Advertising - Any paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor. We will be advertising through hoardings, news papers, POP because at initial level our cost will be very high so to reduce cost we will not go for television ads. In future we are planning to go for television ads. Sales promotion It is Short-term incentives to encourage the purchase or sale of a product or service. We will be promoting our products by giving certain percentage of extra quantity. As our products are of best quality it may give us good return. Public relations - Building good relationships with the company s various publics by obtaining favorable publicity, building up a good "corporate image", and handling or heading off unfavorable rumors, stories, and events. We will also go for word-of-mouth which will help us to build strong brand image. We are offering best quality of products, so if any customer is visiting our shop we will definitely try to attract by our varieties. Direct marketing - Direct communications with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationships. We will be going for direct marketing because this will also help us to attract many customers. Segmentation Market segmentation is the process to divide the total market into groups or segments. Each group consists of people with relatively similar product needs. The purpose of the market segmentation is to enable us to design a marketing mix that can more precisely match the needs of customers in the selected market segment, to concentrate the marketing energy and to establish a competitive advantage. It can help our company to save some costs on various marketing activities and to increase our market share. As a result, we can make more profit. There are two kinds of market segmentation. One is business market segmentation and the other is consumer market segmentation. Our company focuses on consumer market segmentation. 56

61 The consumer market segmentation is divided into four categories which are demographic, geographic, behavioural and psychographic. Under each category, we will choose some segmentation variables which are characteristics linked to customers needs and purchasing behaviour and can be measures readily. Market segmentation: dividing market into distinct groups with distinct needs, characteristics, or behaviours, who might require separate products or marketing mixes. TYPES OF SEGMENTATION: 1. Geographical segmentation: Segmenting by country, region, city or other geographic basis. 2. Demographic segmentation: Segmenting based on identifiable population characteristics, such as age, occupation, marital status and so on. 3. Psychographic segmentation: This segmentation approach involves an understanding consumer s lifestyle, interests, and opinions. 4. Behavioral segmentation: Segmenting the market based on their relationship with the product or the firm. Examples include: heavy or light users, brand loyal or brand switchers, and so on. 1. Benefit segmentation: these approach segments consumers on the basis of specific benefits they are seeking from the product, such as convenience, or status, or value, and so on.segmentation basis for our product offerings would bebehavioral segmentation. Behavioral segmentation divides a population based on their behavior, the way the population respond to, use or know of a product.(segmentation basis) Our market would be segmented into following categories: Occasional Buyers Buying on occasions is the first form of behavioural segmentation. Products such as chocolates and premium foods will sell on festivals. Similarly, confectioneries 57

62 will sell when there is a party. Thus these products are generally targeted by behavioral segmentation. Benefits sought Several products are targeted towards the benefits sought by the customer. Thus a marketer can divide a population based on the benefits they seek within a product. Consumers seeking healthy snacks, freshly made snacks, Low sugar snacks etc. Loyalty There are two ways to grow a business. First is to acquire new customers and second is to retain your existing customers. The more loyal your customer is to you, the more your customer base will increase. The strategies for brand loyal customers are very different from that used for acquiring new customers. Thus the loyalty of the customer can also be used for behavioral segmentation. Usage rate In residential or commercial segment, the usage can be demonstrated in the form of heavy usage, moderate usage or lesser usage. In these segments, the maximum discount goes to the one who buys the maximum whereas others get lesser profits as they also get lesser discounts. Any product which is not targeted towards the masses generally use behavioural segmentation. It is also an excellent form of segmentation for products which are niche in nature and are targeted towards the wants and demands of customers.(behavioral segmantation) Sweets : We plan to initial offer sweets such as Penda, Burfi, Ladoo, Kajukatri, Halwa, Jalebi, Halvasan, Rasgulla, Gulabjamun, Sonpapdi, Mohanthal, Aflatun, Basundi, Mysore pak, Khoprapak. On the basis of Occasional Buying. That is our sweets will be made keeping in mind the occasional buying behavior of our consumers. This occasions would be Festival days of Bangladesh, other important days such as marriages and family occasions. We will offer a variety of flavours in the above mentioned sweets.this sweets will be available both in individual sweet packings and Mix sweet packings. After the success of these sweets we are also planning to introduce new varieties of sweets in this segment. 58

63 Namkeen: Namkeens that we plan to offer namely Bhavnagriganthiya (which will be prepared in Bangladesh), Bikaner bujiya, Aloobujiya, Bhavnagrisevbhujiya, KanpuriKachori& Samosa, Ratlamisev, Boondi, Channa dal, Moong Dal, Masala sev,(which will be imported from India as these do not perish as fast as sweets) will be segmented on Usage rate basis. As it is known that consumption of namkeens is more frequent than that of sweets. Namkeens are bought in households on a regular basis, whereas if we talk about sweets they are bought mostly on special occasions and festivals only. Namkeens will be offered in packaging s of different sizes and in a way that its freshness and taste are well intact. Targeting: The main aim of target marketing is that a company can never sell to everyone successfully. The needs, wants, beliefs and habits of people are so varied that it is nearly impossible to make a product or service that is truly universal to everybody. Focusing efforts on just one or a handful of groups, therefore, is necessary to connect with customers and complete sales. So, once the market has been properly segmented in groups of likeminded people, the second step is targeting the market that we want to serve or focus on. A target market refers to a group of individuals who are inclined towards similar products and respond to similar marketing techniques and promotional schemes. Target marketing will make the promotion, pricing and distribution of our products and/or services easier and more cost-effective. Target marketing would provide a focus to all of our marketing activities. Marketing segmentation and targeting are equally important for ensuring the overall success of a company. As we are a new entrant in the market, initially we would concentrate mainly on two segments: 1. Occasional Buying: Wherein, we will offer specially packed sweets and namkeens festivals and gifting. Also on festival days and special occasions we would offer special 59

64 freshly made Indian sweets and namkeens. We are also planning on taking orders for preparing Indian sweets and namkeensfor our target market on advanced order booking basis. This will enable us to provide customized offerings to our customers and thereby also increase our customer base with a faster pace. 2. Usage rate: Other than targeting, the customers who buy occasionally, one of our major revenue sources would be the segment of heavy users of Indian sweets and namkeens. There is a large market of buyers of Indian sweets and namkeen, purchase Indian sweets and namkeens on a regular basis. We will be offering our sweets and packages to such customers in such packaging that will enable easy storage of the product (Zip pouch, re-sealable cans and containers) We will also be providing special offers to the customers who are purchase our products more often than the regular customer base, this offers will be small packages of sweet or Namkeen as a gift, discounts on bulk purchase loyalty card etc. Positioning: Positioning is an effort to influence consumer perception of a brand or product relative to the perception of competing brands or products. Its objective is to occupy a clear, unique, and advantageous position in the consumer's mind.(market positioning) The process of creating an image of a product in the minds of the consumers is called as positioning. Positioning will help to create first impression of brands in the minds of target audience. In simpler words positioning helps in creating a perception of a product or service amongst the consumers.(product positioning process) Positioning can make or break a brand. A rightly perceived product / company gets lots of returns from the market as compared to a wrongly perceived company. If a product is well positioned, it will have strong sales, and it may become the go-to brand for people who need that particular product. Poor positioning, on the other hand, can lead to bad sales and a dubious 60

65 reputation. We have to think beyond what the product is for when it comes to positioning. Positioning is all about the kinds of people who want to buy our product. It is really essential to analyze, how consumers perceive our products, and how differences in presentation can impact perception of our target markets. Proper positioning of our products and services will also enable us to not only create a unique image but also build our brand. We will position ourselves as a brand, which provides Indian Sweets and namkeens that are prepared on the basis of original Indian recipes and flavour. Our snacks will be positioned as the Taste of genuine Indian Flavours that are both healthy and cost effective. We would also project ourselves as a group who has a real passion for Indian Sweets and Namkeens. USP (Unique Selling Proposition): A unique selling proposition (USP) is a description of the qualities that are unique to a particular product or service and that differentiate it in a way which will make customers purchase it rather than its rivals. Uniqueness is rare, and coming up with a continuous stream of products with unique features is, in practice, extremely difficult. Philip Kotler says that the difficulty firms have in creating functional uniqueness has made them focus on having a unique emotional selling proposition (an ESP) instead of a USP.(Unique Selling proposition, 2009) Unless you can pinpoint what makes your business unique in a world of homogeneous competitors, you cannot target your sales efforts successfully.(uniquie selling proposition) Having a USP will dramatically improve the positioning and marketability of our company and products. Your USP is the force that drives your business and success. USP will allow us to build a lasting reputation while making sales. Our unique selling proposition will be as follow: - The best sweets and Namkeen from the states of India where it is having its specialty, with the unique taste. 61

66 Online marketing Strategy: When we talk about the types of retail business, we can classify it into three major categories: 1. Brick stores: Stores which provide their products and services at physical store locations only 2. Click stores: Theseare the retailers who provide their services on internet through their websites or blogs and do not have a physical store location. 3. Brick and click: These types of stores are the combination of both of the above mentioned types.these stores not only have a physical store to provide their products and services but also undertake selling activities online. Ours will be a brick and click store, wherein we will not only provide our products for retail selling at stores, but also take online orders for the same.internet marketing can attract more people to your website, increase customers for your business, and enhance branding of your company and products. (Quote from Wikipedia, the free encyclopedia) "Internet marketing, also referred to as online marketing or E-marketing, is the marketing of products or services over the Internet. The Internet has brought many unique benefits to marketing including low costs in distributing information and media to a global audience. The interactive nature of Internet marketing, both in terms of instant response and in eliciting response, is unique qualities of the medium. Internet marketing methods include search engine marketing, display advertising, marketing, affiliate marketing, interactive advertising, online reputation management and also Social Media Marketing Methods such as blog marketing, and viral marketing. An Internet marketing strategy includes all aspects of online advertising online activity that promotes a company online, including websites, blog sites, article and press releases, online market research, marketing, and advertising Internet Marketing is not just about having a website. Sure, having a website to convey your information about your business or service is important; however, just having an attractive website is not enough. Having a flashy website may appeal to some people, but not everyone is 62

67 impressed with flash. Most people want good relevant content explaining your opportunity.(meaning of Internet marketing, 2009) Main methods of marketing that we will opt for are as follows: We will create our website, blog, along with accounts in social networking sites such as Face book, twitter, Google +. Website: On our website, we will provide all the data relating to the products and services we offer. There will be a special segment wherein we will ask for testimonials, feedbacks and suggestions from our customers. The testimonials from our customers will be displayed in a separate section of our website, so that we gain the trust and confidence of prospective customers who visit our website. On our website we will also showcase the rich Indian culture of varied sweets and Namkeen of different regions of India, along with the original recipes for a few of them. We also plan to conduct a online section on website wherein our customers will be able to post pictures of their experience at our stores and with our products. We will also conduct a customer survey type of campaign wherein we will showcase the three probable verities or product that we plan to add and we would ask the visitors to provide their feedback on which of the three products they would like to see in our product line. This way whenever we want to add a new product to the target market the possibility of product failure will be very less. This would also encourage extensive participation from the customers and give them a feeling that we care about their likes and dislikes and that their opinion matters a lot to us. This will enable us to increase a loyal customer base for our products. Our website will also play an important role in getting online orders for our main offerings as well as the sample products. Blog, Facebook & Twitter: We all know that now days an individual spends at least one hour on social networking sites and internet blogs in a day. It has become a part of the daily routine of a common man. 63

68 We seek to take benefit from this situation, as this will not only be a cost effective mode of marketing for our product and brand but it will also enable us a larger scope of exposure to our target audience. We will have blog in the name of our brand wherein we will post different articles and recipes relating to popular Indian sweets and namkeens. We also intend to post the images of our products, retail shop and other such occasions that occur in our firm. As far as Facebook & twitter is concerned, we also plan to have accounts in both this social networking sites. Herein we plan to create different events and occasions for our customers. We also plan to have a monthly contest wherein our customers will have the opportunity to vote for the sweet and Namkeen of the month, this will encourage our customer base to try new varieties of products that we offer. On the other hand once a product is chose as the winner the customer who has tasted it will have a proud feeling, and this will also back up their good decision making in their minds. Apart from this the customers who have not yet tried the product will have a urge to taste the winner product. Through Facebook and twitter accounts we will be continuously interacting with our visitors giving and taking suggestions. SEO (Search Engine Optimization): With the help of search engine optimization or SEO, a small online business or trade can achieve better ranking in the most important search engines. Website owners have recognized the value of having their sites on top search engine results long before that made SEO a very big field in the world today. SEO definition stands for Search Engine Optimization. It is the use of methods and techniques to improve the visibility of a website. It uses natural means to achieve natural listings on search engines. The term also describes the design of the website, its menus, videos, images, contents and other elements that should be optimized to achieve exposure on search engines. If there is anything 64

69 that considers how search engine works, it s SEO. SEO also considers what people search with their actual search terms into search engines and which search engines are preferred by their targeted viewers.(what is seo?, 2007) SEO may target different kinds of search which includes local search, image search, academic search, new search and industry specific vertical search engines. These areas are targeted to give the website what is called web preference. With the help of SEO will we able to get more traffic on our website, blog, Facebook account, and twitter account. As discussed above we will be adding photos, videos and articles with tags and met tags that our target customer might type in while searching on net. Our keywords for SEO Tagging will be Indian sweets, Indian namkeens, Indian food, Indian mithaees, all our products name, Indian sweets and namkeen recipe, Best Indian Sweets and Namkeen In Bangladesh, Sweets and Namkeen competitions, Indian flavours and so on. All the technicalities will be taken care of by a SEO who will be appointed on project basis. We will make sure that all the terms and tags used in our website and other online marketing sources are updated and relate to our brand and offerings. We will make sure that people get talking about our brand and create as much as awareness and learning in our target market as possible. OUR PRICING STRATEGY We have analyzed the market and found that there are few competitors who are having good name in the Bangladesh market. We are trying to cater more market with our effective strategies. We have used the nine-price quality strategy for setting our price. Our price at initial level is not much high, so in our model it falls at medium level, and our quality of product is high. So our pricing strategy is high-value strategy, which will help us to attract people from all class. We also offer premium class sweets, and in near future we are planning to set all the range of sweets and namkeen. We have wide range of products in sweets and namkeen. If any customer is visiting our shop he will be having many options to buy in sweets as well as namkeen. We have 65

70 estimated the cost of each product and prepared cost sheet of it. Dhaka city is having good population and we are having very good chances of achieving success in this market. PRICING OBJECTIVES Profit maximization: We will try to maximize our profit by taking the cost and revenues of sweets and namkeen into consideration. We will be more focusing on how to control our each product s cost, cutting the cost and increasing the profit margin. This increase in profit margin would be seen in later days, because initially our fixed cost will be high. We can also pay good remuneration to our workers also if profit maximization is done effectively. Revenue maximization: As we are new in the Bangladesh market we will try to maximize our revenue as much as we could. At this part our focus would be on long term profit. We will try to lower our cost and try to expand our market share. We will be focusing on penetrating more and more in the city of Dhaka. Once if our market share is increased our revenue will also increase. Quality leadership: We have mainly focused on building up the best quality in our sweets and namkeen. The taste of our products is unique because we have selected the sweets and namkeen which are famous in 66

71 various parts of India. Each Indian state is followed by different culture and having different taste so we have picked up the best item from all such cultures of India and we have worked upon the quality so that we can gain good leadership in Bangladesh market in quality aspects. Survival: As we are new in the market and we are also not much familiar with the culture of Bangladesh we will try to sustain our business in the market. There are many competitors who may become barrier for us in the market so we have to compete with those competitors by our uniqueness of taste. Our each product is having unique taste, which will become our one of the strongest side to compete in the market. Bombaywala sweets is only offering Indian sweets in Bangladesh but very less variety is seen there whereas we have wide range of products with the best quality and less price. This would help us to survive in the market. NAME OF COMPANY: ROSH MILAN PUNCHLINE: - where Indian taste meets Bangladesh LOGO: 67

72 PACKAGING: POP 68

73 5M S OF ADVERTISING 1. MISSION OR SETTING THE ADVERTISING OBJECTIVES Advertising Objectives can be classified as to whether their aim is, as we are into the business of sweets and Namkeen our objectives are as follows: To inform: This aim of Advertising is generally true during the pioneering stage of a product category, where the objective is building a primary demand. Our objectives include: Making people aware about our sweets and Namkeen in Dhaka market Offering new flavours which will help us to spread positive word of mouth Informing the market about our best quality with less price Informing how our sweets and Namkeen are unique our available services at Dhaka shop Building our good brand image To persuade: Most advertisements are made with the aim of persuasion. Such advertisements aim at building selective brand. As our sweets and namkeen includes the Indian taste, which is famous across the world will help us to gain good customers. This will attract people to visit our shop atleast once and after which our best quality sweets and Namkeen will definitely make them our customer. To remind: Such advertisements are highly effective in the maturity stage of the product. The aim is to keep the consumer thinking about the product. When any customer will visit our shop we will offer varieties of sweets and Namkeen with the best quality and taste. This will help us to retain the customer who will visit once. 2. MONEY This M deals with deciding on the Advertising Budget Our advertising budget is allocated on the basis of: 69

74 Our investment Media used Specific geographic market areas, our location is Dhaka city We have prepared estimated cost sheets for each product which shows how much we will invest in the product. Sweets will be prepared at our shop while namkeens we are planning to import from India at the initial level. So accordingly we have set our advertising budget. As television advertisement cost very high we will not go for it at initial level. We will advertise our shop by hoardings at the places where public rush is very high, through newspaper advertisements. This will help us to build a good position in Dhaka which is our location of business. 3. MESSAGE GENERATION Message can be generated by talking to consumers, dealers, experts and competitors. Consumers are the major source of good ideas. Their feeling about the product, its strengths, and weaknesses gives enough information that could aid the Message generation process. Sweets and namkeen are usually liked by everyone, when any guest visits our home it is the tradition of offering them something to eat or drink. Usually Bangladeshi people are fond of sweets especially like rasgulla, chamcham, barfi etc. and we are offering these products with the best quality. So our message would be quality aspect as well as price aspect. As our price decided on each product is not much high, it falls at the medium level and on the other side we offers the best quality with the unique Indian taste. Our message would contain slice of life theme, where people are visiting their friends and relatives enjoying the special moments with them and having sweets and Namkeen of our shop. This will help us to attract more and more people on occasions also. 4. MEDIA The next M to be considered while making an Advertisement Program is the Media through which to communicate the Message generated during the previous stage. At initial stage our cost is very high so we will not go for television advertisements; we will be advertising our sweets and Namkeen through hoardings at the public places, newspaper advertisements, word of mouth 70

75 and POP. We have contacted agents who will help us to gain contacts in such advertising agencies from where we can place our hoardings at the best locations and for the newspaper ads we have contacted daily prothomalo, the famous local newspaper of Bangladesh. For POP we will be using our creativity to attract more and more customers. 5. MEASUREMENT Evaluating the effectiveness of the Advertisement Program is very important as it helps prevent further wastage of money and helps make corrections that are important for further advertisement campaigns. Researching the effectiveness of the advertisement is the most used method of evaluating the effectiveness of the Advertisement Program. Our media of advertisement is hoarding, newspaper ads and POP. For the hoarding ads the effectiveness will be measured in terms of visibility of the hoarding, how many times people are watching our ads. Newspaper ads are usually noticed by the reader when he is going through newspaper. The effectiveness can be measured by how many number of time the reader is paying attention towards the advertisement, here the page matter a lot because front page ad is likely to be noticed quickly. Even if newspaper is lying at home there are chances of getting noticed if the ad is placed at front page. We will also try to spread strong positive word of mouth, which will influence people to visit our shop atleast once. Word of mouthcan become our best tool of advertisement at Dhaka city. This city is having very good rush of people and a strong word of mouth in this city can prove to be the best one for us. BRAND NAMES We conducted brain storming session between our group and these many names were suggested by the group. As we are into business at Bangladesh we mainly focused on developing brand name in Bengali language so that we can attract all the local people of that country. The following are names suggested for the shop Brand names: 1) - swadvandari We didn t select this name because it refers to only one taste that is like treasure. 2) - Prolubdhokorswad 71

76 This name is not seen positively in Bangladesh, so we skipped this one. 3) - Baharros This name is good but this is not having much attractiveness so we skipped this. 4) - bharotiosubhus This name is already been used by some other shop, so to avoid copyright issue we didn t went for this name. 5) - desherkhaber This name seems boring and Bengali people don t pay much attention on such type of name shops. 6) Rosh Milan After having a long brain storming session among the group, finally the Rosh milan name was selected. Meaning of this name is the integration of flavours. We have chosen our name in Bengali language so that we can easily attract the people of Bangladesh. ADVERTISEMENT RATES AT BANGLADESH TABLE 7.1: TELEVISION TABLE 7.2 NEWSPAPERS: 72

77 LIST OF LEADING ADVERTISING AGENCIES AT DHAKA CITY»Adcomm Ltd. House 7A, Road 41, Gulshan 2, Dhaka 1212 Tel : , , Fax : contact@adcomad.com»asiatic Marketing Communication Ltd AsiaticCenter, House 63, Road 7B, Block H, Banani, Dhaka-1213, Tel : , , Fax : »Benchmark Limited House 69 (1st Floor), Road 27, Gulshan-1, Dhaka-1212 Tel : , Fax : info@benchmark-bd.com»beach Advertising 52/5, New Eskaton, Dhaka Tel : , , Fax : »Bitopi Advertising 822/3, Shewrapara, Mirpur, Dhaka Tel: , , 73

78 Ltd. House # 10 A, Road # 25 A, Block # A, Banani, Dhaka-1213 Tel : , , , Fax : mail@adexpressions.com»grey Advertising Bangladesh Ltd. HB Tower (4th Floor), House 1A, Road 23, Gulshan-1 Dhaka-1212,, Tel: , , Fax : , mail@greybd.com»interface Communications City Heart (9th Floor), 67, NayaPaltan, Dhaka-1000 Tel : , , Fax : iface@bangla.net»interspeed Advertising Ek House 4 D(NEB) (2nd Flr), Road 73 Gulshan 2, Dhaka, Tel : , »Mattra A-6 Aziz Cooperative Housing Complex 72 PuranaPaltan Line, Dhaka, Tel: , , Fax : , mattra@bdcom.com»media Comm Ltd Rupayan Centre (10th Floor), 72 Mohakhali C/A., Dhaka Tel: (9 lines), ajoy@mediacombd.com»neptune Advertising 74

79 House 255 (3rd Flr.), Road 10 A, Dhanmondi, Dhaka Tel : , , Fax : nep.ad@bdcom.com»nimbus Advertising 105/A, BaraMoghbazar, Dhaka-1217 Tel: , , , Fax: nimbusad@rediffmail.com»nishu Advertising Ltd City Heart (6th Floor), 67, NayaPaltan, Dhaka Tel: , Fax : , nishuad@dhaka.net»popular Advertising Ltd 78, MotijheelC/A., (2nd Floor), Dhaka Tel : , , , Fax: »Prism 89/2, West Panthapath, Haque Chamber, (7th Floor) (Beside Shornorita Hospital), Dhaka, Tel: , , Fax: , prism@bdonline.com»protishabda House 77, Road 12, Block E, Banani, Dhaka Tel: , , , Fax : protishabda@bdonline.com»roop Communications 24A Bijoy Nagar, Suit-9J2, Level-10, Dhaka-1000 Tel: , , Fax: roop@bol-online.com»step Media Ltd. 24/A Bijoy Nagar, Sky Lark point (6-7th Floor), Dhaka Tel : , , 75

80 Fax : info@stepmedialtd.com LIST OF BILL BOARD COMPANIES AT DHAKA CITY Digital Technology Dhaka House 8, Road 2 Mirpur Insert Graphics Ltd. 52/1 New Eskaton Road, Dhaka (Zip/postal:1000) Solar Bangladesh Dhaka Road 2, House 8 Mirpur 1. Dhaka LOCATIONS SELECTED FOR BILLBOARD ADVERTIDEMENTS AT DHAKA CITY 76

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83 Conclusion The secondary data analysis indicated that Namkeen and sweets market is expanding due to changing eating habits. The industry itself is diversifying to offer a variety of healthier snack options. The SWOT analysis of sweets and Namkeen industry suggested there isa great scope of business, provided some new varieties are introduced with some value addition to the existing products. For e.g. both India and Bangladesh have similar culture and similar preferences for sweets. If Rajasthani sweet Ghevar is offered to Bangladeshis there are brighter chances of acceptance by Bangladeshi Promoters selected Dhaka for the launch ofrosh Milanbecause of its diversified culture and rich heritage. However oncerosh Milangets success in Dhaka the promoters plan to open exclusive outlets in Chittagong and Mirpur city also, but for the samein depth consumer surveywill be carried out which will reveal important cross cultural dimensions, taste and preferences related to sweets and Namkeen. Promoters have included all the details regarding how they will invest, what will be their location at Bangladesh, their marketing strategies, and financial statements. In the introductory phase ladoo,bhavanagrigathiya, Ghever, Phetha, Penda, Rasgulla, Halvaetc will be launched, but promoter analysis will carried out by daily sales basis and market survey.along with the customer satisfaction survey carried out to add or remove sweets and Namkeen for future purpose. Promoters will focus on newspaper advertisement and hoardings for building brand awareness about Rosh Milanin selected cities of Bangladesh. The Bangladeshi government has implemented a number of policy reforms designed to create a more open and competitive climate for private investment, both foreign 79

84 and local. Bangladesh has been pursuing a liberal trade policy in keeping with global market economy. To this end, Government in the light of limited productive policy to the extent possible for the sake of health, security and religious considerations adopted the policy for the further liberalizing the export and import regimes including reduction of tariff rates. This indicates healthy business relationship betweenindia and Bangladesh especially in processed food,snacks and sweets industry 80

85 CHAPTER 5 DYES AND CHEMICAL INDUSTRY OF BANGLADESH Bangladesh majorly imports dyes and chemicals from India India and Gujarat has the great potential to export good quality dyes and chemicals to Bangladesh. Technology is the key to success in the dyes and chemical industry. The Government must aim to develop processing capacity and encourage technology up gradation funds. Gujarat government is already helping the people by giving subsidies. With the help of Vibrant Gujarat Summit Gujarat Government is making business tie ups with various countries. In the 2013 summit Gujarat Government should eye on Bangladesh because there is great potential market for Indian dyes and chemicals in Bangladesh This will give more opportunities to the existing players and encourage new players to start their venture in the State. The State should, thus focus on building retail opportunities in dyes and chemicals to meet the growing demand in the country and abroad. Gujarat has large availability of both natural and man-made chemicals as basic raw materials. Thus, the State must leverage on available resources and should focus on expanding the portfolio dyes and chemicals Increasing exports from Gujarat and India can help enhance the Indian Economy. Present Trade Relations and Business Volume of different products with India India was the first country to recognize Bangladesh as a separate and independent state, doing so on the 6th of December 1971, ten days before Bangladesh officially declared its independence. India fought alongside the Bengalis to defeat West Pakistan in Bangladesh's relationship with India has been a difficult in terms of irrigation and land border disputes post However, Bangladesh has enjoyed favourable relationship with India during governments formed by the Swami League in 1972 and

86 If we look back over these last 37 years, we can only conclude that India Bangladesh relations have been a source of disappointment and frustration for the people of both countries. Some Companies of India and Bangladesh which are The Part of Import and Export of Dyes and Chemicals 1. ANAND INTERNATIONAL: We take liberty to introduce ourselves as one of the largest manufacturer and recognized exporter of AZO DYES AND TEXTILE AUXILIARIES in India. We are also certified ISO 9001:2008 Company by TUV Germany and are also bestowed with National award for outstanding export performance by Chemexcil under Ministry of Commerce India. All our products are AZO FREE, ECO FRIENDLY and do not contain any amines banned as per German specification. We are also known suppliers to number of multinationals. PRODUCTS: Full series of REACTIVE DYES Samples and brief literature of all the above products could be sent on demand. You can visit our website to know more about our company. 2. Colormax is a fast growing 12 year old wholesale exporter engaged in textiles and dyestuffs. We provide a one stop solution for all requirements in dyes - textile and nontextile dealing in the entire range of reactive, acid, direct, solvent, disperse, nap hols, bases, basic, vat, sulphur, mordant dyes & pigments available from India. We are a major supplier to user industries in India, serving various sectors like textile, leather, paints, detergents, etc. Our export division is active in serving a ever growing clientele in 34 countries globally. We also offer high quality fabric to clothing manufacturers worldwide. Our facilities include a modern quality control laboratory enabling us to analyse samples of dyes & chemicals on various substrates and QC for fabrics. We offer mainly cotton fabrics in plaid, chambray, stripe, dobby, etc. as per customer specifications. All products are as free and compliant with European and US regulations. Colour max is a one stop solution for dyestuff 3. Evergreen Industries has been in the field of manufacturing reactive dyes since last 35 years. We are specialist for manufacturing and supplying following reactive dyes 1) Everon HD - For deep shades and Yarn. 2) Everon P - Specially designed for printing application. 3) Everon SF - For making ink jet or printing inks because of our very high purity, solubility and minimal salt contents. 4) Everon EL For Light to Medium Shades 82

87 and has characteristics equivalent to Clariant s CL. We also offer all reactive dyes such as HE, ME, C and H with R.O strength. Our monthly production is around 100 metric tons. 4. KIRI Industries Ltd. Reactive dyes, Acid dyes 5. M/S A.Kumar& Co. We represent for overseas Manufacturers/Exporters/Importers to source buyers and sellers for their products/requirements in India. 6. Protexcheme Ltd. Bangladesh 7. Anchor Chemicals Industries India 8. Ganchi Dyes India 9. J K Colors India Duty structure imposed by the Indian authority on the products from Bangladesh is complex and difficult to interpret as the duty varies not only from category to category but also differs from product to product belonging to the similar category. In some cases, basic duty may be nil but other forms of duty, in aggregation, may ultimately precipitate to a substantial figure which is at all not encouraging for exports from Bangladesh. The following tables indicate different type of duties one has to pay to export his/her products from Bangladesh to India The Chemical Industry is one of the largest and oldest industries. It is crucial for the economic development of any country, which provides products and enabling technical solutions to all sectors of the economy. Global chemical industry has been growing by 3.6% and is currently valued at $3.4 trillion. There has been notable transition in the global arena during the last 2-3 decades in chemical industries with a shifting in production from Europe and USA to Asia especially in China, India, Taiwan, Thailand and Indonesia. India and China are now preferred sources for supply of chemicals and related products to the global market. The Indian Chemical Industry is growing annually by 3% with global chemical industry; hence India is an emerging focus destination for 83

88 Chemical Industry. The global chemical companies want to join hands with Indian Business Community. The industry with a large domestic demand potential as compared to other countries, contributes more than 3% of the overall GDP and it helps the overall economic growth and net foreign exchange earnings of the Country. If Indian chemical industries effectively leverage its strengths and manage challenges, adopt their strategies with advanced technology, enhance research capabilities, innovate through backward and forward linkages and utilize production capacities to ensure reduction in dependence on imports, then it can grow at 11% to reach size of $224 billion by Manufacturing and supplying: vat micro disperses quality. Reactive (hot, cold, HE, ME, V.S. based), Acid, Direct, Sulphur dyes, vat Powder, Vat Paste, Pigment powder, Pigment Paste, Solvent dyes, Nap hols and Fast bases, Food dyes and colours, fast salt colours, chemicals used in food and hospitality industries such as bleaches, cleaners, sanitizers. Chemicals have become a part of our life for sustaining many of our day-to-day activities, preventing and controlling diseases, and increasing agricultural productivity etc. An estimation of one thousand new chemicals enters in the market every year, and about chemical substances are used on a global scale. These chemicals are mostly found as mixtures in commercial products. Over one million such products or trade names are available. The chemical industrial sector is highly heterogeneous encompassing many sectors like organic, inorganic chemicals, dyestuffs, paints, pesticides, specialty chemicals, etc. Some of the prominent individual chemical industries are caustic soda, soda ash, carbon black, phenol, acetic acid, methanol and azo dyes. Chemical manufacturing sector in India is well established and has recorded a steady growth in the overall Indian industrial scenario. The Chemical and allied industries have been amongst the faster growing segments of the Indian industry. The risks associated with the chemical industry are commensurate with their rapid growth and development. Apart from their utility, chemicals have their own inherent properties and hazards. Some of them can be flammable, explosive, toxic or corrosive etc. The whole lifecycle of a chemical should be considered when assessing its dangers and benefits. Though many of chemical accidents have a limited effect, occasionally there are disasters like the one in Bhopal, 84

89 India, in 1984, where lakhs of people were affected and LPG explosion in refinery where huge property damage in addition to 60 deaths was experienced. Therefore chemicals have the potential to affect the nearby environment also. ****************** 85

90 CHAPTER 6 ECONOMIC OVERVIEW & POTENTIAL MAPPING FOR DAIRY INDUSTRY IN BANGLADESH INDIA-BANGLADESH TRADE RELATION Introduction India and Bangladesh share more than 4096 km contiguous border. Both the countries can benefit immensely by enhancing bilateral trade and investment. Being one of the major players in South Asia, both India and Bangladesh greatly impact the socio-political and economic demography of the region and relations between them influences the fate of South Asia. Bilateral Trade India's trade with Bangladesh has witnessed rapid growth in recent years. Currently, China is the largest trading partner of Bangladesh. However, India is likely to emerge as 3 the largest trading partner in the coming years India-Bangladesh: An Emerging Economic Relationship A study carried out by the World Bank finds that Bangladesh and India would both gain by opening up their markets to each other. Indian investments in Bangladesh will be very important for the latter to ramp up its exports, including products that would broaden trade complementarily and enhance intra - industry trade, Bangladesh & India s performance in trading across border Making trade between countries easier has become increasingly important for business in today's globalized world. Excessive document requirements, burdensome customs procedures, inefficient port operations and inadequate infrastructure all lead to extra costs and delays for exporters and importers, stifling trade potential. 86

91 Why Bangladesh? JP Morgan has listed Bangladesh among its Frontier Five emerging economies, in which it is worth investing. Goldman Sachs included Bangladesh in the Next emerging countries to watch following BRIC countries. A McKinsey survey identified Bangladesh as a Next hot spot destination for sourcing Ready Made Garments. Bangladesh FDI Bangladesh in recent years has been trying to woo investors across the globe. In order to achieve its goal of becoming a middle income country, the current savings and investments rate need to grow at a much higher rate. For FY2012, gross domestic investments as a percentage of GDP were 25.5 percent. To increase the GDP growth rate to 10 percent by 2021, investment rates need to increase to 38 percent level. India s investments in Bangladesh India and Bangladesh signed the treaty on bilateral investment and protection to strengthen the framework for trade and investment between the two countries which has encouraged several Indian Investments and Joint Venture projects in Bangladesh. PLANNING DAIRY PROGRAMS IN ASIA Regional Dairy Programs A common problem with many regional dairy development programs is the desire to introduce the stock long before the infrastructure has been fully prepared to support them. Importing pregnant dairy heifers provides a small window of opportunity for their eventual calving and milk production, but all too often this window is too small to prepare for their change to a lactating cow, requiring optimum feeding and herd management to settle into their new, often more hostile, environment. A Greenfield or new farm development site Converting a greenfield site into a profitable and sustainable dairy farm also requires careful planning. The steps to take are similar to those in Figure 1 except that several of them would be 87

92 taken for granted. For example, one would assume that there is an existing market and milk processors (Steps 1 and 2) or at least one that will definitely develop in time to utilise the raw milk from the new farm. Ensuring a sustainable feed supply (Step 3) and suitable staff (both managerial and general farm staff, Steps 4 and 5) are essential prior to introducing the stock. Hitting the white wall The above highlights a classic scenario where new farmers enjoy a rapidly increasing cash flow when all cows calf down over a short time frame. The farmer often then increases his cash input, sometimes into lower priority investments, neglecting the most important ones, such as maintaining a high quality (hence high intake) ration as cows approach mid and late lactation and ensuring optimum reproductive performance (using fertile bulls rather than depending entirely on artificial insemination and ensuring all field staff develop skills in heat detection). Persistency of milk production Trouble shooting an existing dairy farm This can cause the biggest problem because errors in design and construction of facilities, shortfalls in supplies of feeds, particularly forages, and inadequacies in managing the stock may have already introduced constraints on potential cow and farm performance. We will discuss this using a theoretical case study based on an actual situation. DEVELOPMENT OF DAIRY HUBS IN BANGLADESH Background There are approximately 4.2 million dairy cows and approximately 1.4 million dairy farmers in Bangladesh. The average milk production is around 3.6 liters per day per cow. The milk quality in Bangladesh can be considered poor. So, PRAN Dairy Ltd is investing in dairy hubs, through which the company can get access to more and better milk for processing. As part of the development of a nationwide network of dairy hubs, PRAN is also facilitating training of farmers and experts to improve the milk supply 88

93 The Dairy Hub Model A dairy hub is a milk collection centre and collection network combining collection of small holder milk with services and training for the farmers. A dairy hub consists of a main milk collection centre and several village milk collection points. Farmers are linked to dairy hub. The dairy processor collects the milk from the hub and takes it to a dairy for processing. Within the same area of the main milk collection centre, the main operational office and training centre for the dairy hub are located. The dairy hub also provides numerous other services Key infrastructure to facilitate dairy farming Training programmes for feeding practices Animal care, better health, hygiene and modern farming practices. The educational programme is a key part of the Dairy Hub model Dairy Hub in Bangladesh Dairy hub implementation start-up 1. Increase milk production and collection to reach milk volumes that make the dairy hub investment financially viable. 2. Improve profitability of the small dairy farmers through nutritional management and cows comfort. 3. Improve milk quality INDIAN DAIRY INDUSTRY Overview India is the world s largest producer of dairy products by volume. country accounts for more than 13% of world s total milk production and is also the world s largest consumer of dairy products, consuming almost all of its own milk production. Milk production in India has developed significantly in the past few decades from a low volume of 17 million tons in 1951 to 110 million tons in

94 Trade Currently, the Indian dairy market is growing at an annual rate of 7%. Production Policy & Regulation of Dairy Products Industry Structure While it is estimated that around 40 to 50 percent of Indian dairy farmers are employed by the organized sector, approximately 65 percent of milk in India is consumed (in fluid or processed forms) on farm or by the unorganized sector including local milk vendors, wholesalers, retailers, and the producers themselves. Of the total milk distributed jointly by both the organized and unorganized sector, around 46 percent of the milk is consumed in fluid form and the rest is processed into various milk products such as butter, yogurt and milk powder. Production The Indian dairy sector is different from other dairy producing countries as India places its emphasis on both cattle and buffalo milk. Out of all bovine population in India, 40 percent are indigenous cows, 46 percent are buffaloes and 14 percent are imported European or North American cattle crossbreeds. 90

95 Consumption growth and industry response Despite its huge production volume, India nevertheless faces a milk supply gap due to increasing demand from a growing middle class population. Estimation suggests that Indian dairy production is growing at a rate of about four percent per year, yet consumer demand is growing at approximately double that rate. Livestock Population India is rich in its livestock wealth. It accounts for nearly 15.8% of the world cattle population, more than half of the world buffalo population. Production of Milk and Milk Products SWOT Analysis Strengths Improved purchasing power availability of milk processing Improved transportation facilities Country s vast natural resources Large number of dairy plants (252) Weaknesses Tropical climate conditions Seasonal fluctuations in milk production pattern. Species-wise variation Lack of marketing avenues Threats Introduction of foreign products in Indian market Poor microbiological quality of milk Deficiency of molasses The liberalization of the Dairy Industry is likely to be exploited by multinationals. They will be interested in manufacturing milk products which yield high profits. 91

96 Opportunities Great improved export potential Established and expanding market Increasing demand for fluid By product Utilization Employment generation Liberalized policies in dairy sector Availability of large resources CONTRIBUTION OF DAIRY INDUSTRY IN DEVELOPMENT OF BANGLADESH & INDIA (GDP) Introduction of GDP What is GDP? Gross Domestic Product or GDP represents the economic health of a country. It presents a sum of a country's production which consists of all purchases of goods and services produced by a country and services used by individuals, firms, foreigners and the governing bodies. Dairy Industry s Contribution in Bangladesh-GDP The first dairy plant was set up in 1946 by the National Nutrients Company in the then Indian subcontinent, at Lahirmonhanpur, now in Sirajganj district (northern Bangladesh). Following the partition of India in 1947, the Eastern Milk Products Company took over through an exchange of properties. Milk and dairy products marketing eventually started in 1952 under the brand name Milk Vita in the then East Pakistan. Dairy Industry s Contribution in India-GDP India has the credit of being the largest producer as well as the biggest consumer of milk in the world. It also has the world s largest dairy herd (com prised of cows and buffalos). In , livestock generated output worth INR 2,075 billion (at prices) which comprised 4% of the GDP and 26% of the agricultural GDP. India s milk production accounts for 16% of total global output. 92

97 IMPORT & EXPORT Import & Export Policy of India Import Policy The economic needs of the country, effective use of foreign exchange and industrial as well as consumer requirements are the basic factors which influence India's import policy. On the import side the policy has three objectives: to make necessary imported goods more easily available, including essential capital goods for modernizing and upgrading technology; to simplify and streamline procedures for import licensing; to promote efficient import substitution and selfreliance. Export Policy Exports are the major focus of India's trade policy and a thrust area is exports involving higher value additions. Most items can be freely exported from India. A few items are subject to export control in order to avoid shortages in the domestic market, to conserve national resources and to protect the environment. IMPORT & EXPORT POLICY OF BANGLADESH Imports On the import side, too, the share of manufacturing increased substantially. In 2002, its share in total merchandise imports stood at 69 per cent, up from 56 per cent in Food imports remained significant, at 16 per cent in 2002, compared with 19 per cent in 1990, reflecting a continuing gap in domestic production and consumption. Food shortages have been a major problem in Bangladesh, although over the last two decades there has been a significant increase in domestic production. Given its low agricultural productivity, Bangladesh needs to bridge the food gap and reduce its import dependence. As a net food importing country, it has continued interest and concerns regarding the WTO negotiations on agriculture. 93

98 Exports The external trade is currently dominated by exports and imports of manufactures. This is vastly different from the situation prevailing in the early 1980s when jute and jute products were the principal export items. In 2003, manufacturing accounted for 92 per cent of total merchandise exports, up from 77 per cent in On the other hand, the share of food fell from 14 per cent in 1990 to 7 per cent in 2002, and that of agricultural raw materials from 7 per cent to 1 per cent. Among exports of manufactures, Export Policy of West-Bengal Export Policy For West Bengal Export-Import Policy is a subject in the domain of Government of India. It lays out specific provisions that are meant to promote exports from the States, and provide certain benefits to which exporters are entitled. At the same time, States can play a complementary role to the national policy. While the policy as designed by the Ministry of Commerce, Dairy Products Import & Export between India & Bangladesh Indian dairy product is becoming viable in world market once again. Global milk powder price has hit a 15-month high in November 2009 making domestic products exportable. High global price has become a dampener for import of milk powder making domestic industry outlook that much positive Indian Dairy Industry Outlook Positive Increasing global price and declining production makes Indian dairy industry outlook positive. On one hand, industry feels safe from large scale import, as has been happening throughout On the other hand, high global price has made Indian dairy products viable for export. OPPORTUNITIES & CHALLENGES FOR DAIRY INDUSTRY IN BANGLADESH Introduction The economy of Bangladesh is based primarily on agriculture, and livestock is an essential component of the rural economy and the livelihood of the subsistence farmers. The country has a sub-tropical monsoon climate and 84.4% of its population is living in rural areas. The demand 94

99 for milk and milk products is increasing because of the rapid increase in population, the spread of education and growing nutrition awareness. Present Status & Potential for Dairy Industry Development Bangladesh is predominantly an agrarian economy with 84.8% of its population living in villages and depending on agriculture and allied activities for their livelihood (Bureau of Statistics 1992). Per capita Gross National Product is US $ 240 (World Bank, 1996). The total labor force is estimated at 32.5 million of which 21 million are women (Harun-Ar-Rashid, 1989:45). About 61% of the labor force is engaged in agriculture (Bureau of Statistics 1992). The agriculture sector cannot absorb surplus manpower. Market Failures & Government Failures in Dairy Production and Marketing Market failure is the failure of a more or less idealized system of price-market institutions to sustain desirable activities or to stop undesirable activities (Bator, 1958). On the other hand, (Arrow, 1971) gives market failure a wider meaning the failure of markets to exist. Information Problems The most important input to production now is knowledge, rather than capital and labor as in an industrial society, or land, as in an agricultural society. Information is not the same as knowledge. Information is the medium in which knowledge is processed, Lack of Disease/Parasites Control (Externalities) Externalities are costs or benefits, which individual decision-makers impose or bestow upon others by their actions but for which they suffer no penalty and/or receive no reward. In consequence, decision-makers exclude consideration of these externalities when arriving at decisions. The existence of externalities in cattle disease control means that the independent actions of individual farmers undertaking control will not except by great coincidence, correspond to what would be considered socially desirable. Shortage of Quality Breeds (Incomplete Market) Shortage of Cattle Feed (Incomplete Market) Lack of Research and Training (Public Goods) Lack of National Milk Grid and Processing Plants (Public Goods) Inefficient Marketing 95

100 Opportunities & Scope This shows that there is a vast demand for milk and a great employment opportunity in the country. Domestic production of milk constitutes only 13% of consumption. The bulk of milk production in Bangladesh is in the hands of a large number of small producers scattered all over the country. To most of them, it is a supplementary or complementary enterprise only. Therefore, except for a few commercialized dairy farms in the urban areas, there still exists vast scope for improving the lot of the country s rural folk by commercializing the dairy enterprise. BUSINESS PLAN Feasibility of Business STP Analysis Segment Target Positioning People who need dairy products and other day to day food products. Lower,Middle and upper middle class families As a foods and dairy brand that has products of high quality at affordable price, with fair returns to the producers Product Portfolio of our Company Brands Bread Spreads Milk Drink Powder Milk Fresh Milk Health Drink Desserts 96

101 SWOT Analysis of Indian Dairy Industry. Strengths: Demand profile: Absolutely optimistic. Margins: Quite reasonable, even on packed liquid milk. Flexibility of product mix: Tremendous. With balancing equipment, you can keep on adding to your product line. Availability of raw material: Abundant. Presently, more than 80 percent of milk produced is flowing into the unorganized sector, which requires proper channelization. Technical manpower: Professionally trained, technical human resource pool, built over last 30 years. Weakness: Parishability: Pasteurization has overcome this weakness partially. UHT gives milk long life. Surely, many new processes will follow to improve milk quality and extend its shelf life. Lack of Control over yield: Theoretically, there is little control over milk yield. However, increased awareness of developments like embryo transplant, artificial insemination and properly managed animal husbandry practices, coupled with higher income to rural milk producers should automatically lead to improvement in milk yields. Logistics of Procurement: Woes of bad roads and inadequate transportation facility make milk procurement problematic. But with the overall economic improvement in India, these problems would also get solved. Problematic distribution: Yes, all is not well with distribution. But then if ice creams can be sold virtually at every nook and corner, why can t we sell other dairy products too? Moreover, it is only a matter of time before we see the emergence of a cold chain linking the producer to the refrigerator at the consumer s home! Competition: With so many newcomers entering this industry, competition is becoming tougher day by day. But then competition has to be faced as a ground reality. The market is large enough for many to carve out their niche. 97

102 Opportunities: Value addition: There is a phenomenal scope for innovations in product development, packaging and presentation Given below are potential areas of value addition: Steps should be taken to introduce value-added products like shrikhand, ice creams, paneer, khoa, flavored Milk, dairy sweets, etc. This will lead to a greater presence and flexibility in the market place along with Opportunities in the field of brand building. Addition of cultured products like yoghurt and cheese lend further strength - both in terms of utilization of Resources and presence in the market place. A lateral view opens up opportunities in milk proteins through casein, caseinates and other dietary proteins, further opening up export opportunities A lateral view opens up opportunities in milk proteins through casein, caseinates and other dietary proteins, further opening up export opportunities Yet another aspect can be the addition of infant foods, geriatric foods and nutritionals Threats: Milk vendors, the un-organized sector: Today milk vendors are occupying the pride of place in the industry. Organized dissemination of information about the harm that they are doing to producers and consumers should see a steady decline in their importance. The study of this SWOT analysis shows that the strengths and opportunities far outweigh weaknesses and threats. Strengths and opportunities are fundamental and weaknesses and threats are transitory. Any investment idea can do well only when you have three essential ingredients: entrepreneurship (the ability to take risks), innovative approach (in product lines and marketing) and values (of quality/ethics). The Indian dairy industry, following its delicensing, has been attracting a large number of entrepreneurs. Their success in dairying depends on factors such as an efficient yet economical procurement network, hygienic and cost-effective processing facilities and innovativeness in the market place. All that needs to be done is: to innovate, convert products into commercially exploitable ideas. All the time keep reminding yourself: 98

103 Benjamin Franklin discovered electricity, but it was the man who invented the meter that really made the money! Raising of Funds Introduction The fund rising is first thing to do after the planning of a business. So, we are get the fund for the business from different sources. District cooperative Banks Venture capital fund- Loan scheme to purchase Dairy cattle -up to 3 lakhs consisting finance for Milking machine( Rs- 70,00/- & Chaff cutter Rs 15,000/-).Own investment 10% of total project cost, Revolving fund By NABARD (50% of total project cost -Intrestfree) Interest by Bank 40% of total investment. Period of recovery - 7 years - Per month interest on 40% bank loan (13% for own or 10.5% for society). Regular filling of interest and capital will have benefit of 50% subsidy by NABARD on submitted interest cost. Doodh Ganga Yojana Dairy Loan Scheme State Bank of India Dairy Plus Scheme For Financing Dairy Units PURPOSE For construction of shed, purchase of milch animals, milking machine, chaff cutter or any other equipment required for the purpose. 99

104 Company Information Business Location We have chosen area of eastern Murshidabad of west Bengal state as our business set up where we would set up plant and will do our business by exporting dairy products to Bangladesh. Plant Setup Equipments Cream Separators (Capacity up to 1500 liter/hr.) Fat Testing Machines Valona machines (Capacity 200 ltr/hr.) Milk fat analysers, Packaging machine Boilers Availability of Resources The state of West Bengal offers extensive scope in the area of processed milk products as a major part of the demand for value-added milk products is presently met by imports from other States. This leaves enough room for investors to invest in value added dairy products in the state as compared to its counterparts in other states of India. Mushidabad has great room for investment. 100

105 Supply Chain Management What is Supply Chain Management (SCM)? Global markets are expanding beyond borders and re-defining the way demand and supplies are managed. Global companies are driven by markets across continents. In order to keep the cost of manufacturing down, they are forced to keep looking to set up production centers where cost of raw materials and labor is cheap. Sourcing of raw materials and vendors to supply the right quality, quantity and at right price calls for dynamic procurement strategy spanning across countries. List of Products Cow Milk Got Milk Buffalo Milk Butter Milk Dahi Penda Anjir role Paneer Cheese Kaju-Katri Flavored Ice-Cream Milkey s Chocobar Milkey s Milk shake Milkey s Special Tea Milkey s Special Cofee Milkey s Mango-Dolly Milkey s Thandai Mango Pulp Malai 101

106 Projected Cost Plant Capacity: The production basis for a typical tiny unit would be as under: Working hours/day : 8 (1 shift) Working days in a year : 365 Production capacity : Processing of 1500 Litres Milk per day. Milk in pouch : 1000 ltrs/day Cream : 100 Kg. per day.(20% yield) Raw Material: The major raw materials and consumables required for production of pasteurized packaged milk where the by-product is cream are raw milk collected from the local and nearby dairy farms in cans. Machinery: Milk cans, storage tanks, homogenizer, refrigeration plant, filtration plant, pasteurizer, emulsifier, cream separator, pouch packing machine, boiler etc. Total Capital Requirement: Projected Cost Land Rented Building Rented Plant and Equipment Cream Separators (Capacity up to 1500 liter/hr.) Fat Testing Machines Valona machines (Capacity 200 ltr/hr.) Milk fat analysers, Packaging machine Boilers

107 Auxiliary equipments Equipment for processing Equipment for storage Instant Milk Chilling Unit Butter Churner Ghee Clarifier Total Furniture Conclusion We would like to conclude that As we know that Bangladesh is under-developed country, so there are very wide opportunities for the business, Specifically we compare the Growth of Bangladesh with other country and we come to know that Bangladesh is at very bottom stage in comparison. There are so many loop holes in the system of Bangladesh which needs to be improve, as there is not a single country in this world which having perfect system but ultimately its depend on the political system of the country We are concerning with the Dairy Industry in Bangladesh, we observe that Development of Dairy industry is very less in Bangladesh as compare to many country, but we seen that since last many years this sector is continuously improving, and only because of this reason we choose this industry. As we found that Government of Bangladesh always giving high importance to importing from other countries, the reason is that Bangladesh is under develop country and not having proper resources and skilled labor, so we found one small village in State of West-Bengal (India) which is very near to Bangladesh and we starting to produce out products there and then we exporting to Bangladesh, as here our Transportation cost is not much increasing because of very less distance and due to this we gaining so many advantages. 103

108 There are so many challenges to start new business and especially when your target market is cross border Population, but as we know that without challenge s you cannot succeed, as there are very less competitor whose apply this ideology, so we are the unique kind of setup. There is very vast scope for Dairy Industry in Bangladesh *********** 104

109 CHAPTER 7 REAL ESTATE INDUSTRY IN BANGLADESH Like any other country in the world, the housing sector plays vital roles both in the context of the economy of Bangladesh and serving the fundamental human right of shelter. Apart from providing physical shelter, housing may have significant impact on the lives of the dwellers in terms of skills enhancement, income generation, increased security, health, self-confidence and human dignity. Bangladesh, like many other developing countries, faces an acute shortage of affordable housing both in the urban and rural areas. Moreover, housing affordability is being eroded by poor land administration policies, which have resulted in very high land prices that make urban housing prohibitive for lowerincome groups. Also, there is no active secondary market for real estate, mainly because of the high transfer taxes and an uninterrupted long-term increase in land prices. In spite of all these, this sector has experienced considerable growth in past few decades. With a rising population and increasing housing demand, apartment culture has grown up in Dhaka sharply. Apartments were first introduced by the formal private developers in early 80s to the housing history of Dhaka. It first appeared in Dhaka near Central Road and subsequently the city experienced a boom in apartment development in all residential areas including Paribagh, Maghbazar, Siddeshwari, Shantinagar, Dhanmondi, Mirpur, Banani, old DOHS, new DOHS, Gulshan and Baridhara, to name just a few. In line with this, house rent in Dhaka increased by 250 percent between 1990 and During the last decade, the total volume of Real Estate, Renting and Business service sector increased every year which implies a positive growth in the sector every year. But, compared to overall GDP growth, this sector expanded at a slower rate. That is why in overall GDP the contribution of this sector has a downward trend. The overall GDP contribution of the sector was 7.02% in In a crude measure, the total volume of the sector was approximately crore BDT in

110 The growth in this industry also facilitated a fast growth in many linkage industries like glass and glass products industry, brick industry, cement industry, ceramic industry, iron and steel industry etc over the last decade. Such consistent growth in the real estate sector is mainly due to a consistent demand at the consumer end. Ambitious aspirations for development. Looking ahead, Bangladesh has an opportunity to accelerate growth by taking advantage of its low labour costs relative to other Asian producers. However, the country will need to come to grips with the effects of weak governance, including unchecked urban congestion, insufficient planning and underinvestment in basic infrastructure. Annual growth of around 8 percent will be needed for the country to achieve its ambitious aspirations of reaching middle-income status and reducing poverty from 40 percent to 15 percent of the population by Past performance has been positive, but a significantly higher growth rate in future will require the country to address persistent governance challenges that undermine the effectiveness of the public sector and create disincentives for private sector initiatives. Strategic objectives of the CAS. The Country Assistance Strategy (CAS) for FY11-14 will support Bangladesh s ambitions by contributing to accelerated, sustainable and inclusive growth, underpinned by stronger governance at central and local levels. Accelerated growth. Massive infrastructure investment and a more conducive business environment are needed--even to sustain recent levels of private sector growth. The Bank Group will increasingly invest in transport (including logistics and ports) and power infrastructure that can overcome severe infrastructure deficits, transform lagging areas of the country, create agglomeration economies in urban areas and foster broader regional networks. Investment will be accompanied by support for reforms to strengthen sector governance, financial sustainability and private sector participation in infrastructure provision and maintenance. More generally, the Bank Group will continue to provide strong support for investment climate reform, building on recent progress in this area. 106

111 The strategic objective to accelerate growth under this CAS is defined as: increasing transformative investments and enhancing the business environment. Among the major Bank interventions will be an exceptional level of support for the Padma Multipurpose Bridge Project in order to unlock the economic potential of the isolated Southwest Region, as well as scaled-up support for power sector development, including financing for an additional 750 MW of power generation. IFC s assistance will focus on access to finance, Economic Zone Development, Public-Private Partnerships (PPPs) and private sector investments. Sustainable growth. Bangladesh is among the most densely-populated countries in the world, already vulnerable to natural disasters and now becoming highly-affected by climate change. Water resource management, agricultural adaptation, environmental protection and disaster preparedness will be critical areas for intervention. Given its vulnerability, the country is at the global forefront on climate change policy and interventions, and needs cutting edge technical and financial support from the Bank Group and Development Partners (DPs) to adapt and respond to climate change and natural disasters. The country is also susceptible to external shocks, such as it experienced with the food and fuel crisis in The strategic objective for more sustainable growth under this CAS is defined as: reducing environmental degradation and vulnerability to climate change and natural disasters. In line with the demand, the prices of real estate properties are also rising very fast. Price hike of land and construction materials also add to the overall price hike. The price of land is increasing at a very high rate after After 2000, the rise in land price became steeper. There is no control of the govt. over the price increase of land within Dhaka city. Increased land price have a direct impact on apartment price. Also, after 2005, price of bricks, granular sand, cement, grade 60 rod etc. had a rapid, almost exponential, increase. Due to such unimaginable increase in land price as well as sharp increase in prices of the construction materials price increase of apartments became an obvious consequence. As an obvious result of such price hike, a good amount of 107

112 undocumented money has been utilized in acquiring land, apartments, buildings, shops etc. in past few years. But the usage of black or undocumented money in the Real Estate sector cannot be measured precisely because no authentic information is available anywhere. Apart from such undocumented money, foreign remittance is a prominent source of fund to purchase any real estate property along with personal and family savings, and bank loan. But, any consolidated figure about how much foreign remittance is invested per year in real estate sector was not available. Apart from meeting the housing needs, the Real Estate sector contributes to the Government exchequer through Registration Fees, VAT, Advance Income Tax (AIT), Stamp Duty, Property Handover Tax etc. Also, the construction industry is a labor-intensive industry, whose capacity of absorbing labor is great. The industry provides many jobs for skilled, semi-skilled and unskilled workers both in the formal and informal sectors. For the migrants from the rural areas the construction industry is often a stepping stone to urban life. Real Estate sector is a major part of the construction sector. Most of the labour force engaged in the construction sector is basically engaged in the Real Estate sector. Thus real sector is also contributing a lot in the overall economy of Bangladesh. Money invested in real estate offers both a regular return on investment as well as a possibility of capital appreciation. Opening up of 100% Foreign Direct Investment (FDI) in the real estate sector, setting up real estate mutual funds coupled with other fiscal reforms like rationalization of stamp duty, property taxes etc. initiated by the Government are steps taken to continue to make the real estate a promising investment option. The projection suggests that the demographic growth will be high and the country is poised for rapid urbanization, which will lead to major developments in real estate and infrastructure projects. Outsourcing has changed the face of commercial real estate in India, but its greater impact has been the demographic shift characterized by rising disposable incomes and increased consumerism. The real estate market in India predominantly continues to remain unorganized, fairly fragmented, mostly characterized by small players with a local presence. 108

113 Traditionally, developers were viewed with an element of skepticism. Developers were often identified with dealing with large amounts of unaccounted money, lacked transparency and would use unscrupulous means to obtain various regulatory approvals. Lending to developers was perceived as being risky as builders were known to borrow for one project and utilize it for another or overstretch their limits and not have sufficient funding to complete the building. But things have clearly changed today: for starters, developers have realized the merits of corporatizing themselves and enhancing transparency in terms of their financials. While earlier even the reputed builders had difficulty accessing formal channels of credit, today almost every bank and housing finance company has relationship tieups with developers and are keen to lend to them at competitive rates. Lenders are also monitoring the projects more closely. There are many opportunity for Bangladesh in Gujarat. They can built their projects in Gujarat and earn profits out of it. We all are aware that Gujarat is one of the fastest developing states of India. Real estate sector in Bangladesh is not regulated yet and government currently has no mentionable intervention to control the firming of the firms in this sector. Therefore developers are doing what meets their interest best. This made the whole sector chaotic and cities like Dhaka suffers for the unplanned urbanization activities. Therefore its time to save other areas of the country along with the protection for the Dhaka city in case situation goes worse. With that aim recommendations from the authors are in point. Government should ensure the proper policy design and most importantly proper implementation of those policies in case of urbanization, in case of real estate firms operations, and in case of government involvement in the business of the sector. Corruptions and bureaucracies from the administration should be removed. Government should ensure that large companies don t get any unfair advantages. 109

114 Decision making should be more decentralized but without any corruptions. Proper control mechanism should be designed and properly implemented. Trade license procedure for the developers should be more strict and strict conditions should be put on the unplanned development activities. Government should take initiatives to help the mass of people in case of real estate financing. Low income people should get priority in this case as they suffer most. Government should come up with different projects too in addition to encourage the private investment in the country. The sector really requires regulation and government should bring that in order to save people from fraud and cities from unplanned urbanizations. Government might think about moving different government offices from Dhaka city to its outskirts to reduce the traffic in Dhaka city. It will also work as the decentralization of the country. As investment in the real estate products is bulky in nature, buyers go through an extensive buying process where availability of information is the key success factor for real estate developers. Almost all buyers visit the project site or at least some other works finished by the same developer before they make any contract. 110

115 CHAPTER 8 EXPLORING TOURISM OPPORTUNITIES IN BANGLADESH WITH SPECIAL EMPHASIS TO MEETING, INCENTIVES, CONFERENCES, EXHIBITIONS (MICE) The project report is divided into different chapters explaining various aspects of the project. First chapter Introduction to tourism in Bangladesh describes the basic introduction about the country and tourism in Bangladesh, what are the contributions of tourism to GDP of Bangladesh and its contribution to the employment generation in the country. Porter s 5 force analysis, SWOT analysis is done for the tourism in Bangladesh. Detailed introduction to various tourist places in Bangladesh divided on the basis of nature of the place such as eco-tourism, archaeological, historical, cultural, religious, adventure and recreational places of tourism. INTRODUCTION TO TOURISM SECTOR IN BANGLADESH A tourist planning for a Bangladesh Tour should know the basic facts about Bangladesh. These facts are helpful while dealing with the Bangladeshi public and the Bangladeshi organisations. The general awareness about the country also helps the tourists to organise their Bangladesh Tour well. Here under we are providing the basic information about Bangladesh valuable for you while your Bangladesh vacation. Bangladesh Tourism department is also introducing Reasonable and comfortable staying facilities for the tourists visiting Bangladesh every year. Bangladesh is a country with rich traditions, natural beauty, beaches, forests, lakes, hills, wild lives, archaeological attractions, monuments, handicrafts, sanctuaries, religious festivals, cultural heritage, tribal culture and architecture, incredible greenery, mighty rivers and attractive river cruises, sunny beaches, colourful tribal life and attractive cultural functions that offer great tourist attractions (Haque, 2005; Hossain and Nazmin, 2006).The renowned Tourist Destinations in Switzerland includes: Cox s bazaar, Kuakata, Sundarbans, Saint Martin s Island, Sylhet, Bandarban, Dhaka Sonargoan, etc. TOURISM'S CONTRIBUTION TO EMPLOYMENT Travel & Tourism generated 1,329,000 jobs directly in 2011 (1.9% of total employment) and this is forecast to grow by 3.6% in 2012 to 1,377,000 (1.9% of total employment). This includes employment by hotels, travel agents, airlines and other passenger transportation services (excluding commuter services). It also includes, for example, the activities of the restaurant and 111

116 leisure industries directly supported by tourists. By 2022, Travel & Tourism will account for 1,840,000 jobs directly, an increase of 2.9% pa over the next ten years. The total contribution of Travel & Tourism to employment (including wider effects from investment, the supply chain and induced income impacts, see page 2) was 2,880,500 jobs in 2011 (4.1% of total employment). This is forecast to rise by 3.9% in 2012 to 2,991,500 jobs (4.1% of total employment). By 2022, Travel & Tourism is forecast to support 4,082,000 jobs (4.5% of total employment), an increase of 3.2% pa over the period. TOTAL CONTRIBUTION OF TOURISM TO BANGLADESH The total contribution of Travel & Tourism includes its wider impacts (i.e. the indirect and induced impacts) on the economy. The indirect contribution includes the GDP and jobs supported by:- Travel & Tourism investment spending an important aspect of both current and future activity that includes investment activity such as the purchase of new aircraft and construction of new hotels. Government 'collective' spending, which helps Travel & Tourism activity in many different ways as it is made on behalf of the community at large e.g. tourism marketing and promotion, aviation, administration, security services, resort area security services, resort area sanitation services, etc. Domestic purchases of goods and services by the sectors dealing directly with tourists - including, for example, purchases of food and cleaning services by hotels, of fuel and catering services by airlines, and IT services by travel agents. The induced contribution measures the GDP and jobs supported by the spending of those who are directly or indirectly employed by the Travel & Tourism industry. The second chapter is introduction to the MICE tourism concept which describes MICE concept in detail i.e about Meetings, Incentives, Conferences, and Exhibitions individually in detail. The general statistics about the MICE tourism industry its importance in the tourism sector of any country is also described in this chapter. 112

117 INTRODUCTION TO MICE TOURISIM M = MEETING, I = INCENTIVES, C= CONFERENCES, E= EXHIBITIONS The acronym MICE is applied inconsistently with the E sometimes referring to Events and the C sometimes referring to Conventions. MICE is used to refer to a particular type of tourism in which large groups planned usually well in advance are brought together for some particular purpose. MICE tourism usually consists of a well planned agenda cantered around a particular theme, such as a hobby, a profession, or an educational topic. MICE tourism is a specialized area with its own trade shows (IMEX) and practices. MICE events are normally bid on by specialized convention bureaus located in particular countries and cities and established for the purpose of bidding on MICE activities. This process of marketing and bidding is normally conducted well in advance of the actual event, often several years. MICE tourism is known for its flawless planning and demanding clientele. MEETINGS Meeting is a general term indicating that coming together of a number of people in one place, to confer or carry out a particular activity. Frequency can be on an ad hoc basis or according to a set pattern, as for instance annual general meetings, committee meetings, etc. An organized event which brings people together to discuss a topic of shared interest. It may be commercial or non-commercial may be attended by 6, or many hundreds, it may last from a few hours to a week. What makes a meeting qualify as part of business tourism is that it engages some of the services of the tourism industry. INCENTIVES Meeting event as part of a programme which is offered to its participants to reward a previous performance. Incentive travel is a global management tool that uses an exceptional travel experience to motivate and/or recognize participants for increased levels of performance in support of the organizational goals. Society of Incentive Travel Executives Unique and exclusive travel continues to be one of most desired and sought after experiences and the generator of many of vivid memories. Top companies are capitalizing on exclusive travel to reward and build key relationships, to create 113

118 compelling promotions and to inspire higher performance. Firms are finding that travel not only motivates and rejuvenates but it also creates long term positive association to the company. In short, incentive travel continues to be proven as an effective contributor to bottom line results. CONFERENCES Participatory meeting designed for discussion, fact-finding, problem solving and consultation. As compared with a congress, a conference is normally smaller in scale and more select in character - features which tend to facilitate the exchange of information. The term "conference" carries no special connotation as to frequency. Though not inherently limited in time, conferences are usually of limited duration with specific objectives. EXHIBITIONS Events at which products and services are displayed. Exhibitions work because they are face-toface. They provide an opportunity to accelerate the selling cycle by matching needs with a company's ability to fill those needs. They work because adults are visual learners. Exhibiting is a like a portable company with a visual medium - the exhibit, products, the graphics, collateral materials and promotional products are visual elements. Buyers are also experiential. Trade shows are extremely effective to bring new products to new markets. Presentation of products or services to an invited audience with the object of inducing a sale or informing the visitor! Exhibitions are considered part of the business tourism industry because the stimulate travel (for both exhibitors and visitors) THE IMPORTANCE OF MICE INDUSTRY Employment in the industry and economic contribution to local communities, provinces and the nation. Direct foreign currencies earning from international participant s daily expenditures on accommodations, food and beverage, souvenirs, etc. Stimulate the investment, both from domestic and overseas investors. Invest in MICE facilities and Invest in other facilities, basic infrastructure and other industries. Stimulate domestic business firms to strengthen their operational management by connecting or building their synergy with external & internal firms. New scientific & technological knowledge to develop the nation. 114

119 Create/build credibility, reputation & reliability of the hosts to local, national, regional and international levels. Opportunities for relevant business, e.g. hotels. F&B, transportation, tour operators, etc. The period of MICE events generally could enhance the tourism industry, during MAY TO OCTOBER is a off-peak period (low season) in most tourist destinations. An average expenditure of MICE participants generally 3 times higher than the normal tourist. The stakeholders gaining indirect benefits are Contractors, Freight Forwarders, Exhibitors, Restaurants &Entertainments, Tour Agents, Shopping Centers, Transportation & Communication, Banks and Temporary Staff. The improvement and encouragement of technologicaldevelopment bringing-in by those exhibitors and participants Contribute these technologiesto other business sectorsresulting the improvementof their productivityand competitiveness. It results in the development of better infrastructure, mainly in transportation, accommodation and air services The third chapter is about the opportunities for MICE in Bangladesh which describes about the current steps taken by Bangladesh government to promote and facilitate the MICE tourism in the country. Detailed description about the places which can contribute to MICE tourism in Bangladesh such as Chittagong, Dhaka, Cox Bazar, and Sylhet where the tourists can come and visit along with MICE objectives being achieved and they can also visit many other places within these famous tourist destinations. Famous tourist destinations in Chittagong include Foy s lake, DC Hill, war Cemetery, The Batali Hill, etc. Famous destinations in Sylhet include The Shrine of Hazrat Shah Jalal, Srimongol, Lawacherra rain forest, Jaflong, Madabkunda water fall, Temple of Sri Chaittayana Dev, etc. Famous places at Cox Bazar include Ramu, Teknaf, Himachari, Moheshkhali, St. Martin s Island, etc. Famous destinations in Dhaka include Lalbagh Fort, Jatiyo Snriti Soudho, National Museum, Central Shahid Minar, Folk Art Meusem, etc. Bangladesh can be an attractive MICE destination. Bangladesh is waking up to MICE possibilities only recently. Tourism professionals are now realizing that the country with its heritage and other sites can be an attractive MICE destination if all the stakeholders including the government cooperate with each other to make guest experience a pleasurable one. 115

120 In Bangladesh, MICE facilities are increasing not only in capital Dhaka but also in Chittagong, Cox's Bazar and sylhet, though still in the category. International and domestic air connectivity is increasing and more people are travelling inside the country on luxury road transports. Bangladesh is waking up to MICE possibilities only recently. Tourism professionals are now realizing that the country with its heritage and other sites can be an attractive MICE destination if all the stakeholders including the government cooperate with each other. The fourth chapter is about the packages designed for MICE tourism which includes packages of 4 days and 3 nights, 8 days and 7 nights. Detailed package information includes various aspects which are listed below: The Packages Include: 1. Hotel accommodation (3, 4 or 5 star of your choice). 2. Guide English, Chinese, French etc. 3.Transportation as mentioned. 4. Includes all meals and entrances fees as mentioned in the package. 5. Rooms are on a twin sharing basis. 6. Temple entrance fees. 7. Seminar or meeting rooms, white board and flipchart with flipchart papers with different markers. 8.1 LCD & 1 Laser pointers. 9. Overhead projector and screen. 10. Sound system with microphones, podium. 11. Distilled water & mints. 12. Meeting set up of your choice, Stationary for every participant. 13. Head table with floral arrangement as required. 14. Reception table with floral arrangement, Signage for direction purposes coffee breaks (Morning at am & Afternoon at pm) The fifth chapter includes the marketing strategy adopted for marketing the MICE tourism in other countries to generate enough demand. At first the stakeholders of the MICE industry such as customers/consumers, suppliers and intermediaries are explained in detail. Then the marketing 116

121 mix and its strategy such as destination and venue marketing, partnership and branding the MICE product offered. The customers/consumers can be corporate buyers, these buyers work for corporate organisations whose main purpose is to make profit. Most of the time, these private organisations come from the industry sectors. The main industries that organise business tourism events are mainly energy, medical, computing, engineering, financial services, retail and wholesale distribution and travel and transport. Other category of customer can be association buyer, which represents numerous associations such as professional and trade associations, voluntary associations and societies, charities, religious organisations, political parties and trade unions. They are sharing common interests or businesses and during meetings they exchange ideas and information. The suppliers can such as destinations and venues, which include conventional centers, National & International Universities, Town Halls, etc. There are several different convention centres across the Dhaka city, A. Spectra Convention Centre B. Victoria Convention Centre C. Bangabandhu International Conference Centre, Dhaka D. Marriott Convention Centre, Dhaka E. Ladies Club, Dhaka F. BRAC Centre, Dhaka Major universities are: A. University of Dhaka B. Bangladesh National University, Gazipur, Dhaka C. Bangladesh University of Engineering & Technology D. Islamic University of Technology Major civic centres are: 117

122 A. Mohammadpur Townhall B. Northbrook Hall C. Sher - e - Bangla Cricket Stadium The different marketing strategies which can be used as described above are Destination and Venue marketing which can be done in collaboration with National Tourism organization Bangladesh Prajatan Corporation. Another form of marketing strategy adopted can be Partnership with any public and private sector company which is already working on such aspects of tourism, next strategy is Branding can be done via web based marketing, various loyalty schemes can be run with hotels which provide accommodation which will increase the probability of the revisit to the country the next time any such event is planned. 118

123 CHAPTER 9 BROADBAND AND WIMAX INDUSTRY OF BANGLADESH 1. BANGLADESH - A TELECOM MARKET PREVIEW (WiMAX & Broadband) Communication in Bangladesh is based on Telephone, mobile communication, TV Broadcast, Radio, Internet etc. Three types of radio broadcast stations; AM15, FM 13 and shortwave 2. It has a huge potential in WiMAX and submarine cable which is a new technology and has attracted the foreign telecom operators. In 2009, WiMAX facility was introduced leading to wireless high-speed internet technology.currently, two companies are providing WiMAX facilities for consumers. i. Banglalion Communications: MHz ii. Augere Wireless Broadband Bangladesh: MHz 119

124 It generates 27.50% of revenue to the government. Numerous multinational enterprises like Intel and Fujitsu have also joined the WiMAX Forum. 2. FEASIBILITY ASPECTS OF DOING BUSINESS IN BANGLADESH I. The supporting IT infrastructure Computer & Internet Technology Bangladesh Telegraph and Telephone Board (BTTB) have already established a networkfor high bandwidth Internet connectivity through offering commercial services. BTTBhas established a fibre optics backbone throughout the country and also has a plan tooffer ISDN (Integrated Services Digital Network) service using the facilities in Dhakaand Chittagong cities. They have opened X25 and X28 services in eight cities of thecountry and established Digital Data Network 120

125 (DDN) at Dhaka and four other cities.through DDN they are going to offer IPLC (International Private Leased Line Circuits), National (Point to Point High Speed data Circuits), Local (Point to Point High SpeedData Circuits) and E1 Access from PSTN (Public Switched telephone Network) to ISPs. II. New ISPs are emerging Current bandwidth of Internet backbone ranges between 64Kbps and 2Mbps through dedicated full-duplex VSAT links. There are a few companies, who are trying to make popularize their Broadband connectivity sharing an allocated bandwidth. Zacknet seemed to lost popularity because of its one way communication. There were a few ISPs who were using Zacknet for downloading during rush hours, but cost of the service has been restricting its popular use. Concentration of ISP is the most in Dhaka city, where more than 80% of them are located. Only three has been established in Sylhet, three in Chittagong and one each in Rajshahi, Khulna and Bogra. There are about 5 large ISPs and among them Grameen Communications has a customer base of more than Two of the ISPs are offering their Internet services through 2Mbps fullduplex VSAT link, while highest peak time Internet usage rate ranges from Taka 1.50 to lowest Taka 0.20 (2.00 to 6.00 am for one ISP). III. The constraints on Internet Growth in Bangladesh Though we have seen some sharp rise in the growth of internet and internet users, there are some impediments on the way to the growth of internet in Bangladesh. Some of the reasons are listed below: Underdeveloped IT industry Lack of efficient use of IT network No direct access to the information super highway Limited skilled human resources Poor telecommunication infrastructure Low-level of computer literacy Widespread poverty Low telephone penetration Lack of software in the Bengali language 121

126 Opportunities for a better Internet support Bangladesh has a nationwide fibre-optic network established by Bangladesh Railway. Hardly 8% of this fibre-optic capacity was ever used during the years of its existence. This facility can provide excellent backbone for nationwide voice and data communication. As we have no direct access to the information super highway the only option is to communicate through satellite. Satellite communication is costlier than fibre-optic. To avoid satellite communication and its high cost, we can establish the missing link to the information super highway if the nation-wide fibre-optic network is allowed to link up with the high speed fibre-optic backbone in India. Availability of telephone lines and reduction in service fee will attract many professionals into internet arena. Young generation should play a vital role in developing IT industry in Bangladesh. IV. Investment Opportunities Why Bangladesh? JP Morgan has listed Bangladesh among its Frontier Five emerging economies, in which it is worth investing. Goldman Sachs included Bangladesh in the Next emerging countries to watch following BRIC countries. A McKinsey survey identified Bangladesh as a Next hot spot destination for sourcing Ready Made Garments. Bangladesh offers many investment opportunities for Indian firms. Bangladesh in itself is home to 160 million people. In addition, it provides much easier access to India's north eastern region. Moreover, abundant availability of low cost labour acts as a major incentive for setting up manufacturing plants in Bangladesh. As demanded earlier by FICCI, an India specific SEZ would help in attracting FDI from India. These firms will not only be able to sell to the domestic market in Bangladesh but also export to India utilizing lower duties. This will go a long way in reducing the trade deficit which at present is heavily in India's favour. Also, Bangladesh has preferential access to around 38 countries; this will immensely benefit the Indian firms investing in Bangladesh and using it as a hub for exports. 122

127 Supply chain synergies can be established between the North Eastern states of India and Bangladesh especially in the area of Agro processing. V. Bangladesh FDI Bangladesh in recent years has been trying to woo investors across the globe. In order to achieve its goal of becoming a middle income country, the current savings and investments rate need to grow at a much higher rate. For FY2012, gross domestic investments as a percentage of GDP were 25.5 percent. To increase the GDP growth rate to 10 percent by 2021, investment rates need to increase to 38 percent level. 123

128 Owing to a lower savings rate, in FY2012 it was less than 19.4 percent. Bangladesh will18 depend heavily on foreign investments. In FY2012, FDI inflows were USD 995 million, an increase of 28 percent over FY2011. Table 3.2 gives the FDI inflows by sector and origin. Over the five years period from FY2006 to FY2011, gas and petroleum, telecommunications, textiles and clothing, and banking have emerged as the major recipients of FDI inflows in Bangladesh. During FY2011, textile sector received almost 29percent of the total FDI inflows, while the share of telecommunication declined compared to previous year and was only 6.7 percent. A major increase was also observed in the banking sector. The main sources of FDIs are the United States, United Kingdom, Hong Kong, Netherlands and South Korea. India accounted for less than 3 percent of the total investments in FY2011.As per the UNCTAD World Investment Report 2012, Bangladesh was the 16th largest recipient of FDI in the world. Potential investment areas To achieve its target of becoming a middle income country, Bangladesh requires to raise its investment from the current level of 25 percent of GDP to 38 percent of GDP by 2021: Majority of this investment will have to be directed towards removing the infrastructural bottlenecks. The main areas where investments will have to flow into are: Energy and power Transportation (both land and waterways) Urban infrastructure Border infrastructure Information, communication and technology Warehousing and cold storage facilities Education services and skill development For improving the investment climate following are required - a vibrant private sector, effective Public Private Partnership (PPP), planned urbanization, skill development, removing regulatory constrains and maintaining financial inclusion. Over the next decade, Bangladesh requires USD 7 billion to upgrade its transport system. Bangladesh industrial policy 2010 identifies a number of industries which offer prospective investments. It can be clearly seen that most of the industries identified are of interest to Indian firms. Bangladesh offers several incentives for investments in Bangladesh. 124

129 Indian Investments in Bangladesh India and Bangladesh signed the treaty on bilateral investment and protection to strengthen the framework for trade and investment between the two countries which has encouraged several Indian Investments and Joint Venture projects in Bangladesh. In2007, India removed the prohibition on investments into India by citizens of Bangladesh or an entity in Bangladesh with the prior approval of the Foreign Investment Promotion Board of the Government of India. Bangladesh and India signed a Bilateral Investment Promotion and Protection agreement in February 2009 in Dhaka that provides protection to investments in both the countries. During the visit of the Prime Minister of Bangladesh to India in January 2010, the Prime Ministers of the two countries agreed that investments, including joint investments and joint ventures, shall be encouraged by both the countries. They agreed that the participation of the private sector in both the countries will give an added fillip to economic integration between the two countries. 125

130 Indian companies are spreading their wings and are investing overseas in their quest to become global multinationals. Indian companies are increasingly looking at Bangladesh as a major investment destination. A large number of Indian firms from both public and private sector have been working on different turnkey projects in Bangladesh in sectors such as power, transmission lines, telecom, textiles, chemicals and pharmaceutical, glass, plastics and engineering. Indian investment in Bangladesh for FY2011 was USD 210 million. Cumulatively Indian investments amount to just under USD 850 million till FY2011. BhartiAirtel investment in Bangladesh as Joint Venture with Warid Telecom BhartiAirtel has invested USD 300 million in Bangladesh for expansion of the operations of Warid Telecom. This is the largest investment in Bangladesh by an Indian company. The acquisition by BhartiAirtel has been partly by purchase of existing shares held in Warid Telecom Ltd. The new funding has been utilized for expansion of the network, both for coverage and capacity and introduction of innovation products and services. As a result of the additional investment, the total investment is around USD 1 billion. Tata's International Ltd. has invested USD 15 million (USD 5 million in footwear and USD10 million in bicycle industry). The Tatas have signed a MoU with Bangladesh's Nitol-Niloy group in this regard. A Memorandum of intent was signed between Meru cabs and Tata Motors Nitol Group to invest in Bangladesh with 10,000 20,000 radio control taxis in January Marico announced its plan to invest additional Tk crores as part of its expansion plans to take the total investment to Tk 100 crores (around USD 12.5 million). It is listed in the Dhaka Stock Exchange and was the first Indian company to have a manufacturing location in Bangladesh. CEAT has announced its plan to set up a Rs. 250-crore tyre manufacturing plant in Bangladesh. Almost 95 percent of Bangladesh's tyre requirements are imported. The initial capacity would be 65 tonnes per day and production will commence in FY2013. Of the total production capacity, 80 per cent will be of truck and light-truck tyres and the19 rest of two- and three-wheelers and last-mile vehicles.in Decmeber, 2010, SAAG RR Infra Ltd was awarded a Rs. 42 crore contract from Garisan Etika Bangladesh Pvt. Ltd. SAAG RR was nominated as the subcontractor for civil, preliminaries and mobilization work for the 2x36 MW combined cycle power plant at 20 Adamjee Export Processing Zone in Bangladesh. 126

131 PRAN Group (Programme for Rural Advancement Nationally) of Bangladesh, set up in1980, which manufactures snacks, confectionery, juices, beverages, culinary products, dairy and premium rice, exports to 75 countries. The PRAN Group would be investing21 Taka 10 crores (around Rs 6.80 core) in Tripura for setting up agro processing plants. PRAN has been permitted by Bangladesh Revenue Board to invest 10 crore Bangladeshi Taka in the state. 3. WiMAX concept and its Applications WiMAX, the Worldwide Interoperability for Microwave Access, is a telecommunications technology designed at providing wireless data over long distances in a variety of ways, from point-to-point links to full mobile cellular type access. It is a wireless digital communications system that is projected for wireless "metropolitan area networks". This technology can provide broadband wireless access (BWA) up to 30 miles (50 km) for fixed stations, and 3-10 miles (5-15 km) for mobile stations. WiMAX is a standards-based technology enabling the delivery of last mile wireless broadband access as an alternative to wired broadband like cable and DSL. WiMAX provides fixed, nomadic, and portable. Soon, mobile wireless broadband connectivity without the need for directs line-of-sight with a base station. In a typical cell radius deployment of three to ten kilometres, WiMAX Forum Certified systems can be expected to deliver capacity of up to 40 Mbps per channel, for fixed and portable access applications. Many companies are closely examining WiMAX for the "last mile" connectivity at high data rates. The resulting competition may fetch lower pricing for both home and business customers or bring broadband access to places where it has been economically unreachable. Prior to WiMAX, many operators have been using proprietary fixed wireless technologies for broadband services. Applications Connecting Wi-Fi hotspots with each other and to other parts of the Internet. Providing a wireless alternative to cable and DSL for last mile broadband access. Providing high-speed data and telecommunications services. 127

132 Providing a diverse source of Internet connectivity as part of a business continuity plan. That is, if a business has a fixed and a wireless Internet connection, especially from unrelated providers, they are improbable to be affected by the same service outage. Providing nomadic connectivity. High speed data and nomadic connectivity of the WiMAX technology enables the freedom and convenience that comes from having your Internet standing by where and when we need it staying connected on the go to the people, communities, and resources that make up our lives. Broadband on the go is your front row seat to all the rich multimedia Internet applications you already use, and electrifying future possibilities enabled by Mobile WiMAX. Playing in Real-Time: Play multiplayer 3-D games, view You Tube videos, and listen to radio broadcasts it s all there waiting to entertain us on the go. Working Smarter: WiMAX appeals productivity out of thin air. Capture lost time by doing things in areas previously unavailable. Working on the go changes the rules of competition by allowing us to be more productive. Staying in Touch: Broadband on the go is about keeping in touch with family, friends, and our communities using all the typical tools like and IM, but WiMAX adds face-to-face video conferencing and voice to our connections. Locating People and Places: WiMAX enables a extemporaneous lifestyle. Locationbased services creates a new pattern in opening real-time information where and when we need it. Receiving TV and Radio on the Go: There are just more streams of data available with WiMAX, so why not pipe broadcast television and radio into a Mobile WiMAX device? Radio stations already co-broadcast over the Internet. Mobile Internet-based TV Transmissions also set the stage for content-on-demand services like movies and sporting events. Merits of WiMAX QoS Improved user connectivity Link adaptation: Provides High Reliability Intelligent Bandwidth Allocation 128

133 High Efficient spectrum utilization Secured Data Exchange 4. Broadband Concept Broadband is often called high-speed Internet, because it usually has a high rate of data transmission relative to dial-up access over a modem. In general, any connection to the customer of 256 Kbit/s (0.256 Mbit/s) or more is considered broadband Internet, but the low-end speed bar is continuously rising. Drivers of Broadband Technology Speed: Video and other applications are continuing to drive up broadband speed requirements, and data service providers have to stay ahead of the curve unless they want to get leapfrogged by the next killer app. Some broadband technologies, like satellite and EV- DO, are reaching the upper edge of their theoretical speeds, while fibre, cable, and WiMAX have a long way to go before maxing out. Cost: The cost of upgrading networks run into the $billions. While enterprise customers are willing to pay a premium for high speeds, there isn't a lot of price/speed elasticity among consumers. Cost is a factor that could both slow network expansion and broadband adoption. Availability: Broadband service is always slowest to reach less populated areas, due to economies of scale. In the states, Cable and DSL, the two most popular broadband options, aren't available in some rural communities. This will drive demand for technologies that serve these areas, such as satellite and most likely WiMAX in the future. 129

134 Quality of Service: For some applications, service disruption is just not acceptable. Wire line broadband technology has always had an advantage over wireless here, but there are differences even among different wire line technologies (i.e. DSL and dedicated lines generally get better marks from customers than cable, although reliability is very similar). Broadband Prices ITU has highlighted the importance for policy-makers to address the issue of ICT prices, and to consider the so-called power of price as a relevant factor for ICT uptake (ITU, 2009a). No matter how effective policy initiatives to extend broadband networks are, they will not result in higher broadband uptake if prices are not affordable. Fixed broadband and fixed telephone penetration are the cumulative result of various years of infrastructure development, pricing policies and other factors. On the other hand, fixed telephony and fixed broadband prices as collected by ITU represent only one tariff (the most general one from the operator with the highest market share), which may not be available in the whole geography of the country, and can greatly vary from year to year. 5. Broadband & WiMAX Market The country has a unique broadband market. The incumbent (BTCL) has a little market share, due to its late entering into the broadband market (its DSL services were commercially launched in 2009). The two mobile WiMAX licensees are yet in the early stages of their network deployment, which limits their coverage to some parts of Dhaka and Chittagong. Therefore the major part of the broadband market is atomized and divided into relatively small players, none of them with more than 3 per cent of the total market share. Bangladesh should speed up the assignment of the 2.1 GHz band for 3G services, which are currently not available in the country. It would be good to involve private operators in the process, as the country has already done for the WiMAX licensing. Bangladesh should continue implementing the analogue-to-digital TV switchover in the 700 MHz 130

135 band (i.e. clearing it, allocating and assigning frequencies), and carry on with the plans to assign at least part of the digital dividend to wireless broadband technologies (IMT Advanced envisaged). 131

136 Bangladesh should consider favouring the concentration of broadband service providers and operators in the country, in order to overcome the atomization in the market and reach efficient scales of operation. This could be achieved, for instance, by encouraging the fusion of regional broadband providers into national groups, or by promoting cooperation agreements between operators. 132

137 6. Bangladesh Telecom Regulatory environment In order to ensure proper competition among the BWA Services licensees, total 3 (three) licenses will be issued to provide nationwide BWA Services in 2.3 GHz and 2.5 GHz spectrum bands. Another two important facts were as follows: (1) The mobile operators (CDMA and GSM) having the cellular mobile licenses from BTRC will not be eligible to apply for this license. (2) One entity will be allowed to get only one BWA Services License. Spectrum Distribution (opted by companies): I) Bangla Lion Communications: MHz II) BRAC BDMail Network Limited: MHz III) Augere Wireless Broadband Bangladesh: MHz 133

138 Important Suppliers/Organization Alvarion AT&T Wireless China Motion Telecom Filtronics Hughes Network Systems NEWS IQ FDM Forum RF Integration Inc. The Telnecity Group Yahoo! Andrew Corporation Atheros Communications, Inc. Compliance Certification Services Fujitsu Microelectronics America Intel Nextel Raytheon RF Components RF Magic Winova Wireless 7. INDO- Bangladesh trade Relations India's trade with Bangladesh has witnessed rapid growth in recent years. Currently, China is the largest trading partner of Bangladesh. However, India is likely to emerge as3 the largest trading partner in the coming years. In terms of merchandise trade, the total trade has increased from USD 1 billion infy2001 to around USD 4.4 billion in FY2012. Currently, the trade balance is heavily in India's favour. India's share in the bilateral trade is around 86 per cent of the total trade. However, it can be seen that Bangladesh's share is steadily increasing. 134

139 135