Light engineering can thrive on bike components
Image: Collected
There is huge potential in the country's light engineering sector to exploit the neighborhood market for motorcycle components, according to speakers at a webinar yesterday.
"The twelve-monthly demand for motorcycles reached 550,574 units on average in 2019 while it was 207,835 units in 2015, that around Tk 2,100 crore worth of extra parts is necessary," said Ihsanul Karim, director of Bangladesh Industrial Technical Assistance Centre (Bitac).
Of the total requirement of spare parts, local suppliers can provide only that worth Tk 20 crore. So, there is a huge scope to seize the marketplace in the light engineering sector, he added.
Karim made these comments while presenting the keynote paper at a webinar styled "Light engineering sector: backward linkage development point of view" organised by SME Base.
"If you want to create occupation and save forex through local production, we must develop the light engineering sector," said Abdur Razzak, president of the Bangladesh Engineering Industry Owners Association (BEIOA).
The two-wheeler industry and light engineering sector are related to one another therefore, growing quality spare parts through native vendors is important, he said.
Parent companies usually do not manufacture every the components within their products. Instead, they source industry standard spare parts from local light engineering sectors, he added.
Over the last two years, the government introduced value added tax on capital machineries despite the fact that there is no custom duty on the imports, Razzak said.
This sort of decision creates an obstacle for the development of the light engineering sector. It is also in conflict with the government's intension to increase the sector, he said.
The BEIOA chief also said it was possible to develop the light engineering sector through the provision of low-cost funds, an industrial park and policy support.
KM Ali Azam, secretary for industry, assured that the federal government would supply the necessary policy support for the sector's development.
He asked SME base to submit a recommendation of the webinar to the ministry to have initiatives as per the recommendations.
Azam also urged for discussions between all stakeholders to recognize the barriers and potentiality for backward linkage sectors.
Developing light engineering is very important to industrialisation, the sector could be incentivised through legal and policy support, he said.
Azam believes the backward linkage sectors of the motorcycle sector ought to be developed for further growing the economy.
Hafizur Rahman Khan, president of the Motorcycle Makers and Exporters Association of Bangladesh, said a good circular from the National Plank of Revenue (NBR) issued in 2011 has helped the motorcycle sector.
On the other hand, the NBR circulars which were issued after were incompatible with each other and creating barriers to developing the sector. It isn't likely to develop the neighborhood motorcycle sector without the improvement of regional spare parts suppliers, Khan added.
He also urged the government to set up a tests institute for motorcycles to ease their exports.
Selim Uddin, additional secretary to the sectors ministry, said they would finalise the auto policy by the following month, which would help the market develop further.
Tax insurance plan support is necessary from the NBR aswell, he said.
"Investments from big commercial groups is required in the light engineering sector to look at high technology and sector advancement to develop our own car manufacturer," Uddin added.
Masudur Rahman, chairperson of SME foundation, said Bangladesh's professional sector spends around Tk 70,000 crore yearly and local manufacturers could cater to the whole amount.
"Industrialisation will never be expedited if the backward linkage sectors are not improved," he said.
Rahman also expressed intension to utilize the individual sector to utilise the potentiality of the light engineering sector.
Anwar Hossain Chowdhury, director standard of the Bangladesh professional Complex Assistance Centre (BITAC), sought cooperation from all stakeholders to build up the light engineering sector and implement the policies.
He underscored adaptation of high technology for speedy improvement along with skill development of technicians.
Chowdhury informed that Bitac would organise training to utilise great technology.
Syed Golam Kibria, member of the NBR, said these were sincere towards helping the mild engineering sector in regards to to the import of capital machineries.
He asked to discuss with the meeting participants with proposer proposals to remove inconsistencies in several circulars of the NBR.
Source: https://www.thedailystar.net
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