Abdul Monem EZ gravitates giant investors

With a wide range of lucrative features, such as suitable location, river connectivity, eco-friendly environment, and all required amenities, private sector industrial hub Abdul Monem Economic Zone has turned out to be a centre of attraction for giant investors, particularly foreign ones.

In a recent breakthrough, the under-construction economic zone on the banks of the Meghna in Munshiganj's Gazaria allotted 5 acres of land for a facility of the US-based multinational chemical producer Huntsman Corporation.

It has already accommodated a big factory of the Japanese motorcycle manufacturer Honda Motor Corporation.

Besides, investments of several other manufacturers, including the Turkish home appliance producer Arçelik, are in the pipeline, according to the economic zones authorities.

"Huntsman Corporation will set up a bonded warehouse soon. After having the necessary approvals, it will start construction of the manufacturing plants. A design has already been finalised," said ASM Mainuddin Monem, managing director and chief executive officer at the economic zone.

Huntsman will produce chemicals used in the apparel industry, with an initial investment of $20 million, he said, adding that local RMG manufacturers will be greatly benefitted once the facility goes into operation.

Currently, the country imports these chemicals from China, India and a few other countries.

"The availability of local apparel industry chemicals will reduce the lead time as well," added Mainuddin.

Besides, Turkey's Arçelik, Prime Textile and Basundhara have shown keen interest in setting up factories in the economic zone, he told The Business Standard, adding that Walton alone has sought 100 acres of land to produce electronics goods.

Infographic: TBS

"We are scrutinising the proposals. We hope we will have over $1 billion investment and can create at least 50,000 jobs in the zone."

On Arçelik's proposal, Mainuddin said the company has already bought 57% shares of the publicly-listed company Singer Bangladesh. "It wants to produce home appliances in the zone."

Visiting the economic zone recently, this correspondent found that an area of 200 acres of the total 350 acres has been developed for setting up factories.

The authorities are prepared to make a power plant for their own electricity, install jetties for utilising river connectivity and develop a system for rainwater preservation. Besides, a solar power grid will be built there.

Officials said the industrial hub, 37km from the capital city and adjacent to the Dhaka-Chattagram Highway, is being developed as a green economic zone at a budget of Tk5,000 crore.

The Bangladesh Economic Zone Authority approved the zone in 2017 for assembling motor parts, producing food and beverage, and manufacturing light engineering, packaging and chemical products.

"We hope we can complete the development work of the zone within the next two years," Mainuddin Monem told TBS. 

Japanese Honda's joint venture with the Bangladesh Steel and Engineering Corporation under the Ministry of Industries, Bangladesh Honda Private Limited (BHL), began assembling motorcycles in its factory in 2018. 

The venture initially invested Tk230 crore on buildings, equipment, facilities, and a land area of 25 acres. It later acquired another 10 acres of land.

Currently, the factory has an annual production capacity of 100,000 lakh units of motorcycles, where some 800 people are working.  In line with market trends, BHL plans to continue to invest in expanding its production capacity to 2 lakh units in the next five years. 

"I think Honda will seek a total of 50 acres of land in future for its factory expansion,"  said Mainuddin Monem.

Abdul Monem Economic Zone is one of the country's existing 11 privately run economic zones. The Beza is working toward establishing 100 economic zones across the country by 2030. 

The goal is to create employment for 10 million people. The Beza also expects to produce and export products worth $40 billion annually in and from these economic zones.

Investors can avail of tax holiday, duty-free imports of raw materials and machinery, exemption from dividend tax, VAT-free electricity, gas and water and other fiscal facilities in the zones.

Besides, they will have the privilege of enjoying some other non-fiscal advantages, such as bond facility, repatriation of disinvestment, unlimited telephonic transfers and separate customs procedures. 

Apart from the common facilities, Abdul Monem Economic Zones has several others. It is near the capital and adjacent to the crucial river Meghna.

Besides, Japanese investment in the very beginning of the zone instilled confidence in others.