The big leap towards self-reliance

Shamsul Huda had long been importing ceramic sanitary ware from Thailand's Siam and construction tiles from several countries for his business.

In the mid-2000s business atmosphere began to change with more emphasis on localisation and Shamsul began manufacturing ceramic tiles in the Gazipur factory of his company, Great Wall Ceramic Industries.

Now, Great Wall is one of the leading manufacturers of ceramic tiles and sanitary ware in the country. Over a dozen conglomerates, including RAK, Akij, Abul Khair, DBL and Sheltech, have followed suit and built their own factories and strong brands.

The local industry's emergence has reduced import dependency to around 10% from the 90% figure from two decades ago.

With a booming economy, the ceramics market has grown 200% in the last five years to reach Tk6,000 crore a year, while the industry is exporting ceramic products, mostly tableware, worth Tk600 crore a year.

At least 66 brands have been established in the ceramic market, according to the Bangladesh Ceramic Manufacturers and Exporters Association.

The growth has not been in a vacuum.

The story of Bangladesh's agro-based, import-dependent economy's transformation towards manufacturing began in the 1980s and took off in the last two decades.

The changed economic basket now holds a wide range of industries, including construction materials, pharmaceuticals, textiles, consumer products, home appliances and electronics, two wheelers, light engineering products and much more.

Import dependency in skills and services also dropped as the younger generation began to expand into education-based knowhow development.

The country, despite its lack of mineral resources, has progressed in local manufacturing owing to the entrepreneurial spirit of the people and the government's policy support.

For instance, until the beginning of the 1980s, Bangladesh would import most of the required cement for construction as the two state-owned plants were not enough, said Masud Khan, an industry veteran.

Private sector manufacturers and multinational players began to enter local manufacturing in the 1980s, changing the scenario and making the industry capable of excess production.

Up to the 2000s, some premium white cement for mosaics used to be imported, but now such imports are a thing of the past.

Masud Khan, an advisor for MI Cement, said, the country was self-reliant for construction materials such as steel, paints, glass, structural aluminium, ceramics, fittings, aside from customer's preference for imported goods.

Local industries have also sufficiently supplied megaprojects like the Padma Bridge, Karnaphuli Tunnel and the metro rail project, ensuring savings of huge foreign currencies.

Homemade for homes

Even in the late 2000s, electronics and home appliances were synonymous with foreign brands distributed by local importers.

The importer Walton then built its own factory, banking on the government's supportive policies. It created a legacy in hi-tech manufacturing success, sealing its emergence as a dominant local market player and also a top exporter.

Local players like Minister, Jamuna, MyOne, Butterfly, Transcom, Konka, Vision, Orion and many others then built their local factories.

The most popular foreign brands, including Singer, Samsung, LG, Oppo, Vivo, Xiaomi, Nokia among others, also built local plants to gain a competitive edge.

Local assembly or manufacturing plants for refrigerator, television, air conditioner, kitchen appliances and smartphones are dominant in the over Tk30,000 crore local market which has been growing at a staggering 15% annual rate for the last decade.

Except for some ICT products, and premium electronics and home appliances, the mass market is being served by local plants.

Two-wheeler vroom

Except for the import of Completely Knocked Down (CKD) units for assembly by state-owned motorcycle assembler Atlas, the two-wheeler market was a story of imports.

Runner's emergence as the first manufacturer and exporter in the last decade changed the scenario.

In the last five years, Japanese Honda, Suzuki, Yamaha, Indian Bajaj, Hero, TVS, Chinese Lifan, Houjue, Italian Benelli-Keeway and many others took up local manufacturing and assembling, with local plants serving over 90% of the market. 

The market grew three times in the last five years and annual sales crossed six lakh units, while industry experts expect the market to triple in the next few years.

The market size, however, is yet to allow the manufacturing of most intermediary parts for industry, while the low-hanging fruits are being included in the portfolio of a few backward linkage factories.

Apart from three-wheelers, a few cars have also been assembled here initially by state-owned Pragati Industries and later by PHP Automobiles.

After the recent government policy for a local car industry, the two-wheeler success story is expected to be replicated there.

Local players, such as PHP, Bangla Cars and Bangladesh Auto Industries, have already emerged.

Many regional and global car industry players are also setting up their assembling plants in the country.

The clothes on our back

Bonded warehouse was a simple supportive tool in the 1980s that helped flourish the world's second largest apparel export industry in Bangladesh.

Once, it was a business of merely cutting and sewing imported fabrics, but now it is heavily backed by local linkage industries.

In woven apparel, around half of the fabrics are locally-made, while in knitwear and accessories, the local industries are almost near self-sufficiency, unless buyers demand specific fabrics or accessories from abroad.

Furthermore, green awareness has already made the country home to the most green textile factories.   

Many large spinners are investing heavily to manufacture high-value yarns.

Apparel now contributes to 80% of the country's exports, with the backward linkage widening the local base in the industry.

The pharma phenomenon

Pharmaceuticals, once dominated by imports from multinational companies, is a textbook example of self-reliance.

A supportive policy in the 1980s helped local drug makers, giving them an edge over many multinational players in the domestic market.

Alongside serving over 97% of the Tk27,500 crore local market, the pharmaceuticals industry is exporting to over 130 destinations, including stringent markets in Europe and countries like the USA and Australia, earning more than Tk1,200 crore a year.

Local syringes and a wide range of medical accessories have also replaced imports significantly.

Active Pharma Ingredients, the raw materials of drugs, are mostly imported, but the industry is looking to increase local APIs market share from the existing 15% following government incentives.

Growing at an annual rate of over 12% in the last five years, the industry is expected to grow at an average compound rate of 15% over this decade to touch the trillion Taka milestone by 2030.

Enter the glass city  

Three decades ago, 90% of the local demand for glass used to be met by importers. Now, 90% is met by local manufacturers.

Back then, state-owned Usmania Glass Sheet Factory, established six decades ago, would manufacture simple clear glasses, while colourful, high-end glass sheets were imported, including by founders of today's glass giants PHP and Nasir Glass.

Understanding the demand growth projection, PHP invested in a factory in 2001, followed by Nasir Glass and a few others.

Now most of the annual glass market, worth Tk2,000 crore, is being served by local plants, with PHP and Nasir Glass having 70% of the local market.

Bangladesh Glass Merchant Association President Mohammad Hossain Alamgir said some high-quality glass were still imported now, mainly because of buyers' preference.

Local companies can produce almost all types of glasses, with exports of glass sheets worth $2 million a year.

Ship it!

Except for a very few lighterage vessels, made by informal builders, Bangladesh used to rely on imported vessels.

But Ananda Shipyard made history in 2008 by exporting the modern container ship Stella Maris to Denmark.

It exported 34 ships, alongside building over 350 small and medium size vessels, for both local and foreign buyers.

State-owned Khulna Shipyard and private sector venture Western Marine Shipyard also made a name in the industry, while there are over 50 shipbuilders and marine workshops in the country.

Some 11 shipyards are capable of building 10,000 ton capacity vessels, except gigantic oceangoing ships and navy's high speed ships.

They are also building almost all the vessels the BIWTA wants through tenders.

Engineering, services and software

Now, thousands of small and mid-enterprises across the country are capable of making high quality replicas of any machine parts industries needed, boosting the light engineering sector.

Chattogram-based Goldenson has long been manufacturing electric fan motors as a substitute for Chinese imports, and the company could have gone much ahead if the duty-structure protected the local units against low cost imports.

Several East Asian light engineering manufacturers, who used to export in bulk to Bangladesh earlier, have also built factories in the country.   

The entry of local conglomerates, including RFL, is gradually reducing import dependency in various tools and equipment.

The service industry has also seen a rapid change.

In 2021, engineers of the Tool and Technology Institute replaced the Japanese team for the annual maintenance of the Ganges-Kobadak Irrigation Project, charging the government only TK3.71 crore, which was Tk12 crore for the Japanese.

Meanwhile, in the last one decade local software firms have grown enough to cater to software solutions to the financial industry, state and of course the private sector companies.

Abul Kashem Khan, chairperson of the Business Initiative Leading Development, also former president of the Dhaka Chamber of Commerce and Industry, underlined the emergence of local firms and professionals in service sectors, including in healthcare, education, tourism and hospitality, financial services, ICT, telecom, construction, and maintenance services.

"Now, we can all rely on the acquired expertise of the local firms while local professionals with leading foreign firms are also doing a great job for the nation."