KPST Shoes makes export as first firm from Bepza Economic Zone

KPST Shoes (BD) Co Ltd, a Chinese-owned shoe accessories manufacturing company, has commenced exporting from the Bangladesh Export Processing Zone Authority (Bepza) Economic Zone, situated in the Bangabandhu Sheikh Mujib Shilpa Nagar in Chattogram.

According to Bepza, in the first shipment, KPST Shoes has exported EVA sheets – a shoe accessory – worth $349,300. The shipment is destined for Blue Ocean Footwear in Gazipur. 

Blue Ocean Footwear is sourcing shoe-making materials from KPST Shoes as a company nominated by its foreign buyer. The transaction is considered a deemed export.

Having started commercial production on 8 November, KPST Shoes plans to invest $8.07 million to expand its production capacity, and create 2,670 new jobs.

The expansion will focus on manufacturing a variety of shoe accessories, including insoles, outsoles, midsoles, EVA foam, and PU foam. The company currently has an annual production capacity of 30 million pairs of EVA and PU foams, and 3,00,000 cubic metres of the materials. Its previous investment was $34.80 million, and it currently employs 30 people.

Engr Mohammad Anamul Haque, project director of Bepza Economic Zone, told The Business Standard, "The two other Chinese-owned companies – Fengqun Composite Material Co (BD) Ltd and Kiaxi Lingerie Bangladesh Co Ltd – have begun commercial production, and are waiting for export. They have received permanent customs bond licences."

With an investment target of $2.2 million, Fengqun Composite has focused on producing a range of items, including shoe accessories and packaging materials such as duct tape, cartons, paperboard boxes, inner boxes, corrugated boxes, rigid boxes, foil sealed bags, and chipboard packing. Fengqun began construction work in April 2022.

Kiaxi Lingerie, a garment product manufacturer, has set investment goals of $60.85 million for their operations within the economic zone.

So far, 23 companies have received the allotment in the economic zone. Of them, 17 are foreign-owned, two joint ventures, and four are local firms. They have put forth an investment proposal of $520.26 million in total with proposed employment of 86,525 people.

The zone, expected to draw approximately $2.70 billion in foreign direct investments once it is fully operational, has been established on 1,138.55 acres of land in the Bangabandhu Sheikh Mujib Shilpa Nagar with 539 industrial plots. Of them, 132 plots have so far been allocated to the 23 companies.

Bepza officials say more than 100 companies have applied for industrial plot allocations within the Bepza Economic Zone. As of now, 23 companies have been granted plots, while the remaining applications are under review.

The companies are expected to contribute to the production of diverse goods, including shoe accessories, packaging materials, finished lubricants, camping equipment, outdoor products, cashew nut processing, tents, apparel, camping equipment, garment accessories, and paper conversion, among others.

Recently, there has been renewed discussion that garment factory owners are reluctant to set up their units in Mirsarai, citing the labour and transportation crisis.

On the issue, Project Director Engineer Mohammad Anamul Haque said, "Many workers from Abu Torab and Bortakia in the neighbouring areas of the economic zone are coming to work. We are receiving a lot of applications. We hope that there will be no labour shortage." 

In addition, the transportation owners are contacting the economic zone authorities. Once the factories are operational, they will also start transportation when people's travel increases, added Anamul.

The Bepza Economic Zone Mirsarai-Phase 1 (1st Revised) project was initiated in 2018 with an estimated cost of Tk1,302.91 crore, and has achieved 75% completion as of now. The project's deadline is set for December 2024, and it envisions creating a smart and green economic zone.

Currently, Bepza oversees eight operational export processing zones (EPZ) – Chattogram EPZ, Dhaka EPZ, Mongla EPZ, Ishwardi EPZ, Cumilla EPZ, Uttara EPZ, Karnaphuli EPZ, and Adamjee EPZ.

The development of the Bangabandhu Sheikh Mujib Shilpa Nagar, spanning 30,000 acres in Mirsarai and Sitakunda upazilas of Chattogram, and Shonagazi upazila of Feni, has meanwhile seen the initiation of production by five industries, with another 15 industries currently under construction.