The light engineering sector has failed to flourish for lack of policy support from the government and financial institutions and lack of modern technology, experts and industry owners said.
Light engineering factories are also struggling because of shortage of capital, strict conditions imposed by the banks for loans and shortage of skilled workers, they said.
Most small entrepreneurs cannot access some facilities which larger business owners enjoy as the former do not have any platform to bargain with the government on different issues, entrepreneurs said.
'The light engineering sector lacks policy support,' Kamal Uddin, director of the Institute of Appropriate Technology at Bangladesh University of Engineering and Technology, told New Age.
For a couple of decades, the sector has constituted a significant segment of the national economy in terms of its contribution to employment, output, value addition and exports, according to SME Foundation.
Small factories are engaged in manufacturing various import-substitute metallic products such as electrical, ceramic, rubber and plastic goods, saving a significant amount of foreign currency, it said.
They produce goods ranging from agricultural machines, machines for the apparel sector, for rice mills and for the paint industry.
They also make spare parts for cars, power looms, and even ammunition boxes for the Bangladesh Army, the Bangladesh Engineering Industry Owners' Association president, Abdur Razzaque, told New Age.
Their annual turnover together is estimated at more than Tk 10,000 crore, according to the association.
About 600,000 skilled, semi-skilled and unskilled people are working in about 40,000 light engineering factories throughout Bangladesh.
The government has declared the sector a 'priority' sector in its export policy 2003 and as a 'thrust' sector in its industry policy 2005 but none of the successive governments have taken sufficient action, association leaders said.
Abul Hashim, the owner of the Nipun Engineering, said that most of the factories use outdated machines and produce low-quality products for lack of capital and support from financial institutions.
The banks charge small businesses high interest levels at rates of 16 to 17 per cent and are also unwilling to offer collateral-free loans although the sector belongs to the SME category, he said.
Saiful Islam, proprietor of the Progoti Engineering, said that most of the people working in the sector do not have any formal training.
'They have learnt the trade simply by working,' he said, adding that proper training can surely improve their productivity.
The managing director of the Dider Engineering, M Bachu Mia, said that weak linkages between industry and technical educational institutions was another important issue.
'Many industries have machines and tools but the workers are incapable of running them,' he said.
The BRAC Bank's head of SME Syed Faridul Islam told New Age that most of the entrepreneurs in the light engineering sector cannot improve the quality of their products and market them through the right channels as they do not have access to information.
If the industries cannot upgrade their technology now, they might not survive in the future because of increasing competition on the global market, he said.
The government-run Bangladesh Institute of Technical Assistance Centre provides some materials and training for light engineering industries but these are not sufficient to promote this sector, said the BITAC director, Syed M Ehsanul Karim.
Students of BITAC or polytechnic institutes are not interested in working in the light engineering sector for lack of job security or technology support, he said.
Syed Rezwanul Kabir, managing director of the SME Foundation, which is capitalised by the government with a total endowment of Tk 2 billion, said that it was not possible to provide too much of this money for the light engineering sector as it is responsible for supporting 10 other 'booster' sectors.
Light engineering factories often need higher loans than factories in other sectors, he said.
A light engineering business needs about Tk 2 crore whereas a footwear or a plastic factory needs Tk 15 lakh to Tk 20 lakh, he said.
Source : New Age
No comments:
Post a Comment