Amid growing energy crisis in Pakistan, many textile manufacturers in its textile hub Faisalabad are planning to relocate their manufacturing units in Bangladesh.
Though the power crisis is also prevails in Bangladesh, business leaders in Dhaka welcomed the move, but said no-one would be allowed to set up readymade garment units in the name of textile factory relocation.
'If any country wants to relocate their manufacturing units in Bangladesh, they're welcome. But we won't accept it if any country tries to run RMG unit in the name of textile unit,' president of Exporters Association of Bangladesh Abus Salam Murshedy told the news agency over phone.
The country's RMG sector is now in a stronger position and around 25 per cent capacity remains idle due to shortage of skilled manpower and infrastructure, he said.
According to a report of The Express Tribune, Pakistan published on August 18, Bangladesh has been offering a lot of incentives, including uninterrupted power supply (at cheaper rates than in Pakistan), tax-free status for the first 10 years and tariff-free access to markets in the European Union.
These incentives on offer have convinced many Pakistani businessmen to invest heavily in Bangladesh.
Owner of Tauseef Enterprises Salamat Ali, for instance, has already invested Rs 300 million in setting up a textile factory in Bangladesh. Others like K&M Textile, are considering doing so, the report says.
'The cost of doing business in Pakistan is very high,' said Rana Ghulam Irtiza, coordination manager at Tauseef Enterprises.
In addition to cheaper and more reliable electricity, Irtiza says, labour costs in Bangladesh are cheaper and the workers tend to be more efficient. The per capita income in Bangladesh is about half that of Pakistan's $1,250.
Profit margins in Bangladesh tend to be around 30 per cent higher for textile exporters than in Pakistan, according to Irtiza.
Source : New Age
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