Introduction

Prior to liberation of Bangladesh all the major industries of our country belonged
to West Pakistani entrepreneurs. Just after liberation all the medium and big size
industries were nationalized with a view to back up socialistic economic order,
consequently the process of creating individual industrial entrepreneurs came to a
halt. In late 70s the economic theme of Bangladesh started to revert back from
state ownership to individual ownership. But the process of transition to new
economic system was not backed up by specific rules and regulations, institutional
arrangement and state sponsorship. As a result, the process of growing individual
entrepreneurship could not be accelerated. Till the middle of 80s maximum
Bangladeshi businessmen were engaged in import based trading business.
Meanwhile, the Government started to denationalize the state owned industries and
many industries were sold out to the individual businessmen. But that process of
disinvestment by the government also could not contribute a lot for creating
industrial entrepreneurs in this country. Of late, at present many individuals have
got the opportunity to float industrial undertaking with Govt. patronization, active
support from the financial institutions and personal initiative.

ECONOMY
GDP Growth Rate- 6.12% (2013-14)
GDP Per Capita Income- US$ 1192 (2014-15)
Inflation Rate (Point to Point)- 6.21% (Nov, 2014)
Investment Contribution to GDP- 28.69% (2013-2014)
(Public: 7.30%, Private: 21.39%)
FDI Inflows- 1181.44 Million (Jan-Sep 2014)
Export- 30.18 Billion (2013-14)
Import- 36.99 Billion (2013-2014)
Remittance- 14.22 Billion (2013-2014)
International Reserve: 21590.00 Million
Amount in US Dollar ($)

UPDATE THE TABLE ACCORDING TO THE ABOVE

INFORMATION
Economic Overview
GDP total: US $112.00 billion (at current prices 2011-12)
GDP per capita: US $848 (at current prices 2011-12)
GDP growth rate: 6.32 per cent (at constant prices 2011-12)
Total exports: US $24.287 billion (2011-12)
Total imports: US $35.44 billion (2011-12)
Total FDI: US $1.29 billion (2011-12)
Forex reserves: US $15.49 billion (June, 2013)
Currency: 1 USD = BDT 80 (avg 2011-12)

The Government of Bangladesh established its first economic zone in Chittagong

in 1983, and since then many more have been developed, with the aim to accelerate
industrialization and economic growth, while providing the investors the best
possible facilities and lowest possible cost base. The economic zones, located at
strategic sites all over Bangladesh, provide ready-made infrastructure and support
facilities as well as various fiscal and non- fiscal incentives. One of the highlights
for foreign investors is that there are no requirements of prior approval or limits
on equity participation and repatriation of profits and income in most sectors. The
details of such services, facilities and incentives have not been well documented
 and remain an understudied area. This report attempts to fill the gap by providing
a consolidated picture of the different economic zones in Bangladesh. It addresses
three major Economic Zones in Bangladesh Bangladesh Export Processing Zones,
Korean Export Processing Zone and Special Economic Zones. Detailed descriptions
of the zones are provided, with an explanation of the facilities and incentives
available.

ECONOMIC ZONE
An economic zone (EZ) is a geographical region within a country with special
economic regulations, designed to stimulate local and foreign investment in that
region, through various fiscal and non-fiscal incentives.

Bangladesh Economic Zone

Bangladesh initiated its own economic zones to augment exports and attract
foreign investments in the early 80s. Over time, Bangladesh has retained its
low cost advantage and remained a preferred choice for foreign investors.

Bangladesh Economic Zones Authority is a government agency that is responsible

for the management of economic zones in Bangladesh.[1] The Authority was
founded through Economic Zones Act and established in November
2010.[2] Paban Chowdhury is the present executive chairmen of BEZA. [3] The
agency reports to the Prime Ministers Office.[4] Prime Minister Sheikh
Hasina is the present chair of the agency.[5]

BEZAs Vision:
BEZA aspires to become a sustainable development driving force and a world class
investment promoter and service provider to ensure quality of life of the people.
Mission:
BEZAs mission is to persistently create value for the investors by establishing
attractive investment facilities in the economic zones through One-Stop service and
competitive incentive packages.

BEZA SERVICES
BEZA is mandated to establish, license, operate, manage and control economic zones
in Bangladesh.

General duties and functions of BEZA as per Bangladesh Economic Zones Act, 2010
(Section 19) are as below:

1. to identify and select sites for industrial or similar sectors on availability of

local resources including infrastructure, roads and communications, travel and
banking facilities and skilled man-power for ensuring efficient utilization of
land in the light of clustering principles;
2. to acquire land for economic zones identified by own initiative or public-
private partnership and take possession of the acquired land on behalf of the
Government;
3. to appoint economic zone developer on competitive basis to develop and
manage the acquired land and different type of infrastructure thereof;
4. to prepare infrastructure development plans of economic zones for
implementation and management of own establishment and submit it to the
Governing Board for approval;
5. to allot or lease or rent of land, building or site, on competitive commercial
basis in prescribed manner, to investors applied for establishing industrial units,
businesses and service providers in economic zones for implementation and
management of their establishment;
6. to ensure infrastructure development of economic zones within specified
period through monitoring of activities of its own and of economic zone
developers;
7. to create opportunities for employment through establishing backward
linkage industries within or outside economic zones by promoting local and
foreign investment including development of skilled labour force;
8. to ensure efficient use of land in the light of clustering principles by dividing
the land based on infrastructure and on availability of local resources to provide
a conducive environment and facilities within economic zones;
9. to encourage more efficient management and monitor programs for
implementing commitments on environment and other matters;
10.to take steps to establish backward linkage industries in economic zones to
meet the requirements of local economy;
11.to encourage business organizations to relocate polluting and unplanned
industries from metropolitan cities through establishing separate economic
zones for different industries;
12.to encourage public-private partnership in the development and operation of
economic zones;
13.to take necessary steps to implement social and economic commitments;
14.to establish the due rights of workers, to ensure their welfare and to establish
conducive relationships between owners and workers;
15.to take appropriate steps to implement poverty reduction program;
16.to expedite implementation of industrial policy of the country by promoting
planned industrialization of the thrust manufacturing and service sectors; and
17.to convert the areas declared as economic zones into economic centers by
developing industrial cities, agro-based industrial zones, trade zones and
tourism zones through investment of banking sectors and to facilitate
availability of skilled labour and efficient service provisions.
Government-Owned Sites
Search:

S/N Name Upazila District

1 Mongla EZ Mongla Bagerhat

2 Mongla EZ Mongla, Bagerhat
3 Rampal EZ Rampal Bagerhat
4 Sundarban Tourism Park Shoronkhola Bagerhat
5 Agailjhara EZ Agailjhara Barisal
6 Bhola sadar EZ Bhola Sadar Bhola
7 Bogra EZ -1 Ushajahanpur Bogra
8 Ashugonj EZ Ashugonj Brahmanbaria
9 Anawra -2 (CEIZ) Anawra Chittagong
10 Anwara EZ Gahira, Anwara Chittagong
11 Mirsarai EZ Mirsarai Chittagong
12 Patiya EZ Patiya Chittagong
13 Comilla EZ Meghna Comilla
14 Coxs Bazar Special EZ Moheshkhali Coxs Bazar
15 Jaliardip Economic Zone EZ Taknaf Coxs Bazar
16 Moheshkhali -1 EZ Moheshkhali Coxs Bazar
17 Moheshkhali -2 EZ Moheshkhali Coxs Bazar
18 Moheshkhali -3 EZ Dholghata Coxs Bazar
19 Moheshkhali Special Economic Zone Ghotibagha Coxs Bazar
20 Moheshkhali Special Economic Zone Cox's Bazar Ghotibagha and Sonadiya, Moheshkhali Coxs Bazar
21 Moheshkhali Special Economic Zone Kalamarchora Moheshkhali Coxs Bazar
22 Sabrang, Tourism SEZ Tacknaf Coxs Bazar
23 Dhaka EZ Dhohar Dhaka
24 Dhaka SEZ Karanigonj Dhaka
25 Feni Economic Zone Sonagazi Feni
26 Shreepur EZ (Nayanpur), Shreepur Gazipur
27 Sreepur EZ Sreepur Gazipur
28 Gopalganj EZ Kotalipara Gopalganj
29 Gopalganj EZ - 2 Gopalganj Sadar Gopalganj
30 Habigonj EZ Chunurughat Habigong
31 Jamalpur EZ -2 Jamalpur Sadar Jamalpur
32 Jamalpur EZ Jamalpur sadar Jamalpur
33 Khulna EZ -1 Boiyaghata Khulna
34 Khulna EZ -2 Terkhada Khulna
35 Kustia EZ Bheramara Kustia
36 Manikgnnj EZ (BIWTA old Aricha Ferighat), Shibaloy Manikganj
37 Shrihatta EZ Sherpur Moulavibazar
38 Munshiganj Gazaria EZ Gazaria Munshiganj
39 Mymensingh EZ Mymensingh Mymensingh
40 Mymensingh EZ Mymensingh Sadar Mymensingh
S/N Name Upazila District

41 Araihazar -2 Economic Zone Araihazar Narayanganj

42 Araihazar Economic Zone Araihazar Narayanganj
43 Narayanganj EZ Bandar & Sonarga Narayanganj
44 Narsingdi EZ Narsingdi Sadar Narsingdi
45 Nator Economic Zone Lalpur Nator
46 Netrokona EZ -1 Netrokona Sadar Netrokona
47 Nilphamarai EZ Nilphamari Sadar Nilphamari
48 Panchghar EZ Debiganj Panchghar
49 Rajshahi Economic Zone Paba Rajshahi
50 Rajshai EZ Poba Rajshai
51 Shariatpur Economic Zone Jajira Shariatpur
52 Shariatpur Economic Zone Gosharhat Shariatpur
53 Sherpur Economic Zone Sherpur Sherpur
54 Narayanganj EZ Sonargaon Sonargaon Sonargaon
55 Sylhet Special EZ, Gowainghat Gowainghat Sylhet

Private Sites
Search:

S/N Name Upazila

1 A K Khan PEZ Polash
2 Megna Industrial Economic Zone PEZ Sonargaon
3 Megna Economic Zone PEZ Sonargaon
4 Aman Private EZ Sonargaon
5 Abdul Monem PEZ, Gojaria
6 Bay Private EZ Gazipur
7 United City IT Park Ltd. Badda and Vatara
8 Arisha Private EZ Keranigonj, Savar
9 East-West Special EZ Keranigonj
10 Bosundhora Special EZ Keranigonj
11 Sirajganj EZ (Adjacent to Bangabandhu Bridge), Sirajganj Sadar & Belkuchi

The Different Economic Zones in Bangladesh

The Economic Zones in Bangladesh can be broadly classed into three main
groups, Bangladesh Export Processing Zones (BEPZs), Korean Export
Processing Zone, (KEPZ) and the third and most recent kind is Special
Economic Zones, illustrated in Figure 1. The segregation has been done
on two grounds, the ownership and the intended market it caters to. There
are some basic differences between export processing zones and special
economic zones. The export processing zones, under Bangladesh Export
 Processing Zone Authority and the Youngone Corporation, host export-
driven industries that focus on the fiscal and non- fiscal incentives to
attract foreign direct investments. On the other hand, the special economic
zones, under Bangladesh Economic Zone Authority, are being developed
with the intention to accommodate industries for both the local and
international markets and to emphasise both local and foreign investment.
What separates the Korean Export Processing Zone from the Bangladesh
Export Processing Zones is that the former was developed by a private
Korean company and the latter by the Government of Bangladesh.

Theory of EPZ: An Export Processing zone is an industrial area that constitutes

an enclave with regard to customs tariffs and the commercial code in force in the
host country.

Economic Rationale for a better export performance of the zones:

EPZs are special enclaves, separated from the Domestic Tariff Area (DTA) by fiscal
barriers and are intended to provide an internationally competitive duty free
environment for export production at low cost. EPZs are benefited usually from
the following:
Modern and efficient infrastructure
 General fiscal and non fiscal concessions to firms

Better governance due to single window facilities to ensure corruption and

red tape free business environment.

Bangladesh Export Processing Zone

In the late-1970s, the Bangladesh Government tried to take the economy of the
infant state in a new direction through denationalization of industries and
promotion of privatization and private ownership. In this attempt to boost
the economy, promote industrialization, generate employment and, most
importantly, attract capital investment, the government decided to
establish industrial enclaves or economic zones with special features and
facilities. This came about through the establishment of Bangladesh Export
Processing Zone Act, 1980 and the first economic zone Chittagong
Export Processing Zone (CEPZ) was established in 1983. Seven more
export processing zones have been established in Bangladesh since, the
details of which are listed in Table 2.

These export processing zones focus on export-oriented manufacturing and

provide a one window service to investors through special incentives as
well as extraordinary legal and
institutional support from the government. During the past 25 years, the total
investment in the Bangladesh Export Zone Authority amounted to

US$1,611.17 million and export has been US$18,914.74 million. 7

The Bangladesh Export Processing Zone Authority (BEPZA) is the official
organ of the government entrusted with the responsibility to promote, attract
and facilitate foreign investment in the Export Processing Zones. The
organisations responsibilities entail creation of infrastructure (buildings,
utilities, warehouses, roads etc), processing applications for setting up industries
(one window service), allotment of land or building space, provision of space
to local and foreign banks, insurance companies, clearing and forwarding
houses, courier services, post offices etc. The Bangladesh Export Processing
Zone Authority also provides financial help and support to investors, ensures
smooth manufacturing and commercial operation of the firms, and remains
vigilant about labour-management relations

within the zones. 8

One of the extraordinary features of the Export Processing Zones in

Bangladesh is that the zones are exempted from the countrys labour laws.
Workers in the Export Processing Zones are prohibited from forming trade
unions. Bangladesh has been under pressure from the European Union
(EU) and the United States to establish trade union rights inside the Export
Processing Zones, as in the rest of the country. However, the Bangladesh
Export Processing Zone Authority has expressed, it wants no change in
the existing law within the zones. It continues to operate under The Export
Processing Zones Workers Welfare Association and

Industrial Relations Act, 2010.9

At present, the eight Export Processing Zones established by the Bangladesh

Export Processing Zone Authority, employ more than 300,000 workers.
The Chittagong Export Processing Zone was the first one to be established
 by the BEPZA, located in the port city of Chittagong. Dhaka Export
Processing Zone was established in the capital, followed by six more
Export Processing Zones in Mongla, Comilla, Ishwardi, Uttara
(Nilphamari), Adamjee and Karnaphuli. Three kinds of investment can be
made in these zones. They are Type A, where investors can retain 100
per cent ownership, Type B, where Bangladeshi and foreign investors can
enter into a joint venture and Type C under which local i.e., Bangladeshi

ownership may be 100 per cent.10

Table 2 shows a detailed account of the eight Export Processing Zones under
Bangladesh Export Processing Zone Authority. It lists details of the
locations, rent, space specifications and services available in the enclaves.
Table 2: The Bangladesh Export
Processing Zone: Location, Profile
and Services
EPZ Location Profile Utility Services & Rent
(charged at the current rate
of US $)
Chittagong Shouth Zone area: 183.37 hectares Water Supply: From
Halishahar. (453 acres) Chittagong WASA.
3.10km from the Number of industrial plots: Storage Capacity 7.26
sea port, 5.50km 502 million litres / day.
from the Total Standard Factory Tariff: Tk. 22.43 / cu-m.
main Building: 15 (measuring Gas Supply: From
business centre, 65,809 sqm) Bakhrabad Gas System Ltd.
11.3km from Size of each plot : 2000 sqm Tariff: Tk. 6.45 / cu-m.
Shah Amanat Tariff: US$2.20/sqm / year. Power Supply: 11 kv, 3
International Space of Standard Factory phase, 50 cycles / sec.
Airport, Building: 65,809 sqm Tariff: Tk. 6.11 / kwh.
Chittagong Tariff: US$2.75/sqm /
month. Rent:
Land (US$/SQM/YEAR) :
2.20
Readymade Factory
Building Space
(US$/SQM/MONTH) : 2.75
Dhaka Savar. 35km Zone area: 361 acres Supply: Own water supply
from Dhaka city Number of industrial plots: system.
centre, 25km 442 Tariff: Tk. 22.43 / cu-m.
from Hazrat Total Standard Factory Gas Supply: From Titas Gas
Shahjalal (R) Building: 17 (Measuring Transmission & Distribution
Airport. 108,850 sqm) Co. Ltd.
304km from Size of each plot: 2000 sqm. Tariff: Tk. 6.45 / cu-m.
Chittagong Sea Tariff: US$2.20/sqm /year. Power Supply: 11 kv, 3
Port. Space of Standard Factory phase, 50 cycles / sec.
Building: 108,850 sqm. Tariff: Tk. 6.11 / kwh.
Tariff: US$2.75 /sqm
/month. Rent:
Land (US$/SQM/YEAR) :
2.20
Readymade Factory
Building Space
(US$/SQM/MONTH) : 2.75
Mongla Mongla port Zone area: 186.21 hectares Water Supply: Sweet water
area, Bagerhat. (460 acres proposed). supplied by Public Health
105km from Number of industrial plots: Engineering Department
Jessore Airport 116 through own supply

and Size of each plot: 2000 sqm. network.

397km from Tariff: US$1.25/sqm / year Tariff: Tk. 23.56/ cu-
Dhaka and for land. m. Uninterrupted Power
664km from Space of Standard Factory Supply: 11 kv, 3 phase, 50
Chittagong port. Building: 18717.68 sqm cycles/sec.
Tariff: US$1.60/sqm / Tariff: Tk. 7.50/ kwh.
month (Utilities will be charged at
the current rate of US$)
Telephone Connection from
dedicated Exchange of
BTCL Mongla.

Rent:
Land (US$/SQM/YEAR) :
1.25
Readymade Factory
Building Space
(US$/SQM/MONTH) : 1.60
Ishwardi Pakshl, Pabna. Zone area: 124.99 hectares Water Supply: Own supply
3.7km from (308.77 acres ) network.
Pakshi Bridge Number of industrial plots: Tariff: Tk. 22.43 / cu-m.
through by-pass 158 (100 in first phase ) Gas Supply: From
road, 10.60km Size of each plot: 2000 sqm Paschimanchal Gas
from Ishwardi Tariff: US$1.25/sqm/ year. Company Ltd.
Airport, 130km Space of Standard Factory Tariff: Tk. 6.45 / cu-m.
from Building: 18000 sqm Power Supply: 11 kv, 3
Bangabandhu Tariff: US$1.60/sqm/ phase, 50 cycles / sec.
(Jamuna) Bridge, month. Tariff: Tk. 6.11 / kwh.
220km from
Dhaka, 280km Rent:
from Mongla Land (US$/SQM/YEAR) :
port, 110km 1.25
from Rajshahi Readymade Factory
Airport and Building Space
484km from (US$/SQM/MONTH) : 1.60
Chittagong port.
Comilla Comilla old Zone area: 108.28 hectares Water Supply: Own water
Airport area. (267.46 acres) supply system.
167km from Number of industrial plots: Tariff: Tk. 22.43 / cu-m.
Chittagong port, 213 Gas Supply:
97km from Size of each plot: 2000 sqm From Bakhrabad
Dhaka. Tariff: US$ 2.20/sqm/ year. Gas system Ltd. Tariff: Tk.
Space of Standard Factory 6.45 / cu-m.
Building: 29,450 sqm Power 50Supply:
phase, 11 kv, 3
cycles / sec.
Tariff: US$2.75/ Tariff: Tk. 6.11 / kwh.
sqm
/month. Rent:
Land (US$/SQM/YEAR) :
2.20
Readymade Factory
Building Space
(US$/SQM/MONTH) : 2.75
Adamjee Adamjee Nagar, Zone area: 118.62 hectares Water Supply: Own water
Shiddirgonj, (293 acres) supply system.
Narayanganj, 15 Number of industrial plots: Tariff: Tk. 22.43 / cu-m.
km from 307 (Proposed) Gas Supply: From Titas Gas
Dhak Size of each plot: 2000 sqm Transmission & Distribution
a City, Tariff: US$2.20/sqm /year. Company Ltd.
40km from Space of Standard Factory Tariff: Tk. 6.45 / cu-m.
Hazrat Shahjalal Building: 42737 sqm Power Supply: 11 kv, 3
(R) Airport, 255 Tariff: US$2.75 /sqm phase, 50 cycles / sec.
km from /month. Tariff: Tk. 6.11 / kwh.
Chittagong Port.
Rent:
Land (US$/SQM/YEAR) :
2.20
Readymade Factory
Building Space
(US$/SQM/MONTH) : 2.75
Uttara Shongalshi, Zone area: 211.99 acres Water Supply: Own water
(Nilphamari) Nilphamari. Number of industrial plots: supply system.
18km from 202 Tariff: Tk. 22.43 / cu-m.
Syedpur Airport, Size of each plot: 2000 sqm Gas Supply: Not available.
401km from Tariff: US$1.25/sqm/ year. Power Supply: 11 kv, 3
Dhaka, Space of Standard Factory phase, 50 cycles / sec.
650km from Building: 12,400 sqm Tariff: Tk. 6.11 / kwh.
Chittagong Port, Tariff US$1.60/sqm /month.
586km from Rent:
Mongla Sea Port. Land (US$/SQM/YEAR) :
1.25
Readymade Factory
Building Space
(US$/SQM/MONTH) : 1.60
Karnaphuli North Potenga Zone area: 222.42 acres Water Supply: From
and Halishahar, Number of industrial plots: Chittagong WASA &
within 6km from 254 through own water treatment
Chittagong Port, Size of each plot: 2000 sqm plant.
10km from main Tariff: US$2.20/sqm/ year. Tariff: Tk. 22.43 / cu-m.
business centre Space of Standard Factory Gas Supply:
of Chittagong, Building: 19,686 sqm From Bakhrabad
9km from Tariff: US$2.75/sqm Gas System Ltd. Tariff: Tk.
Shah Amanat /month. 6.45 / cu-m.
International Power Supply: 11 kv, 3
Airport, phase, 50 cycles / sec.
Chittagong. Tariff: Tk. 8.36 /kwh (peak
hour). Tk. 5.35/ kwh (off
peak hour).

Rent:
Land (US$/SQM/YEAR) :
2.20
Readymade Factory
Building Space
(US$/SQM/MONTH) : 2.75
Up to January 2012, 37 countries including South Korea, Japan, China,
Malaysia, United States of America, United Kingdom, Italy,
Canada, Netherlands, Germany, British, India, Sweden, Singapore,
Pakistan, Panama, Switzerland, Belgium, Denmark, France,
Thailand, Sri Lanka, Indonesia, Australia, Nepal, Mauritius, Ireland,
United Arab Emirates, Turkey, Ukraine, Kuwait, Spain, Malta and
Romania have invested in the export processing zones of
Bangladesh, accounting for 403 industries in operation and a cumulative
investment of about US$ 2,457 million. 11

Despite the continuing global financial crisis and especially the sovereign
credit crisis in Euro zone, one of Bangladeshs main export
destinations, the country has shown positive recovery in exports,
especially from the export processing zones. Exports have grown
by 41.47 per cent in FY 2010-11. The previous fiscal year, worst-
hit by recession, growth rates were just

4.11 per cent.12 Table 3 illustrates the export performance of the eight
export processing
zones individually, in the year 2012-13. It also highlights the investments
made during that period and number of people employed in the zones
so far.

Table 3: Performance of the

Export Processing Zones 2012-
13

EPZ Investment Export Employment

US$ million US$ million (cumulative)
Chittagong 133.84 2095.12 185006
Dhaka 68.45 1780.73 88033
Mongla 3.52 74.10 1562
Ishwardi 5.12 55.71 6071
Comilla 21.06 176.93 14713
 Adamjee 29.99 274.10 30874
Uttara (Nilphamari) 20.62 20.38 8679
Karnaphuli 6.58 379.61 39070

In the fiscal year 2012-13, Chittagong Export Processing Zone (CEPZ)

exported goods worth US$2,095 million. Readymade garment sector is
the leading foreign exchange earner in the Chittagong Export
Processing Zone with 48 factories in operation and five more under
construction while the second largest sector is garment accessories.
Twenty one garment accessories factories are in operation and more are
under development.13

A relatively new zone, the Uttara Export Processing Zone, has also seen
rapid expansion and development. As of 2013, 12 factories in the Export
Processing Zone are in production; and from 1379 employees in 2006,
it now employs close to 9000 workers. The export values have increased
from US $ 0.08 million to US $ 20.38 million over the same period.14

Another upcoming zone is the Comilla Export Processing Zone. The export
values from this zone have increased from US $ 0.01 million in 2001
to US $ 176.93 million in 2013.15 Bangladesh Export Processing
Zone Authority has plans to expand the zone further and set up more
industrial plots; and the World Bank is expected to finance this
expansion project. Production in the zone includes sweater, denim
fabrics, garments, electric appliances, shoes,
zippers, yarns, poly bags, plastic materials and textiles. So far 15 foreign
companies, nine joint ventures and 10 Bangladeshi Companies have
been operating in the Comilla Export Processing Zone. Investments
come from the United Kingdom, Sri Lanka, Hong Kong,

Japan, Malaysia, China, Netherlands, France, USA, Ireland, South Korea,

Indonesia and Pakistan.16

As per the present scenario of 2013 there is scarcity of plots in Dhaka,

 Chittagong, Adamjee, Comilla and Karnaphuli Export Processing
Zones. In comparison, more plots are available in Uttara, Ishwardi and
Mongla Export Processing Zones. The government is trying to free up
plots in all the zones by encouraging vertical expansion of the factories
and also reallocating the under-utilised and un-utilised plots. Plots for
small and medium enterprises are readily available; but due to demand
for large industrial space from investors especially from China,
Japan, Hong Kong, and Thailand, it has been difficult to provide the
desired space.

In early 2013, Samsung sought 500 plots covering an area of 250 acres at
Export Processing Zones in Chittagong and Dhaka to set up mobile
phone, electric, electronics and home appliance plants.17 It has been
reported that Samsung plans to invest US$1.25 billion in the Export
Processing Zones in Bangladesh and negotiations for the best
possible fit are
underway. Nonetheless, President of Korea-Bangladesh Chamber of
Commerce and Industry said the Samsung proposal proves that
Bangladesh is on the right track to woo investments from top global
firms.18

2. Mode of Investment:
BEPZA pursues an open door policy in matters of foreign investment in its
EPZs. Bangladesh Export Processing Zones Authority is a statutory body but
very different from other autonomous organization. It enjoys complete
freedom of action in its decision making process independently of any
Administrative Ministry.
Investment with 100% foreign ownership (Type - A ' )
 Joint ventures (Type-B) with no limit to the extent of equity
sharing by the foreign partner
100% Bangladeshi ownership (Type-C) are allowed in the EPZs.

Fig 10: Type of Industries

The first zone in Bangladesh was set up in South Halishahar in Chittagong in

1983. Following the tremendous success of the Chittagong EPZ, the
government has decided to establish the
countrys second EPZ at Savar near Dhaka a decade later in 1993. In
view of the growing demand of the investors the government has
established 4 new EPZs one at Mongla, a southern port city of
Bangladesh, one at Comilla, situated in an unique place between
Dhaka and Chittagong, one at Ishwardi near the Jamuna Bridge and the
fourth one at Nilphamari named Uttara EPZ near Syedpur Airport. The
Authority has already started allotment of plots for setting up industrial
unit in those EPZs and 3 EPZs have already started operation. 50%
concession on rent of plot and factory building at EPZs of Mongla,
Ishwardi & Uttara (Nilphamari).

Recently, two new EPZs has been declared; one at Adamjee Jute Mills
area and the other at Karnaphuli Steel Mills area.
Investment:
Despite world wide recession FDI has increased in the EPZs during
the last 48 months. In June, 2001 the cumulative investment in
EPZs was US$ 475.20 million but up to June-2005 the
investment stands at US$ 867.01 million. The volume of
investment has increased to US$ 391.81 million with a growth
ratio of 82.45%.

Comparative Analysis on Investment

National

BOI conducted one FDI inflow survey during 2004 where it is

revealed that BEPZA alone shares 73.08% of total
manufacturing FDI inflow in Bangladesh.

BOI Registered BEPZA Financial Inst. Total

FDI Component BEPZA Share %
In million US$ In million US$ In million US$ In million US$

a. Manufacturing 55.676 151.146 - 206.822 73.08

Textile 14.995 101.893 - 116.888 87.17
Chemical 19.681 27.642 - 47.323 58.41
Leather & Rubber 8.666 10.026 - 18.692 53.64
Agro-based 7.284 1.752 - 9.036 19.39
Food & Allied 3.212 - - 3.212 -
Glass & Ceramics 1.28 - - 1.28 -
Printing & Publications 0.558 - - 0.558 -
Misc/NEC - 9.833 - 9.833 100
 b. Service 374.252 0.354 66.518 441.124 0.08
Telecommunications 237.41 - - 237.41 -
Energy & Power 133.045 - - 133.045 -
Power Generation 15.676 - - 15.676 -
Oil, Gas, & Coal 117.369 - - 117.369 -
Other Services 3.797 0.354 66.518 70.669 0.5
Financial Institutions - - 66.518 66.518 -
Others 3.797 0.354 - 4.151 8.53
c. Engineering 0.771 12.089 - 12.86 94
Total (a+b+c)` 430.699 163.589 66.518 660.806 24.7
6
3. Fig 12: Extended Sectoral Distribution of FDI
during 2004

International:
Indian council for Research on International Economic Relations
Conducted a study on comparative performance of EPZs in Bangladesh,
India and Srilanka. This working paper clearly reflects Bangladeshi
EPZs is on the top in attraction of investment and creation of employment.

Investment (Million $) Employment (Number)

Year
Sri Banglade India Sri Banglade India
1978 Lanka
20.9 sh Lanka
5876 sh 3300
1983 50.4 24093 13000
0.9 624
1988 (28.2) (62.0) (58.8)
100.2 17.2 69.9 46104 4207 25625
1993 (19.7) (362. (18.0) (114. (19.4)
221.6 131.0
2) 84058 26336
8) 45885
(24.3) (132.3) (16.5) (105.2) (15.8)
1998 261.2 391.8 223.8 91404 84074 77795
(3.6) (39.8) (22.0) (1.7) (43.8) (13.9)
2003 292.3 749.1 388.0 10423 144147 88977
(2.4) (18.2) (14.7) 7(2.8) (14.3) (2.9)
 *Source: Ministry of Commerce, Government of India; Mondel (2002).
Bangladesh EPZ is on the top in attracting Investment and creation of
Employment.
Fig 13: Total cumulative investment and employment and growth rates in
1983-2003

Export:
Bangladesh has achieved phenomenal export success through the EPZs. In
the total foreign exchange earnings of the country through exports, the share
of EPZs increased from a microscopic low of 0.02% in 1983-84 to a
spectacular high of 17.88% in 2004-05. The share of EPZs in the foreign
exchange earnings through the exports of manufactured goods also shows
the same trend over the corresponding period reflecting fast decline in the
relative share of the DTA in both total exports and the exports of
manufactured goods and the resulting foreign exchange earnings of the
country. Annual trend rate of growth of export earnings of the EPZs has been
more than six times higher than that of total national export earnings and more
than four times higher than that of total national export earnings from
manufactured goods. It means that export performance of the EPZs is much
more impressive than that of the country as a whole.

The enterprises of EPZs have exported goods worth of US$ 10,003.62 million
up to June, 05 and it was US$ 4823.79 million till June 2001. During the
last 4 years the export volume increases to about US$ 5179.83 million.
This shows an increase of 107.38%. The export earnings from EPZs crosses
billion dollar mark in the last four years. BEPZA represents average 18%
of total national export during the last four years.
 Total export of Total export of EPZs % of BEPZAs
Year
Bangladesh (m US$) (m US$) contribution (m US$)
1994-1995 3473 228 6.56

1995-1996 3882 337 8.68

1996-1997 4418 463 10.48

1997-1998 5161 636 12.32

1998-1999 5313 712 13.40

1999-2000 5752 891 15.49

2000-2001 6467 1068 16.51

2001-2002 5986 1077 18.00

2002-2003 6548 1200 18.33

2003-2004 7603 1354 17.80

2004-2005 8654 1548 17.88

Fig 14: BEPZAs contribution towards

total national Export

Productivity Performance of EPZ Workers

During 2004-2005 the export performance of EPZ workers in textile cluster
stands US $ 9952.00 per worker whereas export performance of one DTA
worker in the same sector recorded US $

2886.43. Therefore, EPZ workers productivity performance is 3.5 times than the
DTA workers.
 DTA EPZ

SECT
OR EXP/ EXP/
EM EXPOR EM EXPORT
T EMPL US$ m EMPL
PL PL
US$ m US$ US$
(NO (NO
S.) S.)

TEXT
18,00,000 5195.59 2886.43 1,40,187 1395.195 9952.0
ILE 5 0
CLUS
TER

Total Export: Bangladesh $ 8.654 b 100%

EPZ $ 1.548 b 17.88%
RMG & Knit Bangladesh $ 5.195 b 100%
Export: EPZ $ 1.395 b 26.86%

* TEXTILE CLUSTER INCLUDES GARMENTS, KNIT & OTHER

TEXTILE, TEXTILE, TERRY TOWEL, GARMENTS
ACCESSORIES, CAP, TENT

Fig 15: Productivity performance 2004-2005

4. Export Performance on Investment:

EPZ enterprises derives highest dividend in terms of their investment. During

2004-2005 fiscal, average export performance of enterprises stands around
1.79 times of their actual investment.

INVEST Expor Exp Per

SL PRODUCT UNIT
M US$ t M US$ Inv.
US$
1 GARMENTS 42 222.921 698.15 3.13

2 TEXTILE 26 212.262 314.12 1.48

3 TERRY TOWEL 15 27.749 39.21 1.41

4 KNIT & OTHER TEXTILE 19 73.915 106.99 1.45

5 GARMENTS ACCS. 25 60.096 81.86 1.36

6 CAPS 7 37.548 99.67 2.65

7 TENT 4 21.71 55.22 2.54

8 ELEC & ELECTRONICS 12 48.807 45.58 0.93

9 FOOTWARE & LEATHER 12 50.08 46.67 0.93

10 METAL PRODUCT 11 18.287 13.95 0.76

11 PLASTIC GOODS 12 19.384 12.54 0.65

12 PAPER PRODUCT 2 0.776 0.84 1.08

13 FISHING REAL & GOLF 1 31.07 10.07 0.32

14 ROPE 2 5.913 5.39 0.91

SERVICE ORIENTED
15 4 4.567 1.81 0.40
INDUSTRIES
16 AGRO PRODUCT 10 2.786 7.12 2.56

17 MISCELLANEOUS 17 29.139 8.94 0.31

Gr. Total 221 867.01 1548.13 1.79

 Fig 16: Export Performance on
Investment

Brand Products:
The enterprise are exporting world famous brand products like Nike, Reebok,
Lafuma, H & M (Sweden), GAP, J.C. Penny, Walmart, Kmart, OSPIG
(Germany), Mother Care (UK), Lee, Wrangler, Dockers, NBA, Tommy
Hilfiger, Out Door, Adidas, Falcon (USA), Edie Bauyer, Eagle, Releigh
(UK), Emmilee, Free Spiril (UK), Miles (Germany), Brouks, American
Eagle, Hi-Tech (UK), Decathlon, Phillip- Maurice (UK), Federated, Styles
Co, SAG Harbour (USA), Wins More, H
& M (SWEDEN), LL Bean, Target, Autica, Disley, Vans, Vftnfcamera Lens
(IO Parts) Konika, Minolta, Golf Shafts, Abu Garcia, Mobile Parts of Sony,
Automobile Parts of Nissan, Mitsubishi & Hino.

5. Diversification of Export:
Diversification of Bangladeshi export was started with RMG product
in early 80s. With the influx of FDI in EPZs, RMG sector gives a fresh
thrust in boosting national export. RMG and textile cluster alone represents
90% of EPZ export and 26% of national RMG export in 2004-05. Moreover,
BEPZA could attract substantial amount of FDI for Tent, Camera parts, Golf
Shaft, Bi-cycle, Zipper manufacturing plant. There is no single manufacturing
unit of this kind outside EPZ. BEPZA is expecting big investment particularly
FDI in composite textile, home textile and Ceramics in near future.
Obviously, more investment will lead to diversification of countrys export
basket. During the last four years BEPZA has been maintaining a steady
 growth rate of national export.

6. Development of linkage industries in DTA:

One of the major activities of setting up EPZ is to encourage linkage
industries outside EPZ which will expedite establishment of industrial base
in the DTA. EPZ manufacturing units prompted establishment of multiple
number of linkage industries in DTA. During 2004-05 fiscal EPZ enterprises
made export and import transaction with DTA enterprises to tune of US $

528.310 million. This huge volume of transaction with DTA industries marked
about 26% of export earnings by the EPZ enterprises during 2004-05.

Apart from manufacturing activities private sector enterprises

participation in Banking, Insurance, C&F agent, courier, catering, sub-
contracting, transporting, container handling, cell phone operator, shopping
mall, medical center, school, college are being made in different EPZ.

It is expected that BEPZA will be able to attract private sector

investment in power, water generation and distribution, effluent treatment,
telecom operator and dormitory in EPZs.
(Value in Million US$)
 PERFORMA 2002- 2003-2004 2004-2005
NCE
EXPORT 03120130 1541
PARTICULARS AMO0 % AMO4 % AMO %
OF EXP.
WAGES UNT EXP UNT EXP. UNT EXP.
77 6.4 75 5.7 91 5.9
.
RENTAL 12 1 1 12 50.9 13 10.8
UTILITY 22 1.8 23 21.7 24 41.5
SV. CHARGE 52 34.3 54 64.1 65 64.2
DTA GOODS 3
315 26.25 360 27.60 4 392 2
25.44
ADMN. EXP. 33 2.7 33 2.5 42 2.7
TELE COM. 9 50.7 10 30.7 12 30.7
SURPLUS 5 6 8
17 1.4 18 1.3 35 2.2
RETAINED BY 2 8 3
TOTAL 53 44.7 58 44.8 67 43.7
LOCAL 1
7 5 5 6 4
INVESTORS

Cumulative Performance:
The following shows the cumulative performance of all the EPZs of Bangladesh.
It reveals from the record total number of industries in EPZs rose upto 337
with cumulative investment of US$ 867.01, export US$ 10003.62 million and
employment upto 154,788.
Zone-wise Performance (up to June 2005)
EPZ Industry Investment Export Employme
In Op. (No) U/Impl. (US $ in M)
(No) (US $ in nt (No)
CTG 123 33 472.86 6028.50 94,419
DHK 76 27 M)
359.41 3943.53 56,280
COM 09 22 30.31 14.91 2,814
MON 11 15 2.87 15.59 205
UTR 01 06 1.50 0.00 1,050
ISD 01 12 0.05 1.09 20
Adamjee - 01 - - -
Total 221 116 867.01 10003.62 1,54,788
 Fig 18: Zone-wise aggregate performance

Performance Factor:
7. Infrastructure Facilities
The success stories of EPZs in different countries formed to be closely
associated with the physical facilities provided by them to the potential
investors. Therefore, the provision of creating infrastructure, buildings
and ensuring public utilities to the investors were planned in the early stage
of Bangladesh EPZ.