230 more leather, plastic, light engineering firms to get investment aid

Highlights

• 230 more leather, plastic, light engineering firms to get assistance under ERF
• This will help them increase export capacity, diversify products
• A firm will receive investment assistance of up to a maximum of $40,000
• It will require to invest a minimum of 40% against the matching grant
• Under Window-3, a maximum of $200,000 will be given
• Recipient's contribution should be at least 50% against the matching grant in this case
• Those interested in getting assistance will have to submit applications
• Earlier, 400 companies got assistance under Window-1
• Of them, 165 have already received assistance, and operations of 183 are in process

The government will provide investment assistance to 230 more companies in the leather, plastics, and light engineering industries sectors to increase export capacity and diversify their products.

The project has been undertaken with the assistance of the World Bank for technical services, attaining international standards, and factory development to harness the potential of exporting new products outside readymade garments.

Commerce Secretary Dr Jafar Uddin announced the inauguration of the investment support programme at a virtual event Wednesday. He was the chief guest while industrialists concerned also attended the programme.

The Export Readiness Fund (ERF) is an ongoing activity under the Export Competitiveness for Jobs (EC4J) project implemented under the Ministry of Commerce and funded by the World Bank Group. Jafar said the ERF is working for the development of export trade.

"Hopefully, this activity will strengthen the position of traders in the international market. Through this, Bangladesh will set a milestone in world trade by 2041."

ERF started operations in January this year and will continue till March 2023. Under the programme, three types of grant assistance are being provided which are described in the project as Window-1, Window-2, and Window-3.

Earlier, 400 companies were provided assistance under Window-1 of the same project. Of them, 165 companies have already received investment assistance and operations of 183 are in process.

Investment assistance to 230 companies, including small and medium industries, under Window-2 will be provided for technical services, quality achievement and capacity building. This will also be done to prepare the factory working environment and make quality products as per buyers' demands and regulations applicable to export markets.

In this case, an organisation will receive investment assistance of up to a maximum of $40,000. Recipients will be required to invest a minimum of 40% against the matching grant.

In addition, under Window-3 for factory development, modern technology and innovative investment, especially creative and innovative projects having a strong potential to have a positive social and economic impact will be given a maximum of $200,000 as matching grant or investment assistance to invest in modern technology addition and factory development. In this case, the contribution of the recipients should be at least 50% against the matching grant.

The ERF programme will provide investment assistance to manufacturing industries to improve the environmental, social and quality standards of factories, to improve products and production, and to carry out necessary development to comply with export market standards, laws, and regulations. The key objective is to boost exports.

Assistance in identifying barriers to environmental, social and quality standards improvement (Window-1). In the meantime, evaluation has begun at the factory level to identify the obstacles in improving the environmental, social and quality standards of the industrial enterprises concerned under the project.

Those interested in getting this investment assistance will have to submit applications. Manufacturing industries will be selected in a competitive manner. In this case, proper evaluation method and intensive monitoring will be followed. Emphasis will be placed on the ability to increase exports and create employment while considering and selecting applications.

ERF team leader Dave Ranganaikalo said it is a $10 million fund which has been provided to Bangladeshi companies involved in the production and export of certain products.

"These companies will create a competitive environment in export trade in the international market in terms of environmental, social and quality standards. The ERF programme was launched in January this year."

Hosna Ferdousi Sumi, private sector expert of the World Bank, said the project will bring a big diversification to the products of the sectors.

Abdur Razzaque, president of the Bangladesh Engineering Industries Owners Association, said many of the enterprises the fund was launched for are not availing it because the industry has not grown up in a true sense.   

"But if we can move forward keeping the Sustainable Development Goals (SDGs) as the target, no one will be left behind."

Bangladesh Plastic Goods Manufacturers and Exporters Association President Md Jashim Uddin said the plastics sector has potential as an export sector. "There is big business in this sector every year. This programme will bring big benefits to the plastic sector." 

Md Saiful Islam, president of the Leather Goods and Footwear Manufacturers and Exporters Association, said 80% of Bangladesh's export trade depends on apparels. "This is a wonderful programme that aims to bring diversity to export trade centring four separate sectors by shifting the focus from garment export.

EC4J Project Director Obaidul Azam said, "With great curiosity, we are looking at Window-2 and Window-3 of ERF. The programme will immensely help Bangladesh increase and diversify exports."

"Hopefully, we will be able to properly achieve the goals we are working towards in the second step," he added.