Japanese economic zone now looks to attract foreign investors

Highlights:

• The Zone is a joint venture on 1,000 acres of land
• Gas connection likely to be available by mid-2025
• Singer Bangladesh already in production in the zone
• Japanese firm Lion Kallol is set to begin production in March- April
• Several other firms expected to start construction in a few months

The Bangladesh Special Economic Zone, also known as the Japanese Economic Zone, in Araihazar of Narayanganj, is now targeting foreign direct investment (FDI), especially from export-oriented companies.

"We are now focusing on attracting FDI from companies that will export their products, as this will make Bangladesh a more attractive destination for FDI," Taro Kawachi, managing director of Bangladesh Special Economic Zone Ltd, told The Business Standard.

Singer Bangladesh Ltd has already started production in the zone, manufacturing 1,000 units of refrigerators and televisions per day. The multinational electronics and home appliance company has invested $78 million in the factory, which occupies 33.4 acres of land.

Lion Kallol Limited, a major Japanese consumer goods company, is set to begin production in March or April. Several other companies are also expected to start construction on their factories within the next few months.

Several foreign companies in sectors such as chemicals, food, home appliances, and construction materials have expressed interest in investing in the zone for export purposes.

Kawachi said the zone experienced a slowdown in customer visits after the Covid-19 pandemic, but business has now recovered, and discussions are ongoing with several companies regarding investment and land purchases.

In addition to Singer Bangladesh and Lion Kallol, other companies that have acquired land in the zone include Rudolf GmbH from Germany, as well as Lion Corporation, Onoda, and NICCA Chemical Co Ltd from Japan.

Last year, the Bangladesh Special Economic Zone signed a land sub-lease agreement with Bengal IRIS TAKUMI Ltd to establish a state-of-the-art facility for producing buttons for the garment industry.

In February 2024, the Zone struck a land sales agreement with ARTNATURE BANGLADESH Ltd to produce high-quality hair products for export to Japan.

Kawachi added that electricity and water are available in the zone, and gas connection work is in progress, with completion expected by mid-2025.

The Zone is a joint venture between the governments of Bangladesh and Japan, spanning 1,000 acres of land.

The land is being allocated to the Zone in phases. So far, 190 acres have been handed over, and the first phase of development work on 500 acres has been completed.

The land is in the process of being handed over, and a new project will begin for the development of another 500 acres in the second phase.

Chowdhury Ashik Mahmud bin Harun, executive chairman of both the Bangladesh Economic Zones Authority and the Bangladesh Investment Development Authority, told journalists last month that they are currently focusing on a select list of priority economic zones that will drive industrial development.

These include the National Special Economic Zone, Srihatta Economic Zone, Japanese economic zone, Maheshkhali Economic Zone, and Jamalpur Economic Zone.

"Our commitment is to ensure that these zones are equipped with the necessary infrastructure and utility services, such as water, electricity, gas, and road connectivity within the next two years. By doing so, we expect to attract $5.5 billion in investment and create more than 238,000 jobs," Ashik said.