Japanese economic zone gears up for production from March 2023
A number of companies from various sectors have shown their interest in investing in Bangladesh Special Economic Zone, also known as the Japanese economic zone, in Araihazar upazila of Narayanganj
The Bangladesh Special Economic Zone, also known as the Japanese economic zone, in Araihazar upazila of Narayanganj is taking shape and is expected to go into production early next year.
"This special economic zone would be ready and we are expecting FDI [foreign direct investment] by the end of this year," Japanese Ambassador to Bangladesh Ito Naoki told The Business Standard.
A number of companies from various sectors such as light engineering, automobile and logistics have shown their interest in investing here, he said, expressing hope that some of them will be able to start production in March 2023.
"Our plan is to have 100 companies and the investment would be $1 billion," added the Japanese envoy.
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The Bangladesh Economic Zones Authority (Beza) is set to enter into an agreement with the Bangladesh Special Economic Zone Ltd this week to build roads, power and water supply lines, a common effluent treatment plant (CETP) and water treatment plant in the zone, according to officials familiar with the matter.
Beza and Sumitomo Corporation, which has been appointed by Japan as the land developer of the zone, have jointly formed Bangladesh Special Economic Zone Ltd for the infrastructural development of the zone.
The governments of Bangladesh and Japan are jointly developing the zone on 1,000 acres of land in Narayanganj, 32 kilometres from the capital Dhaka.
The government has already allocated 620 acres of land and the handover of the remaining 380 acres is expected by June this year, said officials at Beza.
Beza Executive Chairman Shaikh Yusuf Harun at a recent programme said 12 industrial companies, including Singer, have already applied for land in the economic zone. Singer Bangladesh wants 13 hectares of land to build a factory.
Economic zone development project
Bangladesh and Japan are developing the economic zone on a government-to-government basis.
The Executive Committee of the National Economic Council (Ecnec) approved the Tk2,582crore project in March 2019. Tk454.35 crore will come from government funds and Tk 2,127.82 crore from Japan International Cooperation Agency (Jica) as loan. The deadline for the project is 30 June 2023.
According to project sources, its cumulative financial progress till January 2022 is 19% and physical progress is 55%. The land development and boundary wall building work has been completed by 74% and 18%, respectively.
Some firms to go into production in March 2023
Ito Naoki, the Japanese ambassador to Bangladesh, said this zone will be ready to house Japanese as well as international investment by the end of this year.
He termed it as a symbol of business partnership between the two friendly countries. If it succeeds, the Japan-Bangladesh partnership will reach a unique height, he said, expressing high hope about the success of this economic zone.
Saying this economic zone is being built according to international standards, the Japanese ambassador said they will attract international companies to invest here.
He said from here products can be easily exported to East Asia and the Association of Southeast Asian Nations (ASEAN) countries. Businesses from these countries are showing interest in investing here. There will be quality infrastructure and quality facilities.
According to Beza sources, companies from various sectors including automobile assembly, motorcycles, mobile handsets, agro-food, light engineering, garments, pharmaceutical, institutions will be set up in this economic zone.
Japanese companies like Toyota, Mitsubishi and Sumitomo have already shown interest in investing here.
Beza is working toward establishing 100 economic zones across the country by 2030. Investors can avail of tax holidays, duty-free imports of raw materials and machinery, exemption from dividend tax, VAT-free electricity, gas and water and other fiscal facilities in the zones.
