5 common facility centres to be set up to boost SME sector

The SME Foundation has taken an initiative to set up five common facility centres (CFCs) for the first time in the country to provide heavy machinery for small entrepreneurs, who cannot buy those machines due to a lack of capital.

Currently, many small and medium entrepreneurs take services from large companies for product finishing or other types of work, which increases their production cost, but often they do not get proper services.

Besides, a lack of advanced technology and research bar the enhancement of product quality and diversification. As a result, entrepreneurs cannot get out of the habit of manufacturing traditional kinds of products, said sources at the SME Foundation.

The CFCs will decrease the entrepreneurs' production cost, increase product diversification and quality, and expand the country's export basket, they said.

According to the SME Foundation, there are 177 clusters of similar products and industries across the country, all of which have been developed by private enterprises. Although these clusters have been formed on a small scale, the SME Foundation is working to expand these industries.

Some of the neighbouring countries have common facility centres for small and medium enterprises, but the SME Foundation in Bangladesh could not set up such centres as it did not have any funds of its own.

The issue of securing funds for the CFCs is not resolved yet, but the foundation is starting the process of setting up CFCs. After seeking expressions of interest for a feasibility study and business development plan for CFCs from 5-19 May, the SME Foundation received proposals from 10 consulting firms, which it is considering.

The sources of funding for the CFCs will be finalised after a completion of the feasibility study. The SME Foundation has discussed the matter with a number of development partners, said sources.

As per the SME Foundation's plan, common facility centres will be set up in Bogura Light Engineering Cluster; Jashore Light Engineering Cluster; Saidpur RMG Cluster, Nilphamari; Gobindaganj Hosiery Cluster, Gaibandha and Purba Matherbari Leather Cluster, Chattogram.

The light engineering cluster in Bogura – the largest in the country – started its journey in 1985 in the Bogura Railway Market area. Agri-machineries are produced in this cluster, where 75 foundries, 600 engineering workshops, and 500 agri-machineries and equipment centres are located, and 25,000-30,000 people are directly employed.

Jashore Light engineering cluster originated from the old bus stand area with fifty workshops, and currently there are 400 enterprises.

The RMG cluster of Saidpur started its journey in the early 1980s with only two factories. Currently, there are 700 factories in the area.

In this cluster, entrepreneurs manufacture high-quality jackets, trousers, shirts, and other types of garments, which have been exported to India, Nepal, and Bhutan since early 2000.

Gobindaganj Hosiery Cluster started in the 1950s, and now it is a complete industrial cluster with more than a thousand hosiery factories.

Purba Matherbari Leather cluster is located in Chattogram, which started its journey in the 1980s.

"The common facility centres will improve the quality of products as well as create opportunities for entrepreneurs to export their products," said Mirza Nurul Ghani Shovon, president of National Association of Small and Cottage Industries of Bangladesh (NASCIB).

India funded the establishment of its common facility centres through the announcement of a scheme. The Small and Medium Enterprises Development Authority (Smeda) of Pakistan has also completed constructing 16 common facility centres across the country under the Public Sector Development Programme.