The decision to set up a specialised industrial zone for light engineering and electrical goods manufacturing units is a long awaited one. Materialising the project is expected to exploit the huge potential that, as of now, is largely untapped due to lack of proper planning. The government's decision that came in the wake of repeated pressure from concerned quarters including the media to put the sector on a well-planned track, says the industrial zone would be built on 50 acres of land to relocate the light engineering units at Betka in Tongibari upazila of Munshiganj district.
The need for bringing the diverse production units under an orderly system of operation with required facilities and congenial working atmosphere has been felt for long. The present state of the light engineering sector traces back its unplanned growth largely to the lack of interest of the authorities for decades. While a sense of apathy did not allow it the right space and opportunity to thrive in a desired way, market demand on the other hand drove it to run production units in whatever ways the manufacturers wished, without having to comply with the rules and regulations in place.
Now that the government has decided about the relocation project to be implemented by the Bangladesh Small and Cottage Industries Corporation (BSCIC) at an estimated cost of Tk 2.18 billion, sector observers are of the view that once put into operation the specialised zone would not only encourage manufacture of high standard light engineering and electrical products and components, but equally importantly, it would eventually turn into a hub of out-sourcing and subcontracting for local industries in domestic and overseas marketing. In the process, the zone would also be able to ensure coordination among the small and medium-sized enterprises (SMEs) related to the sector, and thereby bring a sense of harmony in production and quality assurance. It is not too far-fetched to think that foreign investors may also be lured to set up heavy industries with an eye on the back-up support from the zone. According to the BSCIC, there are some 2,500 units of light engineering and electrical goods manufacturing enterprises in and around Dhaka alone. The main objective of relocation is to house these units in the first place.
As a feeder sector comprising a myriad range of manufacturing, this sector produces machines, equipment, tools of heterogonous varieties for domestic usage in mills, factories and engineering workshops. Besides providing cost-cutting benefits to the consumers, its all important role is in saving foreign exchange that otherwise the country would have to spend on imports. It is estimated that the light engineering currently accounts for around 50 per cent substitutes of imported items in the country. This is reflected in the support it provides to industrial, agricultural and construction sectors by manufacturing a wide range of spare parts, castings, moulds and dices, oil and gas pipeline fittings and light machinery, as well as repairing those. Equally significant is its role in job creation. Estimates based on a study suggest that as many as 600,000 skilled and semi-skilled workers are employed by 50,000 micro enterprises and 10,000 SMEs spread all across the country. The two sub-sectors are reportedly manufacturing products worth Tk 250 billion with local technology.
Despite the commendable role, the reason why the two sub-sectors could not make its journey to a desired height is the absence of institutional character, the key facilitator to help such sectors flourish. In order for them to attain institutional shape as well as growth and diversification, the main requirements are government's policy support, public-private joint initiatives for institutional and financial assistance, availability of technical and business information, innovation and up-gradation of technology, capacity building, research and development (R&D) facilities and removal of many growth-impeding elements.
Sector insiders are hopeful that with facilities available to operate smoothly in the zone, light engineering and electric goods manufacturing should be reckoned as a potential import substituting industry. A news item, published in this newspaper recently, highlighted some of the prospects as well as the immensely gifted potential of the sub-sector that could be capitalised for its growth as a major import substituting industry. Quoting experts, it said that by investing Tk 60 billion in the improvement of the sector in a planned and targeted manner, it is possible for the country to save Tk 650 billion as import substitute for light engineering products every year.
In the attempted drive, the need to upgrade the skill of the workforce is important, and more important is the need to energise the sector with facilities for large-scale upgradation in technology. It is expected that the relocation plan has been targeted to meet these priorities.
