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The Financial Express

Adamjee EPZ making steady progress


Image credit: BEPZA website Image credit: BEPZA website

After the liberation of the country, when some infrastructural development took place and a number of major projects in the communication sector were implemented, overseas investors began to come in looking for substantial gains.

The government earmarked certain areas exclusively for them. Land and other utility services were made available to them at reasonable costs. In this way, export processing zones (EPZs) sprang up in various places of the country.

Its exclusive aim was to attract foreign investors. The idea got some immediate responses. Investors from the USA, Japan, the UK, South Korea, China, Taiwan, India etc., set up industries in the EPZs. While they earned profit, the industries in those exclusive zones generated employment opportunities for the people of the country.

An Export Processing Zone (EPZ) was set up at Adamjee Nagar on the ruins of the defunct Adamjee Jute Mills (AJM). It is hard to believe that the world's largest jute mill is no more and on its premises, quite a sizeable number of overseas industries are now thriving.

The government took the right decision in closing AJM down. The mill was incurring colossal losses after the country's independence when jute began to lose demand in the world market. Mismanagement and corruption also contributed to making it a 'white elephant.' Even after floating of tender on several occasionsfor its sale as a mill, there could be found no taker.

At last, the authorities took the painful decision of closing it down. During the end of the previous Awami League government, the AJM was closed down in spite of stiff resistance from its workers and employees. The agitation continued for several days. But nothing did work, the mill died its natural death and became extinct for good.

At a high level meeting, it was decided that the AJM premises would be turned into an industrial park. One wonders how the decision took such a long time - more than seven long years - to be implemented. In Bangladesh, things move at a snail's pace, papers don't change tables without speed money. Everybody knows how unbridled corruption is eating into the vitals of the economy.

The performances of all EPZs were not similar. Some zones were doing pretty good, some were not. The performance of EPZs in the northern districts was not that much satisfactory.

Perforformance of the Chittagong EPZ was excellent. South Korea's giant business conglomerate - Youngone Corporation - has built an exclusive economic zone in Chittagong. But the Youngone is facing so many hurdles in every step to make it operational.        

Of late, India's famous Tata Group has come up with its $3.0 billion investment plan. Tata wants to build steel mills and a coal-fired power plant. But the negotiation was floundering due to differences over the pricing of gas. The pricing has to be rational keeping the current upward trend of oil prices in view. Of late, the crisis was finally resolved.

The unceasing confrontational domestic politics and the uneasy law and order situation could be factors behind the sluggishpace of industrialisation.

Of late, labour unions were introduced in the EPZs. In order to continue  enjoying the generalised system of preference (GSP) in the European and the US markets, Bangladesh gave its approval to labour unions in the EPZs. Labourers' rights were being well protected.

Earlier, the government offered 20 per cent cash incentive for the foreign entrepreneurs in the EPZs to invest in agro-based industrial sector. Yet the country's export processing zones -- mostly new ones -- received very limited response in this regard. It was assumed that the investment in the country would not pick up very soon.

Prospective investors, at that time, preferred to see how the political situation develops in the run-up to the then election. Generally, businessmen feel reluctant to go for new investment before a general election.

In such a situation, the government has initiated a process to convert 717 acres of land of three closed-down giant state-owned mills into industrial parks. The lands of these mills in Dhaka, Chittagong and Khulna will have around 700 industrial plots, mostly for garments-related industries and chemicals and electronic industries. Some of the plots are expected to host foreign investment.

The government was also planning to turn the premises of some more closed-down mills into industrial plots.

Of the 294 acres of Adamjee land, 214 were set for housing industries while the rest 80 acres will accommodate infrastructural facilities including a three-star hotel, a pollution treatment plant, medical facilities, offices of banks and insurance companies and a container yard. There would be 457 industrial plots -- 319 for garment industries, 84 for weaving units and 54 for dyeing units.

By  opening the newly setup EPZ at Adamjee Nagar, the government of the time triedto discourage frequent hartals and work stoppage. The local and foreign entrepreneurs were requested to come up with bigger investments and technology in the Adamjee EPZ so that it could infuse a new dynamism to the process of  industrialisation in the country.

The government was also exploring other options in order to spur foreign investment. It was considering to set up three special economic zones (SEZs) and attract prospective entrepreneurs to invest there.

The SEZs were designed in such a way that they would attract both domestic and foreign investment in a big way. The government would initially develop the Kaliakoir hi-tech park under a donor-funded project in a bid to attract huge investment from global technological giants.

. The Adamjee EPZ was designed to entice foreign investors and make Adamjee Nagar vibrant with economic activities. The government is trying its best to make a dead state-owned enterprise (SOE) alive again in a new creative form.

Although an export processing zone was set up four years later on a portion of land that housed Adamjee Jute Mills generating 53,118 jobs, the locals still mourn the closure of the mills. Set up in 1950, the mills were a symbol of pride on the bank of the Shitalakhya.

Production began in 1951 with 1,700 hesian and 1,000 sacking looms. On an average, 288 tonnes of jute sacks were manufactured every day, raking in about Tk 60 crore every year. At first, about 100 tonnes of jute goods were manufactured. Later, the output increased to 250 tonnes.

Things started to change a few years after Bangladesh gained independence with several quarters getting involved in clashes.

Financially, the mills also started counting losses. Finally, he government decided to wind up its operations and paid all dues to workers.

So far, $411.43 million has been invested in the EPZ. At present, 50 industrial units on the 245.12-acre EPZ are in operation. Of those, 27 are owned by foreign entities, 10 by locals and 13 are joint ventures. The factories manufacture garments, zipper, cartons, hangers, labels, tags, shoes, sweaters, textiles, socks, jewellery and other items for export.

Products worth $2,716.41 million have been exported until recently. In 2015-16 alone, goods worth $562.91 million were exported by the enterprises of Adamjee EPZ.

New factories are being set up in the zone, creating more jobs. It is expected that the EPZ will create jobs for 0.1 million people. The surrounding neighbourhoods are also being developed.

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