Taiwanese firms invested $200 million in Bangladesh in the first half of this year and are keen to plough more money into the country, a senior Taiwanese trade official said on Wednesday. That is already the biggest foreign direct investment inflow into Bangladesh in the first six month of this year and makes Taiwan the third biggest foreign direct investor in the country after the United States and Britain.
"Our major entrepreneurs are serious about investing in Bangladesh, by relocating factories from China, India, Vietnam and Thailand," said James Kuo, director of Taiwan Trade Centre in Dhaka. "They consider the south Asian country as a prospective investment outlet because Bangladesh enjoys duty free market access in Europe as a least developed country."
He said that Taiwanese firms had registered at least 72 investment proposals but that the Bangladeshi authorities granted only 27 due to lack of infrastructure facilities, mainly shortages of natural gas and land. Kuo said that leading manufacturers of leather and fabric products and furniture had already signed deals with the government to relocate their factories to Bangladesh.
Lacquer Craft Manufacturing Company Limited, the biggest Taiwanese furniture maker in China, and Zhong Shan Glory Shoes, the world's number one walking shoe maker, have signed deals with Bangladesh to relocate their factories, he said.
Such deals are partly driven by firms' keenness to exploit the duty-free market access to European countries. "Moreover, the cost of labour (in Bangladesh) is cheaper and the labourers are also skilled. The country also has adequate supply of raw materials for leather products," Kuo said.
He said Taiwanese firms were looking at Bangladesh as their next foreign direct investment destination after China and Vietnam. Their interest comes after the European Commission in 2006 approved anti-dumping duties on shoes and furniture made in China and Vietnam - a decision EU member states have endorsed recently.
The annual export of furniture made in China is $4 billion, of which 66 percent belong to Taiwanese factories, and Taiwan alone annually exports $1.5 billion, mainly to the US and European markets, Kuo said.
"Besides, production cost in China and Vietnam has also increased by more than 30 percent and that is also another driving factor to relocate firms in this South Asian nation," Kuo said. Taiwanese firms have to date invested more than $300 million in the textile sector and are ready to invest more if Bangladesh can assure the required supply of gas, according to an official at the Bangladesh Textiles Mills Association.