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Manufacturing Sector in Developing Countries

Country PerspectiveBangladesh

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Manufacturing Industry and Globalization

Manufacturing industries’ production contributes in global economy through increasing GDPCreates employment not only for country people but also for others, helps to prevent global unemploymentOffers better, quality products worldwide.Increase global productionLarge production helps to reduce cost worldwide

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Criteria for Developing Country

A developing country is a nation with a low level of material well-beingWorld bank classifies developing countries as-

a. Low income countries had GNI per capita of US$1005 or less.

b. Lower middle income countries had GNI per capita between US$1006 and US$ 3,975

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List of developing countries

Developing countries list AsiaAfghanistan

Bangladesh

Bhutan

Cambodia

East Timor

Myanmar

Nepal

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Developing countries in Map

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Manufacturing Industry

Manufacturing industry refers to those industries which involve in the manufacturing and processing of items and indulge in either creation of new commodities or in value addition. The manufacturing industry accounts for a significant share of the industrial sector in developed countries. The final products can either serves as a finished good for sale to customers or as intermediate goods used in the production process.

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List Of Leading Manufacturing Industries

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Scenario of Manufacturing Industry in Developing Countries

Scaled back trade barriers over the past twenty years, the industrial sector remains relatively protected in the typical country. Governments also promote manufacturing with special tax concessions and relatively low tariff rates for importers of manufacturing machinery and equipment.Developing countries have been able to use the policy buffers (in the form of ample fiscal space) The strong GDP growth in many developing countries and economies in transition, which has been contributing to more than half of the expansion of the world economy since the third quarter of 2009.Developing countries continue to drive the global recovery, but their output growth in manufacturing sector is also expected to moderate to 6.0 per cent on average during 2011-2012, down from 7.1 per cent in 2010

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Chart Of Global Production

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Success Criteria for Manufacturing Industry in Developing Countries

Resources Improvement

Manufacturing Configuration

Manufacturing coordination

Strategies

Manufacturing Control

Manufacturing Compatibility

Managerial Performance

Managerial Regulation

Inventory management

Quality and quantity

improvement

Manufacturing Flexibility

Cost Reduction

Imitation

Government Policies

Labor Employment

Transportations Network

Suppliers Relations

Technological Advancement

Improved Economy

Trade protectionism

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Problems

Imports from abroad

Dumping

Poor Legal Systems and

Crime Prevention

Insufficient Human capital

Economic and Political Volatility

Inadequate road and rail

network

Limited Access to

manufactured inputs

Small Market size

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Economy of Bangladesh

Rank 43

Currency Bangladesh TAKA(BDT)

Fiscal Year 1 July - 30 June

Trade organizations WTO, WCO, IOR-ARC, SAFTA, D8

GDP Growth 6.7% (2010 est.)

GDP Per Capita $1,700 (2010 est. PPP)

GDP By Sector Agriculture: (20.16%), industry: (29.95%), services: (49.90%) (2009 est.)

Inflation(CPI) 8.80% (2010-11)

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Ease of Doing business rank 107th

Exports $22.93 billion (2010-2011)

Export goods garments, textiles, jute and jute goods, ships, leather, produce, frozen fish and seafood, pharmaceuticals, ceramics, cement

Main export partners US 31.8%, EU 12.9%, Germany 10.9%, UK 7.9%, France 5.2%, Netherlands 5.2%, Kuwait 4.9%, Japan 4.5%

Italy 4.42% (2010)Imports $32 billion (2010-2011)

Import goods machinery and equipment, chemicals, iron and steel, raw cotton, food, crude oil and petroleum products,

Main import partners China 11.4%, Singapore 9.1%, India 8.5%, Hong Kong 7.1%, Japan 6.5%, U.S 5.1% (2008 est.)

Ease of Doing business rank 107th

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Contribution of industries to GDP during 2009-10 (m US$)

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GDP Growth

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Manufacturing Industries of Bangladesh

•KDS GROUP

•Pride Group

•Viyellatex group

Textile

•Khulna shipyard

•Ananda shipyard

•Meghnagroup

Shipbuilding

•Beximco•Incepta•Square

Pharmaceutical

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Five Successful Industry of BangladeshTextile

Pharmaceutical

Shipbuilding

Leather and footwear

Electronics

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Reasons For Success

Huge percentage of using computerized machinery & modern technology.Financial support from banks for having outstanding loan, Overdraft facility.Suitable business environment corresponds to the institutional, policy, and regulatory environment in which firms operate.Significant R&D activities complete regularlyExcellent Power supply facilityNegative effect of crimeLess bureaucracy and red tape in these industries Well managed companies

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Five Failing Industries of Bangladesh

Sugar

Paper

Fertilizer

Candle

Salt

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Reasons Of Failure

Less Government support for local producersGovernment is careless about the Import policy & importing from neighboring countries because of Election commitment.Not much R&D activities complete regularly.Poor Power supply facility.Active corruption. More bureaucracy and red tape in these industries.A lesser amount of banking facility.Fewer infrastructure developments than the competitors.

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Sugar Industry of Bangladesh

Bangladesh had a start of Sugar industry before the Liberation . the early startup was impressive when Govt. introduced Shyampur Sugar Mills in 1967 in Rangpur District.This Sugar mill is Still running but the productivity had become lesser than ever. In Bangladesh , currently many private owned Sugar mills and some Govt. owned Sugar mills are running but dishartedly , all of them are not in a good condition.

There is a high Sugar productivity in the Northern regions of Bangladesh which almost comprises about 70% of overall sugar production of Bangladesh. The Base Sugar Production States are :

Among Northern Districts : Rajshahi Natore Dinajpur Rangpur Kurigram Bogra Pabna

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The seasonal nature of the industry,Old and inefficient methods of production,Transport delay in reaching cane to factoriesHigh communication and transportation barriersSevere lack of high-tech technologyStrong need of trained manpowerThe need to maximize the use of Bag gassesCyclical fluctuationsHigh support pricesLack of adequate working capitalPartial decontrol and the uncertain export outlookRising raw material costsLimited export capacitySugarcane area is dwindlingCompetition from more profitable crops like rice and maize makes it difficult to convince farmers to accept the low price offered by mills

Major Challenges

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Possible Solutions

Sugar Refine nary ImprovementTechnological improvementTrained WorkersGovt. regulations to promote Local SugarGovt. help in building Sugar industryCapital flow for Sugar millingImproved MachineriesQuality ImprovementExport ease