Businessmen expect sharp rise in bicycle exports
Abdur Rahim Harmachi, Chief Economics Correspondent, bdnews24.com
Published: 2015-03-23 11:11:47.0 BdST Updated: 2015-03-23 23:12:32.0 BdST
Bangladesh is currently the fifth top bicycle exporter to Europe, though it was itself an importer a decade back.
Businessmen in the country see a huge export potential for bicycles because of their growing popularity in developed nations as an environment-friendly mode of transport.
They expect a sharp rise in bike exports to the European market following its economic recovery.
Bangladesh follows Taiwan, Thailand, Sri Lanka and Indonesia in cycle exports to Europe.
According to the Export Promotion Bureau (EPB), Bangladesh exported bicycles worth $84.7 million in the first eight months of the current fiscal year, beginning on July 1, against the year’s target of $121.5 million.
The July-February export figure was 30.23 percent higher than of the previous corresponding period.
Bicycle exports began in 2000 and picked up speed in 2008.
EPB Vice-Chairman Shubhashish Bose told bdnews24.com: “An increase in bicycle exports shows a diversification of our export basket.”
Bicycles have become a popular mode of transport in Dhaka. Bicycles have become a popular mode of transport in Dhaka. Exporters expect Bangladesh-made bikes will grab the ‘entire European market’, just as readymade garments (RMG) have done, in another 10 years.
According to the EPB, the country fetched $20.31 billion from the July-February exports of RMG alone, accounting for 81 percent of the total export earnings.
The bureau said around 80 percent of bicycle exports was to the European Union countries, and the rest to India, the UAE, Australia and other nations.
According to a report of the US-based research organisation, Lucintel, the global market size of bicycles may reach $68 billion in 2018.
Former Bangladesh Bank governor Mohammed Farasuddin feels the country should grab a large portion of the market.
He told bdnews24.com: “Labour cost is low here. No country can export cycles at prices we can offer. We have to exploit this potential keeping in mind the issue of quality.”
A Taiwan-based company, Alita Bangladesh Limited, started bicycle exports in the 1995-96 FY on a small scale.
Alita, later joined by the Meghna Group, accounts for around 90 percent of country’s cycle exports.
The manufactures said six types of cycles were being exported -- freestyle, mountain trekking, folding, chopper, road racing, and tandem.
Bangladesh imports some of the cycle spares and locally produces the rest -- particularly wheels, tubes, pedals, handles, bearings and seats.
Meghna Group commenced bicycle exports in 1999 from its factory at Dhaka’s Tajgaon, taken over from the government in 1996.
It exports cycles at prices ranging from $100 to $500.
Group officials said they hoped to export 600,000 cycles in the current year.
Its Marketing Manager Moinul Islam Rahat told bdnews24.com they produced bikes at six factories in Gazipur, employing around 7,000 people.
Rangpur Metal Industries Limited, a unit of the Pran-RFL Group, has invested Tk one billion in a cycle-making factory at Habiganj, sensing robust domestic and overseas markets.
The factory, with an installed capacity to manufacture 500,000 bicycles a year, began production last year.
The company’s marketing head, Kamruzzaman Kamal, said they would begin exports to Europe in April next year.
The European market
According to Eurostat, EU’s statistical office, Bangladesh advanced to the fifth position in bike exports to the European market in 2010 from the ninth place in 2009.
The country maintained the fifth position until last year, when it exported over 600,000 cycles.
Bangladesh exported around 355,000 bikes in 2007, 371,000 in 2008 and 419,000 in 2009.
The number was over 500,000 in 2010, around 550,000 in 2011 and 2012 and 600,000 in 2013.
Imports still on
Though the country’s cycle exports are increasing yearly, the lion’s share of the domestic market is still met by imports.
Exporters are blaming the previous import trend for the situation.
Meghna Group Manager Rahat said: “Demand for imported cycles are high as their prices are comparatively low. Besides, selling imported cycles has been a trend among our traders.”
He said their group was manufacturing bikes for domestic market, taking into consideration road conditions and people’s buying capacity.
During visits to Meghna Group’s cycle showrooms, this correspondent found cycles being sold there at prices ranging from Tk 13,500 to Tk 280,000.