business
Bangladesh Bank raises lending interest rate to 10.70% to fight inflation
The Bangladesh Bank (BB) on Thursday increased its lending interest rate on a 50-point basis to tame the growing trend of inflation.
The Banking Regulations and Policy Department (BRPD) of the central bank issued a circular in this regard on Thursday.
The central bank has increased the lending rate of banks by 50 basis points to 10.70 percent from 10.20 percent.
The method based on which the loan interest rate is now being determined is known as 'SMART' or Six Months Moving Average Rate of Treasury Bills. The central bank informs this rate at the beginning of every month.
Md Mezbaul Haque, spokesperson and executive director of the BB, told reporters in this regard that banks can now add 3.50 percent with the reference lending rate, which is also known as the SMART rate of 7.20 percent.
Read: BB raises policy rates by 75 points to 7.5 percent
For pre-shipment export loans, banks can add 2.5 percent with SMART, which was 2.0 percent earlier.
The BB increased the lending rate after increasing the policy rate (repo rate) by 75 basis points to fight inflation.
According to the new guidelines, banks can provide loans in the month of October by adding margin or interest at a maximum rate of 3.5 percent with the 'smart' rate of September.
Read: Don’t print new money, Dr Wahiduddin Mahmud advises BB
In the current month, a maximum of 10.70 percent interest can be taken from banks for large loans. The interest rate on pre-shipment export credit will be 9.70 percent. In case of agricultural and rural loans, the maximum interest can be charged as before—9.20 percent, the circular stated.
BGMEA urges NBR to speed up customs, bond services for RMG sector
President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Faruque Hassan on Wednesday urged the NBR officials to speed up customs and bond-related services to lessen lead times and reduce the additional costs incurred due to shipment delays.He requested the NBR to understand the RMG sector's existing challenges and apply possible ways to enhance its competitiveness.He emphasised on the important nature of timeliness in the RMG export business, where each passing moment is invaluable in the face of stiff competition in the global market.
Read: BGMEA calls for government support to safeguard RMG sector in testing times"The RMG export industry operates as per lead time, and buyers increasingly demand swift and timely deliveries. We must adapt to these evolving market dynamics,” he said as he held a meeting with the NBR.The National Board of Revenue (NBR) needs to streamline business procedures by facilitating faster and more efficient services for the RMG exporters, he said.He further requested the NBR to remove the customs and bond-related problems currently faced by garment exporters, ensuring a hassle-free process.NBR member (Customs: Export, Bond, and IT) Hossain Ahmed led the NBR team in the meeting.BGMEA’s Vice Presidents Shahidullah Azim, Khandoker Rafiqul Islam, Md. Nasir Uddin, Rakibul Alam Chowdhury and Director Asif Ashraf attended the meeting.
Net reserves of foreign exchange as per BPM-6 below $18 billion: Economist Zahid Hussain
Former Chief Economist of the World Bank's Dhaka office Zahid Hussain said on Wednesday (October 04, 2023) that the actual calculation of foreign exchange entering into the country and leaving does not match.He said that the reserves are decreasing due to a deficit in the balance of payments or transaction balance. The net reserves of foreign exchange as per BPM-6 is below $18 billion.Zahid gave this information while speaking at the annual conference of the International Business Forum of Bangladesh (IBFB) held in a city hotel on Wednesday. Indian High Commissioner to Dhaka, Pranay K. Verma, was the chief guest at the event.
Read: IMF reviewing reserves, macroeconomic condition ahead of next fund releaseHe pointed out that one of the reasons for the overall macroeconomic instability of the country is external. The major aspect of this external factor is the price of the dollar.The exchange rate of the US dollar was remained below Tk100 in 2021. But in September 2022 it went above Tk100. It is still above Tk110 even though it has decreased a bit now.Zahid complained that the account of how much foreign currency is entering the country and how much currency is going outside does not match with the reserve.
Read: Why Bangladesh’s forex reserves dipped to $21.15 billion? Economists cite reasonsHe said that usually this calculation is sometimes positive and sometimes negative. But recently it is seen in case of Bangladesh, this account has been negative for quite some time."This means that something is happening beyond our knowledge,” he said.
IMF reviewing reserves, macroeconomic condition ahead of next fund release
A delegation of the International Monetary Fund (IMF) is reviewing Bangladesh’s economic update including foreign exchange reserves before releasing the second installment of $4.70 billion loan.
One of the conditions of the IMF loan was that there should be real (net) foreign exchange reserves of $24.46 billion as of last June.
According to the conditions, Bangladesh Bank (BB) could not keep that amount of foreign exchange reserves.
Also read: Bangladesh expected to receive IMF loan’s 2nd instalment in Nov
The visiting IMF delegation held a meeting with the Bangladesh Bank on Wednesday (October 4).
The central bank’s progress, success, and failure in fulfilling various conditions came up in the discussion. The failure to meet the conditions of the reserve was also informed in the meeting.
The IMF will hold several meetings with different ministries, institutions, and business groups. Financial sector stability, banking sector reforms, liquidity management, dollar market rate transactions, revenue management modernisation, expendable reserve calculation method, interest rate, and monetary policy implementation would be discussed.
The BB in the meeting informed the IMF that most of the conditions related to the central bank have been fulfilled.
Also read: Bangladesh’s foreign exchange reserves now $23.57 billion as per IMF formula
Central bank’s Executive Director and spokesperson Mezbaul Haque told reporters on Wednesday, “The IMF gave us some conditions while approving the loan, some of these have been fulfilled."
There are two failures--reserves slide a little and the revenue collection is low. But many other areas have been implemented successfully, he said.
The central bank revealed the financial stability report of the banks as per conditions. Reserves are being calculated as per BPM-6. A market-fixed exchange rate of the currency was also introduced. New rules of interest have been introduced.
Also read: Inflation, economic uncertainty: World Bank lowers Bangladesh’s growth projection for FY24
“I have mentioned the conditions given by the IMF which have been achieved and those which have not been achieved. It has also been informed why it did not happen,” said Mezbaul.
Banglalink to Livestream ICC Men’s Cricket World Cup 2023 with Unbeatable Internet Offers and World-Class Streaming Experiences
Telecommunication operator Banglalink, will live stream the ICC Men’s Cricket World Cup 2023.
Banglalink is committed to ensuring that customers enjoy uninterrupted, high-quality live streaming of their favorite cricket matches throughout the tournament, according to a press release.
To offer the best streaming experience, Banglalink has introduced an array of internet packs and free internet offers for Toffee and MyBL Super App. In addition to best-value packs, customers can look forward to a series of exciting offerings throughout the tournament, it said.
Banglalink customers can exclusively enjoy up to 5GB free internet upon purchase of the World Cup access packs. These packs start as low as Tk.20 for 1-day, with 1GB of free internet to stream the live action.
Users can also opt for 7-day or 30-day subscriptions for Tk.46 and Tk.96 with 2GB and 5GB of free internet respectively. These packs are available for purchase through the MyBL Super App, Toffee App, official Banglalink website, or retail stores across the country. They can now watch the live matches both on Toffee and MyBL Super App, said the release.
“We share our customers' excitement for the 2023 World Cup! Banglalink is committed to providing customers with the best-in-class streaming experience and eagerly anticipates the cricket fever sweeping the nation. We are gearing up to bring the stadium to the audience's screens with our Ookla®️ certified fastest 4G network, ensuring they catch every wicket and boundary in real-time,”said Erik Aas, Banglalink CEO.
“We are excited to bring the ICC Men’s Cricket World Cup to millions of viewers across Bangladesh and provide cricket fans with a personalized viewing experience through our seamless streaming service. Toffee set a remarkable standard for live sports streaming in Bangladesh during the FIFA World Cup Qatar 2022™️, and we are confident of continuing the same reliable streaming experience this Cricket World Cup also. This time even MyBL Super App will offer the same streaming quality, giving our customers many choices to watch their favorite cricketing event,”said Upanga Dutta, CCO of Banglalink.
BGMEA calls for government support to safeguard RMG sector in testing times
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has called for government support and cooperation to ensure the resilience and continued growth of the readymade garment (RMG) industry in the face of a challenging global economic environment.
A delegation from BGMEA, led by President Faruque Hassan, held a meeting with Sheikh Mohammad Salim Ullah, Secretary of the Financial Institutions Division within the Ministry of Finance at the secretariat on October 4 and made the call.
Also read: BGMEA president stresses timely policy to ensure growth of RMG industry
Other members of the BGMEA delegation were Senior Vice President SM Mannan (Kochi), Vice President Rakibul Alam Chowdhury, and Chair of BGMEA Standing Committee on Challenged Industry Md. Anisur Rahman.
The discussion at the meeting primarily revolved around pressing issues related to the garment industry, the current state of global trade, the implications for Bangladesh's RMG export performance, and potential strategies to address these challenges effectively.
BGMEA President Faruque Hassan emphasized the industry's current difficulties, citing a noticeable decline in garment exports.
This decline has been attributed to reduced consumer spending on clothing, caused by high inflation in major export markets such as Europe and the USA.
Also read: BGMEA opens library to meet industry's need for knowledge
Given the significance and prominence of the garment industry within Bangladesh's economy, Faruque Hassan stressed the importance of prioritizing the safeguarding of the RMG sector during these testing times.
Faruque Hassan further underlined that support and cooperation from financial institutions, including Bangladesh Bank and other banks, are crucial.
He highlighted the necessity of quick and efficient financial services to enhance the industry's competitiveness.
Also read: BGMEA calls for government policy support to weather challenges of RMG sector
He asserted, if the RMG industry can maintain its competitiveness and sustain growth, it will substantially boost Bangladesh's export earnings, thereby contributing to the country's foreign exchange reserves.
ADB capital management reforms unlock $100 billion in new funding over next decade to support Asia, Pacific
The Asian Development Bank (ADB) on Wednesday approved capital management reforms that unlock $100 billion in new funding capacity over the next decade to address the region’s overlapping, simultaneous crises.
The expansion of available funds will be further leveraged through mobilizing private and domestic capital to move from the billions to trillions required to tackle the climate crisis.
The reforms were introduced through an update of ADB’s Capital Adequacy Framework (CAF), according to a message received from Manila.
ADB provides $120 million loan for community resilience, livelihoods in rural Bangladesh
They expand the bank’s annual new commitments capacity to more than $36 billion—an increase of approximately $10 billion, or about 40%.
The expansion is achieved by optimizing ADB’s prudential level of capitalization while maintaining its overall risk appetite.
The reforms also create a Countercyclical Lending Buffer to support ADB developing member countries (DMCs) facing unexpected crises.
The measures, which will enable ADB to provide up to $360 billion of its own financing to its DMCs and private sector clients over the next decade, are designed to ensure ADB maintains its AAA credit rating and its ability to provide DMCs with funding at low cost and with long maturities.
ADB approves $100 million loan to three universities in Bangladesh
The reforms further safeguard ADB’s AAA credit rating through the introduction of a recovery plan that would prevent capital erosion during periods of financial stress. ADB’s capital adequacy framework is reviewed every 3 years.
“These important reforms will significantly expand ADB’s ability to support a broad range of critical development efforts across Asia and the Pacific, including greater concessional resources for our vulnerable members,” said ADB President Masatsugu Asakawa.
Latest ADB report predicts a better year for Bangladesh in FY2024
“Our decision today is part of ADB’s response to the call for multilateral development banks (MDBs) to do more with our resources and faster. These resources will help the region manage a complex set of overlapping crises, address gender inequality, and provide for basic needs in the context of the existential challenge of climate change. This extra lending power will be extended and leveraged further by renewed efforts to mobilize private and domestic capital and maximize the impact of our work.”
Bangladesh to work together with EU to boost trade and investment overcoming problems: Tipu Munshi
Commerce Minister Tipu Munshi on Wednesday urged the European investors who already invested here and have been successfully operating their businesses to advocate for Bangladesh’s competitiveness in the global arena.
“You come and see. Let’s take the message to investors,” he said while speaking at a seminar as the chief guest.
Also read: Tipu Munshi under fire in Parliament for runaway prices of essentials
The commerce minister said Bangladesh wants to work hand in hand with the European Union (EU) and is committed to removing the existing problems that hinder inbound investment.
“Yes, we have problems. But listen to the investors. We want to work with the EU. We will work together. We will resolve the problems,” Munshi said, adding that if the foreign investors come here and invest, they will benefit a lot.
Also read: Tipu Munshi calls on H&M Group to continue support to garment sector for sustainable development
The seminar titled “Unlocking Trade and Investment for European Companies in Bangladesh” was jointly organised by Dhaka Chamber of Commerce and Industry (DCCI) and the European Union Delegation to Bangladesh at a hotel in Dhaka.
Executive Chairman of the Bangladesh Investment Development Authority (BIDA) Lokman Hossain Miah was present as special guest.
Lokman said they are working for reforms to attract more FDI from the EU member countries. “BIDA is committed to provide faster and investment friendly services.”
He also informed that all services of BIDA will be available in OSS by the end of this year and invited more direct or joint venture EU investment in Bangladesh enjoying various fiscal and non-fiscal incentives given to the foreign investors.
Readiness of Bangladeshi industries coupled with sustainable regulatory framework, favourable tax regime, positive image branding, technologically skilled workforce, export competitiveness, conducive environment and diversification of products are key to attract more investment from the European Union countries in Bangladesh, said the speakers.
Also read: Tipu Munshi to NBR: Touching income tax unpopular, widen VAT net to boost revenue collection
DCCI President Md Sameer Sattar said the five-decade-long Bangladesh and EU partnership had truly become an unprecedented and remarkable journey that turned the EU into one of the most reliable trading partners of Bangladesh.
“Our total export to the EU has surged to USD25.23 billion in FY2023 having 93% RMG share which has positioned Bangladesh as one of the popular sourcing destinations,” he said.
Upon the LDC graduation of Bangladesh in 2026, Bangladesh needs to sustain the export market in its traditional and major destinations including the EU.
He also emphasized sustainable export product diversification to increase the share of Bangladesh’s export to the EU market.
He invited EU investors to harness the country’s proven and diversified investment sectors including agro-processing, textile, automobile, service sector, ICT in hi-tech parks, skills development, infrastructure, economic zones and logistics sectors for rewarding return and sustaining the win-win bilateral economic ties.
Ambassador and Head of EU Delegation to Bangladesh Charles Whiteley said for decades, the EU has been the main destination for “made in Bangladesh” goods.
The graduation of Bangladesh to a developing country will reinvigorate EU-Bangladesh ties, he said, adding that it is time to explore new areas of cooperation from ICT to infrastructure, aviation, renewable energy, agriculture and pharmaceuticals. The EU is keen to boost bilateral trade and investment ties in the days to come.
Counsellor, EU Delegation to Bangladesh Jurate Merville said that to attract European FDI, a friendly regulatory framework is crucial.
She said that the EU is one of the top investors here in Bangladesh. She also called for an increasing skilled workforce to tap the future potentials of international business.
Country Representative, Airbus Morad Bourouffala stressed on human capital development, skill development is more important for Bangladesh.
Syed Nasim Manzur, Managing Director, Apex Footwear Ltd. said RMG has positioned us in a prestigious stage in the global arena.
“But we have a few other sectors that have huge potential to have their access in the EU market like the leather industry,” he said.
“At present we have many (Leather Working Group) LWG certified factories in Bangladesh. We need more EU companies to invest in manufacturing industries in Bangladesh. We need EU investment in skills transfer technology to create a technologically skilled workforce,” he added.
Iqbal Chowdhury, CEO, Lafarge Holcim said cost effective and sustainable energy security is crucial for smooth production. “Existing FDI is our brand ambassador to attract more FDI.”
Massih Niazi, CEO, Petromax LPG said they are successfully operating in Bangladesh. “At present we are facing a few short-term challenges like shortages of dollar, lack of LC opening and inflation, devaluation of taka.”
He also hoped that these challenges will be overcome soon. He said the power supply, roads and transportation system should be improved, he added.
Ziaur Rahman, Regional Country Manager, H&M said to compete in the international market “we have to prioritize our product diversification.”
Mushtaque Ahmed, Vice President, Bangladesh Bicycle and Parts Manufacturers and Exporters Association said Bangladesh is now producing a huge number of e-bikes and the EU market will be a potential destination for this product.
ADB provides $120 million loan for community resilience, livelihoods in rural Bangladesh
The Asian Development Bank (ADB) and the government of Bangladesh on Wednesday signed a loan agreement for $120 million to improve access to basic services and climate resilience of remote and rural communities in the Chittagong Hill Tracts (CHT) of Bangladesh.
Sharifa Khan, Secretary, Economic Relations Division, and Edimon Ginting, ADB Country Director for Bangladesh signed the agreement on behalf of Bangladesh and ADB, respectively.
Read: ADB approves $100 million loan to three universities in Bangladesh
“The Climate-Resilient Livelihood Improvement and Watershed Management in Chittagong Hill Tracts Sector Project will adopt an inclusive, holistic, and participatory approach to support sustainable and resilient community development in CHT region,” said Country Director Edimon Ginting.
“By 2031, the project is expected to increase cropping intensity by at least 50% on at least 7,500 ha of agricultural land; reduce by 50% the average time taken for women from 57,000 households to fetch potable water; and reduce the average travel time along the project-supported roads by 50% for buses, cars, and trucks compared with the baseline year of 2023”.
Read: ADB provides $490 million to Bangladesh for 2 projects
The project will cover the three hill districts of Bandarban, Khagrachari and Rangamati. It will help improve village access roads, develop water supply sources and sanitation services, install rooftop solar systems, and establish agricultural facilities, according to ADB.
The project will also improve about 140 kilometers of rural roads with all-weather standards incorporating nature-based, climate-resilient, and safety features, it said.
ADB’s intervention will strengthen watershed management in nine sub-watersheds, to improve resilience to climate change and mitigate risks from natural hazards.
This will entail improving vegetation in watershed areas through agroforestry, building small-scale water harvesting infrastructure, promoting income-generating activities from watershed protection, and training village forest committees in watershed management skills.
Read: ADB mobilizes $261 million for Rampura Amulia Demra Expressway
In addition, the project will support sustainable land use and climate-smart agricultural practices for food security.
Farmers will be provided training and support to shift climate-resilient crop varieties and to diversify into high-value vegetables, fruits, spices, and medicinal plants.
They will be given training, equipment, and linkages with experts and the private sector to help them process, market, and sell their products.
The expected increase in the demand for skilled labor will be met by offering vocational and professional training courses such as carpentry, food processing, entrepreneurship, and community-based tourism and hospitality management.
Bangladeshi furniture industry needs reforms to reach its full potential: HATIL Chairman Selim H. Rahman
With an annual growth rate of 19-20 percent, the furniture industry in Bangladesh has seen remarkable growth in recent years.
According to the Export Promotion Bureau, the current size of the furniture industry in Bangladesh is worth Tk 25,000 crore.
The success of Bangladeshi furniture extends beyond its borders, with thriving exports to foreign markets. Notably, there has been a remarkable 267 percent surge over the past decade, data from the Export Promotion Bureau showed.
In the fiscal year 2011-2012, the country’s furniture exports totalled USD 27.14 million, which significantly surged to USD 76.41 million in the fiscal 2019-2020.
Leading the drive towards this growth is HATIL Complex Ltd, currently the country’s leading furniture brand and also recognized to be a game-changer in the country’s furniture industry.
HATIL traces its roots back to H.A. Timber Industries Ltd – a small timber shop on the bank of the Buriganga River – founded by the late Al-Hajj Habibur Rahman in 1963, at 2/1 Ultinganj Lane in Old Dhaka’s Farashganj area.
Over the next 25 years, the only focus of this business was selling wood.
“Customers would come to our shops with a list of required items they were suggested by carpenters for their homes. Based on their requirements, we would cut the wood and sell them which the carpenters then would use to manufacture doors and everything else,” recalled Selim H. Rahman, the eldest son of Habibur Rahman.
For Selim H. Rahman, currently the chairman and also the managing director at HATIL Complex Ltd, the whole business was “somewhat traditional” and “lacked innovation”.
“It seemed to me that this whole business could actually be thought of and structured differently,” he said.
His vision received a significant boost when, in 1988, his father made the decision to import a seasoning plant — a machine designed to extract excess moisture from freshly cut wood – from Italy.
This seasoning plant was the first in Bangladesh owned by a private entity.
“My father had two things in mind: first, if he could bring in this seasoning plant, it would greatly benefit the customers as it gives the opportunity to season wood in less time (maximum 30 days) because natural seasoning of wood takes one and half years and second, it would also help his business grow,” said Selim Rahman.
His father’s decision to bring in the machine at a time when there was only one small seasoning plant in the whole country under the Bangladesh Forest Industries Development Corporation (BFIDC) “I had an idea since my father brought the seasoning plant: Could we actually think about manufacturing?” he recalled.
Read: Malaysia's semi-government body keen to promote Malaysian timber, furniture in Bangladesh
By the 1980s, the country’s furniture industry had already started flourishing. Most of the household items were already available in the local market.
“But things like doors and window frames needed for building a house were not readily available at stores,” Rahman said. “So, it occurred to me that we could think about this.”
This visionary approach marks the inception of HATIL Complex Ltd, led by Selim H. Rahman, which initially focused on door manufacturing.
Subsequently, as the demand for household furniture items increased, HATIL's product range expanded as well.
After nearly 35 years since its inception, HATIL has indeed become a household name.
According to its company profile, HATIL now has 75 outlets all across the country and 18 outlets overseas.
In an exclusive interview with UNB, the furniture industry tycoon discussed various aspects of the thriving sector.
When compared to the past, what is the current scenario of the local furniture industry?
Selim H. Rahman: The furniture industry in Bangladesh has seen significant development over the years. By development, I mean there was a time when a substantial amount of imported foreign furniture was needed to meet customer demands. The quantity of these imports has now decreased as local manufacturers are able to fulfil those demands.
The government played a significant role in this context. The government has encouraged the growth of the local furniture industry. Some policy support and opportunities have been provided by the government as well.
What do you think are the major challenges this industry faces?
Selim H. Rahman: The culture in our country is such that when an individual initiates a business based on a particular product or demand, it often encourages other entrepreneurs to enter the same sector. This dynamic is a key driver behind the growth of industries here in Bangladesh. This growth encompasses various sectors within the industry. However, it's important to note that due to the lack of proper policy and regulations in place, some actors in the furniture market do not adhere to proper manufacturing methods and lack compliance with industry standards. On the other hand, compliant brands incur higher production costs due to adherence to regulations, including taxes and VAT imposed by the government, ultimately resulting in higher prices for consumers.
Read: The most decisive platform for the Indian woodworking, furniture and mattress manufacturing Industry is set to create new benchmarks
The need of the hour is to establish a structured system that benefits consumers and manufacturers. Developing guidelines for the industry is crucial. There is a lack of specific criteria or policies governing the furniture industry, leading to revenue loss for the government. Reforms could unlock the full potential of this industry.
Furthermore, there is substantial employment potential for youths if provided with adequate training. Every household needs some amount of furniture, even if it is small, for living. As such, furniture is an essential item for human civilization.
Bangladesh’s LDC graduation is scheduled for 2026. Experts are now talking about export diversification. How is the furniture industry preparing in this context? And what is HATIL doing in this regard?
Selim H. Rahman: I’m not fully aware of all the opportunities, benefits and challenges we’ll face once we graduate from the group of LDCs as we are yet to be communicated regarding these matters from the authorities. However, what I understand is that we will need to compete with other actors in the global market to stay competitive in the future because the trade benefits and advantages we are getting at this moment will not be given to us post-LDC graduation. To stay competitive in the future, we will have to attain the required capability. To acquire that capability, we will need to work on the prerequisites. We haven't seen that preparation yet.
One thing that plays a significant role behind the growth of industries is public-private partnerships. What kind of communication with the government is happening in the furniture industry regarding policy issues?
Selim H. Rahman: There is some sort of communication happening in this regard. In many cases, there is a lack of qualified human resources needed for the growth of this industry. It is essential to pay attention to this aspect of our education curriculum. Many polytechnic institutes in our country do not prioritise the wood industry in their curriculum.
Another challenge is the perception among young individuals when choosing careers. Carpentry is often considered more complex compared to working in the garment industry.
Read more: Furniture Brands and Companies in Bangladesh: An Overview
Due to these societal perspectives and various reasons, many institutes have stopped offering courses on these subjects. We have discussed these issues with the government. The academic curriculum related to the wood industry hasn't been upgraded compared to the past. We have worked together to upgrade these curricula. In conclusion, both the government and private initiatives are necessary in this context. Communication from both sides is crucial.
Furthermore, for any industry to thrive, the government must offer essential policy support. If we look at the massive growth of the Ready-made Garment industry (RMG) today, it became possible due to the government's policy support in the 1980s. A comparable growth can also be realized by the furniture industry if the industry stakeholders receive crucial policy support, such as duty-free import of raw materials, among other measures.
HATIL currently sources its raw materials from external suppliers. Given the ongoing global supply chain disruptions, initially triggered by the COVID-19 pandemic and further exacerbated by the Russia-Ukraine war, what strategies does HATIL have in place to navigate these challenges?
Selim H. Rahman: HATIL does not use local wood for its furniture. We source it sustainably from overseas. Now, if that source is disrupted, it poses a challenge for us. It may force us to either halt our business or use locally available wood which is in direct contradiction of our commitment towards the environment. Another issue is that we import certain raw materials that are not available in the country or not produced here. If a supply chain crisis occurs, and we cannot import these raw materials, our business may face significant threats.
Additionally, there are some materials that we used to source from outside but are now exploring local alternatives to reduce dependency on imports. While some things may not be feasible due to the lack of an industry for all products here, we always strive to find local alternatives wherever possible. We are focusing on research and development to discover local alternatives for such materials. Additionally, we are also exploring alternative international sources to diversify our import options in case of a major supply-chain disruptions.