Bangladesh, another potential market for Vietnam
Bangladesh, another potential market for Vietnam
According to the Vietnam Chamber of Commerce and Industry, Bangladesh is currently one of the biggest markets in the South Asian Region and with a population of 161 million people is also a potential growth market for Vietnamese products because of its strong purchasing power.
Bangladesh is not a completely new market for Vietnam, but trade between the two countries is low-key as Vietnamese firms are still hesitant to tap this market. However, in the past few years, some Vietnamese companies have started to trade with Bangladeshi companies and with positive results.
Since 2003, footwear producer Biti’s has realized the potential of the Bangladeshi market, after already tapping into markets in Nepal, India, and Pakistan. In 2004, Biti’s chose five official distributors in Bangladesh and began to sell products there. Now, sales of the company are showing a steady growth.
In July this year, the Hoa Phat Group exported the first batch of 10,000 tons of blast-furnace slag to the Shun Shing Group. Up to now, Hoa Phat has exported three batches of blast-furnace slag to this market and will supply around 80-100 tons of slag annually, according to the agreement. In reality, Shun Shing Group imports upto 300,000-400,000 tons of blast-furnace slag every year for the cement industry in Bangladesh.
Bangladesh also considers its garment and textile industry as one of the main industries, same as Vietnam. Garment exports from Bangladesh have continuously increased, reaching nearly US$22.3 billion in 2011. However, Bangladesh depends on imported materials as much as domestic-made fabrics to meet 40 percent of demand of the garment industry. Moreover, Bangladeshi consumers prefer garments and textile products from Vietnam because of their reasonable price and high quality.
Thus in 2011, Bangladesh imported finished products and materials for their garment industry from Vietnam valued at about $7.5 billion.
In addition, Zafar Osman, director of a timber company in Bangladesh, said that companies in this industry are in dire need for a steady supply of round teak wood and teak planks on a monthly basis. Vietnam has an advantage in the wood industry so this is a good opportunity for firms to cooperate with each other.
After many years of experience in doing business with Bangladeshi companies, Nguyen Tien Dat, director of Vissai Import-Export Company, said that demand to import goods in this market is huge but Vietnamese firms have not developed all potential yet due to lack of information. Hence, authorities should help set up coordination between firms of the two countries.
Besides promoting exports, the Bangladeshi government is also encouraging foreign investors to invest their money in the country to increase goods supply as well as to develop technological standards for its domestic market.
According to Supradip Chakman, Bangladeshi Ambassador to Vietnam, his country has great demand for garments, footwear, wood-pulp, and chinaware as well as for mechanized agriculture. Currently, a few Vietnamese firms have helped the country to improve some sectors that had remained undeveloped.
Viettel bought stakes in Teletalk Bangladesh Ltd for $300 million in 2009. After entering this market, Viettel has set up 19,500 base station towers, provided services to 3.5 million clients, and installed 50,000 kilometers of fiber optic cables and introduced 3G technology.
Data given by the Statistics Office of Bangladesh showed that the gross domestic product grew 6.7 percent in 2011 and is expected to reach 7.2 percent this year. Export growth was 21.2 percent in the past three years and import growth was 22.2 percent.
Bangladesh has been opening trade with other countries to maintain its economic growth in the coming years. In order to achieve this, the government has built many policies to create a fair business environment for both local and foreign investors. Furthermore, at every meeting, Bangladeshi firms always try to persuade Vietnamese firms to invest directly instead of just exporting or importing on small contracts. Accordingly, the former will support the latter with legal procedures, advertising, and market information so that Vietnamese firms might meet Bangladeshi consumer needs.
sggp
