Most Japanese companies want to expand business in BD: Survey

Japanese companies consider the cheapest wage a most competitive feature for continuing business in Bangladesh among 20 Asian countries and two regions though the country's rate of year-to-year wage increase is higher than three other countries.

A JETRO survey on business scenario of Japanese companies, however, found that the country's position in cargo clearance both at seaports and airports by companies is worse.

The survey also found that the wages of engineers and managers in the manufacturing and non-manufacturing sectors are comparatively higher in the country than Sri Lanka, Myanmar and Pakistan.

Secretary General of Japan-Bangladesh Chamber of Commerce and Industry (JBCCI) Daisuke Arai shared the business scenario of Japanese companies in Bangladesh while disclosing the findings of JETRO Survey 2018 at the JETRO office on Sunday.

JBCCI directors Tareq Rafi Bhuiyan, Dr Kabir Ahmed, AK Mizanur Rahman and treasurer Shariful Alam also spoke on the occasion.

Mr Arai, also the country representative of JETRO, said quality control in the manufacturing sector and developing human resources in Bangladesh are still challenging as the survey has found that Japanese companies face problem in Bangladesh.

Necessary measures should be taken to change the scenario in cargo clearance as 16 days are needed to clear seaport freight and eight days for airfreight. "In both cases, time for cargo clearance is the highest in Bangladesh," he told journalists.

According to the survey findings, 62.2 per cent of Japanese companies operating in Bangladesh expect an increase in profit this year comparing to last year while 72 per cent want to expand business in next one to two years.

It also found that 56.6 per cent of Japanese companies plan to increase the number of local employees within next one year. Bangladesh remains in the highest position in business expansion plans by Japanese companies in next one or two years, according to the survey.

Japan External Trade Organisation (JETRO) survey is one of the oldest surveys of Japan being conducted since 1987 to understand the business activities of Japanese affiliated companies operating in Asia and Oceania.

Over 5,073 affiliated companies with direct and indirect investments in 20 countries responded to the 32nd JETRO survey. In Bangladesh, 57 Japanese companies including 30 large ones responded to the survey. Of the companies, 21 belong to the manufacturing sector while 31 to non-manufacturing areas.

According to the survey conducted from October 09 to November 09 last year, 55.1 per cent of the firms selected 'expansion' as their approach to future business challenges.

The JETRO Chief said future plan for expansion of Japanese companies is highly dependent on the improvement of logistics, human resources, and compliance with corporate governance.

He said the JETRO data showed the scenario of competition of Bangladesh with some Asian countries including Myanmar and Cambodia for being ASEAN members which created a scope of establishing the supply chain.

"But Bangladesh is in difficult situation. So, we humbly request the government to formulate proper industrial policy to bring about changes in business scenario for not only Japanese companies but also for other investors," Mr Arai added.

He also requested the government to focus on keeping open ports 24/7 days and removal monopoly in clearance of freight.

Asking about relevancy of the study when only 57 companies responded among 280 Japanese companies working in Bangladesh, the JETRO country director said the survey findings are statistically relevant as it is covered by most big and SMEs as well as manufacturing and non-manufacturing companies.

Japanese companies have found that Bangladesh has huge potential for consumer and processed foods but it needs to maintain high compliance with taxation, financial report preparation, he said, adding that the scope of domestic market remains still high.

The survey said 61 per cent companies showed the reason for expansion as 'high growth potential' and 'sales increase in local market'.