Manufacturers seek cash incentive for market diversification
The country’s bicycle manufacturers see additional export prospects in European countries amid the coronavirus outbreak as a rising number people on the market have started using bicycles as an alternative to public transport to maintain social distancing.
Exporters said that although the country’s exports had been dismal on the global market due to COVID-19 since March this year, the bicycle sector had witnessed a surge in business during the outbreak.
The sector is getting extra benefits on the global market due to the outbreak as people have shifted their preferences from public transport to bicycles for health safety concerns, they said.
Exporters thought that the increased demand for bicycles would sustain for years to come and Bangladesh needed to focus on market diversification to tap into the potential.
According to people in the sector, at least seven manufacturers in Bangladesh export nearly nine lakh units of bicycles annually and more than 90 per cent of the export goes to countries in the European Union.
Kamruzzaman Kamal, director (marketing) of PRAN-RFL Group, said that the demand for bicycles increased on both the global and local markets amid the pandemic as people were avoiding public transports.
He said that their company exported around 1.25 lakh units of bicycles in FY20 and estimated target for export was 2 lakh units in FY21.
‘We have not suffered any order cancelations from global buyers but have rather received additional orders amid the pandemic,’ Alita (BD) Ltd general manager AHM Ferdous told New Age on Tuesday.
Alita (BD) Ltd is a Taiwanese venture located at the Chattogram Export Processing Zone and has been exporting bicycles from Bangladesh since 1990.
Ferdous said that buyers halted but did not cancel orders in March and most buyers asked suppliers to resume production and shipment in April.
‘We began getting additional export orders from May and the trend continued since,’ he said.
According to the data of the Export Promotion Bureau, the country’s bicycle exports in the July-September period of the current financial year 202021 increased by 28.31 per cent to $30.37 million compared with exports worth $23.67 million in the same period of 2019-2020.
Ferdous said that export orders might decline slightly after the coronavirus situation improved but bicycle export would maintain a moderate growth in the coming years as it would be used as a model mode of transportation to maintain social distancing.
He also said that many people in the EU who used to go to gymnasiums before the virus outbreak had now taken up cycling on their home grounds and in nearby places as the virus restricted visits to public places.
‘We mostly export bicycles to the EU as Bangladeshi manufacturers enjoy duty-free access on the market while China faces safeguard duty there. We should go for market diversification as the new virus has also created opportunities for Bangladeshi bicycles in North America and Canada,’ Ferdous said.
India could be a good market for Bangladesh as demand for Bangladeshi bicycles has started to rise in the country, he said.
Ferdous said that some EU and United States-based brands which had stores in India had been selling Bangladeshi bicycles for the last few years.
Meghna Group operations director Md Lutful Bari said that the prospects for bicycle export in the coming months were bright as social distancing regulations had created new potentials for the product.
Meghna Group is the leading bicycle manufacturer in the country and the company alone exports nearly 4.5 lakh units of cycles a year.
Lutful said that people in the EU and US were using bicycles as a model transportation mode as bicycles met the social distancing standards.
‘The pandemic has created an opportunity but market diversification remains a big challenge as we are lagging behind rivals China and Taiwan,’ he said.
Lutful said that Bangladeshi manufacturers exported bicycles to mainly the EU market due to the duty benefit on the market where China faced safeguard duty.
Bangladeshi bicycle exporters need cash incentive to achieve market diversification without which it would not possible to compete with China, Vietnam and Taiwan on the global market.
-With New Age input
The post Bangladesh’s bicycle exports to EU countries are on the rise amid the epidemic appeared first on Dhaka Mirror.
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