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  Volume: XXII, Issue No. 19 May 16-31, 2013  
     
 
   
 
   
  BANKING & COMMERCE
  Honda coming to Bangladesh
 
 
  Untitled Document
-A Monitor Report
Tokyo : The Japanese Honda Motor Co. plans to form a joint venture company in Bangladesh to assemble motorcycles, as production cost had increased in other countries, said a senior official of the industries ministry.
Within five years of operation here, the company would go for full-scale motorcycle manufacturing, said ABM Khorshed Alam, an Additional Secretary of the industries ministry.
Honda would form the joint venture plant with the state-owned Bangladesh Steel and Engineering Corporation (BSEC) soon, he said.
"After vetting from the Law Ministry, I sent the summary of the deal for forming the joint venture company to the Prime Minister's Office for approval," said Alam.
After the go-ahead from Prime Minister Sheikh Hasina, the initial Tk 70 crore joint venture company will soon start operation at a rented abandoned garment factory at Maona in Gazipur. The company will increase investment after two years of operation.
Alam said the Chief of Honda Motor would visit Bangladesh within 15 days of the approval for finalising the joine venture plant.
"We are trying to purchase a suitable piece of land for setting up the permanent plant," he added.
Of the total investment, BSEC will own 30 per cent stake, while Honda will own 70 per cent in the project, he informed.
The Japanese company was looking for a local partner over the last few years, but they were not convinced with the private sector. In 2009, they had proposed to the government for setting up a joint venture, he said.
He said the company was coming to Bangladesh as the demand for motorcycles in the country was increasing.
Generally, Honda sets up a plant in a country where 50,000 motorcycles are sold annually. But, in Bangladesh the annual sale of motorcycle is more than two lakh, he added.
The local light engineering sector would be immensely benefited if the company is set up. Some other motorcycle companies were also contacting the industries ministry for setting up their plants, the official added.
"I know Honda is negotiating with a state-owned company for setting up a joint venture plant," said a senior official of the Japan External Trade Organisation (JETRO) in Dhaka asking not to be named.
   
 
 
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