Intro

Light engineering sector deals with small engineering objects like machine parts, auto parts, small machinery, and plastic products or full scale small industrial machine. This sector is an important sub-sector of the overall manufacturing sector of Bangladesh, fueling the development of many other industries of the country. Industrial, agricultural and other sectors of the economy is largely depending on this sector. Around 1 million of total working population of Bangladesh is involved in Light Engineering sector. The Government of Bangladesh has declared Light Engineering sector as one of the thrust sectors with a motive to encourage the prospect of the light engineering sector of the country.

Industry Overview

Light engineering Industry is mainly a capital concentrated thus the growth of this sector depends most on investment. Though labors are cheap due to lack of training and education but because of their extensive involvement in this sector for a larger period of time, most of the workers have grown high skilled. As with the lowest wages come cheap products, countries like Thailand, Malaysia, China, Sweden and Italy import a huge amount of Light Engineering products from Bangladesh. As per EPB, total export, growth rate and other breakdowns for last 7 years are provided in the following table-

Export of Light Engineering Products from Bangladesh (Value in USD Million)
Products 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Total Export 311.09 309.55 375.49 367.47 366.63 447.04 510.08
Growth Rate (%) -0.5 21.3 -2.14 -0.23 21.93 14.1
a) Iron Steel (72,73) 60.42 69.79 59.73 56.81 54.33 57.9 48.56
Growth Rate (%) 15.51 -14.41 -4.89 -4.37 6.57 -16.13
b) Bicycle (8712) 110.86 99.83 50.93 66.38 49.17 27.88 24.47
Growth Rate (%) -9.95 -48.98 30.34 -25.93 -43.3 -12.23
c) Electric Products (84) 26.11 36.03 3.2 1.58 5.36 3.89 9.22
Growth Rate (%) 37.99 -91.12 -50.63 239.24 -27.43 137.02
d) Engineering  Equipment (85) 23.2 26.07 49.54 48.73 63.06 83.03 174.8
Growth Rate (%) 12.37 90.03 -1.64 29.41 31.67 110.53
e) Copper Wire (74) 49.23 65.04 88.53 63.09 54.63 90.11 65
Growth Rate (%) 32.11 36.12 -28.74 -13.41 64.95 -27.87
f) Stainless Steel ware (82) 2.67 2.43 105.59 105.08 112.89 126.06 99.15
Growth Rate (%) -8.99 4245.27 -0.48 7.43 11.67 -21.35
g) Others 38.6 10.36 17.97 25.8 27.19 58.17 88.88
Growth Rate (%) -73.16 73.46 43.57 5.39 113.94 52.79
Source: Export Promotion Bureau

Light Engineering sector has much potentiality to be a crucial part of every sector because of it scope of work. If proper motivations is provided then this sector will deliver more and more services to every industry. Till now Light Engineering sector has developed the following sub-sectors:

Agriculture Machinery & Spares Paper and Pulp Machinery and Spares
Motor launch and Marine Transport Spares Mold and Dies
Textile Machinery and Spares Component & Spares of Gas Transmission and Distribution
Tea & Jute Machinery and Spares Printing and Packaging Machinery and Spares
Construction Machinery and Spares Poultry Machinery and Spares
Bread, Biscuit and Food Processing Machinery and Spares Kitchen Wear and Bathroom Fittings
Metal Furniture Metal Product and Hard Ware
Pharmaceutical Machinery and Spares LP GAS Cylinder & Fire Extinguisher

Major export destinations of light engineering products are European Union, China, India, Australia, Africa etc. Though based on the category of the product, the market demand also changes. Here is a brief portrait of Light Engineering products demand-

Iron & Steel Saint Barthélemy, Singapore,  Indonesia, India, Myanmar,
Bi-Cycle Thailand, Japan, Sri Lanka, Turkey, USA, Italy, Taiwan, UAE,
Copper Wire Australia.
Construction Machinery and Spares Germany, UK, India, Belgium, Ireland, Spain, Denmark,

Government policy

In the export policy 2015 – 2018, Light Engineering industry is considered as one of the special development sectors. Several points are mentioned in the policy including;

  • Supply of investment credit at reduced rate of interest on a high priority basis;
  • Moratorium on income tax;
  • Various cash assistances;
  • Export credit on easy terms and reduced rate of interest; and
  • Subsidized rate for Air Transportation, Duty drawback and bond facilities.
  1. A Light Engineering Cluster Village will be established near Dhaka for the development of Light Engineering industry
  2. A modem laboratory and common facilities center will be established for the development of light Engineering sector.
  3. Special Economic Zone for Light Engineering sector will be established to attract foreign investors.
  4. Emphasis has been given to increase investment, for greater and easier market access, and easier transfer of technology.

Industry Prospect

Bangladesh immensely relies on foreign countries for costly capital machinery. Local light engineering industries can meet a part of the demand at economy prices if the industries are given financial support to produce modern equipment. These industries are already doing a noteworthy works for the existing industries supplying spare parts fabricated locally and thus saving huge foreign exchange. The country with about 30 million unemployed people needs labor intensive industries. Light engineering industries are especially suitable for their high labor intensity, innovativeness and low capital investment. As all of the resources are available, this industry has much prospect in respect to any other industries.