The power infrastructure in Bangladesh needs to scale up significantly to support the country's annual economic growth of 7%. Current power demand is around 6,264 MW but may reach 34,000 MW by 2030, representing a major investment opportunity. While investments have improved the sector, Bangladesh remains dependent on natural gas which will only meet demand until 2019. The government's master plan aims to increase the use of coal to generate 50% of power by 2030. Private sector already comprises 42% of installed capacity but rental power plants using expensive fuels need replacement with alternative sources. Substantial investment is needed across the power value chain from generation to distribution to meet the country's growing needs.

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Acronyms
BDT Bangladeshi Taka
Bn Billion
GBP Pound Sterling
Kg Kilogram
M MT Million Metric Ton
Mn Million
MT Metric Ton
MW Mega Watt
USD United States Dollar

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Table of Contents
Emerging Bangladesh – A Part of Your Global Growth Strategy .................................................................3
Bangladesh Apparel Export Industry – Clocking Ahead..............................................................................7
Building Bangladesh’s Future – Power Infrastructure ................................................................................9
Footwear Sector – Bangladesh’s Next Export Tiger..................................................................................11
Bangladesh Pharmaceutical Industry – The Thrust Sector .......................................................................13
IT Sector – Gateway to Middle Income Status..........................................................................................15
Footprints – Big names already with the Bandwagon..............................................................................17
Investing in Bangladesh – Government Policy Support............................................................................18

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Emerging Bangladesh – A Part of Your Global Growth Strategy
The Economy has been experiencing steady growth over the last decade and prospects are
looking better for the coming one, with a booming RMG sector, flourishing remittance flow,
record high foreign currency reserve and international investors’ interest in FDIs. Geographic
proximity to emerging Asian powerhouses - India and China - will further add impetus to the
country’s drive towards middle income status.
Strong Performance Relative to Emerging
Economies
Bangladesh economy has performed well over the
last decade with GDP growing by 6-7%, while many
of its competitors have faltered and lost their ways
(Growth has been over the median of ‘Ba’ rated
countries and BRIC). The growth is considered
impressive taking into account frequent instances of
natural calamities and political unrest which have at
times hindered economic activity.
Inflation has remained stable over 2014 at 7.22%
(Source: Bangladesh Bank) despite frequent supply
chain disruption due to political unrest. Reining of
inflation is attributed to declining growth of non-
food inflation e.g. Rent, which has contributed to
lower inflationary pressure. Bangladesh Bank has
also adopted a tight monetary policy which has
further led to lower inflation.
Moody affirms Bangladesh’s rating at Ba3
with Stable Outlook
Bangladesh has performed well compared to other
comparable countries and sovereign ratings by both
Moody’s and S&P are testament to the economy’s
resilience. The ratings are driven by a healthy
economic outlook, progress on policy reform and
limited vulnerability to fiscal and external funding
stress. Local currency country risk ceiling is affirmed
at Baa3, Long term foreign currency bond B2 and
Bank Deposit ceiling at B1.
Bangladesh Economic Vitals are on Growth
Trajectory
Exports have been growing based on the blossoming
RMG sector which has clocked USD 24.49 billion
over 2014. Remittance revenues has grown to the
tune of USD 14.2 Billion, albeit at a slower pace.
However, import growth has declined at a relatively
higher rate which contributed to positive current
account balance.
Bangladesh is experiencing record high forex
reserve position, currently standing at USD 21.8
billion. The current reserve can comfortably cover 7
months of country’s import and the Forex reserve is
expected to grow with steadily improving RMG
export and growth in remittance earnings.
Manpower export is also set to improve as the
Malaysian labor market reopens and the
Government undertakes measures to train and
send more semi-skilled and skilled workers abroad.
Influx in Infrastructure Development
Government has been investing heavily in
infrastructure developments, especially in the field
of power generation. Government has tackled the
demand-supply gap by directly involving the private
sector. Entrepreneurs have established quick rental
power generation plants which have been regularly
supplying to the national grid, contributing to lower
electricity shortage. Additionally, government has
reached an agreement with India to import
8.4%
7.0% 6.6% 6.5% 6.4%
5.5% 5.4% 5.1%
3.9% 3.8%
3.1%
China
Nigeria
Bangladesh
India
Indonesia
Phillipines
Vietnam
Egypt
Brazil
Korea
Pakistan
SOURCE: IMF
Average GDP Growth (%): 2013-18

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electricity, starting with 500 MW per day. The
existing installed capacity is 10,213 MW.
Government has been working to improve
efficiency of the Chittagong Port which has the
potential of doubling its capacity. There also are
long term plans of establishing a deep sea port in
Sonadia and both Chinese and Indian investors have
expressed interest in developing the sea port.
Establishment of seaport can significantly reduce
export lead times and earn steady flow of revenue
for the government.
Expanding Consumer Market providing
Growth Opportunities
Spending power of Bangladesh is steadily enhancing
and by 2021, Bangladesh is projected to become a
middle income nation of 175m people.
With an emerging economy consumer spending,
disposable income and personal savings are also
experiencing positive momentum. Bangladesh is a
mammoth sized consumer market consisting of
almost 160 million consumers.
This huge consumer base is being driven by catalytic
factors like age and gender distribution (60% of the
population being between 15-64 years of age),
increasing urban population (growing at a rate of
over 4%/year), expanding labor force (increasing
purchasing power of the masses), increasing literacy
rate (primary education enrollment of 95%+), rising
middle class, growing white collar culture and
globalization (youth influenced and linked with the
globe via IT and social media).
Strategic Location at the Heart of Asia
Beneficial location at the crux of “Chindia”. Close
proximity of India and China leads to strong trade
relations. Additionally, Bangladesh leverages on the
exceptional growth environment in the region and
commutable distance to key Asian cities – traction
from the 975 million new Asian middle class market.
Economy Offering Long-term Growth
Opportunities
Bangladesh is developing as a key export hub in the
heart of Asia. With Indian and Chinese consumer
spending projected to grow by USD 2.6 trillion+ and
USD 4.2 trillion+ in the coming decade – this
powerhouses will become key markets for
Bangladesh.
Additionally, Bangladesh is one of the few locations
that possess the capacity, access and cost-base to
capture the manufacturing shift out of China.
RMG continues its success story with USD 23 billion
in exports, mostly to EU. With product diversification
and new markets in Asia the volume may well
exceed USD 40 billion by 2020.
Bangladesh has competitive wage rates compared to
other emerging markets.
Additionally, Bangladesh has one of the lowest
Public Debt to GDP ratios compared to other frontier
markets – even India and Vietnam.
374
520
818
1,284
2002 2007 2012 2018
SOURCE: IMF
GDP/Capita (USD)
69
71
73
78
79
80
91
138
262
Bangladesh
India
Sri Lanka
Vietnam
Pakistan
Cambodia
Indonesia
China Inland
China Coast
SOURCE: ILO
Min. Wage Rate in USD (monthly)
Italy, 132%
USA, 72%
UK, 91%
India, 52%
Vietnam,
48%
Bangladesh,
31%
SOURCE: INDEX MUNDI AND CIA FACTBOOK
Public Debt to GDP

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A Host of Emerging Sectors
Bangladesh has started moving into diverse, higher
value sectors. Light Engineering, Pharmaceuticals,
Leather and IT services are exhibiting high potential.
Non RMG exports stand at USD 5 billion now and
expected to exceed USD 11 billion by 2025.
Next Investment Hub in Asia
Bangladesh provides an opportunity space for
foreign investors who can bring in technology and
market access whilst the country provides a
favorable cost base, trade terms and capacity for
set-up of production facilities.
Till date, Bangladesh is already producing
motorbikes, consumer electronics (TVs, Refrigerators
and Mobile devices) and even ships.
FDI Yet to Reach its Full Potential
Bangladesh has been experiencing increasing FDI
over the last decade. FY 2013 inward FDI was USD
1.7 billion (highest in the manufacturing sector –
USD 713 million).
Additionally, FDI is currently 1.2% of GDP which is
low compared to the frontier market average.
Potential Gap of USD 2 billion +
Capital Market provides Long Positions and
Risk Diversification for Investors
Bangladesh capital markets have very low and even
negative correlation with developed, emerging and
other frontier equity markets. Therefore, an
exposure to Bangladesh significantly improves risk
adjusted returns.
The market has returned 203% since Jan 2007
(16.33% p.a.). For long term investors looking to
participate in the Bangladesh growth story – now is
a good time to start investing.
Largest Stocks as of Nov 16, 2014
539
305
161
105
101
63
59
32
Shrimp
Leather Shoes
Leather Goods
Bicycles
ITES
Consumer Electronics
Pharma
Ceramics
SOURCE: EPB
Export - Emerging Sectors in mn (FY
2012-13)
0.28
0.80 0.74 0.79 0.77
0.96 0.91
0.78
1.19
1.73
FY2003-04
FY2004-05
FY2005-06
FY2006-07
FY2007-08
FY2008-09
FY2009-10
FY2010-11
FY2011-12
FY2012-13
SOURCE: BANGLADESH BANK
FDI (USD bn)
1.17%
2.90%
SOURCE: CIA FACTBOOK
FDI to GDP Ratio
0
20
40
60
0
5000
10000
MarketCap(USDbn)
DSEX/DGEN
SOURCE: DSE
Dhaka Stock Exchange Performance
(Jan'07 to Nov'14)
DSEX
6.11
2.10 1.86 1.85
1.05
0.00
2.00
4.00
6.00
8.00
GP (Telenor)-
Telco
BATB (FMCG) Square Pharma Lafarge Surma Titas Gas
(Power)
Stock value in USD (Bn)
Bangladesh
Frontier
Market
SOURCE: DSE

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Get Ready to Enter Bangladesh

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Bangladesh Apparel Export
Industry – Clocking Ahead
Bangladesh’s RMG sector has a bright future as
close competitors like China are moving up the
value chain, leaving value apparel
manufacturing to cost effective players like
Bangladesh. Mckinsey, a leading consulting
firm, in their recent report on Bangladesh’s
RMG sector, has testified to RMG sector’s
growth potential. According to the report, RMG
export is set to grow to USD 36 billion by 2020.
The Growth Story of the RMG Sector
The export oriented readymade garments (RMG)
sector in Bangladesh started its modest journey as a
small non-traditional sector of export in late 1970s.
Within three decades, RMG has transformed itself as
the country’s highest revenue generating sector,
contributing 81% (USD 24.49 billion FY 13-14) of
country’s total export.
Bangladesh is currently the largest RMG exporter
behind China and India having the potential for
growing in the coming years. With GSP facility in EU
and duty free access to Canada and Japan,
Bangladesh is benefitting from competitive cost
advantages which have translated into higher export
revenue.
Bangladesh’s RMG export has spiked in the post
MFA regime from USD 6.9 billion in 2005 to USD 11.8
billion in 2008. The global financial crisis also had
minimal impact on Bangladesh’s export, initially
stagnating at USD 11.8 billion in 2009 before
increasing to USD 19.2 billion in 2011.
Emerging Markets for Bangladesh Apparel
EU is Bangladesh’s largest RMG export destination
constituting 58% of total export followed by US
market with export of 23%. Bangladesh has recently
diversified into emerging export markets including
Australia, Brazil, China, Japan and South Africa
accounting for 14% of total export.
Sustaining Competitive Costs
Bangladesh RMG sector has flourished over the
years catalyzing on inexpensive labor. The country
still sustains the competitive advantage despite
conceding 77% minimum wage hike in early 2014.
China,
34.0%
India, 5.4%
Bangladesh
, 5.1%
Vietnam,
4.7%
Indonesia,
4.5%
Turkey,
3.5%
SOURCE: United States international Trade commission
Global Apparel Exporters
-
5.0
10.0
15.0
20.0
25.0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
SOURCE: BGMEA & EPB
RMG Export Trend 2001-2013 (in USD
bn)
Woven Knit
EU
60%
USA
21%
Canada
4%
Emerging
Markets
15%
BANGLADESH'S RMG EXPORT FY 2014
2.68
2.32
2.07
0.620.570.550.490.39
Turkey
Mexico
China
Pakistan
India
SriLanka
Vietnam
Bangladesh
SOURCE: Textile Ministry Research
RMG Wage Rate in USD/Hr

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Way Forward for Further Growth with
Renewed Compliance
RMG sector has undergone upheaval in 2013 mainly
due to a series of industrial accidents which brought
international attention towards factory compliance
issues. Amid pressure from international retailers,
Bangladeshi factories have undergone structural
changes for adhering to strict compliance norms.
Meanwhile, political unrest in the latter half of 2013
had a crippling effect on the sector.
Despite the double whammy, RMG export has
managed to register growth (c.10%), both in the
last quarter of 2013 and first half of 2014. This
indicates the resilience of the sector and buyer’s
continued trust in Bangladesh as an RMG export
destination.
Bangladesh has recently signed the TICFA agreement
with US and talks are underway to revive GSP
facilities. The new GSP deal may also include tariff
and quota free access of Bangladeshi apparel, which
was missing in the previous GSP agreement.

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Building Bangladesh’s Future –
Power Infrastructure
Bangladesh’s annual economic growth of 7%
calls for the scalability of its power
infrastructure to keep up with the demands of
industry and increased urbanization.
Heavy investment in energy infrastructure has
made improvements but by 2030 Bangladesh’s
power demand may well reach 34,000 MW.
Meeting this increase will create a multibillion
dollar opportunity for investment.
Current Status Quo
The current demand in the country is around 6,264
MW with maximum demand having hit 8,250 MW in
April 2013. The electricity demand is set to grow at
11% in the 2015-2020 period (PSMP 2010) and the
installed capacity was 10,213 MW as of November
2013. However, there is a shortfall due to mismatch
between fuel mixes and plant types.
Moreover, 62% of the population is currently
covered by the electricity grid with the rest of the
population set to come online in the near future.
This represents a still untapped market of 61 million
people who will be connected to the national grid in
the coming years as Bangladesh continues its growth
trajectory out of the LDC category.
The power industry is unique in the fact that
overhauling it can impact all components across the
vertical production chain. This presents ample
opportunity for investment in areas ranging from
electricity generation to distribution channels in the
fuel sourcing function.
Insights on Fuel Sources
The fuel mix of the power plants are heavily
dependent on natural gas which is only enough to
meet the power demands of the country until 2019.
The power developments board’s master plan lays
out a roadmap to reduce dependence on natural gas
and move fuel priority towards coal with plans to
generate 50% of total electricity using it by the year
2030.
Private units are operating in the market and
comprise of 42% of the total installed capacity.
Quick Power Rental from Private Sector
There were various quick rental power plants set up
by these units that were aimed to reduce the
generation deficit during the 2010/11 period with 22
plants in total by the private sector. These plants
have high production costs due to exorbitant furnace
oil prices and are set for replacement with
alternative fuel sources.
Game Plan for the Future
Keeping pace with the level of economic growth in
Bangladesh, the power authorities in the country
have devised a master plan through the PSMP 2010
to upgrade the linkages in the sector and reach the
optimum fuel mix. In addition, there have been
major developments in the sector to ensure that
demand is met adequately in the near future.
Regional Connectivity
Bangladesh has started to move towards regional
power grid connectivity, the first manifestation of
which has been the start of electricity import from
India. It was started on a pilot basis in October 2013
100
112 116 123 131
0
2,000
4,000
6,000
8,000
10,000
2010 2011 2012 2013 2014
0
50
100
150
PowerDemand(MW)
SOURCE: BPDB
GDP(bnUSD)
GDP and Energy Demand
Peak Demand GDP
Natural
Gas
64%
Furnace Oil
19%
Diesel
7%
Coal
3%
Hydro
2%
Power
Import
5%
Current Fuel Mix

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with import of 175 MW of electricity. This import has
the potential to reach 1000 MW given the
infrastructure in place. This gives Bangladesh a
cushion in terms of energy security in the near term.
Alternative Sources of Power
Coal: As a fuel source, coal consists of around 3% of
the total composition. This is set to reach 50% within
the year 2030 according to the master plan by the
Power Development Board. This move into coal
production is because of two reasons; first because
there are huge reserves of coal in the Northern
regions of the country, estimated to be around 3
Billion tonnes. Second, there is potential to import
coal from neighboring countries to fulfill demand if
necessary.
Hydroelectricity: Drawing from the previous point of
regional connectivity, there is huge potential for
Bangladesh to tap in to Nepal and Bhutan’s huge
potential hydroelectric generation capacity.
Renewable Energy (Solar): Bangladesh has
successfully managed to implement one of the
biggest Solar Home System (SHS) projects. Almost 3
million SHSs having being installed to date with a
targeted installation base of 6 million by 2015.
Currently renewable energy makes up 2% of the
total electricity generation.
Wind Energy: Having a 710 km coast line,
Bangladesh is yet to take full advantage of wind
turbines; upsides from this sector can be extensive.
LNG Import Facilities and Offshore Gas
Reserves
Liquefied Natural Gas (LNG) can augment the
country’s energy needs by allowing for import of
liquefied natural gas and subsequent gasification on
landing and distribution. The groundwork has been
laid to construct Bangladesh’s first floating LNG
terminal at Moheshkhali which is going to have a
capacity to handle 5 million MT/year of LNG.
The infrastructure that is going to be set up for this
purpose will also act as a platform for offshore
power exploration as well as subsequent extraction
and transfer. Bangladesh has substantial reserves of
untapped gas in its offshore wells.
Investment Potential
Projected demand to hit ~ 34k MW by 2030. Total
investment in the sector over the next 15 years is
estimated at USD 70.5 bn.
10,283
17,304
25,199
33,708
6,170
10,382
15,749
21,910
2015 2020 2025 2030
SOURCE: BPDB
Demand vs Generation (MW)
Prj Demand Prj Elec Gen
Major investment
opportunities via BOO,
BOOT arrangements
under the PPP scheme
mechani
Overhaul of road,
waterway and
infrastructure to
facilitate fuel
transport
Overhaul of
Pipeline
Infrastructure to
carry imported
LNG and Drilled
Natural Gas from
sea to distribution
hubs
Commercial &
Household demand for
power set to reach
33,708 MW by 2030
Estimated investment
over 15 years: USD
70.5 bn

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Footwear Sector – Bangladesh’s
Next Export Tiger
Although Bangladesh export basket is heavily
skewed towards RMG export, several new
sectors have cropped up over the last decade.
Footwear is one such sector which has
tremendous potential to significantly boost
country’s export while diversifying the
economy’s export basket.
Global Footwear Industry is at an Upward
Trajectory
Given rising global demand for footwear which is
expected to reach USD 211 Billion by end of 2018.
(Source: Transparency market research), Bangladesh
has the potential to tap into the growing market by
offering quality output.
Local Footwear Market is Growing
Bangladesh’s footwear export has doubled during
2010-13 and continues to rise further as illustrated
below. Bangladesh is involved in export of
components at various stages of footwear value
chain ranging from raw materials to work-in-
progress such as soles and finished goods like shoes.
Source: Export Promotion Bureau (EPB)
Eyeing the Global Leather Market
The sector has been growing over the last 5 years
with exports increasing by 46% in 2011 followed by
healthy 25% growth in 2013. Recently, total export
has exceeded USD 1 billion mark for the leather
sector which has been due to rising global demand
and renewed interest amongst local entrepreneurs
for manufacturing footwear. Some international
investors have forayed in the sector setting up
factories in local Export processing Zones (EPZs).
As illustrated above, Bangladesh has the potential
to accommodate relocating footwear units from
China, due to Bangladesh’s inherent input cost
advantages. However, Bangladeshi labor needs to
undergo the learning curve to improve their
efficiency and productivity.
Bangladesh has a distinct advantage in footwear
production as it is involved in all stages of the value
chain from raw leather to the final product. The
annual export of these components is expected to
reach a value of USD 5 Billion within the next
decade.
185 189 192 196 200 203 207 211
160
180
200
220
240
2011 2012 2013 2014 2015 2016 2017 2018
Source:Transparency Market Research on Footwear
Global Footwear Demand (USD bn)
68 88 95 123 159
183 204 298 336
419
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Growth of Footware Exports of Bangladesh
(USD mn)
Countries in
the
European
Union
Countires
including
Japan, USA,
India,
Australia
Regionwise Market for Bangladesh
Leather Exports
Emerging market for footwear
exports include Vietnam,
Indonesia, Turkey, Costa Rica
Source: Export Promotion Bureau
China,
$211
Bangladesh
, $38.5
Bangladesh has the potential
to take a share of China's Footwear pie
0
50
100
150
200
250
Source: Transparency Market Research & EPB
Minimum Wage

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Leather Sourcing will be a Competitive
Advantage
Bangladesh produces superior quality leather from
local livestock, which is subsequently processed by
tanneries concentrated around the capital city.
These inputs are then transformed into final
products including footwear whose exports stood at
USD 419 Million as of 2013. (Source: EPB)
The annual production of leather hovers around 250
Million square feet each year with supply peaking
during the religious festivals of Eid. In 2013 the
supply of rawhide stood around 7 Million pieces
with the tanneries struggling to keep up with the
supply.
Bangladesh has Robust Backward Linkages
In Bangladesh, incoming raw hides are sorted and
processed in tanneries that are concentrated in the
outskirts of the capital in Hazaribagh. These entities
have come under criticism for being environmentally
unfriendly prompting the government to build a 200
acre Leather Industrial Park in Savar at a cost of
USD 60 Million. The park will include state of art
Effluent Treatment Plants (ETPs) to treat the waste
generated while processing the leather in the
tanneries.
The Asian Market to drive Demand
The domestic market in Bangladesh has potential for
growth as well. This is due to rising per capita
income which has recently passed the USD 1,000
mark. In addition, the economic conditions of the
countries in this region is changing rapidly with
increasing economic growth translating to higher
per capita income and in turn, more purchasing
power. This is going to pull the demand for products
such as footwear upward as they move from being a
necessity to a more brand and status oriented
product.

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Bangladesh Pharmaceutical
Industry – The Thrust Sector
The pharmaceutical sector in Bangladesh is one
of the thrust sectors and plays a vital role for
the country’s economy. The sector utilizes
highly skilled manpower along with advanced
machinery for manufacturing high quality
generic medicines and vaccines for local and
international markets at competitive prices.
Currently, the market consists of around 150
pharmaceutical companies, out of which top 20
companies control 85% of the market share.
The local manufacturers cater to 97% of the
country's consumption with a market size of
USD 1.2 billion and are continuously expanding
their reach in the global arena.
Global vs. Local Market Synopsis
IMS projects the global pharmaceutical market to
reach USD 1.135 trillion from USD 953 billion at a
compound annual growth rate (CAGR) of 3-6%
during 2013-2017. Led by China, the BRIC countries
(Brazil, Russia, India, and China) accounts for almost
70% of all pharmaceutical market sales. Parallel to
the global picture, the emerging countries show a
positive growth trend, where Bangladesh is one of
the Tier 3 pharmerging countries that is forecasted
to contribute to this industry growth by 6–9%
between 2013–2017.
The local market demand in Bangladesh differs
significantly from the international market; about
85% of the drugs sold are generics and 15% are
patented drugs. The market comprises of 83 active
pharmaceutical companies, out of which top 20
companies control 85% of the market share. The
local market size currently rests at USD 1.2 billion.
Market Demand and Supply Insights
Bangladesh has one of the lowest per capita drug
consumptions in the world. However, the onset of
the sector growth was accelerated by the
promulgation of the Drugs (Control) Ordinance, 1982
Act. Furthermore, the local demand for generic
drugs sharply increased within past few years due to
the development of health care infrastructure,
increase of health awareness both in rural and urban
areas, escalation in standard of living in general and
increase in life expectancy.
Incepta Pharmaceuticals Ltd, Renata Ltd, Drug
International Ltd, Eskayef Bangladesh Ltd, Sanofi,
Beximco Pharmaceuticals Ltd and Opsonin Pharma
are the top market players. Square Pharmaceuticals
stands out as the market leader with 19.3 percent
market share with its close rivals being Incepta,
Beximco and Opsonin.
Beximco has recently entered EU market and is
enlisted in London Stock Exchange as well. These
companies are also well known for exporting high
end branded drugs such as anti-cancer drugs and
cardiac medicines. High-tech insulin manufacturing
plants have started operation to meet the country's
growing demand.
Export Status Quo
As a member of WTO and being enlisted as one of
the LDCs, Bangladesh currently enjoys the benefits
of intellectual property rights that allows producing
generic drugs and exports until 2016 without
compulsory licenses or paying the patent holders
1,776 2,043 2,349 2,701 3,104 3,573 4,108
4,725
5,433
FY
2014
FY
2015
FY
2016
FY
2017
FY
2018
FY
2019
FY
2020
FY
2021
FY
2022
Source: The Pharma World
Bangladesh Growth Forecast
(USD mn)
SQUARE
20%
INCEPTA PHARMA
9%
BEXIMCO
9%
OPSONIN PHARMA
5%
ESKAYEF
5%
RENATA
5%
ACME
4%
A.C.I.
4%
ARISTOPHARMA
4%
DRUG INTERNATIONAL
4%
OTHERS
31%
Top 10 firms' Market Share

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and thus providing an advantage to the local
manufacturers and exporters.
Source: EPB
The local manufacturers are determined to meet the
local demand fully by 2014 and penetrate leading
foreign markets. At present pharma companies’
exports to 85 countries in Europe, Asia, Africa and
Latin America with export standing at USD 60
million in 2013. Due to the rise in demand in
Southeast Asia, Asia Pacific and Africa, the pharma
exports recorded a rise of 23.9% in FY 2012-13.
Leading companies have already obtained
accreditation from USFDA, UKMHRA, TGA and GCC
and are endeavoring to penetrate into USA and
other EU based markets.
Growth Incentives and Benefits
Healthy growth trajectory is boosting the
pharmaceutical manufacturers towards R&D for
newer generics with global standards in place. The
DGDRA Bangladesh is playing the key role in
inspecting the WHO, GMP and SOP of the
pharmaceutical manufactures and enrolling the
certifications for subsequent two years validity from
the date of inspection.
At the moment companies import 80% of their raw
materials (APIs) from India and China which
significantly escalates the cost of production.
However, currently 15 Bangladesh companies (such
as Beximco, Square and Opsonin) are
manufacturing active pharmaceutical ingredients
(API).
The government is taking significant steps to
implement API Industries Park at Munshiganj, 40
km from the capital. About 40 industries will be
established at the plant, which will include a central
effluent treatment plant incinerator. Building this
backward-integration is a giant leap for this sector as
it will eventually give the local pharmaceutical
manufacturers price competitiveness in the global
arena.
Furthermore, to meet the staggering local and
international demand, the government has
extensively imposed lower or zero import duty and
VAT for certain raw materials/ items and certain
capital machineries, and also allowed tax holidays
of four to six years to investors in this sector.
Rapid Growth Poised to Stay
The Bangladeshi pharmaceutical market is growing
at a fast pace and has a promising future. According
to Business Monitor International's latest report,
Bangladesh has moved one step upward to occupy
the 14th
position amongst 17 regional markets.
This sector offers an enormous investment
opportunity and has the potential to export
alongside the RMG sector in terms of value, catering
to increasing consumption worldwide.
0.05%
1.11%
18.21%
79.40%
0.44%
0.78%
Itemwise Export in FY 2013Glands & extracts,
secretions for
organotherapeuti
c uses
Human & animal
blood; antisera,
vaccines, toxins,
micro-organism
Medicament
mixtures not in
dosage
Medicament
mixtures put in
dosage
40.49 44.38
48.31
59.85
FY 2010 FY 2011 FY 2012 FY 2013
SOURCE: EPB
Pharmaceuticals Products Export
(USD Mn)

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IT Sector – Gateway to Middle
Income Status
Bangladesh IT sector has historically remained
outside the limelight due to neighboring India’s
spectacular IT success. The lack of adequate
infrastructure and inadequate training facilities
compounded the slow progress of the IT sector.
However, over the last decade, there has been
a proliferation of IT ventures earning foreign
currency reserves for the nation.
The government also undertook several
development measures for improving overall
infrastructure which resulted in more reliable
and cheaper internet connectivity while
ensuring training facilities for budding IT
professionals.
Market is Growing with Greater Product
Depth
Currently there are over 800 IT and ITES companies
registered in Bangladesh with an estimated total
industry turnover of around USD 200 million. Nearly
76 percent of these companies are involved with
customized application development and
maintenance. The specialization of the local IT and
ITES companies is shown in the following figure
Source: BASIS
Whereas most Bangladeshi market players initially
offered their services and products predominantly
on the domestic market, Bangladeshi software
solutions and ITES are nowadays exported to other
regions like Europe and Northern America.
Thriving Domestic ITES Market
Recently, many large-scale automation projects have
been implemented in sectors like banking, telecom,
pharmaceutics, RMG and Textile sectors increasing
the domestic demand for software and ITES
solutions. Manufacturing sectors including garment,
textile and pharmaceuticals have created
sustainable demand for IT solutions like ERP, HR
and Payroll management systems, and production
and financial management software. As a result, the
domestic IT service industry has grown by 20 to 30
percent per annum over the last few years (Source:
BASIS).
Prospect of Outsourcing is Positive
The ITC estimates that around 200 Bangladeshi ICT
companies are serving international markets offering
outsourcing services and project delivery models. In
terms of export destinations, North America (Canada
and the US) dominates, whereas European countries
like the UK, Denmark, the Netherlands and Germany
have emerged over the last few years as major
export destinations (source: BASIS). According to the
ITC Exporter Directory there are over 10,000 ICT
freelancers active in Bangladesh as of 2014, billing
an export revenue of nearly USD 200 million.
Source: BASIS
Big Names are Taking Notice
Bangladesh’s prospects have been identified by
several global ICT companies. For example, the
Korean technology firm Samsung has opened a
high-end Research and Development (R&D) center
in Bangladesh employing over 250 engineers. VizRT,
76%
50%
45%
18%
17%
11%
7%
3%
3%
Customized Application
IT Enabled Services
E-commerce
Product Development
Mobile Application
System Integration
R&D Services
IT Infrastructure
Reseller
Specialization of IT & ITES Companies
68%
33%
20% 18% 15% 9% 9% 8% 8% 8%
USA
UK
Canada
Australia
Denmark
Netherlands
Germany
India
Japan
UAE
Top Export Destinations

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a Norwegian company that creates content
production tools for the digital media industry, is
building captive centers following acquisitions of ICT
production companies in Bangladesh. Other global
IT companies like AMD, LG and IBM are currently in
the process of setting up either their captive R&D or
support centers in Bangladesh.
Government is Strongly Backing the Sector
Government’s “Digital Bangladesh” initiative has
assisted in increasing export revenues in the IT
sector from USD 35 million to USD 200 million over
the last five years and also helping to set up
infrastructure for enhanced connectivity, ICT based
citizen service delivery and ICT based Education
system, multiple internet connectivity.
Initiatives like Digital World and BASIS Softexpo are
playing a positive role in building awareness and
promoting IT sector to both domestic and the
international market. Internet connectivity has been
vastly enhanced over the country.
The Sector Outlook is Optimistic
With cooperation and support from both
Government & the private sector; the sector is
expected to reach export earning of USD 1 billion
within the coming decade from the European and
the US markets.
Source: BASIS
Booming Startup Community
Bangladesh is witnessing the rise of a vibrant startup
ecosystem. Many initiatives from public as well as
private sectors are being regularly held with the likes
of Digital World 2014, A2I Innovation Fund, GIST
Bootcamp, StartupBash, Startup Cup, DCCI
Innovation and Entrepreneur expo to promote the
startup concept and support budding entrepreneurs.
Local ventures like BDJobs.com and NewsCred have
raised international funds with many local tech
companies like chaldal.com raising seed finance
from local and international investor networks.
A host of freelancers are now setting up small teams
and making their way towards setting up their own
IT firms. With the right mentoring and access to
market linkages, these local entrepreneurs can be
the next generation of leading global startups.
26.1 24.1 32.9 35.4 45.3
70.8
101.6
200.0
-20%
0%
20%
40%
60%
80%
100%
120%
0
50
100
150
200
250
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
Yearly IT Export Earnings (USD mn)

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Footprints – Big names already
with the Bandwagon
Many multinational companies are maintaining
market presence as a precursor to more heavy
involvement. However, some major
international companies in different sectors
have chosen to take the plunge and enjoy
superior returns. Some of them are:

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- Investment Advisory Services
Investing in Bangladesh –
Government Policy Support
Since economic liberalization of the Bangladesh
economy in the early 90s, successive
Governments have pursued a pro-investment
policy with a view to increasing Foreign Direct
Investment (FDIs). Special economic zones have
been setup across the country and major
foreign investors have been provided with
subsidized lands, tax holidays, profit
repatriation and priority in utility connections.
Bangladesh – Emerging Investment Hub
Recently, attractiveness of Bangladesh as an
investment destination has increased manifold,
especially due to the country’s preferential trade
status in major international markets, inexpensive
labor and proximity to China and India. Increasing
labor costs in China has further precipitated a shift of
investment to neighboring regions. Given the
backdrop, Bangladesh government is keen to
attract investment not only to positively tilt the
balance of payment position, but to further
rejuvenate the economy through employment
generation and GDP growth.
Investment Friendly Policy Framework
A host of policies have been adopted to incentivize
foreign investment.
Tax Holidays: Foreign investors will receive tax
holiday ranging from 5 to 7 years based on
geographic location. For instance, for industrial
enterprises located in Dhaka and Chittagong, tax
holiday is for five years. While it is seven years for
locations in Khulna, Sylhet, Barisal and Rajshahi
divisions.
Accelerated depreciation facility: Industrial units
financed by foreign investors will enjoy an
accelerated depreciation allowance post tax holiday
period. Such allowance is available at 100 per cent
cost of the machinery or plant if the industrial
undertaking is set up in the areas falling within
Dhaka, Chittagong and Khulna. If the industrial
undertaking is set up elsewhere in the country,
accelerated depreciation is allowed at the rate of 80
per cent in the first year and 20 per cent in the
second year.
Concessionary duty on imported capital machinery:
No import duty will be charged for imported
machinery for industrial units which are 100% export
oriented in nature. For the rest, 5% import duty will
be charged for initial installation or BMRE/BMR of
the existing industries.
Full repatriation of Capital: Full repatriation of
capital invested from foreign sources will be
allowed. Similarly, profits and dividend accruing to
foreign investment may be transferred in full. If
foreign investors reinvest their dividends and or
retained earnings, those will be treated as new
investments.
Legal protection: The policy framework for foreign
investments in Bangladesh is based on 'The Foreign
Private Investment (Promotion & Protection) Act.
1980, which ensures legal protection to foreign
investment in Bangladesh against nationalization
and expropriation. It also guarantees non-
discriminatory treatment between foreign and local
investment, and repatriation of proceeds from sales
of shares and profit. Despite change in government,
there has been a continuity of policies with regards
to attracting foreign investments.
Bilateral agreement and treaty: The Government of
Bangladesh has a series of bilateral investment
agreements with a number of countries in Asia
(China, India, Japan, Singapore, South Korea, Sri
Lanka, Thailand, Iran, Malaysia, Pakistan,
Philippines), Europe (Belgium, Denmark, France,
Germany, Poland, Romania, Sweden, The
Netherlands, United Kingdom, Italy, Romania,
Switzerland, Turkey) and North American (Canada,
USA).
In addition, Bangladesh is a signatory to MIGA
(Multilateral Investment Guarantee Agency), OPIC
(Overseas Private Investment Corporation) of USA,
ICSID (International Centre for Settlement of
Investment Disputes) and a member of the
WIPO (World Intellectual Property Organization)
permanent committee on development co-operation
related to industrial property.
Preferential Trade Agreements: Bangladesh has a
number of preferential trade agreements with

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- Investment Advisory Services
countries having significant market size e.g. GSP with
EU, quota and tariff free access to Canada and Japan.
Alongside, Bangladesh has recently signed Trade and
Investment Co-operation Framework Agreement
(TICFA) with the US where bilateral trade issues will
be discussed. Currently, talks are underway to revive
the GSP suspension imposed by the US government
last year.
Gateway to Bangladesh
International investors can undertake investments
seamlessly through the Board of Investment (BOI)
and Central Bank’s support.
Entering the Capital Markets
Foreign investors can also invest directly in
Bangladesh’s vibrant Capital market which can
hedge investor’s portfolio risks in the event of global
economic downturn.
The following steps need to be taken by foreign
investor for investing in the capital market:
 A Foreign Currency (FC) Account is needed for
inward and outward remittance.
 A Non-resident Investor’s Taka Account (NITA) is
required for converting foreign currency into
Taka.
 All Capital Market investors are required to
conduct trading through a Stock Broking
Account maintained with any Stock
Broker/Member of the respective Stock
Exchange.
 In order to trade dematerialized shares listed
with the Stock Exchanges, investors must have a
Beneficiary Owners (BO) Account with CDBL.
 NRB & Foreign Investors may choose to appoint
a Custodian to ensure trade execution and safe
custody of shares.
Set-up of plant:
- Purchase/lease
of factory land
- Import of
machinery
- Industrial Adhoc
IRC
- clering of capital
machinery
- Environmental
Risk clearance
- Fire license
- Connection of
utility lines
Step-3
Application to
BOI will include:
- BOI prescribed
form
- Project profile
- Memorendum
of Artices of
Association
- Certificate of
incorporation
- TIN/ VAT
registration
- Trade license
Step-2
-Opening bank
account as per
'Foreign Exchange
transactions
1996.
- Trade license
- Tin Certificate
- Company
formation
Step-1

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- Investment Advisory Services
About us:
LightCastle Partners (LCP) is a business data firm. We
work at the intersection of market data and
company specifics to simplify decisions and drive
business growth. Till date, we have served several
reputable clients including Mitsubishi, Generac,
Asian Capital Advisors, Care Inc., Swiss Contact
Katalyst and top tier local corporates among others.
The founding partners have backgrounds in
Corporate and Investment Banking, Audit and
Advisory with firms like Citi, HSBC, StanC, KPMG and
Delloite.
All information contained herein is obtained by LightCastle
from sources believed by it to be accurate and reliable.
Because of the possibility of human or mechanical error as
well as other factors, however, all information contained
herein “As IS” without warranty of any kind.
LightCastle adopts all necessary measures so that the
information it uses is of sufficient quality and from sources
LightCastle considers to be reliable including, when
appropriate, independent third-party sources. However,
LightCastle is not an auditor and cannot in every instance
independently verify or validate information received in
preparing publications.
Analysts:
Asif Khan, CFA
Bijon Islam, Co-founder LightCastle
Kashif Choudhury, Business Associate LightCastle
Raitul Rabith, AVP LightCastle
Saifur Rahman, Co-founder LightCastle
Sazzad Hossain, Business Associate LightCastle
Tanzina Moktadir, VP LightCastle
Zahedul Amin, Co-founder LightCastle
For queries or comments, please contact:
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