Sumitomo Corporation is planning to build an industrial park for Japanese firms in Dhaka, the capital of Bangladesh, a source close to the matter revealed on Jan. 25. The trading firm will make a decision as early as this spring. The Japan International Cooperation Agency (JICA) will finance the project through a new yen-lending mechanism. Projects to build airports, railways and other infrastructure are mushrooming in Bangladesh thanks to its stable growth. With many Japanese firms broadening their footprints there, the Japanese public and private sectors will ally with each other to ensure Japanese companies can operate safely. It also aims to help develop supporting industries, such as parts manufacturers, and promote industrial diversification to make stark distinctions from Chinese players, which are growing a presence there.
Sumitomo plans to build an industrial park inside the Araihazar economic zone, which is located about 20km east of Dhaka. It will become the first Japanese firm to operate an industrial park in Bangladesh. It will make use of the operational expertise of industrial parks that it has built up in the other parts of Asia, and will handle import and export procedures on behalf of Japanese firms and help them with logistics services. The Bangladesh government will offer tax breaks and extend support in the area of public security. The project is estimated to cost several tens of billion yen.
JICA will offer yen loans to finance investments that the Bangladesh government will make in a special purpose company, which Sumitomo and Dhaka will jointly establish. It will also extend financial support for the construction of roads to improve accessibility to the economic zone as well as the construction of power plants. It is also considering a financial aid package to extend loans to tenants in the industrial park through the Bangladesh Bank.
Sojitz Corporation, another Japanese trading firm, will open a local representative office in Dhaka this spring to help Japanese firms win infrastructure projects in the country. (Abridged)
