BANGLADESHI interior decors shoring up foothold

Bangladeshi products meant for interior decoration are gradually
getting a strong foothold in domestic market, as many local
companies have sprung up over the past few years on increased demand
for less expensive but quality items. The items like sanitary ware,
tile, aluminium products including doors and windows, bathroom
fitting and cable now drive out foreign products. Sector people
attribute the present position to the local realtors' quest for low
cost but quality interior materials to make apartments affordable to
customers. In a span of only eight years, local makers of such
materials have been able to grab a major market share, they said.
Rashed Mowdud Khan, president of Bangladesh Ceramic Ware
Manufacturers Association, said, " You can even buy a square foot of
tile for only Tk 30 now, which was Tk 130-140 seven to eight years
back. It has become possible, as local manufacturers in a bigger way
have come into the scenario. Earlier, a major portion of the local
demand for the item was met through imports." Khan also pointed to the
fact that availability of cost-effective tiles has driven out mosaic
largely from the market. "I guess local manufacturers account for
more than 65 per cent market share of domestic tile consumption,"
he said. Around seven companies now exist in the market, of which
where RAK Ceramics ( Bangladesh) Pvt Ltd and Bangladesh Insulator &
Sanitary Ware Factory Ltd are on the front line. RAK Ceramics is a
joint venture with the United Arab Emirates, while the other is a
state-run enterprise. These two companies also manufacture
sophisticated bathroom fittings and other equipment. "We produce
around 2 ,700 pieces of sanitary ware every month," a sales
executive of RAK Ceramics said. The chief of the trade body for
ceramic ware manufacturing sector is also upbeat on the item' s
exports in a very near future. Meanwhile, demand for local doors, made
of wood, plastic and aluminium, is also on the rise. "Even five-six
years ago, most readymade doors in the local market were foreign, but
things have changed with the entry of different local companies who
make quality wood and plastic doors," said M Shamim Ullah, proprietor
of Shamim and Brothers, a door vendor and manufacturer in the
capital. Around 10 companies are producing doors with reputation,
according to an official of a renowned furniture company. "Now most
buyers are enthusiastic about locally made doors because these are
durable," said Ranjit Roy, an assistant manager (Sales and
Marketing) of Akhtar Furniture Ltd. Besides, local companies are
making aluminium- made doors, windows and stairs as an alternative of
wood products. "Now the demand for aluminium-made interior material
in the construction sector is fully met by local makers. But things
were different just eight years back when the sector was import-
dependent for such item, " said M Moniruzzaman of Ornate Thai
Aluminium. The annual turnover of the aluminium industry is around Tk
1 ,000 crore, according to industry insiders. President of the Real
Estate and Housing Association of Bangladesh (REHAB) Tanveerul Haq
Probal said realtors prefer to use local products as manufacturers
offer warranty and also provide after-sales-services. "People in the
downtown prefer locally made interior materials as those are
cheaper," he added.

Bangladesh's shoes gaining ground in US

Bangladesh's leather products are gaining foothold in the
multibillion dollar US footwear market as American importers,
hard-pressed by the worse recession, are turning to price-
competitive sources, industry people said. Shoe shipments from
Bangladesh to the USA increased by 112 per cent in January-June this
year, helping local shoemakers offset the slide in their sales in
recession-hit Europe. During the period, Bangladesh shipped 192,509
pairs of leather shoes to US market, up from 90, 991 pairs of a
year-ago period, a Bangladesh Footwear and Leather Goods Exporters
Association official said quoting US commerce department data. The
figures cheered the leather industry up, as exporters in recent months
found US retailers like Macys or Bostonian and giant wholesaler like
Genesco on the list of American buyers. 'Bangladesh might have been
spotted by US importers as rescission made them more price conscious
than ever,' said Syed Nasim Manzur, managing director of Apex Adelchi
Footwear. The joint venture with the leading Italian shoemaker
that entered American market four years back made up $5 million or 12
per cent of its 2008 export turnover from USA and expected 20 per
cent in 2009. 'Relocations of manufacturing facilities in
Bangladesh by some Taiwanese and Chinese shoe manufacturers may also
have inspired US importers to rate Bangladesh high,' said Nasim.
Sikder Mesbahuddin Ahmed, operation director of the South Korea-based
Youngone Corporation's Bangladesh's business, said, ' Number of
queries to his company from US buyers has multiplied in recent months
compared to those a year ago.' A major supplier of outerwear and
sportswear to North Face and Nike, Youngone is the largest foreign
investor in Bangladesh garment export sector and shoe exports share
only one-sixth of its annual export turnover. The company, which
concentrates its production facilities in EPZs, hopes to raise its
shoe sales from $50 million last year to $300 million from 30 million
pairs annually as it plans to inaugurate the first phase of its mega
shoe factory in Chittagong EPZ by the end of this year. The USA
is the world's single largest footwear market with imports in 2008
amounting to $19. 07 billion, including $11.34 billion worth of
leather shoes. China occupied two-thirds of the market, while
other major suppliers include Vietnam, Italy, Indonesia, Thailand,
Brazil and India. US official data showed shoe imports from China,
Italy, Brazil and Thailand were on the decline, while the
Philippines, Bangladesh, and Cambodia were having growths in recent
months. At present US importers are mostly sourcing men's dress
shoes and casual shoes from Bangladesh. Shipments of luggage,
briefcases, travel and sports bags and personal leather goods to USA
also doubled over the year, exporters' association officials said.
In 2008-09 fiscal that ended in June, Bangladesh exported footwear
worth $187 million, up 10 per cent year on year and leather bags and
purses exports amounted to $17 million, up by 65 per cent.
Industry people estimate that less than 10 per cent of Bangladesh
shoe exports earnings came from USA in the last fiscal. Europe and
Japan, however, remained major destinations of Bangladesh's leather
products. The USA is the single largest market for Bangladesh's
garments with exports totaled $3. 5 billion in 2008. Nasim Manzur
said, 'I foresee USA becomes the major destination for Bangladeshi
shoemakers very soon and shoes can book a billion dollar sales
there.' Bangladesh's shoes get duty-free access to Europe, but are
subject to seven per cent duty in US ports. 'If zero duty is
offered, $10 billion sales in dress and shoe to USA are nothing
impossible,' said Anwar Ul Alam Chowdhury Parvez, the immediate past
president of the Bangladesh Garment Manufacturers and Exporters
Association. He stressed that Bangladesh needs to lobby hard for
getting duty-free access to US market for dresses and shoes to create
several million more jobs.

US firms to see tight bank lending until mid 2010

The Federal Reserve said Monday most banks expect their lending to
remain tight through the second half of next year, with the exception
of mortgage standards, which already are loosening a bit. The
Fed's latest survey of loan officers found that about 20 per cent of
US banks tightened their lending standards on prime home mortgages
in the April-June quarter, down from around 50 per cent in the
previous quarter and a peak of about 75 per cent a year ago.
Meanwhile, 45 per cent of banks say they tightened standards on
non-traditional mortgages, such as adjustable-rate loans with
multiple payment options, down from 65 per cent in the previous
survey. Around 35 per cent of US banks reported tightening their
lending standards for credit cards, down from nearly 60 per cent in
the first quarter. Getting banks hurt by the financial crisis to
boost lending is critical to a sustained economic recovery. Demand
for prime mortgages has begun to revive, posting its first increase
in the January- March quarter since the Fed began to track those
loans separately in April 2007. The uptick in mortgage demand comes
as rates rose last week. Rates on 30-year home loans remained above 5
per cent, at 5.29 per cent, after reaching a record low earlier this
year. The Fed survey was based on the responses of 55 domestic
banks and 23 US offices of foreign banks. Most of the banks polled
expect their standards for all types of loans to remain tighter than
average levels over the past decade through at least the second half
of 2010. For businesses and families with tarnished credit, that is
expected to continue into 'the foreseeable future' for many banks,
the Fed reported. In other lending, around 45 per cent of banks
surveyed said they tightened standards on commercial real estate
loans over the last three months, down from 65 per cent in the
previous quarter. While banks' losses on home mortgages appear to
be levelling off, delinquencies on commercial real estate loans
remain a hot spot of potential trouble, experts say. Many regional
banks hold large numbers of them. A dramatic example was Colonial
BancGroup Inc, a big lender in real estate development that failed
and was shut down by regulators on Friday — the biggest US bank to
collapse this year with about $25 billion in assets. Montgomery,
Ala.-based Colonial was a major lender to developers in Florida and
Nevada and was hit hard by the collapse of the real estate market in
those states. Its failure is expected to cost the federal insurance
fund around $2.8 billion. The Fed on Monday extended through March
31 the duration of a program intended to spur lending to consumers
and small businesses at lower rates, though it said it had no plans
to expand the types of loans being made. The Term Asset-Backed
Securities Loan Facility figures prominently in the government's
efforts to ease credit, stabilise the financial system and help end
the recession. Under the TALF, investors use the funds to buy
securities backed by auto and student loans, credit cards, business
equipment and loans guaranteed by the Small Business Administration.
Commercial mortgage-backed securities, which were added to TALF in
mid-June, were extended through June 30 because issuing new
securities in that area 'can take a significant amount of time to
arrange,' according to a joint news release from the Fed and the
Treasury Department. Last week, the Fed held interest rates steady
at record lows and again pledged to keep them there for 'an extended
period' to entice businesses and consumers to spend more and nurture
an anticipated recovery.

DGEN hits second highest this year

The general index of Dhaka Stock Exchange on Tuesday rose to 3,039.
64 points, its second highest this year. The key index gained
32.21 points, or 1.07 per cent, on the day. Its highest in this year
was 3,069.71 points reached on July 2. DSE20 index of blue chips
also gained 23.91 points, or 1.11 per cent, to finish at 2,183.20.
Of the total 240 issues traded, 158 advanced, 74 declined, and eight
remained unchanged. Turnover at the DSE also increased to Tk 710.
78 crore from the Monday's Tk 668.03 crore. Dhaka Stock Exchange on
Tuesday halted temporarily trading of the shares of Chittagong
Vegetables, Dandy Dyeing, and Tallu Spinning, three 'Z' category
stocks. A DSE official said share trading of the companies was
suspended as the bourse's management was conducting enquires into
recent price hike of the low-profile securities. On Tuesday, share
prices of Chittagong Vegetables, Dandy Dyeing, and Tallu Spinning
gained 18.76 per cent, 17.23 per cent, and 11.87 per cent
respectively.

EXXON, China ink $41b Australian gas deal

Australia and China struck their biggest trade deal ever on Tuesday
as the world's two most valuable listed oil companies, Exxon Mobil
and PetroChina, agreed a $41 billion liquefied natural gas deal.
'It's a statement about the nature of our two economies and the fact
that Australia is important to China, just like China is important
to Australia,' Australian Resources minister Martin Ferguson told
Reuters in Beijing. The gas sale agreement between Exxon and
PetroChina comes just weeks after Exxon inked a A$10 billion Gorgon
LNG sales deal with India's Petronet, which marked Australia's first
ever LNG contract with India. The deals, along with regulatory
approvals process from the federal government now nearing
completion, means that the Gorgon project partners could approve the
massive LNG project, located off Western Australia, by early as next
month. The latest Gorgon gas sale would bring PetroChina's total
LNG purchase from the project to a total of 3.25 million tonnes per
annum (mtpa) for 20 years — making it the largest buyer of gas from
the project. Despite the volumes it is buying, the fact that
PetroChina has not secured a minority stake in the project is an
indication that demand for long-term LNG supplies is still buoyant
despite the current economic downturn. With a long list of around
a dozen proposed LNG projects in the Asia-Pacific region, buyers are
also eager to lock in supplies as quickly as possible from projects
that are most likely to be developed. In the deal signed on
Tuesday, PetroChina will buy 2.25 million tonnes per annum (mtpa) of
gas from the Gorgon LNG project for a period of 20 years, Ferguson
said in a statement. The sale is Australia's most valuable trade
deal ever with China, Australia said, adding that the agreement was a
reflection of the strength of Australia's continuing trade and
investment relationship with China. The massive Gorgon LNG
project, operated by Chevron Corp which owns a 50 per cent stake, is
located off western Australia and has a proposed annual output of 15
mtpa. Exxon and Royal Dutch Shell each own a 25 per cent stake in
the project.