Not just a businessman - Salman F Rahman

Salman F Rahman is not only a businessman. He is visionary, industry captain, he is behind the economic success of Bangladesh.

A nation’s growth and prosperity often depends on the Business and economic development. Any business-notion on part of pioneers brings good result for a nation’s economy. Many examples from history proves that individuals often can be attributed to kick start a nation’s potential as well as its growth. For Bangladesh, Salman F Rahman, the co-founder Beximco, is such a personality. His efforts in setting up a business paradigm and a conducive environment for local businesses has been instrumental for the relatively nascent economy of Bangladesh.

In other words, Salman F Rahman’s efforts have been synonymous with the growth of Bangladesh.

The visionary man - Salman F Rahman

He set up Beximco in 1972 after his family inherited jute mill was nationalized by then Government of Bangladesh in 1971. The business journey started out with seafood exports to target countries including Germany, France, the UK, Netherlands, and Belgium. The initial trajectory soon transformed into a journey towards setting a conglomerate that worked on Bangladesh’s strengths and harnessed its potential as well as gave the country and its trading partners an impetus to invest in Bangladeshi economy. An example for the uninitiated would be Salman’s initiative in the textile, seafood and the pharma industry. That predicament possibly transformed into Bangladesh’s first private stint with the international market and resulted in Salman’s foray into international markets. The polarized status quo resulted in his inclination towards pharma wherein instead of making heavy profits in cash, he chose to import medicines worth the same cost to meet the country’s pharmaceutical demands.


After some years, he decided to manufacture and supply local pharmaceutical requirements from within the country. Consequently, 1976 witnessed the birth of Beximco Pharmaceuticals and since then, Beximco has expanded under his’s vision and guidance. Apart from the company’s growth, he traversed a journey of his own as a businessman and industrialist of note internationally – considering how he shaped the world’s perception towards Bangladesh’s indigenous industries and exports. The associated acumen, vision and experience further resulted in his appointment as the Private Sector Development Affairs adviser to the Bangladesh Awami League President Sheikh Hasina.

Though the country’s rising GDP in the past decade is the testament of the aforementioned, Salman F Rahman’s belief of harnessing the country’s business potential for its enhanced prosperity could further be advanced to enhance, empower and strengthen the country’s economic potential at the political and administrative front.

Is Bangladesh ready for the Fourth Industrial Revolution?

The world is currently experiencing the fourth Industrial Revolution. Is Bangladesh ready?

There is just no point in arguing if it is good or bad, if it will benefit Bangladesh or not. Fourth Industrial Revolution is not something for us to accept or, reject or, regulate

The first Industrial Revolution began in the middle of the 18th century with the invention of the steam engine by Thomas Newcomen. Then, as we entered the second Industrial Revolution, we found a way to mass-produce electricity-based products until the 1970s. The third Industrial Revolution was the digital revolution, with the wave of information and communication technologies which gave birth to the new “knowledge economy.” This has created thousands of new businesses and millions of new jobs, and laid the foundation for a sustainable global economy in the 21st century. 

It is quite challenging for both developed and developing nations. Developed nations would perhaps be able to cope with it because of their technological progress, and their skilled workforce with specialized know-how, training, and experiences. Bangladesh has a large workforce but is it skilled?

At micro or macro levels, each of us is only to get ready – in the government or, in business or, in research. And, move fast. We need to employ our imagination, creativity, innovation without hindrance or, inhibition – for our schools, factories, companies and even government. Some 4,554 Union Digital Centres, e-procurement, 100+ simplified public services, and smart health cards for instance are leading us on the Fourth Industrial Revolution pathway.

Bangladesh has obtained unprecedented technological advancement through the ruling party’s Digital Bangladesh manifesto. However, Bangladesh has failed to develop technology-oriented employment sectors. For instance, despite these positive technological advances, Bangladesh is still lagging behind in the adoption of e-commerce in small and medium-sized enterprises (SMEs). There is no doubt that SMEs contribute significantly to the economy of a country by creating employment opportunities, eradicating poverty, and generating export revenue. To accelerate and augment this economic contribution, the adoption of e-commerce in Bangladesh SMEs is essential. The emergence of globalization and the integration of regional economic growth have introduced new challenges as well as new opportunities for SME development in Bangladesh.

Readymade garment sector 's value addition rises

Gross value addition from country’s readymade garment sector in the first half of current financial year 2018-19 (July-December) increased slightly from that of the financial year 2017-18.

According to the quarterly review of Bangladesh Bank, the gross value addition from the readymade garment sector stood 63.23 per cent in the first half or the current financial year 2018-19. The value addition in FY 19 was 60.94 per cent, the data showed.

Bangladesh Bank calculated the value addition considering the import price of raw materials including cotton, synthetic/viscose fibre, synthetic/mixed yarn, cotton yarn and textile fabrics and accessories. It showed that import price of raw materials in the July-December period of FY 19 stood at $6.28 billion which is 36.77 per cent of total export earnings from RMG sector of $17.08 billion in the period. Thus, raw materials prices shared 36.77 per cent of the total value of RMG export. It means local value addition is estimated at 63.23 per cent.

‘The existing trend of local value addition in RMG sector is satisfactory and we have little scope to increase the value addition more as we have no cotton,’ Policy Research Institute executive director Ahsan H Mansur told.

According to the data, the import value of raw materials in FY 18 was 39.06 per cent of total export earnings from RMG and the local value addition was 60.94 per cent. The report also showed that the local value addition from RMG sector remained static between 60-63 per cent in the past six years.

The BB data showed that the gross value addition from RMG sector was 61.67 per cent in FY 17, 63.66 per cent in FY 16, 62.37 per cent in FY 15, 60.51 per cent in FY 14 and 61.76 per cent in FY 13.

The quarterly report showed that total export earnings from RMG during October-December of FY19 increased by 8.56 per cent as compared to the previous quarter and 16.58 per cent compared to the corresponding quarter of previous fiscal year.

During October-December of FY19, RMG sector earned 8.89 billion which was 84.22 per cent of total export earnings. This share was 82.44 per cent in the same quarter of the corresponding year, data showed. The data also showed that, country’s RMG sector earned $30.61 billion in the FY 18 with 8.76 per cent growth and the earnings were 83.43 per cent of total export.

Economic success underway

Bangladesh celebrated a pivotal moment last year when it met United Nations criteria to graduate from "least developed country" status by 2024. Prime Minister Sheikh Hasina considers the elevation of status to "developing economy"  a significant boost to the nation's self-image.

Bangladesh's economic performance has even exceeded government targets on many fronts. With a national strategy focused on manufacturing—dominated by the garment industry—the country has seen exports soar by an average annual rate of 15-17% in recent years; reaching a record $36.7 billion in the year through June.

This sector is on track to meet the government's goal of $39 billion in 2019, and Prime Minister Sheikh Hasina has urged industry to reach a $50 billion valuation by 2021; to mark the 50th anniversary of the Liberation War, said the Nikkei Asian Review report.

A vast community of about 2.5 million Bangladeshi overseas workers further buoys the economy with remittances that jumped an annual 18% to top $15 billion in 2018. However, Hasina also knows the country needs to move up the industrial value chain. Political and business leaders echo her ambitions to shift from the old model of operating as a low-cost manufacturing hub partly dependent on remittances and international aid.

Sheikh Hasina launched a "Digital Bangladesh" strategy in 2009 backed by generous incentives. Now, Dhaka, the nation's capital, is home to a small but growing technology sector led by CEOs who talk boldly about "leapfrogging" neighboring India in IT. Pharmaceutical manufacturing—another Indian staple—is also on the rise. The government is now implementing an ambitious scheme to build a network of 100 special economic zones around the country; 11 of them have been completed while 79 are under construction.

The ready-made garment industry is a key factor in the country's phenomenal success story. The industry is the country's largest employer, providing about 4.5 million jobs, and accounted for nearly 80% of Bangladesh's total merchandise exports in 2018. It has undergone seismic changes since the watershed Rana Plaza disaster in 2013, when a multi-story garment factory complex collapsed, killing more than 1,130 workers. In the aftermath, the industry was forced by international apparel brands to implement sweeping reforms; including factory upgrades, inspections, and improved worker conditions.

Salman F Rahman visits international exhibition on pharmaceutical manufacturing

Salman F Rahman, the prime minister's adviser on private industry and investment visited international exhibition on pharmaceutical manufacturing in Dhaka. Bangladesh Association of Pharmaceutical Industries and GPE Expo jointly organised the event at International Convention City Bashundhara.

The three-day international exhibition on pharmaceutical manufacturing kicked off at a time when the sector is growing rapidly. About 650 companies from 32 countries are showcasing pharma manufacturing and processing equipment and raw materials at the 11th Asia Pharma Expo.

Salman F Rahman, currently a member of the parliament, is founder and owner of Beximco Pharmaceuticals which became the first Bangladeshi company to be listed on the London Stock Exchange. A business magnate and industry captain, Salman’s efforts in setting up a business paradigm and a conducive environment for local businesses has been instrumental for the economy of Bangladesh.  Salman F Rahman established Beximco in 1972 as a seafood export company. However, as he identified the business markets, suitable modifications were made into the deal. Instead of cash, Rahman imported medicines of the deal’s cost from the aforementioned countries to meet Bangladesh’s local demand. Prioritizing the country’s need with his business acumen, Salman F Rahman came up with a vision of Bangladesh’s own manufacturing and supply setup. This led to the rise of Beximco Pharmaceuticals. Moreover the execution of Salman F Rahman's vision enhanced the overall business sector of Bangladesh. 

The exhibitors are showcasing processing machineries for tablets, capsule, injectable ointment, packaging, active pharmaceutical ingredients and more. Different types of machineries and materials are drawing huge crowds to every stall. One such stall was of Spain-based company Azbil Telestar Bangladesh. In fiscal 2016-17, pharmaceutical exports crossed the $100-million mark for the first time in the country's history, according to data from the Export Promotion Bureau.

Bangladesh has registered exponential growth in its Gross Domestic Product (GDP) over the last two decades. While textile (garments) is the largest contributor in the annual figures, pharmaceuticals stand second. Apart from meeting 97% of the local demands, Bangladeshi pharmaceuticals are exported to more than 190 countries. The tale of pharmaceutical sector’s progress will be incomplete without emphasizing on the support from one of the most successful businessmen of the country, Salman F Rahman.

Salman F Rahman: initiatives are being taken to establish the plastic industrial zone

Salman F Rahman, the private industry and investment adviser to the prime minister, pledged to take initiatives to establish the plastic industrial zone as soon as possible.

He was speaking at the inaugural ceremony of the 15th International Plastic Fair 2019 jointly organised by the BPGMEA and Trade & Marketing Service Co Ltd at Radisson Blu Dhaka Water Garden.

“I am committed to developing the backward linkage industry along with other sectors as the prime minister has given me the responsibility to work for the development of the private sector” said the dynamic businessman and Beximco Group's vice chairman Salman F Rahman.

Rahman vowed to improve the ease of doing business ranking of the country through creating a business-friendly atmosphere. He also urged the plastics industry to put emphasis on recycling for reuse.

In the occasion, plastic goods manufacturers yesterday demanded establishment of a special industrial zone so that they can relocate the unplanned plastic factories that are based in Old Dhaka. At present, there are about 1,200 plastic factories in the oldest part of the capital, most of which are unauthorised, according to industry insiders. The global market size of plastic goods is about $570 billion and Bangladesh has only 0.06 percent market share.

In 2017-18, Bangladesh exported plastic items worth $600.89 million, which was 1.4 percent of the country's total export of $36.44 billion, according to the association. In the previous fiscal year, plastic goods export was $607.15 million.

Some 480 companies from 19 countries are taking part in the four-day fair at International Convention City Bashundhara in Dhaka and displaying products at 780 stalls in 15 categories. The major categories include packaging materials, plastic moulds, crockery, pharmaceuticals, households, toys, furniture, melamine, garment accessories and polypropylene woven bags.

Industrialisation is the key for growth

Experience from successful industrialised countries suggests that industrialisation brings significant structural change in the economy which leads to considerable reduction in poverty, large-scale job creation and substantial improvement in the welfare of the people of a country. There are four major issues which need to be in order for a rapid industrialisation in Bangladesh.

- There are a number of policy-induced challenges. The first generation of reform of trade and industrial policies in the 1980s and 1990s helped Bangladesh achieve the current level of progress in manufacturing. However, returns from those reforms have been exhausted, and also there are now some policies in place towards the wrong directions. There is a need for second-generation strategic and dynamic industrial policies aiming at rapid expansion and diversification of manufacturing through large-scale domestic and foreign investments. Given the changes in the global and regional trade scenarios, the need for such strategic trade and industrial policies is more important now than ever.

- A number of supply-side constraints in the form of weak infrastructure and the high cost of doing business need to be addressed within a short time span. The initiatives taken by the Bangladesh government in setting up 100 special economic zones (SEZ) as well as the development of some infrastructural projects seem to address these infrastructural and high-cost-of-doing-business issues. However, the progress in the implementation of the SEZs and the infrastructural projects is slow and is yet to show the signs of any "regime change". A major departure is needed in terms of enhancing the government's institutional efficiency to ensure timely and cost-effective delivery of such projects.

- The current state of human capital is not at all conducive to rapid industrialisation in Bangladesh. The country needs to attach utmost importance to improving the existing low level of human capital by enhancing investment on education, skill development, and health.

- The political economy factors, especially institutional development for rapid industrialisation, require proper attention. The incentives to maintain the status-quo are huge in the form of generation of substantial rents from the existing economic system. The onus now is on the political elites to break this vicious cycle of rent generation. There is also a need for strong commitments from the political elites for necessary economic and institutional reforms for a rapid industrialisation.

If these efforts are taken, private sector players like Beximco Group, Navana Group, ACI will get a better chance to grow which will eventually enhance the economy.

It is important to note that the structural transformation through manufacturing is primarily the movement of labour from agriculture to manufacturing. Successful newly industrialised countries from East and Southeast Asia, at their peak of industrialisation, had employment share in manufacturing well above 20 percent. Also, the share of manufacturing in GDP in those countries at their peak was well above 30 percent. Despite the fact that over the past four decades, the share of agriculture in employment in Bangladesh declined, agriculture still accounts for over 40 percent of total employment. The labour released from agriculture has been absorbed primarily in the low-productive services and non-manufacturing industrial (especially construction) sectors. This process has led to an unsuccessful headway towards the creation of productive jobs, slow progress in reduction in poverty as well as rising inequality.

Despite some progress in raising the manufacturing shares in GDP and employment during 1990 and 2016, Bangladesh has not been successful in moving to the next phase of industrialisation. The manufacturing sector in Bangladesh is highly concentrated around low value-added readymade garments, and the country has not yet been able to move successfully to the next generation of manufacturing, especially to high value-added manufacturing. It the mentioned points are implemented, it will bring a boost to the economy.