Chinese smartphone manufacturer Vivo is all set to roll out the first mobile assembly plant in Bangladesh with full foreign direct investment, as international companies flock to the country to make the best use of the favourable tax regime.
The plant in Rupganj of Narayanganj will put together at least one million smartphones every year.
“We hope ‘Made in Bangladesh’ handsets will be available in the market within three months,” Tanzib Ahamed, an assistant manager of Vivo Mobile Company (BD) Ltd, said in a written statement.
“Vivo always ensures high quality and the ‘Made in Bangladesh’ products will also be of best quality and at reasonable prices.”
This will be the Chinese company’s fifth factory, after two in China and one each in India and Indonesia.
The company aims to export ‘Made in Bangladesh’ handsets within a few years, Ahamed said.
Vivo has already received green light from the tax administrator and the Bangladesh Telecommunication Regulatory Commission.
Now, it is at the final stage of getting approval from the telecom regulator. Some tests will be carried out before giving a no-objection certificate, a senior official of the BTRC said.
Vivo, under the company name of Best Tycoon (BD) Enterprise Ltd, needs to employ at least 250 Bangladeshi to run the plant, according to BTRC’s regulation. Telecom Minister Mustafa Jabbar welcomed the move of Vivo.
He said it was a huge challenge for the government to increase the import duty on handsets and decrease the duty on the raw materials used in mobile phone assembly plants.
“Not only Vivo, Chinese companies such as Oppo are also contacting us to set up plants in the country to get the tax benefit,” Jabbar said.
The government first introduced a tax policy for the local assemblers in the fiscal year of 2017-18 and it was revised in the budgets of 2018-19 and 2019-20.
Currently, there is 57 percent tax on smartphone import and 32 percent on basic and feature phones. The tax for locally assembled and manufactured handsets is 18 percent and 13 percent respectively.
Vivo’s plant will be the seventh assembly unit in Bangladesh. Of them, six are already assembling handsets.
Local brand Walton became the first company in Bangladesh to set up a mobile phone assembly plant in October 2017. It has been assembling all of its handsets locally since the middle of 2018.
Oppo is setting up a plant in Gazipur under a joint venture with a local company. The Chinese handset maker has not applied to the BTRC yet, a senior official of the commission said. “Oppo has informed us verbally that it is setting up a plant,” he said.
Currently, six assemblers are meeting more than 40 percent handset demand in the country and it will reach 55 percent after Vivo’s products hit the market, said Ruhul Alam Al Mahbub, president of the Bangladesh Mobile Phone Manufacturing Association (BMPMA).
Mahbub is the chairman of Fair Group that is assembling more than 1.5 lakh pieces of Samsung smartphones in its plant in Narsingdi. Currently, 8 lakh units of smartphones are sold in Bangladesh every month and more than 3.5 lakh pieces are supplied by the local players.
According to the BMPMA, Symphony is assembling more than one lakh units of smartphones and several thousands of feature phones.
Walton assembles 40,000-50,000 units of smartphones and Transsion Bangladesh Ltd 70,000-80,000 units.
Two other companies -- Al Amin Brothers and Anira International Limited -- are currently assembling different kinds of mobile phones.
Grameen Distributors Ltd and OK Mobile Ltd have received initial approval from the BTRC to set up assembly plants. Three more companies are also seeking approval. When all the companies start making mobile handsets locally, the industry will meet the domestic demand entirely and move for exports, Mahbub said.