About 72 percent of Japanese companies operating in Bangladesh are willing to expand their business in one or two years while around 61.8 percent of Japanese companies in Bangladesh expect their profits to go up in 2023, unveiled a survey of the Japan External Trade Organisation (JETRO) on Wednesday.
Bangladesh is at the top position as an ideal site for expanding business among the countries in Asia and Oceania regions where Japanese companies are operating, according to the survey report placed at the office of the Metropolitan Chamber of Commerce and Industry (MCCI) in Gulshan in the capital Dhaka.
As regards profit, Bangladesh ranks second in South Asia, the survey revealed.
The survey said a total of 44.4 percent of the companies chose for an expansion of their future business in the next one or two years.
Regarding the operating forecast for 2023 in the whole region, 43.3% of the companies expected an increase while 12.3% expected a decrease.
In the ASEAN region, 44.9 percent of the companies forecast profit surge and 44.1 percent to remain at the same position like the previous year.
The survey was conducted between August 22 to September 21 in 2022. Responses from about 4,400 companies were considered in the survey, said Yuji Ando, the country representative of JETRO.
Some 214 Japanese companies presently working in Bangladesh also took part in the survey.
The survey found that around 62 percent of Japanese companies in Bangladesh expect to turn a profit in 2023.
JETRO’s country director Yuji Ando said, "Japanese companies in India widely appreciated the size and growth potential of the market. Similarly, the companies in Indonesia, Bangladesh and Vietnam also had high growth expectations,"
He said companies in Cambodia and Pakistan also had high expectations about growth potential compared to the current market size.
"Bangladesh's market has a growth potential as well."
However, evaluations of the general business environment were not good.
Sixty percent of Japanese firms in Australia, Singapore, Thailand, Vietnam, and Malaysia were very positive about the business environment. The proportion between positive and negative answers was almost the same in India.
In Bangladesh, 70.8 percent of the firms said they were dissatisfied with the general business environment in the country. Of them, 26.2 percent were highly dissatisfied and 44.6 percent slightly dissatisfied, according to the survey.
Some 73 percent of Japanese companies termed complicated customs clearance procedures complicated and this poses as the biggest challenge for business operations in Bangladesh, followed by volatility in the exchange rate, difficulties in local procurement of raw materials and parts, and shortage of electricity.
In another survey on ‘Business Conditions of Japanese Companies Operating Overseas (Asia and Oceania)’ conducted by the JETRO centring business performance continues to recover in ASEAN and Southwest Asia also revealed in last February that security status at the work places and for their business has been improved.
The study said that among export-oriented countries (average export ratio of 50% or more), Japan accounted for about 70% of the export destinations in Bangladesh, Philippines and Vietnam.
According to the summary of the survey, percentage of profitable companies rose in both 3 manufacturing and non-manufacturing sectors. By industry sector, the percentage of profitable companies in manufacturing sector was 66.3 percent while 65.0 percent in non-manufacturing sector, increased 0.9 and 3.9 points respectively compared to the 2021 survey.
Regarding the manufacturing sector, the percentage of profitable companies in the food industry especially increased by 9.0 points compared to the 2021 survey. Regarding the non-manufacturing sector, the percentage of profitable companies in travel/amusement, real estate, business services and retail respectively increased by more than 10 points.
It is widely known that Japan is the biggest investor countries for Bangladesh and most of the mega projects are funded and operated by Japan.