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Thursday, January 23, 2025

Experts view investment opportunities in Bangladesh with caution

dhaka textile
MICCI vice-chairman Shaun Cheah warns that the garment and textile manufacturing in Bangladesh is ‘oversaturated’. (EPA Images pic)

PETALING JAYA

Malaysian businesses and investors have mixed views about potential investment opportunities in Bangladesh, with the prevailing sentiment being one of caution.

Soh Thian Lai
Soh Thian Lai.

Federation of Malaysian Manufacturers president Soh Thian Lai said Malaysian investors were cautiously optimistic about business opportunities in Bangladesh.

He said the country’s low-cost labour, young workforce and global leadership in garment manufacturing are the primary attractions for investors.

“Key areas of focus for Malaysian investors include textiles and garments, electronics assembly and internet communications technology, leveraging Bangladesh’s expertise and competitive production capabilities,” said Soh.


However, Malaysian International Chamber of Commerce and Industry (MICCI) second vice-chairman Shaun Cheah said Malaysian investors were generally less than keen on exploring opportunities in Bangladesh.

Shaun Cheah
Shaun Cheah.

He also said the garment and textile manufacturing sector is not ideal for Malaysian businesses as the field is “oversaturated”.

He believes Malaysia’s food and beverages (F&B) businesses and consumer goods have more potential to thrive in Bangladesh’s market.

“F&B, consumer goods, electronic gadgets, cafes and bakeries will do well. For example, Malaysian-owned King’s Confectionery is a premium hangout spot for Bangladeshis in Dhaka.

“Cosmetics and skin care products also fly off the shelves there,” he said.

Cheah said young Bangladeshis and those who were once migrant workers here have a high regard for Malaysian goods, but cafes and F&B outlets are generally only frequented by higher-income Bangladeshis.

Challenges for Malaysian investors

Both Soh and Cheah said Malaysian businesses must be prepared to face several obstacles to doing business in Bangladesh, including the country’s dearth of resources.

“Bangladesh is a resource-poor country with a large population. Language barriers, frequent political unrest and rampant corruption are also some of the challenges.

“The country’s financial sectors are rudimentary as well,” said Cheah.

Soh said poor infrastructure, labour conditions, skills gaps and compliance issues challenge Bangladesh’s potential as a manufacturing hub.

“Concerns over labour conditions and compliance with international standards also pose reputational risks for businesses.

“Overcoming these issues through targeted reforms and investment protection measures will be key to unlocking Bangladesh’s full potential as a competitive manufacturing hub for Malaysian and other international investors.” he said.

Last week, Malaysian high commissioner to Bangladesh Shuhada Othman held a meeting with Bangladesh’s commerce adviser Sheikh Bashir Uddin, who said Bangladesh is keen to boost bilateral trade and investment relations with Malaysia through the implementation of a free trade agreement.

Bangladesh is Malaysia’s second-largest trading partner among South Asian countries. Total trade between the two countries hit RM12.7 billion in 2023. - FMT

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