Mongla Economic Zone · provided by our addressee client and was performed exclusively for our ......

Pre-Bid Meeting - Presentation

Mongla Economic Zone

Strictly Privateand Confidential

9 December 2014

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PwC6 December 2014

Section 1Our Understanding of Bangladesh'sEconomic Landscape

1

Transaction Advisory Services for Economic Zones to BEZA • Pre-Bid Meeting -Presentation

PwC6 December 2014

Bangladesh’s economy has experienced strong growth rates over the pastfew years , country’s perspective plan sets ambitious targets for future

2

Section 1 – Our Understanding of Bangladesh's Economic Landscape


5.9 6.16.7 6.3 6.0 6.1

8.0

10.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

FY09 FY10 FY11 FY12 FY13 FY14 Target FY15

Target FY21

Real GDP growth (%)

Source: Bangladesh Bank, Perspective Plan 2010-21

19% 19% 18% 18% 17%

29% 28% 28% 28% 29%

53% 53% 54% 54% 54%

2009 2010 2011 2012 2013

Sector wise contribution to GDP

Agriculture Industries Service Sector

• 6% growth experienced

• Perspective Plan 2021 aims to achieve amiddle income status for the country till2021 with growth rates exceeding 8%

• Bangladesh is primarily an agriculturaleconomy with close to 50% of the labor forceemployed in agriculture

• Industry sector contribution to GDP hashovered around 25-30% over the last fewyears lagging the service sector

• Services sector while creating lesser jobs hasthe highest contribution to the country’sGDP

PwC6 December 2014

Review of Manufacturing sector through key economic indicators shows apredominance of export led Garments and Textile industry

3



20%11% 11%

6% 9%

26%

13% 14%16%

21%

16%

34% 36%55% 28%

11%

7%7%

9%

7%3%

17% 14%

2%8%

No. ofestablishments

Gross Output GVA Employment Investment

32 Other manufacturing 31 Furnitures

30 Other transport equipment 29 Motor vehicles, trailers and semi- trailers

28 Machinery 27 Electrical equipment

26 Computer, electronic & optical products 25 Manufacture of fabricated metal products, except machinery and equipment

24 Basic metals 23 Non-metallic mineral products

22 Rubber and plastics products 21 Pharma

20 Chemicals & chemical products 19 Coke & refined petroleum products

17 Paper & paper products 16 Wood & wood products except furniture

15 Leather & related products 14 Wearing apparel (Ready made garments)

13 Textiles 12 Tobacco products

11 Beverages 10 Food products

Ready madeGarments

Textiles

Basic Metals

Food Products

Non-Met. Min.products

PwC6 December 2014

Transition from EPZ to EZ regime is being suitably supported by vision fordiversification of manufacturing sector with focus on employment creationand import substitution

4



Textiles &RMG39%

Leather4%

ChemicalFertilizer

10%

Machinery28%

Others18%

Key sub sectors of Manufacturing inBangladesh

• Limited economic impact of Export Processing Zoneswhich were used as a strategic instrument to attractmore FDI

• Economic Zones aimed at creating more downwardlinkages and spillovers for domestic impact

• Private Sector Development Support Project aims tocreate new sources of growth and enable newmanufacturing sectors beyond Pharma, Processedfrozen food and shipbuilding

• Perspective Plan 2021 also presents a vision ofBangladesh’s development and sectors of focus

• Key manufacturing sectors for exploration as perPerspective plan & PSDSP include-

• Agro-processing,• Light Engineering, auto parts &

electronics• ICT Based Sectors• Food, Beverages• Added focus on Jute industry• Shipbuilding• Non metallic minerals – ceramics etc

Sector wise Contribution to GDP in FY11

PwC6 December 2014

Bangladesh’s favourable business potential and emerging prospects for EZdevelopment are evident through reforms in policy and regulatory regimeas well as other key areas influencing business

5



10

12

22

34

34

52

80

80

0 189

United Kingdom

Thailand

Bangladesh

Pakistan

India

Sri Lanka

Regional Average (South Asia)

Nepal

Bangladesh's favourable ranking on Investor Protection

• Favorable business potential

• Growing domestic consumption,

• Increase in Foreign trade

• Improving Prospects of Doing Business in Bangladesh

- Ease of business registration , Reduction in time

requirement for licenses and approvals , Improved

investor protection , Improvements in physical and

energy infrastructure

• Several other Positive Factors influencing EZ

Development

• Positive BEPZA Experience

• High Demand for existing industrial land plots in the

EPZ with 93% occupancy

• Increased access to private sector funding

• Availability of mass skilled labour

• Conducive policy environment in the form of well

defined EZ Act and Rules

Year % of GDP

2008 84.2

2009 82.75

2010 82.2

2011 83.56

2012 82.41

Growing Domestic Consumption in Bangladesh

PwC6 December 2014

Section 2Technical Site Assessment

6Mongla Economic Zone • Pre-Bid Meeting - Presentation

Site hinterland development

ProposedMongla EZ

ExistingEPZ

Mongla river

Mongla port

Industries

Mongla port road

Pasur river

Khulna Monglahighway - N7

Site Location

ProposedMongla EZ

ExistingEPZ

Mongla river

Mongla port

Industries

Khulna Monglahwy - N7

Mongla port road

Pasur river

3 km from mongla port

Presence of Mongla port adjacent to the proposed EZ and existing EPZ willprovide cost effective and timely logistic support resulting in a sustainable

logistics service”

Presence of Mongla port adjacent to the proposed EZ and existing EPZ willprovide cost effective and timely logistic support resulting in a sustainable

logistics service”

• 205 acre• 83 hectare

Proposedarea

• Khulna divisionDivision

• Bagerhat districtDistrict

• MonglaUpazila

Proposedsite

Location of the project

EZ

Village

Monglariver

MonglaEPZ

Ghonariver &Mongla

Port

N

S

EW

Surrounding features of the site

ProposedEZ

Mongla EPZ

Mongla port

Neighborhoodvillage

Place

Bagerhat, DistrictHead Quarters

Khulna, Division HeadQuarters

Dhaka, NationalCapital

Jessore (Airport)

Mongla port

Chittagong, BusinessCapital

Direction from site

NE

N

NE

NW

W

E

Distance from site,km

26

35

158

105

3

225

Regional framework

Road Network Map

Proposed EZ

Legend

Land use map

Proposed EZ

Contour Map

Proposed approach road to site Proposed EZ

Mongla river Ghona river

Site Snaps (1 of 2)

View from north side View from east side

View from south side View from west side

Site Snaps (2 of 2)

Site and Technical Analysis (1 of 2)

LocationConnectivityaspects and

approachOrientation Existing land use

Surroundingdevelopments

Developmentcontrols and zoning

regulationsSoil characteristics Type of vegetation

Terrain /topography

Drainage Tidal variationsMaximum flood

level

Water availabilityand quality

Site and Technical Analysis (2 of 2)

Utilities infrastructure

Existing utilities infrastructure,easements, etc.

Existing services, capacityconstraints/ user demands

Future plans of facilities’expansion and improvement

Transportation facilities

Regional access / circulationExisting roadway network,

utilization, capacities, level ofservice

Future plans of transportationsystem expansion and

improvement

Existing Site conditions

Site boundariesTopography /

vegetation

On-sitebuildings / land

use

Adjacent land uses /development character

/ linkages

Special sitefeatures

Existing regional framework / context

Land use Linkages / connectivity Physical / Landscape character

Environmental parameters (1 of 2)

• Maximum 24.2°C to minimum 12.0°CTemperature

• 1947 mmAverage annual rainfall

• Nil at proposed EZFlora and Fauna

• Available at 50’ depth -Saline not suitablefor potable purpose

Ground water

• plainTopography

• claySoil

Environmental parameters (2 of 2)

• 1mTidal variation in the river

• 1.7 m/sWind speed

• 1 (Quiet Zone)Seismic Zone

• Sundarbans, World Heritage Site, is at adistance of 4.5 km from the Site insouthwest.

• There is no other National Parks/Biosphere Reserve/ Elephant Corridor/Historical Monuments, etc. exist within 10km radius area of the Project area

Sensitivity area

Offsite Infrastructure Considerations by Govt. of Bangladesh

Proposed Offsite Infrastructure by Govt. of Bangladesh (GoB)

FromFoyla

(21 km)

SI.NO

1

2

3

4

5

6

7

8

Offsite infrastructurepackage

Access road

Bridge

Boundary wall

Admin building

External water supplysystem

External powersupply system

Land development

Total

Total cost (in lakhtaka)

309

463

380

558

1922

800

500

4932

Total cost in MillionUSD

0.40

0.60

0.49

0.72

2.50

1.04

0.65

6.41

Proposed Offsite Infrastructure by Govt. of Bangladesh (GoB)

Proposed Access Road

• 350 metersLength

• 15 metersWidth

• 309 lakh taka /0.40 Mn USD

Investmentoutlay

Status: Detailed engineering completed. Tender floated. Bid processmanagement is under progress. Expected to complete within 2months from the date of award


Proposed Access Road

Proposed Bridge across Ghona River

• 36 metersLength

• 15 metersWidth

• 463 lakh taka0.60 Mn USD

Investmentoutlay



To Mongla port Road

Proposed Boundary Wall

Elevation

Plan

Section

Length

4 Km

Height

3 meters

Investment outlay

380 lakh taka / 0.49 Mn USD



Proposed Admin Building

Built up area

1680 Sq.meters

Height

G+2 (12 meters)

Investment outlay

558 lakh taka0.72 Mn USD



Proposed External Water supply system

Proposed mongla EZ

Foyla

Proposed alignmentof incoming watermains to EZ

• 4 MLDDemand

• Bore wellsSource

• FoylaLocation

• 21 kmsDistance

• 1922 lakh taka2.50 Mn USD

Investmentoutlay

Status: Detailed engineeringcompleted. Tender prepared. Reviewis under progress. Expected tocomplete within 8 months from thedate of award

Status: Detailed engineeringcompleted. Tender prepared. Reviewis under progress. Expected tocomplete within 8 months from thedate of award

Proposed External power supply system

Mongla substation

Proposed 33/11 Kvsubstation

• 15 MVADemand

• Monglasubstation

Source

• 1 kmDistance

• 800 lakh taka1,04 Mn USD

Investmentoutlay

Status: Detailed engineering completed. Tender prepared. Review is underprogress. Expected to complete within 8 months from the date of award

Status: Detailed engineering completed. Tender prepared. Review is underprogress. Expected to complete within 8 months from the date of award

Overview of Mongla economic zone

Description Details

Total area in Ha 83

Area available for future

expansion

Yes

Nearest commercial airport Jessore Domestic Airport & Dhaka international airport

Distance to airport 105 km & 158 km.

Nearest port facility Mongla Port

Distance to port 3 km

Land development Under progress

Boundary wall Under progress

Electricity PGCL substation located within a km from proposed EZ with

surplus capacity to meet the ultimate requirement.

Water Under progress

Sewage treatment To be proposed by developer

Tele communications Already available in the region

Storm water drain To be discharged in to Ghona river and mongla river

Solid waste To be proposed by developer

PwC6 December 2014

Section 2Industry Identification & Land DemandAssessment – Analysis of Survey Result

7


PwC6 December 2014Transaction Advisory Services for Economic Zones to

BEZA

2 Industry Identification & Land Demand Assessment –Analysis of Survey Result

7

Overall Approach

PharmaFood ProcessingT Textiles

Auto & AutoComponents*

Chemical andPetrochemicals

Machinery*

Electronics*

Non-metallicproducts

PwC6 December 2014

Mongla Economic Zone


8

Overall Approach

Steps Objective/Approach Outcome

Primary Interview (Throughe-mails, telephonic &

personal Interview

Target sample size of 150 respondentsCollect information (through structured

Questionnaire) on –

Respondent Profile

Interest in Mongla EZ

Survey Respondents Ranking to rationalefor As-Is interest

Industry Sub-sector ranking

Enablers/Incentives sort by investors

Target Investment size

Respondents Profile

As-Is interest of Respondent

Rankings to rationale for interest

Subsector Rankings

Incentives (policy push) sought byinvestors

1

Survey Analysis

Collate rankings given to subsectors( on scale of1 to 10) –

Determine Derived Ranking* (highestranking given to any of subsector) ofsectors

Determine probability of occurrence*

Identifying industries with PoO ≥ 65%

Listing of shortlisted industries

Ranking for Sectors

Probability of occurrence of Industry*

Shortlisted Industry

Finalization of product mix for MonglaEZ

2

Ind

ust

ryId

enti

fica

tio

n

(ܴܽ݊݇݅ ݊݃݅ଵ No. ofRespondents

*Probability of Occurrence (PoO)= ∑ (ܴܽ݊݇݅ ݊݃݅ଵ

ୀଵ × No. ofRespondents)/(Total No. of

Respondents)/10


BEZA


9

Survey Sample Overview

• Maximum number of respondents belonged to Textile & Leather Industry (40%), which is alsoaligned with the industry breakup in the country, with Textile, RMG and Leather industryforming around 43% of the overall figure.

• The regional breakup indicated dominance from Dhaka region, followed by Khulna,Chittagong, and Narayanganj regions.


BEZA


14

Land Demand Distribution – Mongla EZ

FoodProcessing

24%

Shipbuilding5%

Textile andLeather

58%

LightEngineering

13%

Based upon the response (Rankingsgiven to different industry sectors)of Survey respondents probabilityof coming up of any particularindustry type has been evaluated

Further sectors with probability ofoccurrence >65% have beenshortlisted

However, Cement industry has beeneliminated due to the environmentalconcerns

Shipbuilding being one of theemerging sectors in Bangladesh,land area distribution for CementIndustry (i.e. 4%) has beenallocated to Shipbuilding


BEZA


15

Suitability of Various Sub-Sectors under SelectedPotential Sectors – Mongla EZ

Food processing Attractiveness for Mongla EZ

Aquaculture FeedPlants √

Fish Processing √

Meat Processing √

Light Engineering Attractiveness for Mongla EZ

Light Engineering(bicycles) √Light Engineering(others) √

Shipbuilding Attractiveness for Mongla EZ

Ship EquipmentAncillary √

Ship fabrication √

Ship Repair √

Textile and Leather Attractiveness for Mongla EZ

Jute basedindustries

√

Textile and RMG √

Weaving Mills √

Sector 2Sector 1

Sector 3 Sector 4

PwC6 December 2014

Section 4Proposed Master Plan

38Mongla Economic Zone • Pre-Bid Meeting - Presentation

Master Plan Considerations

1

2

3

4

5

6

7

8

Climatic conditions

Design vision

Overall Master plan

concept

Spotting of target

zones

Site constraints

Lay out

Zoning• Master Planning –

Objectives, GuidingFactors

1

• Land use pattern2

• EZ–Product Mixconfiguration3

• EZ– Infrastructureneed assessments4

• Externalinfrastructure5

• GeneralInfrastructure andsupport facilities

6

• Green Concept7

Layout planning

Components of zones based on conceptand functional requirement

Zone area requirement,demarcation

Utilization of naturalopportunities

Facilities and amenities planning

Focus

Proposed Master Plan

Core offerings of the site

Better access through Roadways, Inland water ways and sea

Adjacent to Mongla EPZ

Easier and quicker cargo handling management - Due to proximity fromMongla port

Development of offsite infrastructure by BEZA

The proposed site is regular in shape

Topography: Plain (70% of site filling has been completed)

Geology : Underlain by deltaic and alluvial deposits of the river systems

Environmental concerns : Almost Nil

Thank You

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