High customs duties challenge for Korean investors: Envoy

South Korean investors are facing challenges in doing business in Bangladesh due to high customs duties on the imports of raw materials and intermediate goods, Ambassador Park Young-sik said on Tuesday at a seminar in Dhaka.

"Samsung manufacturing consumer electronic goods, including mobile phones, and Hyundai car assembly are struggling because of high customs duties on raw materials and intermediate goods," he said.

Mobile phone smuggling and flooded second-hand cars are hindering their business as well, the Korean envoy to Bangladesh said at the seminar titled "Korean Investors' CSR Activities and Business Outlooks" at the InterContinental Hotel.

Park Young-sik said the Bangladesh government needs to pay attention to consolidating the base and increasing the productivity of the manufacturing sector to overcome challenges after its graduation from the Least Developed Country (LDC) status. 

To become a developed country requires a lot of hard work by both the government and the private sector, he continued.

The Koran envoy said Samsung manufactures consumer electronic goods, including mobile phones, while Hyundai cars are being assembled at Bangabandhu Hi-Tech Park beginning this year.

"These companies are creating good-quality jobs through domestic production," he added.

He said Korean companies will continue to invest in the garment sector to diversify its export items, as Bangladesh exports are limited to mainly cotton-based garments, while the world market is exactly the opposite.

"Increasing the export of man-made or synthetic garments requires huge capital and advanced technology. Here is the room for the garment companies of both countries to cooperate with each other," he stressed.

"From sharing advanced technologies to promoting education, environmental sustainability, healthcare, and more, Korean companies have been instrumental in Bangladesh's social development," said Park Young-sik.

There are 454 Korean industrial units registered with the Bangladesh Investment Development Authority (Bida), according to data presented by M Jashim Uddin Khan, director of Registration and Incentives-Foreign Industry at Bida.

Of which, 198 units are fully Korean, which are about to invest $286 million and generate an estimation of 75,062 jobs, and 256 are joint venture units to invest $6.59 billion, employing 82,802 people in Bangladesh.

The most investment worth $3.6 billion will be estimated in the engineering sector, followed by $2.3 billion in the service sector and $281 million in the textile sector.

Bida Executive Chairman Lokman Hossain Miah said, "Our bilateral trade sharply increased by 39% in 2022 compared to the previous year. It is a very positive sign for our relations between these two nations."

Lokman asked Korean investors to invest more in Bangladesh, saying, "Bangladesh is a plump and profitable country. Why do investors invest here? If you invest here, there is a winning situation.

"Investors' first target is making profit, and the country is in a position you can enjoy. You bring the capital machinery, and also our people will be employed through the establishments."

"Even 72% of Japanese companies in Bangladesh reinvested here. If any company invests here, they do not look back.  We have a very good domestic market, though our geographical size is small," he shared.

On the occasion, Youngone, Korea Expressway Corporation, LG, Samsung R&D, Dohwa Engineering, Samsung Electronics, Woori Bank, Samsung C&T Corporation, Korean RMG Contributor, and Save the Children showcased their CSR contributions in the country.

Referring to these companies' corporate social activities in Bangladesh, Korean Ambassador Park Young-sik said Korean companies' CSR activities must be recognised.