It was in 1990 when a rapid industrialisation was taking place in Malaysia, leading to a crisis of workers. The need for a skilled workforce in factories, where many Bangladeshis worked, turned into a blessing in disguise for the bicycle manufacturing industry in Bangladesh, helping it to flourish.
Yea Chang Min, a Taiwanese, ran a bicycle manufacturing factory – Akoko – where a few Bangladeshi workers were employed. Yea Chang's factory was also facing a worker shortage at the time. He discussed the problem with his Bangladeshi employees, informing them of his interest in relocating to Bangladesh. The workers also assured him that cheap labour was available back in the country. And that was the beginning of the bicycle manufacturing industry in Bangladesh.
In 1994 the Malaysian bicycle manufacturing company Alita secured registration from the Bangladesh Export Processing Zones Authority to establish a factory in the country. In March 1995, Yea Chang Min's new company, Alita Bangladesh Limited, started manufacturing and he established the first export-oriented bicycle producing factory in the country. It took the company some one and a half years to elevate the production quality to export standards and after that it did not have to look back. The export market in Europe started to grow bigger and more local companies moved to manufacturing bicycles, leading to a stronger position of 'Made in Bangladesh' bicycles in the global market.
Initially the challenge in exports was to prove that the bicycles were indeed made in Bangladesh, AHM Ferdous, general manager of Alita Bangladesh Limited, told The Business Standard.
"In our first consignment we exported some 1,000 bicycles to the UK. We also had to prove the quality of the bicycles," Ferdous said, adding that from 1997 onwards exporting became much smoother.
Exporting bicycles started to become profitable from 2008. After Alita Bangladesh, Meghna Group became the first Bangladeshi company to start manufacturing bicycles. In 2014 Pran-RFL Group followed suit. Currently six companies are producing bicycles in the country, German Bangla, Corvo and North Bengal being among them.
In 2007 Bangladesh exported 3.55 lakh bicycles, which increased to 6 lakhs in 2014. In fiscal year 2020-21 a total of 10 lakh bicycles were exported.
With an increase in exports, export earnings also increased gradually. In FY2019-20 export earnings stood at $82.84 million. In FY2020-21 they increased to $130.89 million and in the first ten months of the current fiscal export earnings reached $140.71 million.
According to Eurostat data, Bangladesh is currently the 3rd largest exporter to the European Union (EU) and 8th largest exporter in the world. Some 80% of the export goes to the 27 countries of the EU. The rest are exported to India, the United States, the United Arab Emirates, Australia and others.
This massive export industry began with only eight Malaysia-returnee workers, who joined the Alita factory. These eight workers trained some 250 workers, who were the workforce in other local factories that had sprung up over time. Currently over 400 workers work in Alita's one manufacturing factory and two equipment producing factories.
Alita mainly manufactures mountain trekking bicycles, priced between $60-$280. Its factory has the capacity to produce 2.40 lakh bicycles a year, its current yearly production standing at 1.60-1.70 lakh. Some 98% of Alita's production is exported to Europe, with 70% of the bicycles ending up in the UK. Alita manufactures bicycles for top EU brands, notably Halfords, Reece Cycles Limited and Monty Bikes.
Alita Bangladesh Limited built its factory at Chattogram EPZ area with an investment of $47.46 lakh. The company invested $59.23 lakh more to set up two other factories under the name Ace Hicycle to manufacture various bicycle parts, including tyres, tubes, brakes, frames, forks, handles, saddles, pedals and grip.
According to the Bangladesh Export Processing Zones Authority (BEPZA), the company has exported bicycles worth $178.186 million since 2003. The company's export revenue in 2004 was $4.84 million which in 2014 rose to $14.683 million. However, in 2021, revenue dropped to $12.520 million.
Alita Bangladesh GM Ferdous said bicycle order volume during the pandemic was very good. However, the post-pandemic hike in freight charges and raw material prices caused sales to drop.
"Besides, some shipments were stuck during the lockdown phases. So the overall situation is a bit challenging now," he said, adding, "Currently we are not taking orders for lower value bicycles and are focusing on higher value ones instead, causing the order flow to be low."