Based on a Study of

Comilla Export Processing Zone

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Mr. Md. AbdullahAssistant ProfessorDepartment of MarketingComilla University

Md. Shahadat Hossain SunnyBBA First BatchDepartment of MarketingComilla University

Date of submission: July 24, 2011

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LETTER OF TRANSMITTAL

July 24, 2011

Md. AbdullahAssistant ProfessorDepartment of MarketingComilla University

Subject: Submission of a Term Paper Report.

Dear Sir

With due regards and respect we state that we are very thankful to you as you assigned us to prepare this Term Paper on ‘Selling & Sales Promotion”, which you asked us to prepare it last May 23, 2011. Our Term Paper topic is- “Performance Evaluation of Export Processing Zone: A Case Study of Comilla Export Processing Zone”. It is a great opportunity for us to acquire theoretical and practical knowledge that would be needed for us to meet today’s challenging job market. We have tried my best to gather what we believe to be the most complete information available.

Your kind acceptance and any type of appreciation would surely inspire us. We would always be available and ready to explain further any of the context of the whenever you asked.

Sincerely yours

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Md. Shahadat HossainOn behalf of the group

PREFACE

To submit a term paper report is part and parcel of our BBA program.

With a view to shaping human abilities, it is necessary for a human to

amass a practical knowledge with the theoretical exercises. Without

practical knowledge it is difficult for a man to cope himself with a new

environment.

We are the student of BBA, Department of Marketing. Our topic is

“Performance Evaluation of Export Processing Zone: A Case Study of

Comilla Export Processing Zone”. Though it is very difficult to collect all

kinds of information, we have tried our level best to present a real

picture of the scenario of current situation.

In the present competitive arena, only the fittest and qualified business

people will survive. At present, BBA and MBA are very lucrative degree

for the business personnel’s and the submission of the term paper

report is a very important part of the BBA examination. During the

study period, the students get the opportunity to show their theoretical

skill in practical field. If they accomplish it successfully, they will be the

future business talent and play important role in trade, commerce,

industrialization and future economic as well as infrastructure

development of the country. We as the student of Marketing took this

opportunity and attempted to focus the every points of the topic.

This report will provide some recommendation, which we believe our

contribution to take any correct decision. We have given all of our

efforts towards making it a perfect one.

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CONTENTS

Page No.

Abstract………………………………………………………………………06

Introduction………………………………………………………………..06

Statement of the Problem……………………………………………..07

Rational of the Study……………………………………………………07

Hypotheses of the Study……………………………………………….07

Objective of the Study…………………………………………………..08

Apply the Methodology…………………………………………………08

Comilla Export Processing Zone……………………………………09

Industries are Operated in Comilla EPZ…………………………10

Industries in Under Construction………………………………….11

Contribution of Comilla EPZ……..………………………………….11

Fiscal Year Export of Comilla EPZ………………………………… 13

Fiscal Year investment of Comilla EPZ…………………………..13

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Ratio Analysis of Investment and Export……………………….14

Conclusion…………………………………………………………………..17

Academic Research Questionnaire…………………………………18

Reference…………………………………………………………………….21

Abstract

Export Processing Zone’s are established to attract foreign capital investment and mobilize investment for capital formation for rapid industrialization, to create employment opportunities for the country's manpower, to induce transfer of technology, and to earn foreign exchange by boosting exports. It plays an important role in export trade of Bangladesh. We have tried to get proper knowledge about the performance of Comilla EPZ and its contributions in the economy of Bangladesh through preparing this report.

Comilla Export Processing Zone is established at the old airport site in Comilla, near about 4km far from Dhaka-Chittagong National Highway. There are total 28 foreign, local, and foreign-local jointly owned companies are operating their production. From starting year of operation to present year, the amount of investment for industrialization is increasing with a large number and also the amount of export from Comilla EPZ has been increased in a big amount in every year. It plays a great role in the economy and foreign earnings of Bangladesh.

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Introduction

Export Processing Zone (EPZ) is a response to international market demand for cheaper goods. It addresses the national problems like growing trade gap, high unemployment, and dearth of capital investment, shortage of foreign currency and lack of technical knowledge.

As special industrial parks EPZs are located in areas with advantages in terms of communication and access to raw materials and industrial labor. The manifest objectives of EPZs are established to attract foreign capital investment and mobilize investment for capital formation for rapid industrialization, to create employment opportunities for the country's manpower, to induce transfer of technology, and to earn foreign exchange by boosting exports.

Statement of the Problem

The amount of export of Bangladesh had decreased in last some years because of world recession. As a result the amount of foreign investment also decreases. Export Processing Zone plays an important role in export trade of Bangladesh. At present Export Processing Zone is facing some problems; such as-

Because of decreasing the export, productivity of the EPZ’s also decreases.

As foreign investment has been decrease, the success of EPZ is hampered.

The contribution of EPZ’s in the economy of Bangladesh is not hopeful.

Rational of the Study

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It is expected that the result will be an interesting one. The findings of the study will help to identify the present scenario and the level of performance of Comilla Export Processing Zone.

We are going to complete our BBA program. Just after completing this we have to search for job, as it is business related issue so it will help to get a good job in export oriented business organizations. So we have tried to get proper knowledge about the performance of Comilla EPZ and its contributions in the economy of Bangladesh through preparing this report.

Hypotheses of the Study

The following hypotheses are formulated in relation to the research of The Performance Evaluation of Comilla Export Processing Zone.

H1 : The growth of Comilla Export Processing Zone is in progress.H2 : Comilla EPZ is playing a strong positive role in the economic contribution of Bangladesh.

These hypotheses guided the research by ensuring various measuring knowledge.

Objective of the Study

Stating some proper objectives is half done of any successful task. As the study is an integral part of academic curriculum, its main objective is to evaluate the performance of Comilla Export Processing Zone in the economy of Bangladesh. The specific objectives of the study are given below:

1. To evaluate the performance of Comilla Export Processing Zone.2. To analyze the role of location, labor and other facilities of

Comilla EPZ in the economy.3. To know about the contribution of Comilla EPZ in export.4. To discover the prospects related to the future of Comilla EPZ.5. To provide some suggestions to improve the overall contribution

in economic development of Bangladesh.

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Apply the Methodology

For smooth and accurate study every one has to follow some rules and regulations. Actually we have conducted a survey by applying questionnaire method.

Source of Data:

a) Primary data collected through: -1. Questionnaire.2. Observation.3. Personal Interview.

b) Secondary data collected from: - 1. Internet

2. Statistics on Comilla EPZ.3. BEPZA’s Web site.4. Newspapers

Questionnaire design:As the questionnaire is the heart of the survey the researcher

would give his best effort to construct the questionnaire to reflect the objective of the study. We prepare a questionnaire by using five points multiple choice questions.

Analysis techniques:After getting all raw data collected, both theoretical and

numerical techniques have used to analyze data. We used some table of analysis to prepare this report.

Performance Evaluation of Export Processing Zone:

A Case Study of Comilla Export Processing Zone

Comilla Export Processing Zone:

Comilla Export Processing Zone (COMEPZ) is established at the old airport site in Comilla. The site is located about 4km from the Dhaka-Chittagong National Highway. The total area currently under development is 267.46 acres.

The profile of Comilla Export Processing Zone is given below.

Location:

Comilla old airport area.

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167 kilometers from Chittagong port, 97 kilometers from Dhaka, and 4 kilometers from Dhaka-Chittagong national highway.

Profile of Zone:

Zone area: 108.28 hectares (267.46 acres)Number of industrial plots: 211Size of each plot: 2000 square meters.Tariff: US $ 2.20 / square meters / year.Space of Standard Factory Building: 27000 square meters.Tariff: US $ 2.75 / square meters /month.

Utility Services:

Water Supply: Own water supply system.Tariff: Taka. 18.47 / cu-m.Gas Supply: From Bakhrabad Gas system Ltd.Tariff: Taka. 5.76 / cu-m.Power Supply: 11 kilovolt, 3 phases, 50 cycles / sec.Tariff: Taka. 4.18 / kilowatt.(Utilities will be charged at the current rate of US $)

Contract Address:

Comilla Export Processing Zone, Airport Area,Comilla, Bangladesh.Phone: +88 081 77055Fax: +88 081 77056

Industries are Operated in Comilla EPZ:

In Comilla Export Processing Zone, in total 28 foreign, local, and foreign-local jointly owned companies are operating their production. A list of these companies according to the category is given below in the table.

Sl. No. Name of Company Type Product01 Blossom Textiles Ltd. A Sweater

02 Yogotex Fabrics Co. Ltd. A Denim Fabric

03 Nor-Pearl Knitwear Ltd. A Garments

04 Seiko Precision Parts (BD) Ltd. A Electrical Equipments

05 Whitex Garments (BD) Pvt. Ltd. A Garments

06 Xin Chang Shoes (BD) Ltd. A Footwear

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07 Shepherd Asia Zipper Ltd. A Zipper

08 Ea-Chen Textile Corporation Ltd. A Interlinings

09 Golden Moon (Bangladesh) Ltd. A Footwear

10 Kadena Sportwear Ltd. A Garments

11 Hun Hsin Textile Co. (BD) Ltd. A Dyed Yarn

12 Yongtai Industries (BD) Ltd. B Sweater

13 R N Spinning Mills Ltd. B Synthetic Yarn

14 Nassa Taipei denims Ltd. B Denim Fabric

15 Nassa Spinning Ltd. B Cotton Yarn

16 Nassa Spinners Ltd. B Polyester Yarn

17 Green Star International Ltd. B All type of Bag

18 FAR Chemical Industries Ltd. B Textile Dyes

19 TM Chemicals Ltd. B Textile Dyes

20 B. Plastic Industries. CPlastic Sheet of

Polymer of Ethylene & Poly bag

21 Speed Plus Manufacturing Co. Ltd. C Poly bag

22 Shahjalal Poly Industries Ltd. C Plastic Sheet of Polymer of Ethylene

23 REL Plastic Recycling Ltd. C Plastic Sheet of Polymer of Ethylene

24 Royal Denim Ltd. C Denim Fabric

25 Enzychim Iberica (BD) Ltd. C Textile Dyes

26 Tubingen Chemicals (BD) Ltd. C Textile Dyes

27 Sigma Engineers Ltd. C Treated Water

28 Etasia Interlinings Ltd. C Interlinings

Industries in Under Construction:

Some industries are under in construction to start the production. Hope these industries will start operating in Comilla Export Processing Zone.

Sl. No. Name of Company Type Product01 M/s. Arvind Textile Mills Ltd. A Garments02 M/s. Eusebio Textile (BD) Ltd. A Textile03 M/s. BMT International Ltd. A Garments

04M/s. Bangladesh Textile &

Chemical Fibre Industry Ltd.A Textile

05 M/s. Italia Knitworks Ltd. A Garments06 M/s. CAT Garment Co. Ltd. A Garments07 M/s. Eastport Ltd. A Garments08 M/s. J B Networks Ltd. B Chopsticks09 M/s. Vihrea Com Ltd. C Garments

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Contribution of Comilla Export Processing Zone:

Comilla Export Processing Zone has big contributions in various fields. Among them, most important contributing fields are given below.

Opportunity of Employment:

Comilla EPZ creates an opportunity for the large number of employment in Comilla. Now near about 5500 workers are working in Comilla EPZ. It removes unemployment and it will create lot of employment opportunities in the future.

Development of Related Business:

A lot of EPZ related business is developed in Comilla with the setup of the EPZ. A lot of Transport agencies are developed to transport the exported goods. Some logistics, such as DHL, TNT Express, SWIFT Logistics are setup business in Comilla. Some banks and insurance service companies are opened their branch in the EPZ area.

Economic Development:

Comilla EPZ helps to remove poverty of the various poor peoples who were lived below the poverty line. These people are now economically developed by working in Comilla EPZ. Side by side Comilla EPZ contributes in the economic development of Comilla.

Infrastructure Development:

By setting up EPZ in Comilla, the infrastructure is developed. It improve the communication and transportation facility in the old airport area of Comilla, it increase the location and land value of the EPZ area.

Industrialization in Comilla:

After setup of Comilla EPZ, there is a lot of industrialization over the Comilla district. In last few years, a lot of industries are setup in Comilla. So it impacts in the industrialization in Comilla.

Increase Export Earnings:

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In every year Comilla Export Processing Zone exports a large number of produced goods in the foreign countries. EPZs are the important source of export earnings. It contributes in the increase of export earnings.

Balance of Trade:

Every year, Bangladesh faces a big gap in the balance of trade. Bangladesh imports in a large number and exports limited number of goods. Export processing zones helps to minimize the balance of trade.

Earning Foreign Currency:

EPZs are a big and important sector of earning foreign currency. Comilla EPZ plays a very important role in the earning of foreign currency every year. The foreign earnings of Comilla EPZ is increasing every year.

Balance of Payment:

For the large number of commodity imports with limited exports, Bangladesh has to pay a lot of foreign currency for the more amounts of exports than imports. So it creates a big gap in the balance of payment. EPZ plays a strong positive role to meet the balance of payment.

So, Comilla Export Processing Zone has a big contribution in the every sector of Comilla also in Bangladesh.

Fiscal Year Investment of Comilla EPZ:

Comilla Export Processing Zone starts its operation in 2001. From 2001 to the present year, the amount of investment is increasing with a large number. The amount of investment in Comilla Export Processing Zone from fiscal year 2001-02 to 2010-11 is given below.

Year Investment (US$ in million) in Comilla EPZ

2001- 02 0.64

2002- 03 1.05

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2003- 04 9.03

2004- 05 19.59

2005- 06 10.62

2006- 07 21.02

2007- 08 9.72

2008- 09 8.20

2009- 10 20.44

2010- 11 36.26

Fiscal Year Export of Comilla EPZ:

In every year, the amount of export from Comilla Export Processing Zone has been increased in a big amount. In the following chart we can see before 5 year, in the fiscal year 2006-07, the export amount was $46.01 million. In last fiscal year 2010-2011, the export amount was $145.47 million. So, the export increases more than three times with in the 5 years.

Year Export (US$ in million) from Comilla EPZ

2001- 02 0.01

2002- 03 1.15

2003- 04 4.10

2004- 05 9.66

2005- 06 34.99

2006- 07 46.01

2007- 08 131.38

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2008- 09 95.85

2009- 10 95.35

2010- 11 145.47

Ratio Analysis of Investment and Export:

To evaluate the performance of Comilla Export Processing Zone, We have to use some ratio analysis, such as- the return of investment, the changing rate of investment, and the changing rate of export. From the results of this analysis, we can reach in a decision about the performance of Comilla EPZ, and we can prove the hypotheses.

Return on Investment:

This ratio analysis formula measures the rate of return by exports by the investment in each year. By dividing the amount of exports in a year with the amount of investment of that year, we can get the return on investment of that year.

Return on Investment = entNetInvestm

NetExport

Now the returns on Investment in last 5 years are calculated below.

In 2006-07, Return on Investment = 02.21

01.46

= 2.19

In 2007-08, Return on Investment = 72.9

38.131

= 13.51

In 2008-09, Return on Investment = 20.8

85.95

= 11.69

In 2009-10, Return on Investment = 44.20

35.95

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= 4.66

In 2010-11, Return on Investment = 26.36

47.145

= 4.01

So, it can be said that the return on investment in Comilla EPZ is in good condition and the return rate is effective on investment.

Changing Rate of Investment:

This ratio analysis formula measures the increasing or decreasing rate of investment in each year. By dividing the difference amount of investment of two years with the amount of investment of the previous year, we can get the changing rate of investment in that year.

Changing Rate of Investment,

= eviousYearofInvestment

eviousYearofInvestmentearofCurrentYInvestment

Pr

Pr− 100

Now the changing rates of Investment in last 5 years are calculated below.

In 2006-07, Changing Rate of Investment = 62.10

62.1002.21 − 100

= 97.93%

In 2007-08, Changing Rate of Investment = 02.21

02.2172.9 − 100

= - 53.76%

In 2008-09, Changing Rate of Investment = 72.9

72.920.8 − 100

= - 15.64%

In 2009-10, Changing Rate of Investment = 20.8

20.844.20 − 100

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= 149.27%

In 2010-11, Changing Rate of Investment = 44.20

44.2026.36 − 100

= 77.40%

From the analysis, we can say the changing rate of investment is positive in maximum previous years and the investment is increases every year in Comilla Export Processing Zone.

Changing Rate of Export:

This ratio analysis formula measures the increasing or decreasing rate of export in each year. By dividing the difference amount of export of two years with the amount of export of the previous year, we can get the changing rate of export in that year.

Changing Rate of Export,

= eviousYearExportof

eviousYearExportofrrentYearExportofCu

Pr

Pr− 100

Now the changing rates of Export in last 5 years are calculated below.

In 2006-07, Changing Rate of Export = 99.34

99.3401.46 − 100

= 31.50%

In 2007-08, Changing Rate of Export = 01.46

01.4638.131 − 100

= 185.55%

In 2008-09, Changing Rate of Export = 38.131

38.13185.95 − 100

= - 27.04%

In 2009-10, Changing Rate of Export = 85.95

85.9535.95 − 100

= - .52%

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In 2010-11, Changing Rate of Export = 35.95

35.9547.145 − 100

= 52.56%

After the analysis, we can say that the changing rate of export in Comilla Export Processing Zone is positive in maximum previous years and the amount of export increases every year in Comilla Export Processing Zone.

Finally, we can say that the growth of Comilla Export Processing Zone is in progress and it is increasing rapidly.

Conclusion

After the performance evaluation of Comilla Export Processing Zone, we reach into the conclusion that, though it is a new Export Processing Zone in Bangladesh, the amount of investment is increasing every year and it leads to a rapid growth of export from the Comilla Export Processing Zone. It contributes in the economic development of Comilla and also in Bangladesh. So, its performance is increasing and plays a strong positive role in the export earnings, balance of trade, earning foreign currency and the economy of Bangladesh.

Appendices

The questionnaire format of our research is given here.

Academic Research Questionnaire

Date: Questionnaire No:

A. Demographic Information

Name of the Company / Organization:

Name of Respondent:

Profession:

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Address:

Contact Number:

E-mail:

B. Questions on Performance Evaluation of Comilla Export Processing Zone.

[Please out your option (use) on the box.]

1. The growth of Comilla Export Processing Zone is in progress.

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

2. Do you think distribution efficiency is major factor to increase the rapid growth of Comilla EPZ?

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

3. To what extents the facilities of low cost labor influence you to choose this EPZ?

81% − 100%

61% − 80%

41% − 60%

21% − 40%

0% − 20%

4. To what extents convenient location influence you to choose this EPZ?

81% − 100%

61% − 80%

41% − 60%

21% − 40%

0% − 20%

5. To what extents transportation facilities influence you to choose this EPZ?

81% − 100%

61% − 80%

41% − 60%

21% − 40%

0% − 20%

6. To what extents the business environments of Comilla EPZ influence you?

81% − 100%

61% − 80%

41% − 60%

21% − 40%

0% − 20%

7. To what extents export - import facilities influence you to choose this EPZ?

81% − 100% 61% − 80% 41% − 60% 21% − 40% 0% − 20%

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8. Employees of Comilla EPZ authority are willing to help and give prompt service to manufacturers.

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

9. When you face a problem, Comilla EPZ authority shows sincere & interest in solving it.

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

10. Do you think that the Comilla EPZ authority is able to implement the export- import policies effectively?

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

11. Are the promotional incentives given from the Comilla EPZ authority satisfied you?

Highly Delighted

Satisfied

Natural

Dissatisfied

Highly Dissatisfied

12. Are you happy with the performance of Comilla EPZ?

Highly Delighted

Satisfied

Natural

Dissatisfied

Highly Dissatisfied

13. Are you satisfied by using Comilla Export Processing Zone?

Highly Delighted

Satisfied

Natural

Dissatisfied

Highly Dissatisfied

14. Comilla EPZ is playing a strong positive role in the economic contribution of Bangladesh.

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

15. Would you consider Comilla EPZ for next project of your company?

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

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16. Would you recommend others for industrialization in Comilla EPZ?

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

≈ Thanks for Your Support ≈

C. Allocation of points:

Strongly Agree/Highly

Delighted/ 81% - 100%

= 5

Agree/Satisfied/ 61% - 80%

= 4

Neutral/Natural/

41% - 60%= 3

Disagree/Dissatisfied/ 21% - 40%

= 2

Strongly Disagree/

Highly Dissatisfied/

0% - 20%= 1

Reference

Mohammad Abdul Jabbar.Assistant Manager (Commercial Operation)Comilla Export Processing Zone, Comilla.Cell : 0088 01912 517963

BEPZA office in Comilla Export Processing Zone.Old Airport area, Comilla.Tell : 081 71004

Managers of the industries of Comilla EPZ.

Annual Report- 2010-11 of BEPZA.

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Economic Review of Bangladesh 2009-10.

Web site: Bangladesh Export Processing Authority. “www.epzbangladesh.org.bd”

Articles from the daily national news paper.

Class Lecture of the Course Teacher.

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