Bicycle exports now stand as the single largest product export from Bangladesh�s engineering sector, contributing about 7.5 per cent to the country�s total engineering exports. Bangladesh currently ranks fifth among top bicycle exporters to Europe, despite being an importer just a decade back.

Two-wheeled revolution gaining pace

It might not be apparent initially, but a cycling revolution is quietly underway in Dhaka and other major cities in the country for the past couple of years. This new revolution is turning out to be good for business, driving the creation of a new supply chain for bicycles and accessories as more commuters take to two wheels.
Bicycle exports now stand as the single largest product export from Bangladesh’s engineering sector, contributing about 7.5 per cent to the country’s total engineering exports. Bangladesh currently ranks fifth among top bicycle exporters to Europe, despite being an importer just a decade back.
According to the Export Promotion Bureau (EPB), Bangladesh exported bicycles worth $121 million in the last fiscal of 2014-15. In the previous fiscal of 2013-14, it was $112.89 million.
The export figure went up from around $111 million in 2011-12 and 106.1 million in 2012-13 fiscal years. In the first two months of the current fiscal, which started on July 1, the amount is $9.24 million.
EPB data shows that bicycle exports began around 1995 and have been growing steadily since then. Bangladesh’s bicycle exports are now highly concentrated in three key markets: the UK (64 per cent), Germany (14 per cent), and Belgium (9 per cent).
The investment opportunities in Bangladesh for capturing a share in the EU market for bicycles have emerged after the imposition of anti-dumping duties (AD) on Chinese exporters.
The first AD measures were imposed in 1993. After continuous lobbying by the European Bicycle Manufacturers Association, the EU imposed anti-dumping duty of 30.8 per cent on bicycles made in China.
This duty provided an opportunity for existing producers and new investors in other countries to enter the lucrative bicycle market in the EU. After that, Foreign Direct Investment (FDI) facilitated the emergence of bicycle export industry in Bangladesh.
Malaysian investors were first to set up a bicycle manufacturing-cum-export industry back in 1995. They established their manufacturing facility in the Chittagong EPZ with an investment of $2 million.
A domestic trading group, Meghna, was the next firm to enter the bicycle export manufacturing industry. Meghna’s founders had been involved in bicycle and parts trading since the 1960s. They manufactured bicycle spokes in the 1970s and started assembling bicycles for the local market in the 1980s.
After diversifying and becoming a highly successful trading conglomerate, Cycle Life Exclusive, the bicycle manufacturing concern of the Meghna Group, grew to become the largest bicycle and bicycle parts manufacturer in the country.
It now has two factories dedicated to the export market, two factories dedicated for the local market and five bicycle components factories.
Marketing manager of Cycle Life Exclusive, Mainul Islam Rahat, told The Independent that the local bicycle market is growing at a faster pace than their expectation. Rahat said they were struggling to meet the demand, which prompted the conglomerate to establish factories for manufacturing bicycles, catering exclusively to the local market.
“We now produce bikes in six factories in Gazipur, employing around 7,000 people,” he said, adding that bicycles such as MTB (mountain bicycle), road bike, Trek 3900, Upland Vanguard-100 and Upland Vanguard-300 and Laux Fight are topping the sales charts.
Meanwhile, Pran-RFL group, the largest food and nutrition producer in Bangladesh, has invested $10 million in a bicycle assembly plant near Dhaka, is the latest entrant in this emerging industry.
An official of the group said that their bicycles, to be called 'Duranta', will belong to different load-carrying and welded categories such as MTB, sports light roadstar (SLR), kids and juveniles. Their target is to sell bicycles in the Indian and the Bhutanese markets.
Shahabuddin Rajon, an independent researcher, who has conducted research on the bicycle revolution in Bangladesh, said that the bicycle manufacturing sector in Bangladesh is split into two distinct supply chains: modern export-oriented OEM (original equipment manufacturer) manufacturers and small-scale cottage bicycle and parts industry, catering exclusively to the local market.
These two supply chains operate independently with extremely limited interactions and linkages owing to the differences in market demands, said Rajon.
“There are no suppliers in Bangladesh who occupy the middle part of the supply chain, consisting of specialised parts and component manufacturers. Local suppliers cannot produce parts and components of the quality required for export-oriented OEMs,” he said.
Rajon said that OEMs that are financially strong, like Meghna, have made significant investments in parts and components manufacturing. For bicycles sold locally, Meghna’s share of own parts and components is estimated at 80 percent and for export bicycles up to 45 percent.
“This, combined with the issue of economies of scale in the parts manufacturing business, probably, limit opportunities for independent suppliers of export-quality parts and component suppliers to emerge,” he said, adding this has allowed China and even higher wage countries to remain competitive in different segments of the bicycle market.
Mozammed Haque, founder of the largest cycling association in the country, BDCyclists, however, is hopeful that the bicycle industry in Bangladesh will only grow from here.
“In a city like Dhaka, bicycle could be the best option for short and medium distance commuting. Realising that the revolution has already started both at the commuter and the entrepreneur end of the chain,” he said.
“Even the government is now promising to dedicate lanes solely for cyclists in the Bangladeshi capital, where gridlock on its 1,900 km of road poses a daily headache for workers,” he added.

Bicycle exports now stand as the single largest product export from Bangladesh�s engineering sector, contributing about 7.5 per cent to the country�s total engineering exports. Bangladesh currently ranks fifth among top bicycle exporters to Europe, despite being an importer just a decade back.

Two-wheeled revolution gaining pace

It might not be apparent initially, but a cycling revolution is quietly underway in Dhaka and other major cities in the country for the past couple of years. This new revolution is turning out to be good for business, driving the creation of a new supply chain for bicycles and accessories as more commuters take to two wheels. Bicycle exports now stand as the single largest product export from Bangladeshs engineering sector, contributing about 7.5 per cent to the countrys total engineering exports. Bangladesh currently ranks fifth among top bicycle exporters to Europe, despite being an importer just a decade back. According to the Export Promotion Bureau (EPB), Bangladesh exported bicycles worth $121 million in the last fiscal of 2014-15. In the previous fiscal of 2013-14, it was $112.89 million. The export figure went up from around $111 million in 2011-12 and 106.1 million in 2012-13 fiscal years. In the first two months of the current fiscal, which started on July 1, the amount is $9.24 million. EPB data shows that bicycle exports began around 1995 and have been growing steadily since then. Bangladeshs bicycle exports are now highly concentrated in three key markets: the UK (64 per cent), Germany (14 per cent), and Belgium (9 per cent). The investment opportunities in Bangladesh for capturing a share in the EU market for bicycles have emerged after the imposition of anti-dumping duties (AD) on Chinese exporters. The first AD measures were imposed in 1993. After continuous lobbying by the European Bicycle Manufacturers Association, the EU imposed anti-dumping duty of 30.8 per cent on bicycles made in China. This duty provided an opportunity for existing producers and new investors in other countries to enter the lucrative bicycle market in the EU. After that, Foreign Direct Investment (FDI) facilitated the emergence of bicycle export industry in Bangladesh. Malaysian investors were first to set up a bicycle manufacturing-cum-export industry back in 1995. They established their manufacturing facility in the Chittagong EPZ with an investment of $2 million. A domestic trading group, Meghna, was the next firm to enter the bicycle export manufacturing industry. Meghnas founders had been involved in bicycle and parts trading since the 1960s. They manufactured bicycle spokes in the 1970s and started assembling bicycles for the local market in the 1980s. After diversifying and becoming a highly successful trading conglomerate, Cycle Life Exclusive, the bicycle manufacturing concern of the Meghna Group, grew to become the largest bicycle and bicycle parts manufacturer in the country. It now has two factories dedicated to the export market, two factories dedicated for the local market and five bicycle components factories. Marketing manager of Cycle Life Exclusive, Mainul Islam Rahat, told The Independent that the local bicycle market is growing at a faster pace than their expectation. Rahat said they were struggling to meet the demand, which prompted the conglomerate to establish factories for manufacturing bicycles, catering exclusively to the local market. We now produce bikes in six factories in Gazipur, employing around 7,000 people, he said, adding that bicycles such as MTB (mountain bicycle), road bike, Trek 3900, Upland Vanguard-100 and Upland Vanguard-300 and Laux Fight are topping the sales charts. Meanwhile, Pran-RFL group, the largest food and nutrition producer in Bangladesh, has invested $10 million in a bicycle assembly plant near Dhaka, is the latest entrant in this emerging industry. An official of the group said that their bicycles, to be called Duranta, will belong to different load-carrying and welded categories such as MTB, sports light roadstar (SLR), kids and juveniles. Their target is to sell bicycles in the Indian and the Bhutanese markets. Shahabuddin Rajon, an independent researcher, who has conducted research on the bicycle revolution in Bangladesh, said that the bicycle manufacturing sector in Bangladesh is split into two distinct supply chains: modern export-oriented OEM (original equipment manufacturer) manufacturers and small-scale cottage bicycle and parts industry, catering exclusively to the local market. These two supply chains operate independently with extremely limited interactions and linkages owing to the differences in market demands, said Rajon. There are no suppliers in Bangladesh who occupy the middle part of the supply chain, consisting of specialised parts and component manufacturers. Local suppliers cannot produce parts and components of the quality required for export-oriented OEMs, he said. Rajon said that OEMs that are financially strong, like Meghna, have made significant investments in parts and components manufacturing. For bicycles sold locally, Meghnas share of own parts and components is estimated at 80 percent and for export bicycles up to 45 percent. This, combined with the issue of economies of scale in the parts manufacturing business, probably, limit opportunities for independent suppliers of export-quality parts and component suppliers to emerge, he said, adding this has allowed China and even higher wage countries to remain competitive in different segments of the bicycle market. Mozammed Haque, founder of the largest cycling association in the country, BDCyclists, however, is hopeful that the bicycle industry in Bangladesh will only grow from here. In a city like Dhaka, bicycle could be the best option for short and medium distance commuting. Realising that the revolution has already started both at the commuter and the entrepreneur end of the chain, he said. Even the government is now promising to dedicate lanes solely for cyclists in the Bangladeshi capital, where gridlock on its 1,900 km of road poses a daily headache for workers, he added.