August 2008

Taiwan avoids EU duties, moves shoe factories to Bangladesh

Taiwanese industrialists are relocating their shoe, furniture, and tent fabric manufacturing units to Bangladesh.

The units were in China and Vietnam before, but now that the U.S. and EU have levied anti-dumping duties on the two Asian countries, the change became necessary. Production costs had risen in the two countries as well, and that was an added reason for bailing out.

The Daily Star (Bangladesh) reported the relocation of factories by the Taiwanese helped Bangladesh to receive over $200 million foreign direct investment in the first six months of 2008, which is two-third of the investment the Export Processing Zones Authority received in 2007-08 fiscal year.

In April 2006, the European Commission formally approved anti-dumping duties on shoes and furniture made in China and Vietnam.

In March 2008, EU member states voted in favor of a regulation, which extends the anti-dumping duty until October 2008.

Everyone expects the European shoe industry will request a further extension of the anti-dumping measure.

Another reason for shifting the plants to South Asian countries from China and Vietnam is the soaring production costs, which increased over 30% in the two countries during the first six months of 2008.

According to sources at the Taiwan Trade Centre in Dhaka, during the period seven Taiwanese leading furniture, shoe, and tent fabric manufacturing companies shifted their factories in China and Vietnam to Bangladesh.

Taiwanese investment in India also jumped to $600 million this year.