RFL Group launches new bicycle factory in Rangpur
Star Activity Report
Sun, May 8, 2022 12:00 a.m. Last updated on: Sun, May 8, 2022, 1:43 a.m.
Workers are seen on the assembly line of RFL’s second bicycle manufacturing plant at Gangachara upazila in Rangpur. Photo: Collected
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Workers are seen on the assembly line of RFL’s second bicycle manufacturing plant at Gangachara upazila in Rangpur. Photo: Collected
RFL Group has set up its second bicycle manufacturing plant in a bid to secure a bigger share of the domestic Tk 1,800 crore two-wheeler market, which is growing due to rising health awareness and the search for convenience in transport.
The factory, established at Gangachara upazila under the northwest division of Rangpur, has already started marketing the bikes locally, an RFL official said.
For all the latest news, follow the Daily Star’s Google News channel. According to the company, the annual demand for bicycles in Bangladesh is 20 lakh, but the majority of this demand is met by imports, as only two local companies are engaged in manufacturing bicycles.
These two companies supply 40% of the local demand for bicycles.
“Previously, the demand for bicycles was huge in rural areas. Nowadays, however, it is highly preferred in urban areas considering the traffic congestion as well as the health benefits and environmental friendliness of two-wheelers,” said Kamruzzaman Kamal, Marketing Director at Pran. -RLF group.
The domestic market for bicycles is growing by around 7-8% every year.
The new factory has an annual production capacity of three lakh pieces. With the new unit, RFL’s total annual bicycle production capacity has become 11 lakh units.
The company’s first bicycle factory was established in the Habiganj Industrial Park in Shaistaganj upazila of Habiganj, where it mainly produces two-wheelers for export.
Kamal went on to say that around 300 people are employed by the new factory, which cost around Tk 60 crore to construct.
Bicycles imported from China and India dominated the market before 2010 in the absence of domestic manufacture. Later however, RFL entered the industry with their locally made bikes in order to sell them domestically and overseas.
“Currently we cover around half of the total domestic demand,” Kamal said, adding that RFL would consider increasing production again if demand increased further.
RFL has to import a number of raw materials, components and other accessories for bicycle manufacturing from overseas, namely China, India, Malaysia, Indonesia, Vietnam and Japan. During this time, he manufactures the necessary frames, forks, rings, tires and inner tubes in his factory.
“We always try to meet domestic demand as well as exports year after year,” he added.
Of the country’s total bicycle exports worth $130.8 million in the 2020-21 financial year, RFL brought in $18.8 million. The company exported $12 million worth of bicycles the previous year.
RFL started exporting bikes in 2015 through a shipment to England. It now exports to 10 countries, including England, the Netherlands, Denmark, Germany, Austria and Belgium. The company also exports components such as bicycle magnets, frames, forks, tires and inner tubes.
Kamal said political support is needed to develop the upstream linkage industries of two-wheeler manufacturing.
For example, low-cost loans, allocation of land at cheaper rates and tax benefits are needed, he said.
Most investors are hesitant to invest in the bicycle business because a good amount of capital is required while it also takes time to generate a return on investment.
“Thus, policy support such as reduced import duties on components would encourage investment in the sector and help the domestic market to grow,” Kamal said.
RFL is working to export bikes to the United States by 2022, he added.