M.A.Hanif
Executive Director
Walton Digi-Tech Industries Ltd.

Interviewed by Akhlaqur Rahman Sachee, Team MBR

Walton Digi-Tech Industries Limited is a reputed Bangladeshi mobile and computer technology based company that develops, sells, repairs and provides support for mobile, computers and related products and services. Walton Digi-Tech Industries Limited has introduced a variety of desktop computers, laptops and related accessories. The company provides a dynamic range of products depending on user preferences for personal and official use.

Akhlaqur Rahman Sachee: Though locally assembled mobile phones meet up to the major portion of the local demand, Bangladesh still has to depend on imports for most of the mobile phone components. Can we expect backward integration to happen in the local industry in the near future?

M.A. Hanif: China is currently the largest supplier of mobile phone components, and most of our products are being assembled using Chinese components. It cannot be denied that backward integration is needed to enhance our value addition. But, it requires a huge amount of investment, for which we will need to wait for some more time. In addition to that, the production volume matters here as well. Export opportunities will be needed to take advantage of economies of scale. Undoubtedly, government policies will play a crucial role here.

Akhlaqur Rahman Sachee: Bangladesh is widely known as a country with abundant cheap labour. However, the mobile phone manufacturing industry is driven by a skilled workforce. Do you think that the country will be able to ensure a sustainable supply of a skilled workforce for the industry?

M.A. Hanif: The majority of the labour force participants in this industry are Bangladeshi. In the early days, we had to hire industry experts from China for technical support. But, the proportion gradually declined. Currently, more than 90% of the staff are from Bangladesh, except a few specialists. Because of the government’s efforts to support vocational education and the opportunities for training and growth that the industry offers, we can be sure that Bangladeshis will one day be in charge of the industry.

Akhlaqur Rahman Sachee: The very first mobile phone manufacturing plant in Bangladesh was established in 2017. In the span of five years, local manufacturers have managed to meet around 80% of the country’s demand. What are the factors you think are driving this phenomenal growth?

M.A. Hanif: A combination of factors created a conducive environment for the mobile phone manufacturing industry to flourish. It is obvious that budgetary initiatives of the government in the year 2017 boosted the growth of the industry significantly. As a result of the government initiatives, we experienced multiple global brands’ interest in setting up their manufacturing plants in Bangladesh in later years. The credit goes to the labour force as well. The mobile phone manufacturing industry requires a labour force that is equipped with technical skills, and our labour force was found quite ready to be employed in the industry at that moment of time or to be trained up to make them job-ready.

Akhlaqur Rahman Sachee: Do you think the industry has the potential to be one of the major contributors to our export basket after meeting the local demand? What are your thoughts regarding the current export figures?

M.A. Hanif: It is evident that our current export figures are very small. However, it has the potential to grow. There is still room left in the local market for the industry to explore, and we need to capture the local market first. As we have government policies in our favour and a vast labour force which has been proven to be quite fit for the industry, the production volume can only be expected to grow further in the future. This will surely create more export opportunities after meeting the local demand.

Akhlaqur Rahman Sachee: Our neighbouring country, India, has already taken second place in the list of top mobile phone manufacturing countries. As Bangladesh has similar socioeconomic and demographic trends, can we expect to see our country’s name on the list anytime soon?

M.A. Hanif: Though we have socioeconomic and demographic similarities, the size of the Indian local market is eight to ten times bigger than ours. Catering only to the local market may not help us grab a position at the top. So, unless we can scale up our production volume and create export opportunities to get our enhanced production volume absorbed, it will not be easy to reach that level. With the current pace of development, Bangladesh may be ranked among five to ten countries in the near future.

Akhlaqur Rahman Sachee: It is clear that the mobile phone manufacturing industry largely depends on foreign direct investment. What are the challenges local conglomerates are facing to come up?

M.A. Hanif: More than 80% of the local smartphone market is being served by global brands, which encouraged them to set up manufacturing plants in Bangladesh. The smartphones of the local brands are not as popular as their feature phones are. The market share of feature phones will decline even further in the upcoming days. Only the popularization of local branded smartphones through innovations and the creation of export opportunities to export feature phones to lower-income countries will encourage more local conglomerates to come up. If not, global brands will continue to control the market, and foreign direct investment will continue to be important.

Akhlaqur Rahman Sachee: Do you think the policy support is adequate for the industry? What are the areas in which policymakers can work to help the industry flourish even better?

M.A. Hanif: Government policies have gradually become much friendlier for the industry than they were before. To ensure sustainable growth, policies need to be in effect for a reasonable amount of time. Frequent changes in policy make investors confused, and they fail to make long-term growth plans because of frequent changes. Policymakers are expected to stick to newly enacted policies for at least five to ten years in order for investors to make long-term plans. The current duty structure may also be relaxed further to help the industry flourish.