<div><em><strong>Sandeep Bamzai</strong> writes how even Bangladesh, once described as a basket case, has emerged as a better manufacturing option for the world including Indian companies</em><br><br><br><table align="left" border="0" cellpadding="2" cellspacing="2" style="width: 200px"><tbody><tr><td><img alt="" src="http://bw-image.s3.amazonaws.com/Sandeep-Bamzai1.jpg" style="width: 200px; height: 287px; margin: 1px; float: left;"></td></tr><tr><td><strong>Sandeep Bamzai</strong></td></tr></tbody></table>Over the weekend I went to purchase a high end geared bike for my son. I was told Firefox is the best, so I went shopping with my son in tow. The bikes looked sleek and my son selected one priced rather exorbitantly. On checking, I realised that the price range extended from Rs 10,000 to Rs 120,000. Dang, I was buying only the cheaper version. By now I was curious and I asked the store manager which part of China the bikes came from. To my horror and surprise, the bikes are made in Bangladesh. The company is helmed by Indian promoters - Shiv Inder Singh and Pradeep Mehrotra. In February 2013, they shut their manufacturing plant in Sri Lanka, owned by one of the promoters, and moved it to Bangladesh to avail lower duty benefits. The Gurgaon store that I went to sells approximately 1,400 bikes annually. You can do your math given that they are priced at anything between Rs 10,000 to Rs 120,000. And with fitness and raahgiri dominating people's mindsets, the sales will only be going up in the days to come.</div><div> </div><div>Mystified, I wanted to know more about Firefox and why it was being manufactured in Bangladesh and assembled locally in India in this day and age of Make In India? Why is it that premium bikes were being manufactured in Sri Lanka and Bangladesh when they should be made in India given that Indians were behind the enterprise anyway? As I dug more I discovered that the manufacturing plant in Lanka was operated by Intertrend Ltd, which is led by Firefox Bikes' majority stakeholder Pradeep Mehrotra. The plant's major output was consumed by European markets. Checking the internet, I discovered that Singh a key shareholder in the Company but also its MD had at the time of the relocation said, "The EU has some human rights violation issues with Sri Lanka because of which EU took away the zero-duty benefit from bicycle exports from Sri Lanka. So, the business of the company's other promoter got affected." Firefox Bikes pays an "additional duty" of 6.5 per cent for products coming from the Bangladesh plant, he added. When asked about the investment in relocating and setting up a new plant in Bangladesh, Singh said it was borne by Mehrotra and his company. In the interview, he added that the Bangladesh plant has an initial production capacity of 50,000 units per month as against 25,000 units in the erstwhile Sri Lankan unit. The Bangladesh plant can be expanded up to a monthly capacity of 75,000 units.</div><div> </div><div>Curiosity remain unsated and I wondered why top Indian manufacturers with large domestic plants - Hero, Atlas, BSA/Hercules, Avon and a whole host of others - were not taking the risk and getting into what is obviously a high yielding lucrative market. Shiv Inder Singh, a Doon School, IIT and IIFT alumnus is the brain behind the operation. But this story not so much about Firefox bikes but equally about the Bangladesh growth story. Sitting quietly in our backyard, Bangladesh has grown on the twin engines of micro credit and garment exports. The numbers themselves tell a story. Yes, a third of its population of 150 million still lives in acute poverty, but there is affluence and steady growth too. </div><div> </div><div>Between 2004 and 2014, Bangladesh averaged a GDP growth rate of 6 per cent. The bulwark of the economy is export led industrialisation. Cheap and cost effective sweat shops are turning out premium quality goods and products. Case in point being Firefox bikes. The country's garment industry is the second-largest in the world. Other key sectors include pharma, shipbuilding, ceramics, leather goods and electronics. Described as a Frontier Five nation, it is classified as a Next Eleven Emerging Market. A recent opinion poll described Bangladesh with the second most pro capitalist population in the developing world. The world and in the Firefox case, its Indian promoters have realised that there are other fish to fry. If a country like Bangladesh, once referred to as a basket case, is willing to provide manufacturing incentives to back its low labour cost arbitrage, then there are learnings for India to transpose. India cannot be about rhetorical sloganeering, it has to translate this empty talk with pro active policy and a bedrock of incentives for real time manufacturing to take place. On Tuesday morning one read that Xiaomi phones are being assembled in Andhra Pradesh, I would have preferred if that read manufactured. What is preventing India from becoming a formidable manufacturing hub and migrating upwards, distancing itself from the stigma of being the world's back office? And I mean genuinely a manufacturer's delight not just for Indian companies but for global corporations. Why can't Apple manufacture the iPhone and other products in India instead of China? The emergence of Foxconn in Taiwan as the contract manufacturer for the global heavies with revenues of $131 billion is another example of what human ingenuity backed by best of breed policies can do. From Kindle to the iPhone, from blackberry to xbox one, from PS4 to the iPad, they manufacture everything. </div><div> </div><div>Similarly, the Firefox story on a much smaller scale is something to take note of. A few years short of 60, Shiv Inder Singh tapped into the expertise of his friend Pradip Mehrotra who had a bicycle manufacturing facility in Taiwan. With seed money of Rs 4 crore, the duo launched Firefox bikes out of an office in Greater Noida by hiring 10 people in 2004. In the first year of operations, they sold 1,200 bikes. Now they are selling bikes worth Rs 75 crore. </div><div> </div><div>Time for us to wake up and smell the coffee.</div><div> </div><div>Before the world passes us by.</div><div> </div>
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