Financial performance evaluation of BEPZA regulated enterprises

Abstract

The study entitled “Financial Performance Evaluation of BEPZA Regulated Enterprises” is based on secondary and primary data with cross section analysis. This is a comparative and empirical study, which evaluates the relative performance of enterprises situated at different EPZs in Bangladesh. Seventy six (76) sample enterprises were selected out of population size of 428 enterprises through stratified non proportionate random sampling method. In this study, enterprises were classified from three view points like ownership structure, location of the industry and main product of business. Data were classified, organized, analyzed and interpreted in both qualitative and quantitative fashion through SPSS and Excel. A list of variables were analyzed for checking four types of performance, i.e., (a) Growth Analysis, (b) Productivity Analysis, (c) Profitability Analysis and (d) Value Addition measure. The broad objective of the study was to critically evaluate the comparative financial performance of the BEPZA regulated industry in Bangladesh. To accomplish this objective, the following specific objectives had been set up in this study: i) Analyzing the overall growth of the BEPZA regulated Industry in Bangladesh, ii) Measuring the group wise productivity of different components of the enterprises, and iii) measuring the group wise profitability as well as value adding capability of the enterprises. The main findings of the study are presented below: I) Location wise analysis of total export, employment, value addition, ROI, and others related variables reveals that Dhaka and Chittagong EPZs are dominating over the other EPZs of the country. Karnaphuli, Adamjee and Comilla show relatively competitive performance; though they are still far behind from CEPZ and DEPZ. After 2000-01, total export volume of BEPZs rose sharply; so, we can conclude that the overall export performance is remarkable. II) Ownership type wise analysis of total export, employment, value addition, ROI, and others related variables reveals that fully foreign ownership enterprises are dominating over local and joint venture enterprises. III) Industry wise analysis of total export, employment, value addition, ROI, and others related variables reveals that most of the time garments and garments accessories industry are dominating over other industries. It is, however, found that in few cases Knitting & Textile industries and Footwear & Leather goods industry show competitiveness. IV) Though total employment of BEPZ dominated by Chittagong and Dhaka EPZ, their growth rate is very low. It indicates that Chittagong and Dhaka EPZ have reached in matured stage of their life cycle and other EPZs are in growing stage. V) In the sphere of investment volume, Chittagong EPZ gets first position by contributing 39.59%, Dhaka EPZ gets second position by contributing 35.22% of total investment and others are in weak position. Chittagong EPZ is the first EPZ in Bangladesh history and it is internationally well known, cost competitive and very near from our prime seaport. Dhaka EPZ is the second EPZ in Bangladesh that is adjacent to capital city of Dhaka and international airport. National & international skill manpower, technicians and engineers are available in Dhaka EPZ. Besides, the offices of the foreign buyers of different brand are also available there. This is why the both EPZs are established firmly than other EPZs. VI) In capital / investment productivity, Mongla EPZ has extra ordinary performance compare to other EPZs. As illustrated in figure 6.2.1, Mongla EPZ has no remarkable capital investment and most of the enterprises of Mongla EPZ purchase and re-export agro processing foods with minimum value addition, they just play a traders rule. This is why the export on investment rate is very high for Mongla EPZ. VII) It was observed that garments accessories and Knitting and Textile industry defeated garments industry in a few cases. Because, two of those industries need limited manpower but huge capital investment, while the scenario of garments is fully reverse. So, per capita labor value addition of garments is lower than those industries.