W ith the global financial meltdown relenting and the trend of eco-conscious consumerism gaining ground the world market for bicycles is set to grow significantly in the coming years. The nineteenth century mode of transport has survived the scythe of contemporary technology for a number of compelling reasons one of which is the bicycle is a zero carbon transport; if a person has both a car and a bicycle but chooses the latter to cover a four-mile distance he will save the environment 15 pounds of pollutants. Other benefits include: riding a bicycle is a non-stressful cardiovascular exercise that improves the health of our heart considerably; during peak hours when vehicles are interlocked in traffic jams, it is faster than a car; it saves money; it enables the rider to soak up a scenic atmosphere at will; bicycle trekking is a fulfilling adventure.

But the world bicycle market in FY2008-09 was more or less volatile, some bicycle manufacturing countries, especially China and India bearing the brunt. China, still the world's largest manufacturer of complete bicycles, frames, and other parts and accessories, saw its bicycle export fall significantly in 2008 from 59 million units in 2007 mostly due to EU-imposed anti-dumping duties and strong Yuan induced higher costs of production. India's bicycle export, which was worth Rs 746 crore in FY2007-08, fell to Rs 550 crore in FY2008-09, global recession being attributed to the steep decline.

By contrast, Bangladesh's performance was highly encouraging; as against $64.28 million's worth of bicycle export in FY2007-08, earnings from bicycle export in FY2008-09 amounted to $84.54 million - an increase by 31.52%. Meanwhile Taiwan made great strides towards overtaking India and catching up with China in terms of deeper penetration into the world's bicycle market; it produced 4.5 million units in 2007, out of which 932000 units went to the UK and 596,000 units to the US. Among the other Asian nations that are in the process of making major headway are Malaysia, Thailand, Sri Lanka, Cambodia and the Philippines.

Against the backdrop of the changing international market equation, Bangladesh stands to gain substantially with low labour costs, relatively stable currency exchange rates and manufacturing skill. At present about 60% of the country's bicycle exports go to the UK and the rest go to other countries, mainly Canada, France, Italy and Australia. Japan is a singularly vast market that Bangladesh needs to tap into; until recently about 97% of Japan's imported bicycles came from China.

Domestically, increased use of bicycles will mean less traffic congestion and pollution in big cities, especially in Dhaka, but for that there should be separate bike-lanes and clear bike path guidelines. At the same time wearing safety helmets should be made compulsory for bikers to reduce the risk of serious head injuries in the event of falling off the bike. According to an estimate, on average, 800 cyclists get killed in the US every year, mostly for not wearing helmets.

Although more than a dozen companies are involved in bycycle manufacturing business in Bangladesh, it is Transworld Bicycle Co. Ltd, a subsidiary of Meghna Bangladesh Ltd, that alone accounts for about 90% of the country's bicycle exports. According to the company's managing director, Muhammad Mushtaque Ahmed Tanvir, Bangladesh exported 450000 units last year to which Meghna's contribution was 4,00,000 units.

"Frankly, we are the biggest exporter of bicycles from Bangladesh. There is another company, Chittagong-based Alica, which exports some units. A newly established bicycle manufacturing company in Savar claims that they too export but there is no proven track regarding the claim. We are expecting one more new company at the end of November."

Prominent among the raw materials that go into making a bicycle are steel, wood, plastic and aluminum. Tanvir informs ET that his company uses locally produced materials such as paper and plastic, whenever possible. Other items are imported mainly from Japan, China and Korea. "We import because there is a shortage of raw materials in the country, but then we try to minimize our dependence. For example, we import just the steel sheet and then we shape it ourselves to suit it to different sizes and models." To the question "How much did you earn in foreign exchange in FY2008-2009?" Tanvir's answer is: "Actually, it's a very sensitive question for any company to answer. But since we are the only market leader in this particular field and even we are the only manufacturer and exporter in the real sense of the term I can tell you the figure. We earned $ 55 million in FY2008-09."

As regards his company's growth the managing director says, "In terms of the number of bicycle units for export we have not achieved any growth. But in terms of foreign exchange, yes there has been growth. Per unit bicycle our income or revenue has increased from what it was in the past." He considers doing business with a traditional product like bicycle is itself a challenge especially when it comes to competing with such countries as Sri Lanka, Maldives and Cambodia. His advice to a new entrant is: "Before investing in this industry please study the process and system well."

ET Report