The country's manufacturing and processing behemoth Pran-RFL Group has made a foray into mobile phone manufacturing to capture a slice of the rapidly expanding digital device market in Bangladesh. 

The group has already set up a 30,000-square feet manufacturing plant at Palash, Narsingdi. At its peak, it will produce 3.5 lakh feature phones and 1 lakh smartphones per month.

Its first batch of phones could hit the market soon.

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Bangladesh scales up might in mobile manufacturing

"Pran-RFL always makes essential products. Now, for the first time, the group is entering into the information technology business through the setting up of a mobile manufacturing plant," Kamruzzaman Kamal, director for marketing at the group, told The Daily Star.

"The mobile phone market is big and it is going to be bigger in the coming days, so we have targeted to make a footprint in the sector. We hope it will brighten up our brand image further."

The group has invested around Tk 30 crore initially and more than 500 people will be recruited at the plant to begin with.

RFL Electronics, a sister concern of RFL Group, will run the business under the brand name Proton.

The group also plans to manufacture mobile phone accessories, laptops, tablets, closed-circuit television, and smart home appliances.

Its entry into the digital device market comes at a time when several companies have already invested heavily in the segment and a range of devices are now being assembled or manufactured in Bangladesh.

In recent years, local handset production has made an impressive stride, aided by the government's huge tax benefits in the fiscal year of 2017-18.

Since then, 14 plants have been set up, creating jobs for around 17,000 people. Another four plants, including that of Pran-RFL Group, are in the pipeline.

The annual handset market stands at Tk 11,000 crore to Tk 12,000 crore. The accessories market is at least one-fourth of the handset market, according to industry people.

Backed by steady economic growth and rising per capita income, the sales of mobile phones are growing fast in an economy forecast by Fitch Ratings to accelerate to 7.2 per cent in the current fiscal year.

The demand for mobile phones was 4.10 crore units in 2020-21, 63 per cent of which was met by local manufacturers.

In the first six months this year, about 1.85 crore handsets were manufactured locally. Of them, 65 per cent were feature phones, data from the Bangladesh Telecommunication Regulatory Commission (BTRC) showed.

According to the Bangladesh Mobile Phone Importers Association, mobile phone sales grew 17 per cent in value and 8 per cent in volume in the last five years. Thanks to local manufacturing, the prices of handsets have dropped by more than 35 per cent.

But the recent withdrawal of a 5 per cent VAT exemption at the sales stage, along with the current global crisis, has cast a negative impact on the local industry.

However, this could prove a boon for Pran-RFL Group's plan to grab the market.

"A majority of the people in Bangladesh don't have the capacity to buy mobile phones of foreign brands since they are expensive. To meet the demand for people from all walks of life, RFL plans to sell mobile phones at affordable prices," said Kamal.

"Pran-RFL Group is a big company and their entry into phone manufacturing is good news," said Shyam Sunder Sikder, chairman of the BTRC.

"If more companies enter the market, customers will get devices at more competitive prices. If local companies can export devices, it could be a source of foreign currencies for us."

In fact, local brands have already started shipping smartphones abroad. Walton Group is exporting smartphones to the US and Symphony to Nepal.

Pran-RFL Group will face stiff competition from both local and global companies.

Walton now manufactures laptops, computers, printers, and tabs alongside mobile phones. Global brands such as Samsung, Vivo, Oppo, and Xiaomi hold significant market share.

Pran-RFL is the largest food processor and household products manufacturer in Bangladesh and has been entering new verticals since its inception nearly four decades ago.

The group has a presence in the areas of agro-processing, plastics, light engineering, furniture, electronics, bicycle, packaging, and readymade garment.

It has factories in 25 locations across the country and exports to 145 countries. In 2021-22, it shipped goods worth $532 million.

Pran-RFL is the largest employer in Bangladesh, creating jobs for about 1.5 lakh people directly.