Panther Opts Out of GermanBangla Venture in Bangladesh
German Panther International GmbH is opting out of the joint venture GermanBangla Bicycles Ltd. The 4 million euro joint venture was set up in 2008 for making bicycles at a place called Dhamrai, close to the Bangladesh capital. According to a GermanBangla Bicycles spokesperson the reason for…
DHAKA, Bangladesh – German Panther International GmbH is opting out of the joint venture GermanBangla Bicycles Ltd. The 4 million euro joint venture was set up in 2008 for making bicycles at a place called Dhamrai, close to the Bangladesh capital. According to a GermanBangla Bicycles spokesperson the reason for Panther International to stop the partnership is in the fact that Panther’s Lohne, Germany plant is running below capacity.
500,000 units plant
“We hold a 67% stakes in the venture, while Panther has the rest (33%),” said Mr S. M. Fakhar-Uz-Zaman, Managing Director, GermanBangla Bicycle Ltd Ltd. The plant has been built with an installed capacity of 500,000 units annually. Commercial production at the plant commenced in 2009. The venture has manufactured around 100,000 units in the last three years, of which 40% are kid bikes. Currently, the plant is completing a few pending orders.
Slowdown played spoil-sport for GermanBangla venture
When asked where these bicycles have been shipped, Zaman said, “Panther has taken those bikes for the Germen market.” It is the slowdown which played spoil-sport for the GermanBangla venture. “The idea was to manufacture the entry-level bicycles in Bangladesh but things have gone slow at Panther’s Lohne plant, which has capacity to manufacture 300,000 units annually and it was running below capacity,” Zaman said. “They also have another plant in the Baltic state of Lithuania, the plant has the capacity to manufacture 1 million bikes annually.”
Final settlement in the making
When asked about the exact time when Panther would bow out of the venture, Zaman said, “We are working out the modalities and we hope to make the final settlement in the next 2-3 months.” Despite setbacks, the Bangladeshi promoter remains committed to the venture and hope to come out from ongoing troubles in the next six months. The company has no plans to leave the bicycle business, rather it has been working hard on getting orders on its own. “Earlier we were bound by the joint venture agreement not to enter directly in certain markets but now that cap is removed, we are now free to look for markets for our product anywhere in the world,” Zaman said. The company has already appointed an agent in the US to look for orders from that market.
Negotiations in final stages with Indian buyer
“We have appointed an agent E+M in California and hope to open the market soon. We are focusing on the markets of the US, Japan & Europe. We are in the final stages of securing an order of 200,000 units from 2 buyers from the US and 1 from the Europe,” Zaman revealed. The orders would likely to be finalized in the next three months. The company is also in the process of acquiring international accreditation for exporting bikes to the high-end markets. “We are also in touch with an Indian buyer, the negotiations are in the final stages,” Zaman added.
Committed to contract manufacturing for global OEMs
GermanBangla would retain the name even after the final settlement with the German partner as the process is long for making changes in the name. The company hopes to overcome the current crisis by September 2012. “Once, things normalize, our plan is to run the plant at 300,000 units annually,”said Zaman, assuring, “We will remain committed to contract manufacturing for global OEMs as planned. Panther Bikes has also assured it will be working with us in the future also.”
Comment Panther MD Michael Schminke
When asked to comment on this news; Michael Schminke, MD of Panther International GmbH, reacted with: “The locally investigated information of your employee and talks to some persons in Bangladesh are beyond my knowledge. Therefore there is neither basis nor reason to comment on anything.”