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Bangladesh's 1,000-acre industrial zone in the Araihazar subdistrict is expected to bring in $20 billion in Japanese investments as Japan seeks to relocate manufacturing plants out of China. .
Japan, which added Bangladesh to a list of preferred destinations, has allocated $350 million in special loans to develop the $1 billion Special Economic Zone (SEZ) that Bangladesh is creating to lure Japanese firms’ production facilities.
Naoki Ito, the Japanese ambassador to Bangladesh, noted that it is the largest such assistance for an SEZ in Asia.
The Araihazar industrial park, which will be operational by 2022, is seeking to draw new investments from Japanese automakers, such as Mitsubishi Corp. and Suzuki Motor Corp.
So far, Japan Tobacco Inc. and Honda Motor Co. are among its largest Japanese investors.
The industrial zone is 32 kilometers away from the nation’s capital Dhaka.
According to Ito, the number of Japanese companies operating in Bangladesh has tripled to about 300 over the last 10 years.
Japanese firms have been seeking supply-chain diversification and lower labor costs by moving some manufacturing output out of China, where wages were rising.
Meanwhile, infrastructure in countries like Bangladesh and Vietnam improved.
