Vizrt, the world’s largest creator of software-based media solutions, has announced closure of its seven-year-old Dhaka office from August this year due to rising cost of doing business, red tape and security fears.
The security situation in Bangladesh has deteriorated drastically in the last few years, which compelled the Vizrt management in Norway to take this decision, said Mahmudul Haque Azad, managing director of Vizrt Bangladesh.
“None of the high officials from Vizrt headquarters in Bergen could travel to Dhaka in the last one year, so executives from Dhaka had to go instead. This increased their operational costs.”
Regulatory uncertainty and the rising costs of doing business in Bangladesh were the other reasons behind Vizrt’s decision to wrap up its operations in the country.
“A company like Vizrt leaving Bangladesh is a great loss for the country,” said Azad, who has been involved with the company from its inception.
Vizrt entered Bangladesh in 2010 by buying a local company that had started operations in 2007. Its yearly turnover is about Tk 15 crore.
About 45 local engineers are employed in Vizrt Bangladesh, which provides real-time 3D graphics and maps, visualised sports analysis, journalist story tools, studio automation, media asset management and so on for the broadcasting industry.
The office served local and foreign television channels like BBC, Fox, Al Jazeera. It provided analytics for the last FIFA World Cup, according to Azad, who owns shares in Vizrt Bangladesh.
“Even though the payroll is not high when compared to other countries, the cost of doing business here in Dhaka suddenly spiralled. This also forced the shareholders to quit the market,” said another top official of the company.
For instance, the government announced some changes in the tax structure in last fiscal year’s budget and the company found a Tk 50 lakh tax bill overnight. The shareholders took the move very negatively, Azad said.
“The government has given ICT huge importance as it has a vision of establishing a Digital Bangladesh. However, there is some dirty bureaucracy going on, which also deters entrepreneurs.”
For instance, the local management failed to remove a foreign shareholder’s name one and half years after his departure from Bangladesh.
“The shareholder had only one share of Tk 500 to begin with. The authorities told us to bring back the shareholder to Bangladesh to drop his name. His name is yet to be removed,” Azad said. Vizrt Bangladesh has the most sophisticated equipment, which are worth about Tk 6 crore.
“If any interested party wants to run this venture, they can take their chance. Even the government can jump in and run this office as a research and development venture,” Azad added.
However, Md. Momenul Islam Milton, former managing director of Vizrt Bangladesh, said the top management in Norway wanted to shut down the Bangladesh office a few years ago.
“But the local management then came up with ideas that changed the top management’s minds.”
Milton too said Vizrt’s departure from Bangladesh would send out the wrong signal about the country’s ICT industry.
Vizrt, which is privately owned by Nordic Capital Fund VIII, has 40 offices around the world, where nearly 600 people are employed. It has customers in more than 100 countries worldwide.
The company has already squeezed its operations in Thailand and shut down its functions in Israel recently.