Terry Towel industry is playing a special role in Bangladesh’s export trade. This sub-sector of textile is moving forward with a great demand in full swing overcoming many obstacles and challenges. Considering the importance of the industry, the government has identified this sector as a ‘high priority industry’. However for local sales the Value Added Tax (VAT) of terry towel products is highest, about 70 percent.
A terry towel is described as a textile product which is made with loop pile on one or both sides generally covering the entire surface or forming strips, checks, or other patterns (with end hems or fringes and side hems or selvages). It is a piece of absorbent fabric used for drying or wiping a body or a surface.
Mechanism of terry towel
Terry fabrics basically belong to the group of pile fabrics. These fabrics can be produced either by weaving or by knitting but woven terry fabric is the first method and still has major share. In terry fabric manufacturing, two sheets of warp threads run simultaneously, of which, one is kept under normal tension and other is kept under loose tension. The threads of normal tension warp sheet are for ground and threads of loose tension warp sheet are for pile. Terry towels are woven as 2,3,4,5 or more pick terry weaves. The most common type is 3-pick terry toweling. The sequence of operations during weaving for pile formation in 3-pick terry is given below
- Insertion of first pick as per the design with loose beating
- Allow a predetermined gap near the fell of cloth
- Insertion of second pick following the first pick with loose beating
- Insertion of third pick with real beating and bring all the three picks to the fell of cloth
The 4-pick terry fabrics are heavy in structure and provide better quality in comparison to 3 pick fabrics.
Fiber chosen criteria for manufacturing a towel are:
i) High absorbency
ii) High wet strength
iii) Ability to dye well
iv) Good color fastness
v) Wash ability
vi) Cost and availability
- Considering above facts, it is seen that in manufacturing household terry towel, cotton fiber is the most widely used fiber in the world. Apart from these, fibers like modal, lyocel, rayon, bamboo, flax, microfiber and silk are widely used. In some special cases, fibers like soybean and corn are also used. The production of terry fabrics is a complex process and only possible on specially equipped weaving machines. Especially for the production of towel, modern loom like Air Jet, Rapier etc. are used by Dobby, Jacquard systems.
It is known that in the 1980s, a factory named Qualitex started making terry towel in Chittagong EPZ. Now there are many industries around the country. There are now more than 150 small and large towel industries in Bangladesh. Of these, the registered number in Bangladesh Terry Towel & Linen Manufacturers Exporters Association (BTTLMEA) is 110. But still, the potentiality of terry towel sector of Bangladesh is due to be capitalized.
Export growth of last few years in Bangladesh
In the country, investment in towel production is 1.2 billion US dollars and annual production capacity is 135 million kg. The number of workers in different factories is about 65 thousand. All towel factories are working together to produce 100% export quality towels.
The top 5 countries for manufacturing and exporting home textile and terry towel products are China, Pakistan, India, Turkey and Bangladesh respectively. Among them, Bangladesh is in 5th place. According to statistics, China’s export was US$ 9449.87 million in 2015-2016, Pakistan’s US$ 2822.89 million, India’s US$ 1435.43 million, Turkey’s US$ 1177.35 million, and Bangladesh’s US$ 800.81 million.
Top 10 importer countries of home textile and terry towel products are USA, Germany, United Kingdom, Japan, France, Australia, Spain, Netherlands, Canada, Italy etc. respectively. In the fiscal year 2015-2016, the amount of import of these countries is approximately 14,178.04 million US dollars. Among them only United States imported $ 6,359.96 million home textile and terry towel materials. This sector jointly accounts for only US$ 1 billion (approximately) out of total US$ 28.5 billion export earnings now in Bangladesh.
Md. Mujibur Rahman, Secretary of BTTLMEA said, “Exporting terry towel in abroad only 4% cash assistance is received on export price (FOB) and this cash aid is applicable to any one of the parties from yarn production to finish products. For small and medium industries, the government is giving more than 4% of cash assistance but due to various types of conditions, most of our industries can’t be included in this facility. The price of cotton is increasing in the international market. That’s why; the price of yarn, our main raw material is also increasing. So the value of exported goods is decreasing, rather than rationally increasing.”
“Gas is an important adherence in the production process of our products. Captive generators, boilers, dryers etc. are directed by gas in our industries. 6% of our production cost is spent on gas. Presently our industries are facing gas crisis”, he added.
According to renowned consulting company Mckinsey, Bangladesh remains top of the list for sourcing towel markets expected to grow in importance in the next few years. Traders said that there are currently 30 to 35 types of terry towel products being made in the country. Their average GSM is from 250 to 900 & 10 to 40 count yarn such as AC, RS carded, RS combed are used. America is the biggest market of these products. Besides, products are being exported to all European Union countries, Canada, Australia and Japan. Among the EU countries are importing significant amount of terry towel from Bangladesh. As per BTTLMEA, country’s 50 percent terry towels are exported to EU, 40 percent to the USA and the remaining 10 percent heads for other markets. Besides, Military, Navy and Air force are the domestic bulk buyers and modern elite hotels, spa resorts, hospitals and restaurants purchase a large number of terry towel products for the use of themselves from the local producers.
Mohammad Anwar Hossain, General Manager of Towel Tex Ltd said, “India, China and Pakistan provide the domestic demand of America, world’s largest towel importer, about 65 percent. But the market has been expanding for the last few years in Bangladesh. As the quality of the product is good, there are a large number of orders from Malaysia, Saudi Arabia and Japan coming in this country.”
He said, “Quality is our prime focus of everyday business. We have a systematic monitoring and evaluation procedure in place for every single stage of production. Each towel is gone through a rigorous checking process before being packed in poly bags. Currently we are working with MIP, VISTA, Winsam, LAF, Crok etc. valued customers of America, Canada, Europe and Czech Republic. Our in house production capacity is 90 tons/month. The number of Rapier and Pakistani looms is 82, with complete modern dyeing, washing & garment Unit.”
According to Alamgir Hossain, Excecutive (Sales & Marketing) of Noman Terry Towel Mills Ltd. (Noman Group), “Definitely this country is keeping role to drive towel sector globally. Among others,Noman Terry is one of them since 2012. Its specialties include printed towels, yarn dyed, embroidery, jacquard, dobby towel, velour towel and much more. Our present capacity is 70 tons/day equipped with 305 looms. Now we are working with reputed IKEA, H&M, Walmart, Sears Canada, Target, Houei, Venus, Woolworth, Decathlon, Otto-Herm’s International etc. buyers. We are making stretchable & zero twist towels first ever in the county and also have plans to manufacture bamboo towels in the future.”
Rubel Akter Sohag, Manager (Operation) of Mark Terry Ltd. said, “The growth has been prompted by a higher demand for Bangladeshi terry products abroad and the success of the country in exploring new markets. Moreover, as it is a specialized sector, superior concentration should be given in this regard by government and local investors. Generally, Bangladesh produces terry towel which are low-end, average-quality towels mostly worth US$ 3-7 per kilogram but in recent time a number of companies are producing high value product which is worth US$ 8-15 per kilogram.”
Difficulties of terry industries:
Industry experts feel that if gas supply, lower price of raw materials, lower bank interest rates, incentives, developed transportation systems and competence of sea port are ensured to retain its competitiveness, the country can earn US$ 5 to US$ 6 billion from export of terry towel products within a couple of years. Absence of research and development (R&D) in the sector is a very big issue. Bangladesh has a history of labor problems. Worker’s unrest is pointed out as another drawback.
China, Pakistan and India are main competitors for Bangladesh for exporting of Terry towel. They have their own raw materials (cotton), machinery, color-chemistry, skilled craftsmen. At different levels in the textile sector, from the cotton production to the finished product, the government of Pakistan gives subsidies to their exporters. The government of China is giving about 73 types of subsidies/incentives in their textile sector. The Indian government has recently announced a package of 6,600 crore rupees for their textile sector. They have planned to provide free uninterrupted power supply from nuclear energy to the textile industry. As a result, the implementation of China-Pakistan economic corridor, the Chinese industrial zone Xinjiang is going to join the Arabian Sea through Pakistan. This means that China-Pakistan export trade is going to be more dynamic.
Md. Mujibur Rahman, Secretary of Bangladesh Terry Towel & Linen Manufacturers Exporters Association (BTTLMEA) told, “By the year 2021, Bangladesh government has been working to promote the country to middle-income. So now, we have to work to get GSP+ facility instead of GSP and have to increase our ability to survive in export trade with competing countries like China, Pakistan and India. In this case, we want the following cooperation from the government for the next 10 years.
1. Providing project loans for 10 years at reduced interest rate
2. To set the income tax rate at 10% and income tax deduction rate at source to 0.25% for home textile and terry towel sector
3. To allow import of duty-free dyes and chemicals for local industries
4. To ensure the availability of raw material in the terry towel sector with the minimum export price and export duty imposed on cotton waste and jhuta waste by continuously discouraging export of these products
5. To provide tax holiday opportunities established tax fair in different districts of the country
6. To prioritize shipping of terry products
7. To help in gaining new market
8. Provide 10% subsidy on electricity, water and gas bill
Bangladesh produces different types of terry towel for export. The industry has seen a total of Tk. 15 billion investments and more than 100 units established during last three decades. Besides, to exhibit the towel industry, the participation of every year of Bangladeshi companies in the “Heimtextil Fair” in Germany is quite noticeable. New entrepreneurs and investors have to come forward. At the sametime, government’s cooperation and correct implementation can speed up the industry. If this trend continues, it is assumed that Bangladesh will rule in towel sector in future like denim.
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