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Focusing on diversity and quality can increase denim export

According to the US Department of Commerce, Bangladesh is currently the third-largest denim exporter to the United States after Mexico and China with a market share of 11.3 percent.

Last year, Bangladesh exported denim products worth $561 million to the US. Bangladesh has been the largest exporter of jeans clothing to the EU (including the UK) for the last few years, according to Eurostat data. Generating US$1.6bn (EUR1.31bn) in denim exports in 2019.

Tareq-Amin-Textile-Today-Shams-Mahmud-Shasha-Denims-Shafiur-Rahman-G-Star-RAW
Figure 1: (Clockwise) Tareq Amin, Founder & CEO, Textile Today; Shams Mahmud (CIP), Managing Director, Shasha Denims Ltd.; Shafiur Rahman, Country Manager, G-Star RAW.

Denim is the fastest-growing sector in the Bangladesh textile and RMG industries. At first, denim manufactures thought that the lifespan of the denim industry might not be so long. Denim manufacturer like Shasha Denim has calculated that the demand of its industry could last until 2010. Because of the US financial crisis in 2008 switched consumer demand. But it proved wrong.

Annually 2.1 billion pieces of denim are sold globally. It is also predicted that the size of the global denim market will reach $64.1billion by the end of 2021. So even after the epidemic, the denim industry has stood tall. But questions have been raised about the success of the denim industry and the next thing that industry needs to maintain this success.

Textile Today arranged its weekly webinar titled on ‘Building on Denim Success’ in episode 15th of TexTIMe presented by COATS on 5th September, 2021. Shams Mahmud (CIP), Managing Director, Shasha Denims Ltd. And Shafiur Rahman, Country Manager, G-Star RAW were present as panelists. Tareq Amin, Founder & CEO, Textile Today moderated the webinar.

With a global denim market share of $87.4 billion, Bangladesh lags behind China, the United States, Italy and some Latin American countries. According to the Bangladesh Textile Mills Association (BTMA), 32 mills manufacture denim fabrics for export-oriented denim product manufacturers. Bangladesh has enough capacity to compete with the big ones.

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Figure 2: Shafiur Rahman, Country Manager, G-Star RAW.

However, Bangladesh’s denim industry has less diversification and quality issue to offer the world. Bangladesh is working on basic denim products. Shams Mahmud said, “We need to focus on quality and more R&D to create more healthy competition in the market”.

When the market competes with the same basic products, competition depends only on the cheapest price and the shortest lead time. Bangladesh does not have adequate port facilities to shorten the lead time and also most of the raw materials are imported from abroad.

Shafiur Rahman said, “In comparison, Bangladeshi manufacturers have to pay the highest price for the yarn so that they do not take advantage of the backward linkage”.

Bangladesh has got Generalized Scheme of Preference (GSP) status in 37 countries which is now the only benefit of the country. Shams Mahmud said, “GSP is an issue that has grew the denim industry in a short period of time”.

Shams-Mahmud-Shasha-Denims-Ltd
Figure 3: Shams Mahmud (CIP), Managing Director, Shasha Denims Ltd.

“At first, manufacturers are using slub yarn to produce denim, but as manufacturers move toward stretched denim, we begin to face problems” he (Shams) added. Bangladesh’s denim industry lacks proper R&D. Shasha Denims’ most R&D works come from Italy.

Shams Mahmud said, “The reason we can’t do proper R&D work is that we follow the Manchester curriculum instead of the Russian curriculum”.

Russian curriculum follows more on cotton. Manchester curriculum follows the inputs and outputs of machinery that limit knowledge. Bangladesh denim manufacturers have invested $1 billion in technology in recent years to increase the capacity and the investment should move towards R&D now. Shams Mahmud said, “Large export doesn’t matter if the profit margin is low”.

Manufactures still can work on R&D in many denim products with low investment. Shafiur Rahman said, “Washing sector of the denim industry has a lot of potential to diversify and increase exports”.

Buyers prefer the unique denim designs produced by the washing sector. Nowadays, different types of eye-catching wash denim carry extra dimensions in the fashion world. Washed cloth is gaining extra importance for the western and eastern generations which are giving a great opportunity to the Bangladeshi manufacturers.

Recently, denim manufacturers have started shipping to some new destinations: China, India, Malaysia, Thailand, Japan, and Russia. Bangladeshi entrepreneurs supply denim products to retailers such as G-Star RAW®, H&M, Uniqlo, Levi’s, Nike, Tesco, Wrangler, s.Oliver, Hugo Boss, Puma, Primark, and JC Penney.

Shams Mahmud said, “There are many diversity opportunities in the washing sector and it is time to seize that opportunity and maintain the success of the denim industry”.

Denim is a growing industry due to the demand of buyers but not because of Bangladeshi manufacturers. Shams Mahmood suggests that new entrepreneurs should focus on creating denim brands. So that manufacturers can connect the denim market with both local and international markets.

Shams Mahmud said, “Brands today are focusing on lightweight (8 ounces) fabrics so new entrepreneurs should focus on developing lightweight fabrics”.

Tareq Amin mentioned that the world knows the denim industry as a dirty industry if there is a possibility to make it more sustainable. Shafiur Rahman said, “Apparel means water wastage but with the advancement of technology, water waste is decreasing day by day”.

But this waste management carries costs. Manufactures are always been pushed for sustainability by the buyers. But buyers are reluctant to give too much help. It is difficult for manufacturers to maintain sustainability in this situation.

Shafiur Rahman said, “If brands take on the cost of sustainability, it could potentially drive the industry to minimize waste”.

Shams Mahmoud suggested that sustainability can be pulled in many ways with unique solutions. Blues slubs in Ethiopia are collected from tannery waste. Japan has developed natural brown color cotton so zero dyestuffs are needed for producing khakis.

Watch the full video here:

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