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Man-made fiber: A great room to invest for Bangladesh textile and apparel millers

Man-made fiber (MMF) is the future of Bangladesh’s apparel business as the demand for those goods are growing all over the world. Because the conscious consumers of the world are trying to make the world greener by consuming less nature damaging items.

Manmade fiber to invest for Bangladesh textile & apparel millers
Figure 1: Man-made fiber is the future of Bangladesh’s apparel business as the demand for those goods are growing all over the world. Courtesy: aliexpress.com

Making the world greener

A sustainable and green world is the target of the people. It does not mean only to build green factory buildings to save the costs of light, energy and less consumption of water.

On a broader scale, greening means turning wastages, especially the plastic products into assets through the recycling process as the whole world environment, especially the oceans and aquatic environments are under threat due to massive dumping of plastic goods by consumers.

The natural eco-system is under threat due to plastic goods, as it takes a couple of hundreds of years to decay. So, turning the waste into assets means greening the world. Less consumption of nature damaging products is also a major part of it.

Bangladesh will have to grab more market share in the global garment business for the sustainability of the apparel business. The local garment manufacturers are also going for manmade fiber, although the pace is still slow.

Real investment

The product basket of Bangladesh is narrow compared to China or Vietnam as the country is still limited to cotton-based products. So, Bangladesh has an immense scope of product diversification in manmade fiber, which is unexplored in Bangladesh.

A Matin Chowdhury, Managing Director of Malek Spinning Mills, a leading spinner, said setting up of MMF based mill is very expensive.

“I tried to set up an MMF based mill 10 years ago when the project cost was estimated at $100million and now it takes between $400million and $500million. So, very few investors are interested in up those expensive mills,” Matin Chowdhury said.

However, he also agreed that the demand for the MMF based garment items has been increasing worldwide and Bangladesh’s spinning mills will also have to set up those mills. Otherwise, the country’s $8billion worth primary textile sector would be in big trouble soon, he added.

Syed M. Tanvir, Director, Pacific Jeans Ltd, opined, “Like cotton man-made fiber price does fluctuate based on petroleum price. As we do not produce cotton but we are heavily dependent on cotton, the same as, we can expand our market horizon by start producing manmade fiber. And regarding its technology, it’s not an issue because technology is a commercial product. So, if we can bring out the right product, technology, and raw materials, it is not an issue.”

“We must have to realize; we are taking the same risk with cotton. So, why not manmade fiber? In this, I think Bangladeshi textile millers’ lack of experience is barring us divulge in manmade fiber. Someone needs to be the pioneer and others will follow,” M. Tanvir emphasized.

The good thing is some of the leading companies are already doing it, like DBL Group, Habitus Fashion Ltd, Fakir Apparels Ltd, Debonair Group, etc.

The Debonair Group is set to establish a recycling facility to turn discarded plastic into yarn and fibers for manufacturing jackets, paddings and quilts, keeping in tune with rising global demand for manmade fibers and growing environmental awareness.

“Like cotton manmade fiber price does fluctuate based on petroleum price. As we do not produce cotton but we are heavily dependent on cotton, the same as, we can expand our market horizon by start producing manmade fiber. And regarding its technology, it’s not an issue because technology is a commercial product. So, if we can bring out the right product, technology, and raw materials, it is not an issue.”

Syed M. Tanvir, Director, Pacific Jeans Ltd

The new facility will be established on 45 bighas of land in Bhaluka at a cost of Tk 240 crore and production will start from October this year, said Mohammed Ayub Khan, Managing Director of Debonair Group.

The company will no longer need to depend on imports, mainly from China, worth some $55 million annually.

“We will collect discarded plastic bottles of edible oil and water from different corners of the country to make flakes and then to make yarn and fabrics and finally the paddings and quilts.”

The company currently exports jackets and padding worth $140 million a year. Its major buyers are H&M, Colombia, VF Corporation, Benetton Group, according to a report published on The Daily Star.

debonair group polyester products
Figure 2: Debonair Group currently exports jackets and padding worth $140 million a year.

Import of MMF is on the rise

With the rise of high-end smart fashion markets worldwide, the demand for man-made fibers is increasing. Due to changes in lifestyle, consumers are looking for products, which are easy to care. As a result, the import of man-made fibers such as polyester staple, viscose, and Tencel is on the rise in Bangladesh.

Bangladesh import of manmade fiber in 2016

Bangladesh imported 78,208 tons of polyester staple fiber in 2016, up 11.39 percent from 70,209 tons in 2015 and 35.72 percent from 51,729 tons in 2014, according to data from Bangladesh Textile Mills Association (BTMA).

The import of viscose staple fiber was recorded at 29,146 tons in 2016, slightly down from 29,538 tons in 2015. From January to June of 2017, the volume was 16,063 tons, the data showed. In 2014, Bangladesh imported 18,115 tons of viscose staple fiber.

Imports of Tencel, a fiber made of trees and leaves, stood at 5,034 tons in 2016 and 6,199 tons the previous year.

“The import of man-made fiber is increasing every year,” said Monsoor Ahmed, Secretary of the BTMA.

According to the spinner, the durability and the longevity of artificial fibers are higher than cotton-made yarn and fabrics. That’s why the demand for man-made items is going up. If garments made from man-made fibers are not washed for many days their quality will not deteriorate or over-wash will not compromise the quality.

Production of the MMF is also rising

The number of factories producing artificial fibers also went up. Alone the polyester fiber production units rose to 52 from 10 to 12 seven years ago. There are 45 viscose staple fiber mills and 10 Tencel factories.

Globally, the ratio of man-made fiber has gone up compared to the cotton fiber, although the latter is still the main item for spinners. The ratio of the cotton-made yarn and the artificial one rose to nearly 80:20, whereas it was 90:10 even five years ago.

The local manufacturers’ export of MMF apparel items remained stuck at 20 percent over the last many years, although, worldwide the MMF made garment items production has already crossed more 40 percent worldwide, according to a recent study by Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Whilst, the worldwide production of MMF garment production and consumption has been increasing, Bangladesh’s cotton-based yarn and garment products are rising every year. As a result, the exporters have been receiving low prices from the buyers from the sales of cotton fiber garment items.

Cotton fiber is still dominating in Bangladesh

For instance, of the total garment export from Bangladesh in fiscal 2018-19, 74.14 percent was made from the cotton fiber and the percentage of the country in this segment was 68.67 percent in fiscal 2008-09, the study also said.

Not only, over-concentration on cotton fiber, but also Bangladesh’s export is over-concentrated on five particular garment items like a t-shirt, trousers, jackets, sweaters and formal shirts. And, these five top exported items cover 73 percent of the total garment items
last fiscal year.

For instance, Bangladesh exported t-shirts worth $7.01billion, trousers $6.93billion, jackets $4.38billion, sweaters $4.25 billion and formal shirts worth $2.32billion, the BGMEA study said.

Ziaur Rahman, Head of H&M for Bangladesh, Pakistan and Ethiopia said the trend of garment export from Bangladesh shows that the higher concentration of cotton made garment items, whereas, global consumption has been diverting to MMF.

Rubana Huq, BGMEA President agreed that the MMF based garment production. However, Bangladesh needs foreign direct investment and the government’s assistance for going to the MMF based garment production.

The government should also ease the rules for attracting foreign direct investment in MMF textile production as the country has still very low capacity in MMF textile production, Huq said in a recent discussion.

Out of 20,52,000 tons of imported fiber in Bangladesh in 2018, the share of cotton was 93.57 percent, the BGMEA study also said.

The share of MMF based apparel is around 45 percent of global trade, which is growing at 5 percent Compound Annual Growth Rate (CAGR) in the same period. In 2017, the global trade of MMF based apparel was $150 billion, where Bangladesh had a 5 percent share of it whereas Vietnam had a 10 percent share.

On the other hand, the share of global trade of cotton-based apparel is around 35 percent which is shrinking at 0.5 percent CAGR between 2007–2017.

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