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Positive signs for RMG orders in Bangladesh

In this unprecedented closed world, businesses and people’s lives are reopening gradually. But the scars made by the COVID-19 virus has left countries and industries globally on their knees. And it is no surprise that the developing countries like Bangladesh have been hit hard in this pandemic.

Figure: The Bangladesh garment industry is seeing light at the end of the tunnel, like Europe, the US and other strong economies are showing signs of reluctance in getting back to China-based manufacturing like before.

The heart of Bangladesh’s economy the readymade (RMG) industry has bear the most burnt. The apparel sector only exported around USD 360 million during April. A miserable comparison, as at the same time last year, Bangladesh exported around USD 2.42 billion, which declined more than 84%.

The garment industry is seeing light at the end of the tunnel, like Europe, the US and other strong economies are showing signs of reluctance in getting back to China-based manufacturing like before. Many European countries have returned Chinese made medical kits.

Bangladesh RMG leaders and experts are hopeful in light of these encouraging analysis and news’s are emerging in the leading global media like BBC, Forbes, The Diplomat, Bloomberg, NIKKEI.

This is surely creating a negative environment for the country as China is the largest exporter of goods in the US and EU. And leading experts are hinting that in post-COVID-19 world mass manufacturing from china might shift to other countries like Bangladesh.

Recently Japan declared a US$2.2 billion package to re-shift its manufacturing from China. In this strategic move to maintain its supply chain, Japan will disburse its previous single country sourcing.

Simultaneously signs of hope are emerging as lockdown in the US and EU are easing and the clothing brands and buyers are returning with orders. The bulk of the orders are for next winter.

A lot of brands preaching sustainability in Bangladesh have turned away from their social responsibilities to workers and declined to pay even for the orders that were already made.

On the other side of the coin, in this troubled time the EU Commission – where Bangladesh exports more than 80% of its garments – has created a ‘Fair and Sustainable’ initiative to safeguard apparel workers from losing their job as garment factories were shut for more than a month.

Countries like Sweden, Germany have promised that they will not withdraw any apparel orders from Bangladesh. Simultaneously brands like H&M, Primark, Puma, Inditex, GAP, PVH, TESCO, JCPenney, KIABI, etc. have declared the same.

To utilize this golden opportunity Mosharraf Hosain Bhuyan, Ex-Chairman, NBR analyzed in a social media post that if big economies are thinking of re-shifting the manufacturing in China, then Bangladesh can be a good destination for this.

Mosharraf Hosain added, it is high time to take pinpoint actions to remove trade and investment barriers. Bangladesh government has to come forward to ensure this.

Dr. Mashiur Rahman, Advisor for Economic Affairs to the Prime Minister said, due to suitable land, ease of road communication, and port facility Japan is highly interested to invest in Bangladesh.

Mashiur Rahman emphasized that the Coronavirus impact is already too devastating for Bangladesh and in a quick time if the government can remove barriers in land allocation and other bureaucracy, then a lot of foreign investors will come and invest here.

Bangladesh Investment Development Authority (BIDA) and Bangladesh Economic Zones Authority (BEZA) should play a leading role in attracting and securing these investments, opined several top officials.

Md. Shahidul Haque Mukul, Managing Director of Adams Apparels Ltd. said, “We have already received two orders from Ireland buyers for the coming winter. They are being cautious about placing orders in China.”

China’s Coronavirus handling has not received positively globally, which is a blessing for the Bangladesh textile and apparel industry.

Ashiqur Rahman Tuhin, Managing Director, Tex Wave said, after the ease of restriction in Germany, clothing sales have gone up incredibly. Brands are returning to Bangladesh.

The same scenario is also prevailing in the Netherlands as orders are returning, added Ashiqur Rahman.

Fazlul Hoque, Ex-President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) opined, “Yes, it is likely that a big chunk of apparel industry might shift from China. I am hopeful that we can grab that opportunity.”

But to get the full benefit of the situation we need to wait for another six months. Till then we have to survive, he added.

Besides, globally medical equipment like masks and personal protective equipment (PPE) demand is huge. Bangladesh garments are at the forefront of making it. Shahidul Haque Mukul informed that recently he supplied 150000 PPE to a renowned French buyer.

Other leading groups like Team Group, Beximco, TRZ Group and Mohammadi Group among many others are making it. While JMI Hospital Requisite Manufacturing Ltd, a medical equipment maker, has completed successful test runs of its newly-installed lines that can manufacture 40,000 KN95 standard masks a day. It will manufacture KN95 standard masks, which price will be half of its importing price.

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