To meet the growing demands of fabrics and yarn, Bangladeshi investors’ made an investment of Tk6900 crore in the primary textile sector, the backward linkage industry for RMG sector, in last five years.
According to the Bangladesh Textile Mills Association (BTMA) data, during 2014 to 2018 period, textile manufacturers have invested Tk6,900 crore in the primary textile sector to meet the demands of fabrics and yarn.
According to BTMA data, there are 430 yarn manufacturing mills, 802 fabric manufacturing mills and 244 dyeing-printing finishing mills in the country.
Speaking to Textile Today sector people opined that the increasing demands of fabrics and yarn attracted investors in the sector. While steady growth in the apparel export earnings also pushed the demand up.
“In the last couple of years, Bangladesh’s Primary Textile Sector (PTS) has attained growth and been able to meet local demands. Currently, local manufacturers are capable to supply 85% of yarn and fabrics for the knitwear sector, while 40% of woven fabrics,” MD Mohammad Ali Khokon said the Textile Today.
In the last couple of years, Bangladesh’s Primary Textile Sector (PTS) has attained growth and been able to meet local demands. Currently, local manufacturers are capable to supply 85% of yarn and fabrics for the knitwear sector, while 40% of woven fabrics.
Since there is a 60% gap between demands and supply of woven fabrics, the investors made the investment to take the advantage, said Khokon.
While the banks were friendly in providing financial support to the primary textile sector as well as in helping the industrialization, said the business leader.
Meanwhile, trade analysts opined that new investment is because of growth in apparel exports and it would make Bangladesh strong in the global value chain.
“In last few years, there was a reasonable growth in export earnings, which increased the demands for fabrics and investors have grabbed the opportunity,” Centre for Policy Dialogue (CPD) Research Director Khondaker Golam Moazzem told the Textile Today.
The new investment will make backward linkage industry stronger and would increase Bangladesh competitiveness in the global export destination, he added.
Since Bangladesh is highly dependent on import for higher-end fabric, Foreign Direct Investment (FDI) can be a solution to this end.
“As of now, Bangladesh is not strong in non-cotton products, while local investors are not willing to invest. On the other hand, the woven sector especially the higher end or value-added products manufactures are highly dependent on fabrics import,” said Moazzem.
So, allowing FDI in these products can pave ways for Bangladesh in moving towards value-added products, he added.
According to Bangladesh Bank (BB) data, in the calendar 2017, Bangladesh’s textile and apparel sector has received a foreign investment of $421.68 million, which is 15.70% higher compared to $364.44 million in the year 2016.