It is time for the industry to re-think the business model toward diversification from basic to mid/high price segment, and diversification from cotton to non-cotton items, especially for ladies and girls’ dresses to increase exports.
According to the Export Promotion Bureau (EPB) data, earnings from RMG export performance (Goods) for FY 2019-20 July-November fell by 7.74% to $13.08 billion from $14.18 billion in the same period of FY19.
Earning from woven garments fell by 8.74% to $6.27 billion in July-November of FY20 from $6.88 billion in the same period of last fiscal year. On the other hand, knitwear export fell by 6.79% to $6.80 billion from $7.30 billion.
Industrialists are thinking that the sector will see positive growth in the coming year as they have received many positive responses from the brand and retailers. The present negative growth is a result of a wage hike at the beginning of 2019.
On the other hand, the forecast of work order receiving for 2019 was not accurate so factory owners were not prepared for drastic changes in the market situation.
Besides this, industry experts suggest taking initiative and implementation of innovation like process development to reduce overall wastage in the production, upgrade efficiency, develop new products and new market outreach.
Engr. Muhammad Mahiuddin, Executive Vice President, Robintex Group said, “Bangladesh RMG sector has already made huge capacity but people developed a trend to expend less in fashion. Many RMG factories are now going to shut down due to scarcity of work order which means our forecast and prediction was not correct. So, considering next year’s market trend we have to venture and take the necessary steps.”
Rubana Huq, President, BGMEA, said, “This has been the fourth consecutive month of declining RMG export growth out of the first five months of the current fiscal year. Such continuous negative growth for four months in a row has last happened in FY2011-12 (March-June).”
The latest data from the official source of USA and EU shows that Bangladesh is significantly lagging behind our competitors in terms of growth during the third quarter of 2019, i.e. July-September 2019. During this period Bangladesh registered 1.70% growth in the USA whereas Vietnam grew by 14.23%, India 3.93%, Cambodia 15.56% and Pakistan 6.58%.
“While the strategic growth target for the RMG industry for FY2019-20 is set at 11.91% by the government, such consecutive decline only testifies the fact that –the competitiveness of the industry is really endangered.”
“We are not aligned at all with the global competitive scenario, particularly the exchange rate movement of Taka against the competitor currencies remain inconsistent,” she added.
“The shutting down of factories over the recent months (especially after the minimum wage hike in December last year) is taking its toll on our exports and industry.”
The latest data from the official source of the USA and EU shows that Bangladesh is significantly lagging behind our competitors in terms of growth during the third quarter of 2019, i.e. July-September 2019. During this period Bangladesh registered 1.70% growth in the USA whereas Vietnam grew by 14.23%, India 3.93%, Cambodia 15.56% and Pakistan 6.58%.
“The picture in Europe is not much different as Bangladesh has seen only 0.90% during the mentioned quarter, where the growth of Turkey was 2.98%, Vietnam 2.88% and Sri Lanka 6.17%. Therefore, it’s a high time for Bangladesh to take a few quick steps to recourse the growth curve.”
A few recommendations on the quick fixes are the exchange rate premium on the local retention of the RMG export and untangling the complexities in cash incentives.
While Bangladesh has made such a huge stride in the safety and sustainability of the industry, and we are making outstanding steps in green industrialization, such a shift in the sourcing pattern of global brands is leaving a question to our sustainability initiatives, she mentioned.
However, since Bangladesh is operating mostly in the lower tier of the retail market segment, it’s time for the industry to re-think the business model toward diversification from basic to mid/high price segment, and diversification from cotton to non-cotton items, especially for ladies and girls’ dresses, she emphasized.
According to Md. Jahidul Islam, Managing Director, Ismail Concern, “E-Commerce is growing in the fashion industry so making won brand is the only alternative to survive in this crisis situation. Even we can use online platforms like Alibaba or Amazon.”
Khandaker Ataul Gani (Khokon), Director, Weimco said, “Bangladesh should work on technical textile to broaden its product range so that opportunities never go untouched.”
Other than apparel product the export earnings from leather and leather goods in July-November of FY20 fell by 10.03% to $391.09 million from $434.7 million in the same period of last fiscal year.
Export earnings from leather-footwear decreased by 12.91% to $230.16 million from $264.28 million while other leather products fetched $104.63 million with 11.10% growth in the period.
Earnings from the home textile export in July-November of FY20 fell by 12.34 % to $298.65 million from $340.7 million in the same period of FY19.
The export of jute and jute goods increased by 15.16% to $404.79 million from $351.5 million.