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RMG exports posted 11.49% rise to $34.13 billion in FY19

Exports earnings from the country’s apparel sector have posted an 11.49% rise to $34.13 billion in the fiscal year 2018-19

According to Export Promotion Bureau (EPB) data, the apparel sector, employer of 4 million workers, has contributed 84.21% to Bangladesh’s total exports of $40.53 billion.

In the FY19, Bangladesh’s export earnings from the RMG sector stood at $34.13 billion, posting 11.49% growth. In the fiscal year 2017-18, apparel sector earned $30.61 billion and the growth was 8.76%, thanks to workplace safety improvement.

In the FY19, apparel sector exceeded the export target by 4.42%. Bangladesh has set a target to earn $32.68 billion.

Of the total amount, Knitwear products fetched $16.88 billion, which is 11.19% higher than the $15.18 billion in the same period a year ago. Woven products earned $17.24 billion, up by 11.79%, compared to $15.42 billion a year ago.

The specialized textile sector saw a 28.51% growth to $144 million, while the home textile sector saw negative growth in earnings by 3.07% to $851.72 million, which was $878.68 million.

Meanwhile, Bangladesh’s overall export earnings have registered a 10.55% growth to $40.53 billion in the just-concluded fiscal year.

Push factors for sharp growth

Giving reactions to the export performance, apparel manufacturers have given credit to workplace safety and compliance in the clothing industry, which boosted buyer’s confidence to buy more goods from Bangladesh.

For the last couple of years, the Bangladesh apparel sector invested a huge amount of money to improve safety standard at the workplace, which is recognized by global retailers. As a result, retailers confidence on Bangladesh has boosted and placed more orders

Salam Murshedy, Managing Director of Envoy Textile

Meanwhile, US-China trade war and, which relocated work orders to Bangladesh from China was another reason for the good performance.

“For the last couple of years, the Bangladesh apparel sector invested a huge amount of money to improve safety standard at the workplace, which is recognized by global retailers. As a result, retailers confidence on Bangladesh has boosted and placed more orders,” a former Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President told Textile Today.

In addition, the production capacity of the apparel makers have increased after the competition of safety remediation, which is another reason for the sound growth of export, said Salam Murshdey, Managing Director of Envoy Textile.

On top of that, products and market diversification move along with machinery and process upgradation accelerated the growth.

“Besides safety improvement, the sector went on massive process and machinery upgradation to ensure product quality and to produce value-added goods gradually,” Giant Group Managing Director Faruque Hassan told the Textile Today.

On top of that, manufacturers move for new market explorations and product diversification market, which altogether pushed the export earnings up, said Hassan also a former Senior Vice President of BGMEA.

However, the economists said, US-China tariff war was an opportunity for Bangladesh as the global buyers shifted orders from China to Bangladesh to remain in the safe side.

“As a whole, the export earnings do well, when the apparel sector performed well. And the apparel sector did better due to US-China trade war, which made Bangladesh’s position in the US market stronger than it was in the past, Policy Research Institute (PRI) executive director Ahsan H Mansur told the Textile Today.

The US economy was better in the last year, which also helped the country to export more. Beyond this, export performance to non-traditional export destinations including China, Japan and India were better, said Mansur.

In the coming days, Bangladesh may get some more privilege from the trade war, if it escalates further, he added.

Challenges ahead to sustain the growth

“An 11.49% export growth is very encouraging but there are some challenges such as prices of goods as the buyers are cutting unit prices despite rising in production cost, which is worrying the apparel makers,” Md Hatem former Vice President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) told the Textile Today.

In addition, the new gas tariff is another big challenge for the sector as it will increase the production cost further, said Hatem.

In going for value addition and high-end products, the sector needs investment in research and innovation. For this the government should continue policy support and allocate from the budget for research, said Hatem.

Meanwhile, economists suggested attracting investment in tech-based manufacturing from foreign investors. They also called for grabbing orders, which are being relocated from China.

“Most of the exports earnings from the apparel sector are from basic goods, which is a concern for us. In earning better price, Bangladesh should invest in technology for value addition and foreign investment can be a solution as they have the experience,” former Advisor to caretaker government AB Mirza Azizul Islam told the Textile Today.

On the other hand, Bangladeshi manufacturers have to establish a link with the buyers who are shifting their purchasing base especially from China and concentrate on manufacturing goods, what they need, said the economist.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

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