Bangladeshi apparel makers aim to grab a bigger share of the high-end apparel business as demand rises worldwide
Bangladeshi spinners are more and more importing man-made fiber (MMF) as well as increasing investment in its business is increasing in Bangladesh because of the higher demand for polyester and viscose-made garment items worldwide.
According to data from the Bangladesh Textile Mills Association (BTMA), in 2020, 99,345 tons of polyester staple fiber (PSF) was imported by the local spinners’, attaining 3.4 percent growth from 96,077 tons a year ago even during the COVID-19 pandemic.
At present, 40 spinning mills import PSF fiber to produce high-end garments, such as sportswear.
In 2020, the import of viscose staple fiber (VSF) rose last year as well as spinners brought in 72,504 tons of VSF, an increase of 36 percent year-on-year.
The import of MMF has been on the rise over the last few years because of the surge in demand for fabrics made from fiber as an alternative to cotton.
Since MMF is used as a substitute for cotton fiber, all of the imported MMF is used by local millers.
The demand for casual wear went through the roof for the longer stay of people indoors worldwide because of Covid-19.
More public are buying MMF-based apparel as they are long-lasting, recyclable and re-useable. Synthetic fiber also meets the conditions for sustainable apparel compared to cotton-based fiber. Furthermore, Gen-Z prefers products that are easy to care for. MMF fits the bill perfectly, spinners say.
Spinning experts say, in the Bangladesh primary textile sector, approximately 30% out of US$8 billion investment took place in the MMF segment, up from 20 percent three years ago.
Md Khorshed Alam, Chairman of Little Star Spinning said, “The investment in MMF sector is rising as consumers are picking the synthetic fabric instead of cotton fiber.” Adding that MMF fabric use augmented because of higher production of value-added garment items.
Since Bangladesh’s entry into readymade garments (RMG), the industry is highly concentrated in cotton-made apparel items. According to a study of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the concentration in cotton in terms of garment items produced and exported increased from 68.67 percent in fiscal 2008-09 to 74.14 percent in 2018-19.
The cotton-based apparel trade globally stands at around 35 percent. While it down by 0.5 percent annually between 2007 and 2017.
Out of 2,052,000 tons of fiber import of Bangladesh in 2018, the share of cotton was 93.57 percent, which highlighted the country’s reliance on natural fiber.
The MMF-based garments share in the global apparel trade is around 45 percent, and it raised at a 5 percent compound annual growth rate (CAGR) during the decade.
In 2017, the MMF-based apparel global trade was $150 billion. Where Bangladesh’s share stood at 5 percent in the segment, compared to 10% of Vietnam.
While the industry people expressed that Bangladesh has a clear prospect in the global MMF-based clothing market.
Syed Shafqat Ahmed, Managing Director, Saiham Knit said, “The perspective is very high as Bangladesh are getting a lot of work orders of MMF-based apparels. We need to capture this global market.”
While Monsoor Ahmed, Secretary of the BTMA expressed that presently, more than 120 spinning mills out of a total of 500 have the production facility for polyester staple fiber (PSF) and viscose staple fiber (VSF).
BTMA member factories are increasing the PSF and VSF production facility every year as the demand is growing worldwide, Ahmed opined.
As setting up a single spinning mill dedicated to PSF and VSF yarn production is expensive – costs around Tk 80 crore to Tk 120 crore to set up a medium-sized MMF spinning mill in Bangladesh – most spinners make yarn from MMF in the same mill with separate lines.
BGMEA President Rubana Huq stressed that, “While we can’t ignore the importance of the cotton-based market, the MMF-based clothing market bears strategic significance as far as our product diversification and higher-value-addition-led growth strategy is concerned.”
Due to a lot of diverse challenges, it is quite challenging for the spinners to invest in the MMF sector.
In this regard, BTMA President Mohammad Ali Khokon said the import of MMF needed to be duty-free like cotton as the demand for yarn was increasing.
Khokon added that the burden of 5 percent VAT on the sales of yarn is a disheartening factor for the sector.
The expense of MMF has increased because many mills were shut in China and India during the peak of COVID-19 last year.
3 months ago, PSF was sold between $0.70 and $0.72 per kg and it went up to $1.30 to $1.40.
VSF was priced between $1.15 per kg and $1.18 per kg three months ago. The prices now vary between $2.50 and $2.54.