Bangladeshi readymade garment (RMG) manufacturers have requested the bond authorities to increase the amount of waste acceptable while making RMG from imported duty-free items under bonded warehouse benefit.
Recently, RMG manufacturers and exporters in a meeting with the Customs Bond Commissionerate (CBC), Dhaka demanded a rise in the percentage of waste permitted in making export-oriented garment items to 25 or 30%. CBC Dhaka is a field office under the National Board of Revenue (NBR).
Representatives from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Bangladesh Textile Mills Association (BTMA) participated in the meeting with the bond commissioner.
At present, apparel manufacturers are permitted to waste 7% to 9% of the mandatory materials while making export-oriented clothing items. It is 7% during the dyeing process and 9% in case of processed knitted fabrics.
In numerous cases, RMG manufacturers and exporters cannot keep the commerce ministry’s fixed 7% and 9% waste allowances in making high-end garment items.
The process of making fancy or high-value added garment items generate more waste compared to the production of basic apparel products.
With local apparel makers entering more high-end market, the percentage of waste has risen in parallel.
Consequently, the bond office and customs offices from time to time cause delays in freeing goods from ports because of a disparity in the amount of fabrics imported and its consumption for making finished apparel goods for export under bond licenses.
Apparel makers say that a good amount of fabrics is wasted for several reasons in manufacturing. For example, during fabric cut, processing or sewing fabrics.
They also voiced that high-value-added apparel items produce more waste compared to the production of basic apparel products.
To become more competitive in the international market, local garment manufacturers started making diversified garment items like fancy, semi value-added and high value-added garment items.
Also, new suppliers like Myanmar and Ethiopia are producing cheap basic garments, making the price of “Made in Bangladesh” garment items for export declined by 1.79% over the last 5 years but the cost of production rose 30%.