Bangladesh’s readymade garment (RMG) businesses must reshape the lead time for product shipment and produce artificial fibers, according to industry experts, analysts and businesspeople. A recently arranged webinar on the impact of the pandemic was focusing government on foreign direct investment to meet up post-COVID-19 challenges.
The France Bangladesh Chamber of Commerce and Industry and the Policy Research Institute (PRI) organized the webinar. Bangladesh ambassador to France Kazi Imtiaz Hossain was the special guest. CCIFB president made the opening remarks while PRI executive director Dr. Ahsan H Mansur chaired the event.
Concentration in cotton made products, material mix and markets together with a lower market share in man-made fiber (MMF) are undermining the growth potential of the sector, they opined.
They recommended for heavy investment in manufacturing yarns, fabrics and dying facilities with proper wastewater and chemical management for the post-COVID-19 recovery efforts.
Foreign secretary Masud Bin Momen, who was the chief guest, was triggering his opinion about shortening the lead time by developing backward linkage industries of Bangladesh. He notified to the current dependence on imports of MMF, industrial machinery, chemicals, inefficient port facilities and customs processing are liable for much longer shipping time compared with rivals.
More than 70 percent of exports are concentrated on five basic items while 74 percent of items are cotton-based and 83 percent of exports are destined to the European Union and North America, he said.
These low-value-added items are hindering Bangladesh’s per-unit price to very low. While the global market share of MMF products has increased from 28 percent to 40 percent, in Bangladesh, its share has declined or remained unchanged, he said.
Dr. Ahsan H Mansur said, “Bangladesh should strive for heavy investments in digitizing the process and transforming value chains as the product development would become more flexible and agile to face the post-pandemic challenges.”
Seeking investments from France, he said that it should be an issue for discussion to attract investments from the France companies which were interested to leave China.
Kihak Sung, Chairman of Youngone Corporation, analyzed that the importance of FDI for the RMG sector in Bangladesh as foreign investments would bring new technology.
He said that the global companies who were interested to migrate from China were considering Vietnam due to the equitable policy of the country. Bangladesh may take Vietnam’s lead on how to cope with challenges in export brought in the coronavirus fallout through more foreign direct investment (FDI).
Decathlon Sports Bangladesh Chief executive officer Deepak Dsouza observed the importance of smaller lead time as a short-term measure and product diversification to synthetics as a medium-term measure, as demands for such artificial items are growing worldwide very rapidly.
He was sharing his joy that they worked with 60 factories that employed one lakh people and no factory lost business from the brand.
Explaining the drastic effects caused by Covid-19, Kazi Imtiaz Hossain was emphasizing that consumers’ purchasing power might not be the same as it was before Covid-19 and then take the time up to 2022 for recovery.
Rubana Huq, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said that Bangladeshi suppliers faced problems in France as two brands canceled their orders fully and filed applications for bankruptcy.
She emphasized ethical buying practices, saying that fulfilling the promised payment terms by the buyers could ensure the wellbeing of the RMG workers. Rubana Huq proposed an unemployment fund to support the workers who would lose their jobs due to the pandemic.
Speaking at the webinar, Momen said the government is working on grabbing a share of investment flying out of China and is facilitating businesses to grab the potentials of the changed situation on the global market.
Showing the necessity of personal protective equipment business, he said that Bangladesh exported PPE worth $6.6 million. The foreign secretary also said that the government was working to capture the part of the investments moving from China.