The global economy is going through a tough time. The heat of global economic slowdown is also affecting Bangladesh. The country’s biggest industry –the textile and apparel industry — is observing order slowdown and some other problems including power and energy crisis. In these circumstances, how Bangladesh can attain its $100 billion export target and remain competitive—is a common concern roaming around the industry.
Textile Today was in a conversation with Shahidullah Azim, Vice President, Bangladesh Garment Manufacturers & Exporters Association (BGMEA) to learn how the industry can attain the target and remain competitive in the global market.
Textile Today: The $100 billion readymade garment (RMG) export by 2030 – how realistic is this target?
Shahidullah Azim: in FY 2021-22, Bangladesh’s RMG export growth was 34% – the export goal was set based on this growth – if the calm global scenario persists and local challenges like energy crisis eases. The RMG industry is optimistic as for the last few years our growth was continuously more than 20%. So, Bangladesh apparel industry has the capacity to persist this growth rate. Meaning, the export target is within our reach.
On top of it, we are focusing on diversifying our garment export market – till now Bangladesh RMG’s main export destination was EU and the USA – like the South East Asia, japan, Korea, Latin America, etc. We are focusing on conventional and non-conventional markets.
You have to dream big. If in case we miss the $100 billion RMG export by 2030, then we will reach within close to the target. Which is still a milestone for our apparel industry. Yes, the $50 billion RMG export target we could not achieve due COVID and other supply chain challenges but we achieved $42 billion. Meaning, by setting a bigger and achievable goal – we can set ourselves on the right track. But we have to have some goals to look up to and envision ourselves.
Textile Today: As you have mentioned the global unstable scenario – as a result we are seeing work order shrink. Also, some factories shared that they are operating in 30% less capacity due to work order crisis. How can the industry overcome this scenario and achieve the garment export target.
Shahidullah Azim: Yes, we are living in an uncertain situation which is hurting global businesses. Worldwide inflation – especially in the USA and EU is record high. Thus fashion is a secondary priority among the consumers. As a result, retailers and brands are asking us to ‘put on hold’ or deferred delivery to already complete orders. Some retail giants like Walmart decreased 30% work order in Bangladesh. That is why we are witnessing a shrink in work order.
Due to work order crisis – a lot of factories are operating in around 30% less capacity – I know the situation. These factories are closing 2-3 hours earlier due to less work order. As diesel and electricity price has gone up significantly – they cannot just sit idle.
The government is working relentlessly to solve the energy crisis. And the govt. must come forward to solve this imminent issue. It is also a global phenomenon. So, this reality persists for all and everybody has to absorb it.
Textile Today: How can we be prepared for LDC graduation?
Shahidullah Azim: We are working closely with the govt. to find a solution into our major export destinations. For example, we are in talk with the UK govt. to give us duty free access after LDC graduation. The good news is we got positive response from them. Similarly, we are in talks with the EU to give us GSP+ status and with other major markets.