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Strong backward linkage pushes knitwear sector value addition to 75%

Value addition to the Bangladesh knitwear sector, a sub-sector of the country’s apparel sector, has reached 75%, thanks to strong backward linkage industry.

Bangladesh knitwear sector value addition
Figure: In the July-February period of the current FY, Bangladesh earned $11.5 billion exporting knitwear products.

According to Export Promotion Bureau (EPB) data, in July-February period of the current fiscal year, Bangladesh earned $11.5 billion exporting knitwear products, up by 13.5%, which was $10.12 billion in the same period last year.

A 75% value addition means, of the total export earnings, 75% will remain in the country as the manufacturers do not import raw materials to make their products.

Talking to Textile Today, sector people from primary textile sector and knitwear manufacturers opined that current value addition to the knitwear sector stood at over 75%.

This is because of the strong backward linkage industry as the local manufacturers of spin and fabric are capable of meeting local demands about 90%.

“As of now, the value addition of knitwear sector is about 85%, which is increasing gradually. This is because of the strong backward linkage industry,” said Mohammad Hatem Managing Director of MB Knit Fashion.

The great advantage of the Bangladesh knitwear sector is its strong backward linkage. And the sector is capable of supplying about 90% of knit fabrics that the local manufacturers need.

As a result, the value addition of the country’s knitwear sector has reached 75%, however, the sector people claimed that it is now about 85%.

Meanwhile, the sector people are introducing the latest technology and upgrading machinery to improve the quality of the fabric for valued added products.

“In the global export market, Bangladesh Knitwear sector has become a trusted name and a hub for knitwear goods across the world,” A.K.M. Salim Osman, President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) told the Textile Today.

In grabbing more market share and to take the lead, BKMEA has taken different types of initiatives such as research and innovation for the products development, skills training for workers and increasing capacity to promote the export growth of knitwear products, said Salim.

In addition, the trade body is working and helping manufacturers to incorporate the latest technology as it will help to add more value to products, he added.

“The country’s primary textile sector, a strong backward linkage industry for the RMG, is contributing a lot the apparel sector by proving of yarn and fabrics,” told Mohammad Ali Khokon, also Managing Director of Maksons Spinning Mills Limited.

As of now, Bangladesh is capable of supplying 85% of yarn and fabric, along with 40% of woven fabric, required by the knitwear sector, which helped to take the value addition to 75%, he added.

However, value addition to the woven sector is now around 35% to 40% meaning that Bangladesh is unable to fulfill 60% demand of woven fabrics.

“As of now, Bangladesh’s value addition in the knitwear sector is quite good, which helping the country to retain more and reducing import dependency,” former caretaker government Advisor AB Mirza Azizul Islam said.

But in meeting the demands of high valued fabrics, Bangladeshi manufacturers of fabrics and spinning mills owners has to invest in latest machinery and technology, said the economist.

In addition, trade analysts also called for fresh investment in reaching the target of 100% value addition.

Centre for Policy Dialogue (CPD) Research Director Khondaker Golam Moazzem said, “New investment will raise Bangladesh’s competitiveness in the global market.”

“The investment should focus on new technology adoption,” he added.

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

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