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Textile and RMG entrepreneurs pouring new investments considering strong global demand

Bangladesh’s readymade garment (RMG) export continued its optimistic drive in the first 9 months of the current fiscal year (July-March FY2021-22) – and exported $31.43 billion worth of garments. Witnessing a 33.81% growth in the period. Meaning country’s RMG – as well as – textile industry has witnessed a massive work order boost from global fashion brands and buyers.

Textile and RMG entrepreneurs are now pouring new investments in the garment sector that is at present enjoying an outstanding work order flow. However, there are glitches in the supply chain, raw material price hike, constant power and energy supplies.

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Figure: Textile and RMG entrepreneurs are now pouring new investments in the garment sector that is at present enjoying an outstanding work order flow.

In 2021, country’s primary textile sector invested a mammoth Tk57.90 billion (BTMA data) and adding more than 745,400 new spindles to their existing as well as new capacity. Local textile millers took the advantage of COVID induced disrupted supply chain came up with new investments to improve capacity.

As per BTMA data, total investment in the country’s primary textile sector is about $15 billion, which is expected to reach $20 billion by 2025.

Total investment in the spinning sector stood at $11 billion and there are about 500 spinning mills in the country.

The annual yarn production capacity is about 1.8 million tons meets about 90% of the knitwear sector’s demand.

bangladesh-Textile-RMG-investments

As strong backward linkage industry is a blessing for Bangladesh’s apparel industry, so that to grow further, Bangladesh needs more investment in the sector mostly in the high valued segment.

Industry experts disclosed that at present, Bangladesh’s apparel and textile sector investment stands around BDT180 to 200 billion. RMG sector’s prominent entrepreneurs are now setting up new facilities to enhance their production capacity – which will go into production by 2023 – and to have a greater stake in the global RMG export market.

According to BGMEA sources around 110 garment factories have attained memberships for setting up new factories and there are numerous applications submitted to the leading RMG body.

Leading groups like Team Group, Urmi Group, RDM Group and Sheltech are setting up new facilities to surge their production capacity and have a bigger stake in the global apparel export market.

Team Group invested BDT7.20 billion to construct an industrial village to build a 32 production lines denim factory, a washing plant, a sweater factory, and a blouse manufacturing unit.

While, Urmi Group invested BDT 1.20 billion to construct a new 40 production lines RMG factory and it will create about 3,000 jobs.

BKMEA Vice-President Fazlee Shamim Ehsan said to Textile Today said, “The whole industry is going for expansion with new investments, new factories are coming up and closed factories are reopening. The work orders increased so much that almost all the factories cannot fulfill the demands. They are either witnessing worker shortage or do not have sufficient machine.”

“To mitigate the worker crisis, the entrepreneurs are bringing in more automated type of machinery.”

Faruque Hassan, President, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said, “The growth we achieved so far is the result of sacrifices made by the industry, the resilience we have shown in all the crises and the commitment. In the last few years, we made huge progress in the areas of responsible and sustainable manufacturing which have earned confidence on us. However, we need to look beyond the conventional pattern of business and growth, and prioritize investments in technologies, modernization, skills, efficiency, diversification in product range, which will add more value to our business and competitiveness.”

“In the FY21, Bangladesh exports were $38.75 billion of which $32.58 billion came from the textile apparel sector. Local input in the apparel exports earnings was $21 billion, where textile millers played an important role,” BTMA President Md. Mohammad Ali Khokon told the Textile Today.

Industry leaders say that the current trend will linger in the next few years as Sri Lanka is experiencing a volatile situation and China imposed strict lockdown in some of its key industrial regions coupled with power crisis. So, it would be a very prudent decision to invest more in the textile sector.

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

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