With a tradition of producing globally recognized one of the finest fabrics in the world namely ‘Muslin’ Bangladesh has emerged as second largest apparel exporter in the world. The apparel industry is almost 40 years old today and it is in the best position now to deliver more efficiently and effectively to the world. A lot more is yet to be explored in Bangladesh.
Bangladesh has been well known for producing low price basic garments in volume but now is undergoing a huge transformation. Companies in Bangladesh are producing top quality value added products for brands like ‘Hugo Boss’ and they are also supplying major volume of Fast Fashion products for Zara-Inditex and H&M. At the same time the country is producing low cost big volumes for brands like Walmart/Asda, Primark, JC Penny, Carrefour, K-Mart, Target etc.
Strong export growth open up enormous opportunities
Bangladesh could maintain a significant growth in apparel export to the world through last many years. A study from BGMEA shows that the growth was highest among competing countries for eight years from 2008 to 2015. While global industry growth was about 50%, Bangladesh could secure a growth close to 120% through the period. As per the figure 1, only Vietnam is close to Bangladesh in this aspect.
As per as apparel export growth is concerned 2016-17 financial year was not good for Bangladesh otherwise the country was maintaining a tremendous growth for last 10 years. The country was maintaining a CAGR apparel growth of 12.43% through this period. In financial year 2015-16 apparel export growth reached to 28.09 billion USD from 10.7 billion USD in FY 2007-8. In the year 2016-17 apparel export was 28.15 billion USD which is only 0.2% higher than the previous year. From figure 1 Bangladesh can identify its major competitors in apparel export who are Vietnam, Cambodia and India.
Based on the positive trends and core competences of Bangladesh, the government has set an ambitious target for the textile and apparel industry. BGMEA and government look for USD 50 billion apparel export by the year 2021. If that has to open the country has to go through a major transformation as shown in figure 2. And this transformation is going to open up enormous market and business opportunities for countries like China and India. These countries will be able to supply huge amount of raw and processed materials.
Bangladesh for ‘quality at lowest cost’:
Textile & Apparel industry is considered to be the strongest pillar of Bangladesh economy. It has fundamental distinctive characteristics and involves a large and diversified range of activities that use varying mix of materials for producing products which are trusted by leading global brands. Bangladesh could establish it as quality supplier of cotton and cotton blends based knitwear and woven garments. However in recent times it has proved its strength in producing diversified fabrics and accessories especially for knits. The woven fabric sector particularly has great internal fabric demand and poses enormous investment opportunities. The core competence of the country is not only ‘cheap labor’ but now it could be mentioned also as ‘quality at lowest cost’.
Openness, resilience and readiness to accept improvement suggestions
Though the country still requires more diversification in products and market, it has achieved good level of efficiency in doing a certain range of products. The openness, resilience and readiness to accept improvement suggestions of the buyers have made Bangladesh a safe haven for global brands. The companies and the people working in the industries literally have proved that ‘customer is first and alright’. Buyers enjoy full freedom in access to the resources and information of the Bangladeshi textile and apparel manufacturers. And this open culture has made Bangladesh a place where buyer, supplier, manufacturer all work hand in hand to overcome supply chain uncertainties and risks. And so Bangladesh is the most preferred destination of most of the purchasing managers of global brands as per reported by McKinsey & Company.
Potential supplier of textile engineers, researchers and experts to the world
Bangladesh has seen a revolution in textile education and a big flux of textile educated graduates are joining the sector every year. For last few years around 5000 graduates are coming out every year from education system from B.Sc. Engineering in Textiles and other relevant subjects. Bangladeshi students have proved themselves in the fields of research. Every year hundreds of students are going out to the world including China, USA, UK, and Germany for masters, PhD and post-doctoral level research. Many Bangladeshi experts are working in global positions of global brands and textile manufacturing companies. Bangladesh is emerging as a potential supplier of textile engineers and experts for the world.
Blessed with a young population
Bangladesh is blessed with huge human resources. Being a labor intensive industry textile and apparel industry is making best use of it. 70% of Bangladesh population is under 40 years old. Most of them are educated and motivated. Every year around 2 million people are entering in the job market. And that is where the core competence of the country lies. If this youth could have been prepared well and utilized well they can pull the country towards next transformation. A recent research of Textile Today has identified transforming Human Capital of the country as one of the way outs of reaching Bangladesh’s export targets.
Has transformed it as one of the safest textile and apparel industry in the world
Due to the intensive safety net programs like Accord & Alliance, Bangladesh textile and apparel sector is transforming into one of the safest industries in the world. As per BGMEA Accord and Alliance already has audited 3746 apparel factories among which about 98% were found to be fit for continuing operation. Meanwhile most of the factories have completed their suggested remediation and corrections by Accord and Alliance. Both the initiatives have acknowledged the progress Bangladesh has made in the building, fire safety and other occupational health and safety areas.
Undergoing a ‘Green’ revolution:
The country hosts top ranked USBC LEED certified Green factories in the world. As per BGMEA, Bangladesh hosts 7 among top 10 Platinum ranked textile apparel factories in the world. Over several years Bangladesh has made a clear revolution in making ‘Green’ factories which is helping reducing environmental foot print of the country. About 250 factories has applied for USBC Green certification among them 80 are ongoing and 25 already been approved. Green factories are believed to have great positive impact for Bangladesh in branding the country as an environment friendly producer of textile and apparel.
A well know supplier for ‘Denim’ products
Over the years Bangladesh could establish himself to number one denim makers in the world. Starting from yarn dyeing to denim washing the country has a very strong manufacturing base for denim products. Bangladesh is stitching denim garments for brands like Levi, Wrangler, Diesel, G-star Raw and also for brands like Primark in high volume. More than 50% of denim fabric demand of Bangladesh could be catered by local fabric mills. Bangladeshi washing industries has developed themselves significantly over the years. Bangladeshi denim washing units possess high-tech water and energy efficient machinery using lasers and automation controls. A proper strategy in denim sector could bring huge opportunities for investors and buyers.
Major infrastructure projects underway
Bangladesh government is in the process of resolving key challenges for the industry. The gas and electricity problem is being solved by the arrangement of LNG infrastructure and high voltage grid power connection to the factories. Four lane road projects are underway to connect manufacturing districts all around Dhaka. Though still there are number of bottlenecks are creating considerable traffic congestions, a better management can help them reducing. After completion of some projects, traffic situation is supposed to improve.
Padma Bridge is progressing well and is to connect the South-West part of the country with faster and easier access. This will help the country using more resources for global trade and manufacturing.
Special Economic Zones are attracting foreign investment
Special Economic Zones with all necessary facilities are opening up enormous opportunities for foreign investors. In the era of fast fashion and product customization reducing lead time is a critical issue. Chinese fabric or textile producers can come closer to the Bangladeshi apparel producers by setting up manufacturing plants in Bangladesh and helping achieving the target of the global brands in terms of faster lead time. The Bangladesh government is offering all necessary infrastructure and facilities in the SEZs for foreign investors. Though BGMEA (Bangladesh Garment Manufacturers and Exporters Association) doesn’t want foreign investment in producing regular products, Bangladesh would welcome foreign investments in backward linkage industries which will reduce import of input materials for Bangladesh. Bangladesh now imports woven and other fabrics and accessories worth of around 5 billion USD per year. More investments are needed in producing such products to reduce lead time for manufacturing final products.
Manmade fiber and textile producing would be thrust sector in Bangladesh. The country welcomes foreign investment in such technology driven products. Despite some infrastructure bottlenecks foreign investments in Bangladesh particularly in textiles have been proved to be very successful one. One of such great example is ‘Youngone Group’ which has set its largest manufacturing base in Bangladesh and employing more than 60,000 people in its number of successful factories.
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