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HomeNews & ViewsBangladesh RMG Sector Hope to Achieve USD 100 Billion Export Target by 2030

Bangladesh RMG Sector Hope to Achieve USD 100 Billion Export Target by 2030

Mohammad Nurul Alam

Bangladesh apparel industry is experiencing positive growth and a bit of advancement towards the 100 billion export target that has been set for 2030.BGMEA Bangladesh Garment Manufacturers and Exporters Association set a 100 billion goal for apparel export last year and the target was considered quite ambitious due to some unavoidable situations that the industry still requires changing and developing. But despite of all challenges BGMEA positively set the future road map to attain the new goal and the present statistics data show Bangladesh RMG export is heading towards the century, no doubt that this is a good start.

Bangladesh Business summit 2023

Mohammad Hatem Executive President of BKMEA has been delivered the prospects and progress report of Bangladesh RMG export recently that seems quite satisfactory.

In a business summit under the banner of ‘Bangladesh Business summit 2023’ on 12 march, he informed the global audience that Bangladesh is really improving in various aspect of RMG industry.

The summit was hosted by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) at the Bangabandhu International Conference Centre in Dhaka where Mohammad Hatem speaks on behalf of BKMEA and says “Despite the COVID-19 Pandemic and due to recent Russia-Ukraine war energy price crisis all around the world, we are still managed to fulfill our export target in 2021-2022 by exporting 42.61 billion and in the first 8 months of fiscal year 2022-23 we already exported around 35.79 billion whereas our export target was around 31 billion USD for the same period. We already are in surplus of our export target. We are hopeful about our target to reach the $100 billion export mark by 2030.”

INFLATION, GEOPOLITICAL INSTABILITY AND SUPPLY CHAIN DISRUPTIONS ARE THE TOP RISK FOR FASHION BUSINESS IN 2023, FAR ECLIPSING COVID-19 (SOURCE –BGMEA)

100 billion export target and new challenges

According to the experts in the RMG sector to meet the new aim 100 billion, suppliers will need to spend $7.17 billion more year than they currently do. In the most recent fiscal year, which concluded on June 30, Bangladesh exported clothing worth $42.61 billion, according to figures from the Export Promotion Bureau. So Bangladesh RMG exporters need to export additional 57.38 billion in next 8 years. This is quite challenging but not untouchable.

Require product diversification and shifting to MMF from cotton

At present Bangladesh is producing cotton base garments nearly 74% of its total production whereas 78% of global apparel markets are MMF manmade fiber and remaining 20% are produced of cotton fiber. In the instance of Bangladesh, only 26% of the products are MMF based but the market size of MMF is $ 700 billion and so this could be a golden opportunity for the exporters if they really could diversify their product range from cotton to MMF.

Faruque Hassan, President, BGMEA, explained to Textile Focus that how the 100 billion export aim could be possible. He says –

“It is possible to achieve the target as we are diversifying the products and markets. Three key products, including the shipment of mid-range clothing items, MMF-made goods, and technical clothing like the uniforms worn by healthcare experts and professionals in other service sectors, will be the main sources of income for Bangladesh.”

RISE OF THE RMG INDUSTRY IN BANGLADESH FROM 2015 TO 2022 (SOURCE –BGMEA)

Need to focus on value, not on quantity

Besides diversification of apparel product Bangladesh should also focus to earn money in value rather to give focus on low or medium-grade of garment production that are always volume base. In this regard Md. Sirazul Islam, Former Executive Chairman, Bangladesh Investment Development Authority (BIDA) expressed opinion to The Textile Focus –

“Exporting more amount is not a fact, the fact is how much we are earning by export. If we want to earn more by exporting less amount then we must add value to RMG products, we have to diversify our product range from Basic items.”

Adopting new technology and upskilling and reskilling of the worker

Upskilling and reskilling workers for more productivity along with new technology adoption is also important to attain the new target.

“Now we have the challenge of 4IR, upskilling & Reskilling workers for more productivity by learning modern technology and automation. If we can do that, we will achieve them otherwise lose them,” said Abdullah Hil Rakib, Managing Director, of TEAM Group and Director, BGMEA.

RMG EXPORT FROM BANGLADESH FROM 1984-85 TO 2021-22 (SOURCE –BGMEA)

Uninterrupted power supply and settling a reasonable price

Gas supply shortage, price hike plan, and the policy of promoting grid power line is one the biggest barriers to achieve the export target so government should rethink about gas price hiking and resolve gas and electricity supply problems to help the industry. 

Engr. Shafiqur Rahman, Managing Director, Hams Group and President, ITET expressed his concern –

“I think the target of touching 100 billion dollars in the next 8 years is quite possible as the current Bangladesh textile industry development trend is so satisfactory. But there are some obstacles here that we need to overcome. We especially need the cooperation of the government to resolve the continuity of Gas & Electricity.”

Strong backward linkage is a must to achieve 100 billion

Strong backward linkage is a must for the woven sector to grow because woven product manufacturers are highly bound on imported fabrics from china and neighbouring country which cost more to be competitive in the global apparel market. Also, abroad fabric requires the longest lead time and the end result is retailers are not ready to place orders and they are interested to place elsewhere for shortage delivery lead time.

S.M. Nishat Bin Zia Rumman, Director of Marketing, Far East Textile & Clothing shared his views with Textile Focus –

“Due to China backing down from Textiles, there is a huge opportunity for Bangladesh to develop a stronger backward linkage industry that will give the textile industry a competitive advantage along with an expanding market and price benefit.”

LDC graduation & GSP withdrawal can be big challenge

The LDC graduation in 2026 will be another challenge for the Bangladesh RMG sector because duty free benefits withdrawal by the importing countries in the post-graduation period Bangladesh will have to pay a range from 9%-12% duty. So to achieve the 100 billion by 2030 Bangladesh should pursue EU for GSP Plus facilities for post LDC era.

Shifting from a traditional market to a non-traditional market is a must

Experts agree that Asian markets like China, India and Japan will help Bangladeshi clothing exporters to gain more profit and to come out from excessive dependence of EU and US markets. At present 71.37 per cent of Bangladesh’s apparel exports earnings come from EU and US and exports to non-traditional or new markets are nearly 15 per cent.

Bangladesh’s RMG exports to Japan crossed the $1 billion mark in fiscal 2021-22 July-June and Japanese apparel retail market size was $84.30 billion in 2021. On the other hand, Bangladesh exported $188 million worth of garments to India in July and August on 2022, up from $94 million last fiscal, according to the Export Promotion Bureau (EPB). So this is a huge scope to broaden the apparel market to our neighbouring country as well. Australia, Brazil, Maxico, Turkey, South Africa and Russia are being also considered as new markets for garment export.

Asiv Ibrahim, Managing Director, of Newage Group, said in an early interview that manufacturers from Bangladesh must, therefore, create contacts with prominently Indian retailers and seek to build a long-term relationship based on mutual confidence and profit.

Bangladesh hosts half the top 100 LEED-certified green garment industries

Currently, Bangladesh has 192 USGBC- LEED certified green garment industries, among these green-certified garment factories, 52 are platinum rated, 121 gold rated, and 10 are silver rated. 500 more garment factories are in the pipeline for getting green certification from the United States Green Building Council (USGBC) for their green initiatives. 

Fazlul Haque, Managing Director of Plummy Fashions Limited, one of the top eco-friendly garment factory in the world, said – “Big brands are interested in buying clothes from green factories, we are in an advantageous position in bargaining”.

Trending lower price from the retailers is a biggest challenge

According to RMG makers Bangladesh has improved a lot in quality, product diversity, and compliances compared to its competitor countries but international buyers and brands are consistently paying lower than the global average price to garment suppliers in Bangladesh but higher to some of the country’s competitors. Buyers hardly talk about the fair product price topic. Buyers also should pay fair and ethical prices for the products as Bangladesh is producing products following all compliances.

In conclusion it could be said to ensure consecutive improvement in the RMG sector and achieving 100 billion RMG export Bangladesh requires a collaborated effort from all stakeholders, including buyers, manufacturers, suppliers, retailers, and the government. By addressing its challenges and implementation of 9 Sustainable Development Goals initiated by BGMEA like People, Inclusivity, Transparency, Infrastructure, Innovation, Circularity, Global network, Brand Bangladesh and Environment- the industry can become more competitive, profitable, and sustainable in the long run.

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