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Bangladesh should focus on collaborative efforts among policymakers, RMG stakeholders, and foreign bodies to unlock more business opportunities in Australian Market

Syed Moazzam Hossain has been elected as President of the Australia Bangladesh Chamber of Commerce and Industry (ABCCI) for the term of 2023 – 2025. He is the Managing Director of SMH Engineering Limited and SMH New Generation Apparels Ltd, SMH AGRO Industries Ltd, and Chairman of Lama Rubber Industries. SM Hossain is immediate past director of the Federation of Bangladesh Chamber of Commerce & Industry (FBCCI) and former President of Bangladesh–Malaysia Chamber of Commerce and Industry (BMCCI), Bangladesh Indenting Agent Association (BIAA) and Bangladesh Rubber Garden Owners Association (BRGOA) and involved in many other organizations. Recently Textile Focus had a conversation with him in regards to the prospects and challenges of the present Bangladesh RMG situation. He elaborately spoke what the major areas that the industry should focus on and change for development.

Syed Moazzam Hossain
Figure-01: Syed Moazzam Hossain President of the Australia Bangladesh Chamber of Commerce and Industry (ABCCI)

In an answer of a question Syed Moazzam Hossain expressed his views that Bangladesh is the second largest apparel exporter in the world with an export volume of 47 billion U.S. dollars in 2023 but China who is in 1st position for apparel manufacturing is exported about 159 billion USD in the same year. On the other hand, Vietnam, the 3rd in apparel export, stands at 40.3 billion U.S. dollars for the year 2023. So the scenario shows Bangladesh in apparel export not in good position with the competitors. With China there are still mighty differences and with Vietnam, the apparel business is not much ahead as per data shows.

Though it has been seen good positive business growth in the sector but many of the BGMEA enlisted RMG industries are not in operation due to the overall increase in cost of doing business, compliance requirements and the pandemic period situation made the large-scale closure of small and medium-sized garment manufacturing units in Bangladesh. So the new entrepreneurs and small RMG industry is not in operation and the big factories are expanding their new production units. This situation happens due to small RMG factories fail to maintain overhead cost and getting closure on the other hand big factories somehow manage the operational cost by their composite set up. This is really an alarming situation for the country’s RMG sector as he mentioned in his discussion.

He sees the Russia-Ukrain war and the rise of oil, commodity, and food prices impacted heavily upon the consumer markets in the EU, the UK, and North American countries so the apparel users in these region reduced the clothing consumption to save money and consequently the brands of these majority export destinations for Bangladeshi apparel export cut the order volume. As of now the prospects for the coming days do not seem to indicate any good news for the apparel manufacturer.

Bangladesh apparel export to australia
Figure-02: Bangladesh apparel export to Australia (Source BGMEA)

According to him Bangladesh RMG sector regularly received the lowest price in comparison to its competitor due to a lack of power in negotiations with the brands and this resulted of the lowest margin in garments making. So manufacturers are taking apparel orders in their break-even just to survive in the sector. But how long they could stay alive or continue their operation is really uncertain. So we should work to enhance skills in price negotiation and to develop bargaining power. 

Mentioning the need for diversification towards non-cotton products he said “Our RMG sector is highly confined with basic products that are based on cotton or blended with mixed fiber. This is a limitation of Bangladesh RMG sector that they fail to run after fashion trend that focuses on Man Made Fiber (MMF) quality in the sportswear and for an active day.”

Data Bridge Market Research analyses show that the global synthetic fibers market which was USD 65.53 billion in 2022, is expected to reach USD 93.91 billion by 2030, growing at a CAGR of 4.60% during the forecast period of 2023 to 2030. The MMF quality and worldwide size of market is more than 70% where we can produce only 25% of MMF in our yearly apparel export. Bangladesh exports only 24% of its apparel export in MMF quality and 76% is exported based on cotton-based garments.

As you know we are passing a crisis period in the industry where order flow went down and so the sector is facing numerous problems. Actually, this is the right time to go for product diversification, exploring new markets and doing innovative work to get new business. He opined during the conversation.

Once again Bangladesh government should think about how to keep the garment industry sustainable for the future. He said “We should also make decisions for new investments by analyzing proper future market demand for the synthetic yarn industry. To achieve the ambitious 100 Billion export target, we must need a competitive textile industry to produce fabric both from cotton and synthetic fiber.”

SM Hossain in a conversation with Textile Focus
Figure-03: SM Hossain in a conversation with Textile Focus

In his insightful observation, he opined that market diversification, product development, shifting to high-end fashion items, technological upgradation, design and skill development should be our priority tasks to shift towards diversification. We should also focus on medium and small-sized businesses so that they can also thrive amidst the market difficulties.

He urged that the government should continue policy support to maintain the competitiveness for the ready-made garment industry amid global economic challenges. We need a clear and robust strategy as well as practical support measures to help the RMG sector to navigate way through the uncertain and challenging time with an opportunistic roadmap.

SM Hossain showed statistical data that Australia recorded an apparel market revenue in 2022 of bout 18 billion U.S. dollars and it is expected that apparel market revenue to reach around 22 billion U.S. dollars by 2027. But Bangladesh exports apparel products to Australia about $1.5 billion annually to Australia which is about 93 % of Bangladesh’s exports to the country. Bangladesh has captured approximately 12% of the Australian market in this particular sector. So Bangladesh could maintain a significant growth in apparel export to Australia but none of the countries both Bangladesh and Australia never come forward to get the opportunity for increasing growth and development by trade and business. He thinks the Bangladesh government as well as all the stakeholders like BGMEA and BKMEA should focus to develop a relationship with Australia to grab more apparel business.

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