Textile Focus Special Feature
As Bangladesh celebrates 50 years of independence, the remarkable economic and social development has a been the attention for many. The father of nation’s 100th birthday has made the 50 years’ mark for country historic. Bangladesh is celebrating the Father of the Nation Bangabandhu Sheikh Mujibur Rahman’s 100th year in a festive manner country-wide. He was a visionary leader for the country who always dreamed for the economic freedom. Industrialization was one of the main focus during the rebuilding of war-ravaged Bangladesh after the liberation war when he was the President. Textile and Apparel Industry has contributed heavily towards full-fulling his dream. Today the textile and apparel industry is leading the economic development of the country. At the event of his 100th birth year celebration, Textile Focus proudly conveying gratitude to the venerated Father of the Nation and also takes the opportunity to thank the warriors of the industry who are working hard day and night to uplift the image of the country. This article tries to put light on the selected key facts to know about and look forward for the Bangladesh textile and apparel industry in 2021, the 100th year of the Father of the Nation Bangabandhu Sheikh Mujibur Rahman.
A Vertically Integrated Industry Set-up
Today Bangladesh is renowned as the apparel manufacturing hub of the world with a vertically integrated industry set up consisting 425 yarn manufacturing, 796 fabric manufacturing, 240 wet processing and 4000+ export oriented apparel industries (BTMA and BGMEA data). The total export earnings from this sector before the pandemic was over 34 billion $ which was approximately 84% of the total export earnings of the country. We have lost a significant amount of business due to the Covid pandemic, however, Bangladesh stays as one of the major apparel manufacturer of in the World. The textile and apparel industry is not only the country’s main bread earner, but also a sustainer in terms of societal and economic aspects. The current pledge of the industry for sustainability, productivity, innovation, and workers well-being is transforming the socio-economy of the country, helping to achieve the SDG goals. Also new special economic zones and investment scopes are in the development process which will definitely strengthen our hands.
The Challenges for 2021 and Onwards
Rise of business operation cost, re-shoring and near-shoring trends, hard competition from Vietnam and recently the cocid-19 pandemic, have put the textile and apparel industry of the country in a great challenge. The sector will need to innovate, upgrade, and diversify, investing in flexibility, sustainability, worker welfare, and infrastructure in the upcoming years to be in the race. From July to September, 2020 the industry was affected with slowdown, cancellation of orders and in some cases factory shut downs. However, from September, the situation started recovering. Now, again the second wave is hitting hard, and perhaps, we are moving towards uncertainty. However, research from McKinsey show, Bangladesh is still the preferred destination for apparel sourcing for the CPOs of the leading retailers. But to become sustainable and retain competitive in the business, challenges are manifold. Like,
- Tackle the slowdown of export, look for new markets, improve business strategy and negotiation skills with customers
- Smart and innovative industrial capacity utilization
- Improve product price through quality enhancement, diversification and value addition
- Maintain proper covid-19 health protocols and improve overall Occupational Health and Safety measures in factory level
- In long term, work with technological and process development in terms of industry 4.0 scopes
Changing Market Dynamics
For years the EU and USA was the largest market for Bangladesh apparel exports. But the market dynamics is changing. Bangladesh is still the preferred apparel import destination for EU due to the GSP facilities, but we have lost a significant portion of USA market as Vietnam is taking over. Today, Vietnam exports 2.5 times more compared to Bangladesh in value terms to USA. The Transpacific Partnership Pact did come into play in the recent years, and Vietnam has been able to grab most of the market shifting from China holding a strong position in USA now.
Again, with the graduation to ‘Middle Income’ status we are about to lose the single transformation rules of origin from EU. Only left option for any potential FTA then will be GSP and GSP+. Even securing them will not as easy as we are getting today due to strict compliance regulations and legislation as a middle income country we have to ensure. However, if we can overcome the challenges mentioned earlier, we will be able to graduate to the next level and adopt the changing global apparel market dynamics effectively. Bangladesh also needs to sign free trade agreements (FTAs) with countries around the world. While Vietnam has FTAs with around 20 countries, Bangladesh has none.
Growing Specialized Sectors
|Jeans and lingerie items are topping the export list of late|
In the last five years or so special sectors like denim industry has grown manifold and helped to keep the export pace as the regular garment products were struggling. Denim and jeans is regarded as a value added product and Bangladesh has developed the complete supply chain of denim solution starting from weaving to washing. Bangladesh is now the highest denim exporter to EU and USA, other markets are also expanding. As a value added product, denim sector can be a great opportunity for Bangladesh to brand the Made in Bangladesh tag worldwide.
Also allied sectors like all over printing, digital printing, garments washing is becoming strong resulting is retention of value. These value added services are creating wealth which are re-injected in the sector. Capacity is also developing in special garment categories like lingerie, night dresses and functional apparel. Transformation from cotton to more non-cotton options specially the recycle-poly products is a trend now, and we must adopt this trend to get ready for the future market of consumer apparel.
The father of the nation always dreamed of a Bangladesh that is hunger free, pollution free and corruption free. Textile and apparel industry has been the means of achieving economic and social stability for the country. Today, directly and indirectly around 1 crore families are managing living from this industry. Bangladesh has a name in the global market as the second largest exporter of RMG. If we can do our best from our areas with proper dignity and honesty, surely our Shonar Bangla is not far away.