The apparel industry is firmly committed to achieving export revenue of 100 billion by 2030 but the industry is not getting reasonable price increases from buyers, even Our green factory has added a new dimension to the eco-friendly garment and textile industry and is showing a ray of hope.
Bangladesh’s competitiveness in trade is eroding due to factors such as higher import taxes and non-tariff barriers, excessive dependence on readymade garments, and the delays facing exporters while complying with border and documentary requirements, said the World Bank recently Apr 10, 2023
The Garments and textiles owners are still suffering from inadequate energy supply although the price of gas and electric was doubled last year it’s continue increase going on.
The worst sufferers of the lower inflow of work orders were the small and medium level factories as they do not have strong financial capability to face the challenges, Some 79.1 percent of the apparel factory owners said international buyers are yet to increase prices of Bangladeshi goods, which they earlier promised to do after the new garment wage comes into effect in December last year, a survey found. it is bitter truth that neither in the past nor in the future buyer’s increase specially CM Wherever there is a slight price benefit, orders are placed. There are several important parameters in the costing of a product such as the price of raw materials like yarn, fabric consumption, trim prices, commercial prices, etc. If a product is ordered from Bangladesh, Pakistan, China, Turkey, or any other country, some basic prices remain the same everywhere or very close, such as yarn price, fabric consumption, trim prices, etc. But why are we getting so many orders despite having so many countries? The answer is simple; our CM (Cutting and making) is lower compared to other developed or competitor countries, and the product quality is sufficiently good. Garment workers in Bangladesh ensure quality production despite the minimum wage of just $1 per hour, which is low but guarantees excellent product quality. Even though buyers are aware of these factors, they overlook them and prioritize self-interest, as the cheaper the labor, the lower the CM the buyer can negotiate with. They have never increased CM in the past, nor will they doing so now. This is natural, but there are additional internal costs that we have never considered, yet we are still incurring them, knowingly or unknowingly.
As per exporter their cost of production increase of high utility cost but i think this can’t be reduced as day by day lot of new industry established in last few years other then Textiles and Garments so the energy demand will be higher every single day and government need to provide sufficient energy for agriculture and other sector so here the possibility is zero of decrease price on energy and utility.
solar power project. Can be a solution for energy saving it’s a huge costly but if combine investment by our entrepreneurs jointly work together for this project taking funds from ADB/World Bank it can be a long-term solution for cost saving, recently Beximco earned Tk 634 crore in the first year of production of this Tk 3 thousand crores solar power project. The group is hopeful that it will be able to withdraw the investment within 5 years many other groups already implemented solar energy projects recently ADB financed $120 million for private sector solar projects in Bangladesh The Asian Development Bank (ADB) has taken a significant step towards bolstering renewable energy infrastructure in Bangladesh by signing a loan agreement of $120 million with Dynamic Sun Energy Private Limited.
For getting good price increase orders New markets like Turkey, Russia, China, and India are market low-cost clothing and are much smaller markets than those in Europe and the USA imports more or less
$ 300 billion worth of clothing a year in my opinion our local exporters still unable to reach a large buyers group in Europe and the USA or not been able to produce garments according to the needs of that customer, our RMG sector much more productive if we can establish good control in these two markets, now capacity building should the first goal and strong workforce. If owners take responsibility for reducing costs they can take a few steps to cover their cost of production by saving for their external and internal expenses.
Also to get better prices as our industry is now well mature enough and know the test of and aware of seasons and buy plans of customers allover the world need set-up design studio so Near future our RMG sector exporter need to go for SIM inventory model it reduces the inventory buying cycle we need to keep huge options ready in stock available for buyers with zero minimum quantity and lead time, this approach streamline inventory cycle and reduce lead times and we can get better prices their are huge number of small stores or buyer those who struggling with minimum quantity buying and they don’t want any Hassel so for this kind of buyers it will be a great opportunity so here we need to focus in small scale.
There are lots hidden costs can be reduced as per exporters they complain regularly they are facing a expenses in government offices Leaders of the country’s apparel sector have raised harassment allegations against veriour department , In response to the complaints of the apparel industry leaders, governments bodies asked them to be more specific.
“Rather than saying you are being harassed, inform us where the harassment is happening on a case-by-case basis need to be addressed ,
Additionally, we are somewere dependent on foreigners employees in mid-level and high level management , which adds to our total costs currently. In the supply chain, there is a huge commission business that needs to be stopped. In other hand many buyers offer the right prices, but trading houses under foreign ownership and local keep significant margins, resulting in factories not getting the right prices. A beautiful bridge of trust has not been built between buying houses and factory owners for a long time; it’s time to do it now., fixed service charges need to be imposed on buying houses, currently theirs is no policy regarding service charges, it’s ranging from 5% to 25%, and there’s also a significant 3rd country LC margin even we don’t have any options to know the original price which must be fixed. Since we have an organization of buying houses BGBA and BGMEA, BKMEA members must recommend sales contracts or LC transfers from the buying house to the service charges that need to be fixed in a reasonable amount organization by law. Then there will be no obstacles or fears in placing our orders. On the other hand, BGMEA BKMEA should ensure members buying the house’s service charge, and they will settle their money within seven working days of realizing proceeds there are huge complaints regular from Both parties regarding not getting service charges on time so it is better before opening LC a Both organization recommendations will be deposited in the bank before along with BBLC proposal which will have a positive impact on both organizations. If we calculate the above costs, a significant portion is drained because of our lack. Without pushing buyer we can save and adjust costs If we calculate, we can understand that if we want to achieve a 3-4% profit margin, owners need to be a bit more assertive and conscious. In our textiles and garments industry, Many have lost a lot, and despite what we have given to the country, due to some unfortunate events and some unscrupulous businessmen, garment owners are the most criticized. They will earn foreign currency, they will argue, regarding this issue various policies change from time to time, and everyone has to suffer because of it, and the lives of the real affected people are disrupted. Even though it’s sad, the truth until today is that there hasn’t been a long-term plan to save this industry save the local exporters, But this industry is interdependent on commerce, banks, and imports; neither a long-term plan nor policy adoption has been made, and due to various obstacles, many times when the government seeks policy cooperation, it cannot be done. And since our current government is business-friendly, the government will only provide support to the garment industry in a unified manner, which is not right. To achieve the target revenue of $100 billion, Our RMG sector exporter need to address and change their internal issues and save cost The goal of achieving 100 billion has been set; if we try, we can save 5/6 billion ourselves. And if now banks, bonds, NBR, and the Ministry of Commerce do not provide proper guidance and planning for local exporters then the country’s garment industry and economy will suffer. Especially our local exporters once upon a time this sector did require not that much investment it was easy to be an entrepreneur, but now our RMG sector exporters invest hugely and build a strong faith in the international market so it’s no longer to sustain without proper knowledge and smaller investment, never think we are competitors, but it’s upset me when our RMG sector owners and service provider always treat each other as a competitor, but they are subordinate this mindset need to change, also our private entrepreneur should focus more on FDI and JV equity sharing with marketing, technical and technology support to sustain for the long run.
All our RMG and textiles leaders are working day and night for the service of the industry and to secure business for future generations, best wishes for their great effort
I am a very small boat of an Ocean sharing my thoughts with my limited knowledge At the end I like to say we believe it or not our industry’s only strength is our Manpower nothing else so we need to strengthen our manpower and upgrade them and give chance to our New generation and encouraging them and invite them in this sector otherwise this minds will go out of our hands sooner or later.
I have taken these words from my real-life experience, excuse the mistakes, Everyone stay well, thank you. The garment industry is moving forward; Bangladesh will move forward and develop. We must remember that once an owner becomes an owner, there is no opportunity to look back, but if we don’t unable to pay what minimum they workers and employees deserve and put right people in right place there are many opportunities for workers and employees in the country or outside the country, believe it or not our workforce are now the target of foreign investors so these issues need to take care for our future workforce development.
Under the visionary leadership of the successful honorable Prime Minister Sheikh Hasina, Bangladesh is moving forward towards the realization of that dream. And the garment industry of the country is working tirelessly to implement this vision. The apparel industry is firmly committed to achieving export revenue of 100 billion by 2030.
Every citizen of the country will have a better life, the benefits of freedom will be enjoyed by all – the present board of textile and garment industry owners and organizations are working with this conviction.
Everyone should come forward to build a prosperous and prosperous ‘Smart Bangladesh’ by the year 2041.
Salauddin, Bunon
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