Bangladesh’s garment sector has a glorious beginning. Our RMG industry has grown in capacity and growth over the last four decades. By facing various challenges step by step, various achievements have been added in the garment sector. However, it will not be easy to continue the growth of this sector by following the same business model. Bangladesh Textile Industries are facing several problems from raw material import to production and export. Some of the following problems are discussed below.
Value addition of required goods: Our cost of production and wages have increased but the ‘value’ of the goods has not increased. Although the industry’s social and economic progress is unique, maintaining competitiveness has become increasingly challenging. At this stage the sector needs to re-evaluate its business model in light of current ‘reality’ to transform from labour-intensive manufacturing to diversified and innovative industries; Especially in terms of product diversification, value addition and raw material constraints.
Product modernization: A challenge for our country. If a manufacturer makes a plain blouse, he should make the product more attractive, so the customer will pay extra for the finishing and extra work. As much as buyers look for uniformity in a supplier’s inventory, they also look for versatility, which allows customers to easily order other products and allows for maximum output on the same production line by adding and coordinating equipment.
Sector Diversification: This is very important. If the small and medium entrepreneurs are linked with the big industrial sector we will benefit, without this there will be no diversification of the sector. Meanwhile, our garment factories have been upgraded but we are not getting the price of the products from the buyers accordingly, we have green factories, green products but we are not getting the green price.
Market expansion: Most of our exported readymade garments are concentrated in the North American and European markets. However, Bangladesh’s garment export market has been diversifying over the years. Progress has been made as well. Also in search of new markets. Bangladesh has a huge potential to export garments made in both conventional and non-conventional markets. Economic diplomacy is needed if new markets such as Brazil and Russia are to be pursued.In this case, the Ministry of Foreign Affairs, Commerce, Labor and we have to work together through coordination.
Unequal Competition: We cannot identify wage and price and skill challenges. Because wages are rising, skills are not. There are many projects for skill building. But efficiency is not increasing. We don’t even know the real reason why skills are not increasing. So we have to understand, as many factories as we have, whether we are creating additional capacity! At some point everyone but us has grown, grown to the point where we are not optimising the production lines.But what we are doing very nicely is increasing the empty line in the factory, and taking orders at any price. Not saying that everyone is doing it, but most of them are doing it because of the fear of losing the order.
Energy & Gas Shortage: The textile industry in Bangladesh is facing a crippling energy crisis. Load-shedding of electricity has reduced production capacity by 30%, forcing mills to use expensive generators. This has increased production costs and decreased competitiveness in the international market. A joint working group has been formed to address the issue, aiming for complete exemption from electricity load-shedding and reduced tariffs. The situation is worsened by gas shortages. Up to 70% of textile mills are unable to accept export orders due to gas load-shedding. Months of continuous gas disconnection have caused significant production losses. The industry is urging the government to ensure a smooth supply of electricity and gas to maintain its export capabilities and contribute to the national economy.
Floor Price: We have to set a floor price, whereby we cannot export below a certain price limit. The government should do this. Currently, there is nothing to do despite the context of the free market economy. The price limit is to be fixed in respect of basic or fundamental products. Basic t-shirts cannot be exported below the prescribed price limit in any case, such limit should be fixed. It has also been possible in other countries of the world. As it happened in Sri Lanka, it happened once in India too. So it is possible. It needs to be done now.
The fourth industrial revolution: a big challenge before us. Here we need innovation. What happens many times, we suddenly have to give new things to the production floor, which is prescribed. We don’t even make a proper washing machine in Bangladesh, maybe once. In fact, we are getting stuck in very basic places.Because they don’t happen at all. This means there is a deficiency or lack of innovation.
Investment Policy: When an industry starts to develop in a country, various types of investment policies are fixed by the government. There is no investment policy in our country. We talk about Vietnam again and again, because the country has been able to diversify so quickly.They have RMG but they are also leaning towards electronics and pharmaceutical products. Guidance and good governance are very important for the economy of a country sector.
We are lacking in many places. We are competing among ourselves and lowering prices. An unfair competition is engulfing our sector, due to which the prices are falling day by day. But compliance pressure is increasing.Now it’s time for branding. We ourselves are responsible for not getting recognition for our good deeds. By competing among ourselves we have arrived at an unhealthy place. We need to move towards sector diversification very quickly. For this purpose investment should be made in the education sector first.
Reference :
- https://bonikbarta.net/home/news_description/351592/
- https://www.researchgate.net/publication/236839094_Textile_Industries_in_Bangladesh_and_Challenges_of_Growth
