Textile Focus presents Industry Opinion, powered by US Cotton Trust Protocol Episode-16 was on topics- “Observation 2022 & Expectation 2023”. Team Textile Focus received feedback from the industry stakeholders.
Siddiqur Rahman, Chairman- Laila Group, Former President, BGMEA
During the pandemic, we managed to continue our garment factories and maintain the economy of Bangladesh, because of continued support from the government & the workers, and the endless hard work of the entrepreneurs. But in 2022, due to the Russia-Ukraine war, one of the big challenges we faced was the Insufficiency of fuel. As a country, we are mainly dependent on other countries for fuel. Due to war, the price of fuel oil suddenly got high. At that moment, powerful countries like the USA, Europe, etc. stored fuel oil immediately, and we could not store fuel oil from the market. As a result, we faced a fuel insufficiency temporarily and needed to go through load shedding also. Now the situation has changed. Now we can supply electricity adequately to the industries despite some gas shortages. The government is trying its best to solve this situation. The State Minister for Power, Energy & Mineral Resources is talking with other stakeholders about storing fuel even at a higher price. If the garment industry gets continuous electricity & gas supply, we can maintain the country’s economy. In the last Financial Year, our RMG sector grew by 35% and the country earned around 42 Billion USD. This year, the situation is still stable though some factories are facing fewer work orders. This is because the Europe market is going through inflation. People’s buying capacity has reduced. As a result, some factories are getting fewer work orders. Still, we hope that by the end of January, the situation will change, the Russia-Ukraine war will end & we will get more work orders.
Mohammad Ali Khokon, Chairman, Maksons Group; President, BTMA
In 2023, if the Russia-Ukraine war ends by next February’23, the Bangladesh RMG sector can have a better scenario. In Europe, summer starts in late March and stays till September. Again, in North America, summer starts in late April and stays till October. Apart from that, Bangladesh is also grabbing some new markets such as South America, Japan, etc. that also have an upcoming summer for the next 5-6 months. These summer orders should be in-house by January-February-March. We strongly hope that the next few months will be good for Bangladesh’s RMG sector, specially Knit. Generally, the knit sector has a huge demand in summer & the most robust backward linkage of BD is the knit sector. With the backward linkage of Bangladesh, we support around 90% of the knitting industry, 60-65% of the denim industry, and 40% of the woven industry. Some people hope we reach 70% for the denim industry, this year. We earned around 23 Billion USD last year with our manufacturing process.
Sharif Zahir, Managing Director, Ananta Group
Ananta Group is a multi-product manufacturer. We produce bottoms, denim, suits, sweaters, intimate apparel, etc. Although, 2022 has been a difficult year. I think the first half was quite promising. We have seen the business grow and support the country’s economy. The post-mid of the year, particularly the last part of 2022 has been quite challenging for the manufacturers. This is mainly because of the overstocking of most retailers. As a result, later the retailers had to cut back the orders. So, there was an emplacement of the slot of orders. And so, today a lot of the factories are suffering from fewer orders. They have to run for only 8 hours of production. Luckily, the sales have been consistent with the retailers. We are still hopeful that the inventory will be deported soon. By maybe fall of 2023, some say it might take a longer time, the stack will be departed, and the retailers will be placing new orders. We are hopeful and looking forward to a recovery by the mid of 2023.
Abrar Hossain Sayem, President, BAYLA
2023 looks like one of the toughest times for the country. But we should always keep a positive attitude. Previously, we have faced various difficult moments, and we have overcome them successfully. I think we should look for opportunities. We should look for alternate ways how can we manufacture & sell our products. Apart from giant retailers, we should look for alternate retailers, even in digital platforms. There are around 13000 wholesalers who are selling their products through digital mediums. I think this is the right time, we should put effort into finding the alternate market, alternate market policy & alternate customers. We the industry persons need to come forward and collaborate with the buyers, the industry & the government. This is a test of negotiation. If we can make this collaboration & find out for new opportunities, I think we will be able to sustain 2023. Our aim should be to determine how we can sustain the year 2023 & reach 2024. If we cannot sustain 2023, many small & medium factories will shut down. Even, many giant manufacturers will shut down some of their lines and go for lay-offs. If the problem of the energy crisis cannot be solved, more than 65% of textile factories will go for lay-offs as they are now producing at under-capacity. Many garment factories are up for sale now. We need to deal with this fearful situation with an alternate-finding mindset. We have to turn this crisis situation into an opportunity. This is the toughest job we have, but this is the most important job we have. If I summarize the market scenario, one group is saying that from the year 2023, the market will pick up. If so, we are safe. But if this situation extends, we must find alternate ways to sustain. As 2023 is one of the toughest times, it has to be one of the most innovative years for the manufacturers.
Rafia Anowar, Director, Textown Group
I believe, 2023 is going to be a very critical year for everyone locally and all around the world. It will bring new challenges for us especially due to the global recession, the cost of raw materials due to the Russia-Ukraine war, Bangladesh’s political environment, and the geopolitical situation. What I mean by the geopolitical situation is that Australia made Indian goods duty-free recently which resulted in orders being shifted away from Bangladesh which will continue. But we must be optimistic and resilient as every year brings new challenges.
