Textile Focus Analysis
Textiles have always been an essential aspect of Bangladesh’s economy for a variety of reasons. After China, Bangladesh is the world’s second-largest exporter of clothes. Ready-to-wear clothing accounts for more than 80% of foreign earnings. Product diversification is the main focus of our RMG industry nowadays. In this context, the spinning industry plays a vital role being the main Backward linkage industry.
According to Bangladesh Textile Mill Association (BTMA), at present, there are 500 spinning factories in Bangladesh. Three more new spinning mills are to be added in the next two years. According to BTMA, in 2021, 5970 crore taka is invested in this spinning sector. 26 mills are newly added to the list. The wheel of Bangladesh’s spinning sector has started moving due to the rising demand for cotton yarn in the international market. But this potential sector is facing obstacles due to rising cotton prices, gas crisis, lead time and various other problems. Team Textile Focus in Association with US cotton Trust Protocol recently tried to know the earliest history and recent scenario from some Spinning Industry Leaders and Spinners in this emerging sector. Feedback are depicted below for our readers-
Mohammad Ali Khokon, President BTMA, Chairman, Maksons Group
You know the spinning sector of Bangladesh is a very old sector. The mills that were abandoned after independence were all spinning mills. At that time all the factories were composite factories where spinning and weaving took place at the same time. The industry started its journey in the private sector in early 1990. In the nineties, we moved towards export as well as meeting domestic demand. As the spinning factory grows, so does the knit industry. And as the knit industry grows, the backward linkage industry becomes stronger. After the incumbent Prime Minister Sheikh Hasina came to power in 1996, an initiative that brought about a radical change in our spinning industry overnight, she announced that the domestic industry, which would be made with local yarn, would get 25 percent incentives.
In this continuity, the knitting industry of Bangladesh goes a long way because we could have got many additional benefits due to our quality and short lead time. The machinery and technologies currently used in our spinning sector are in tandem with the modern world and the fourth industrial revolution. Starting from the nineties, about 13 million spindles are running in Bangladesh now and next year about 2.5 million more spindles will be added.
I am hopeful that within this year our business will return to comfort and healthy competition. We will be able to rip the benefit from Buyers with healthy negotiation. Our backward linkage is now ready to support the current garment industry. If no more epidemics hit the business, then hopefully 2022 will be a golden year for us and 2023 will be a year of success. And by 2030 we will be able to achieve the 1-billion-dollar export target.
Engr. Abu Syed Mohammad Haider, Chairman, Euro Group
The spinning sector is the backbone of our garments industry. Without the spinning sector, there would be no sufficient support for the value addition of the garments sector. Our spinning sector is now booming. Lots of investment projects are ongoing. The arrival of these new machines in Bangladesh will be around 2023. It is a matter of concern whether the current demand for yarn will be in the future. Considering the current demand, many people are investing. We have to think about whether the return on investment will come in line with the rising price of cotton or not.
Pakistan is investing almost four times more in the textile and spinning sector than we. They are investing so much to capture the Chinese market. In this situation, if the yarns that used to be exported from India to China are stopped and if Pakistan captures those markets then Indian yarn will come to Bangladesh at very low prices. Then we have to start preparing now keeping in mind the fact that the Bangladeshi spinning mill may face some problems.
Ehsan Haq, Director, Knittex Industries
Since the textile market is moving away from China and we have over 40 years of experience in the sector we can easily do something better in this sector if we truly want. That’s why we’re investing in a spinning factory. We can export our yarn to the same buyer at different factories if we can make it right. There is huge potential. If we can give proper importance to the research and development of the spinning sector then a huge development is possible.
Among many other cotton suppliers in Bangladesh, US cotton holds a majority portion. They are not only selling cotton, They provide various technical support to the millers, We also talked with Cotton USA local Representatives and figured out the benefit of being under the Cotton USA Umbrella.
Ali Arsalan, Country Representative of Cotton Council International (Bangladesh)
We are promoting cotton from US Brand. We are a nonprofit organization especially focusing on the use of US cotton in the Bangladesh Market through the garment supply chain. Our Principal work over the year has been licensing. If any spinning mill has procured a sizeable quantity of US cotton, we will go in and a very simple verification L/C document and we would then be able to license them as a user of US cotton. Knitters also can get the license with the same process. Brands and Retailers wishing to use US cotton USA mark, are able to do so. For the European Market product, the composition has to be 51% US cotton and for the US market, it has to be 100% US cotton.
There are multiple Benefits of the Cotton USA license. First of all, Cotton USA licensee demonstrates your commitment to sustainably sourced and sustainably grown US cotton. It will demonstrate your commitment to the sanctity of contract anyone on any ICA or WCA default list is not allowed to become a cotton USA licensee or their membership is suspended pending the issue.
We understand US cotton is not the cheapest cotton available in the market. But through the use of our excessive experience and our consultancy team, we aim to show you what is the best way to use raw materials so you get the maximum output of it. Asides from this, we introduced a virtual vendor visit where we aim to connect brands and retailers with our Cotton USA trust Protocol members in Bangladesh. We simply do the matchmaking and step away. We do not get involved in any business discussion. So if you are interested can visit www.cottonusa.org for exploring more about licenses and benefits.