It is not unknown how much the Covid-19 has hit Bangladesh’s ready-made garment industry!! Overcoming all adversities, Bangladesh is surprisingly in the top supplier position for denim clothing for both the US and EU. This path was not so easy, there was a lot of ups and downs in the denim market. Let’s talk about the view of denim market in Bangladesh before and after the Covid-19 pandemic.
Market Analysis and Insights Global Denim Market:
The denim market value was 21.4billion U.S. dollars in 2020 and expected to grow at a rate of 6.7% between 2022-2029. Data Bridge Market research reports on denim market, analyzes market growth and provides insights. According to them, the rise in the level of disposable income of consumers is driving the growth of denim market. The growing popularity of denim jeans will further boost the growth of the denim market. The market price of denim jeans is estimated to be around 3% CAGR for denim jeans between 2021-2031, the market price is expected to reach US$ 152 Bn by 2031.
Denim Industry in Bangladesh:
Bangladesh is one of the important center for the production and export of denim garments in the world. Bangladesh is exporting about 200 million pieces of denim every year. According to BTMA, there are about 35 denim fabric mills in Bangladesh, producing more than 435 million yards of fabrics every year. Bangladesh produces more denim fabric than any other fabric and exports it to reputed brands worldwide. A large part of the country’s exports earnings comes from denim.
The present position of Bangladesh in Denim Market:
- Bangladesh is the top exporter in the US market from January to September 2021 calendar period.
- Bangladesh export 32% more denim to US market in 2021.
- Bangladesh exporting $436.53 million denim in US market in 2021.
- Bangladesh has maintained its top exporting position in the EU market for the last few years.
- Bangladesh has earned over €1 billion from exporting denim products to EU countries during the January-December period of 2020.
- Bangladesh denim industry is currently the top producer of denim in EU and US markets.
Overview of Denim Market in BD Before and After Covid-19 Pandemic:
Global demand for denim products has created opportunities for the denim sector in Bangladesh. Bangladesh is one of the largest producer and exporters of denim products in EU. In 2017, Bangladesh exported €1.30 billion denim products to the EU market, in 2016 it was €1.29 billion; within a year rise of 0.54%. According to Statistics directorate of the European Commission (Eurostat), Bangladesh earned €917.14 million by exporting denim products to EU from January to August in 2018. In 2020, Bangladesh has earned over €1 billion from exporting denim products to EU countries during the January-December period, which was €1.27 billion in the previous year. Turkey is the second-largest exporter of denim products to the EU market, which earned $940 million in 2020. During this period, the amount of export earnings decreased due to Covid-19 pandemic. In 2020, Bangladesh has 29% market share of total EU denim markets.
According to data from the Office of Textiles and Apparel (OTEXA), Bangladesh earned $507.92 million exporting denim products to the US markets in 2017, which was $463.61 million in 2016 products in the US after Mexico and China with 14.20% market share. In 2018, Bangladesh earned $419.21 million. In 2020, BD earned $561 million exporting denim products to the US market, down by nearly 4%, which was $585 million in 2019. This time BD taking the first position with 20.03% market share in US. Mexico holds the second position with a 16.74% market share followed by China 11.85%. In 2021, Bangladesh once again captured the top position by exporting $436.53 million denim in the USA market.
What is the Present Situation of Denim Business in BD?
Centuries ago, denim was used in a limited range, but with its versatility the demand for denim has now skyrocketed in the world market. In recent times, denim has become one of the most sought after items in BD. Bangladesh’s denim is now famous all over the world, mainly in European countries. Top names of denim fabric manufacturing factory in BD are: Ha-meem Denims Limited, Beximco Denim Limited, Partex Denim Limited ect. These factories hold Bangladesh’s leading position in denim export to UK and USA. However, due to the corona situation, there was some change in denim business. But now denim business is doing quite well in the country.
The Impact of Covid-19 on Bangladesh Denim Industry:
The effect of Covid-19 on Bangladesh denim industry has as seen as an epidemic crisis. Primary the reason is that China the main source of raw materials for the denim industry, has been infected first by Covid-19. The whole supply chain in China immediately after the announcement of lockdown, those industries that are completely dependent on China have been disrupted. Bangladesh is dependent on China alone for more than 50% of its raw materials. According to a survey, 93% of suppliers in BD have reported that they faced delays in transporting raw materials during epidemic. Besides due to these delays, the price of raw materials have gone up. As a result, many industrial factories were closed down. The second effect is to cancel the orders from retailers and brand edges. As a result, the BD denim industries have suffered a lot. Another effect of Covid-19 in the denim industry is the late payment of retailers. Due to Covid-19 lockdown, retailer and brand sales go to zero. Also, as a result of this epidemic there was no transportation for goods and other shipment that’s why related works were also stuck. Covid-19 has a great effect on the workers. Many have lost their jobs, many have spent their days without food. In short, Covid-19 puts public life at risk.
Challenge and Ways Forward:
The denim industry is facing the heat of the Covid-19 Corona virus-led recession. In the post-crisis period, work should be done to reach the estimated global market of 87.3 billion USD by 2027. In addition to the many opportunities, there are also some challenges in the denim industry, such as-
- Rising production costs, vat & taxes, no free access.
- Power crisis increases.
- Lack of innovation in product, weaving m/c, sewing m/c.
- Bangladeshi taka BDT being strong against US dollar.
- Increase in wages of garment workers.
- Design development and innovation of denim products.
Bangladesh has a bright future in the denim industry. To meet the growing demand for denim in the international market, the country’s factories need to acquired machinery and technology to produce high value-added and high quality denim garments. Further investment in research and innovation in the denim sector is required to meet the targets of the global market. If the government of Bangladesh gives priority to the denim industry and provides all possible support to the entrepreneurs, then Bangladesh will easily reach its desired goal.