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Withdrawal of GSP plus facility in EU for Pakistan create an opportunity for Bangladesh to grab the orders

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Md. Akhter Hossain Apurbo

Director Wisdom Attires Ltd and BKMEA

wisdomThe 2nd weave in Bangladesh heated very badly to the RMG industry. After a year long struggle when the industry was started to recovering and new orders getting momentum from July, we witnessed the 2nd weave and government had to imposed lockdown including all export-oriented industries. July-August are the month when buyers started giving orders for the next season and due to the lockdown it was hampered.

Immediate after resuming the lockdown, buyers getting back confidence on us and started giving us orders and this is a very good sign of improvement. Please note that there are two types of buyers in knitwear industry. One is the fashion industry oriented and the finished goods exported from Bangladesh are directly distributed among the retail shops. Due to EU and USA recovering from the Covit situation, there outlets are opening now. So, there is a huge demand from end users, which accelerate the orders.

But the other type of buyers is importing intermediate goods like basic t shirts and polo shirts. These items mostly used for printing and embroidery factories for any public events, uniform companies and so on. As still mass gathering is not allowed in most of the countries, orders in these items yet to pick.

Despite of numerous orders in our hand and flow of more orders, we are yet not able to negotiate prices with buyers due to higher yarn price as well as all raw materials. On average total cost of knitwear production increased almost 45% whereas buyers offering less than the real cost increment.  This is another problem for us.

On top of these, containers/shipment cost for all importing and exporting items increased more than 4 folds which hindering our projected export target. There is a trend of switching cotton products to man made fibres and still we are far behind in sourcing/producing man made fibres. This could be another opportunity got our investors to concentrate on.

Withdrawal of GSP plus facility in EU for Pakistan create an opportunity for Bangladesh to grab the orders and therefore, if yarn prices could kept stable and competitive, ensure the availability of  container for shipment with competitive price, and we can get proper bank support as our crucial business partner, then I’m seeing a brighter future of RMG industry in coming days/years.

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