[🇧🇩] Textile & RMG Industry of Bangladesh

[Saif]

All sides for 9% raise in minimum garment wage

A state-run annual increment and wage review committee yesterday recommended that the government raise the minimum wage of garment workers by 9 percent.

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All sides for 9% raise in minimum garment wage

photo: Star/file

A state-run annual increment and wage review committee yesterday recommended that the government raise the minimum wage of garment workers by 9 percent.

The workers had been seeking 10 percent to address yearly inflation in the country while staging demonstrations in August and September over an 18-point demand.

However, the garment factory owners offered 8 percent during recent tripartite meetings organised by the Ministry of Labour and Employment.

One such meeting yesterday settled on 9 percent, according to an agreement signed by the committee's Chairman Md Sabur Hossain alongside representatives of the workers and factory owners.

The labour ministry will now have to finalise the rate and issue a circular to bring it into effect.

A tripartite meeting yesterday settled on a 9 percent increase to the minimum wage for garment workers, according to an agreement signed by Md Sabur Hossain, increment and wage review committee chairman, as well as workers' representatives and factory owners

This will enable workers to receive revised salaries based on the increment from January next year.

Other benefits will also take into account the annual increment as per the Labour Law (amended) of 2006, the agreement said.

In previous years, the increment was fixed at 5 percent.

Over 99 percent of factories under the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) have implemented the previous minimum wage, as promised by the factory owners, according to a report from the Ministry of Labour and Employment.

In late November last year, the minimum wage board finalised Tk 12,500 as the minimum monthly salary for garment workers.

According to the report, at least 2,121 factories out of 2,140 had implemented the minimum wage by October this year, with the remaining 19 yet to comply.​

 

[Saif]

Bangladeshi garment workers at risk from extreme heat: study

Workers in some of the world’s biggest garment manufacturing hubs in Bangladesh, Vietnam, and Pakistan are increasingly exposed to extreme heat as climate change pushes temperatures up, a report found on Sunday, a problem multinational retailers and brands will have to help address.

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Bangladeshi garment workers at risk from extreme heat: study

Workers at a garment factory are making jeans in Dhaka. Photo: Reuters

xWorkers in some of the world's biggest garment manufacturing hubs in Bangladesh, Vietnam, and Pakistan are increasingly exposed to extreme heat as climate change pushes temperatures up, a report found on Sunday, a problem multinational retailers and brands will have to help address.

New European Union regulations make retailers selling in the bloc, like Inditex, H&M and Nike, legally liable for conditions at their suppliers, putting pressure on them to help fund improvements to cool factories they source from.

In Dhaka, Hanoi, Ho Chi Minh City, Phnom Penh and Karachi, the number of days with "wet-bulb" temperatures - a measurement that accounts for air temperature as well as humidity - above 30.5 degrees Celsius jumped by 42 percent in 2020-2024 compared to 2005-2009, researchers at Cornell University's Global Labor Institute found.

Above that threshold, the International Labor Organisation recommends as much rest as work in any given hour to maintain safe core body temperature levels.

The report identified only three retailers - Nike, Levi's, and VF Corp - which specifically include protocols to protect workers from heat exhaustion in their supplier codes of conduct.

"We've been talking to brands for ages now about this issue, and they're only now starting to turn their attention to it," Jason Judd, executive director at Cornell University's Global Labor Institute, told Reuters.

"If a brand or retailer knows that temperatures in a production area are excessively high or doing damage to worker health, then they're obligated under this new set of rules to do something about it," he added.

The EU Corporate Sustainability Due Diligence Directive came into force in July and will start applying to large companies from mid-2027.

Fixes to cool factories could include better ventilation and water evaporative cooling systems, instead of energy-intensive and expensive air conditioning that would increase manufacturers' carbon emissions.

Some factory owners would likely be willing to make such investments themselves, given how heat stress significantly impacts productivity, Judd said, but the EU rules highlight brands' responsibility to address the issue too.

The report also urged retailers and brands to invest in higher wages and health protections so that workers can manage the risk of missing work days due to heatwaves.

Extreme heat and flooding could erase $65 billion in apparel export earnings from Bangladesh, Cambodia, Pakistan and Vietnam by 2030, research from asset manager Schroders and the Global Labor Institute found last year.​

 

[Saif]

US Trade Representative, BGMEA discuss RMG issues

US Trade Representative Brendan Lynch and Trade Policy Analyst for South and Central Asia Emily Ashby met with the leadership of the Bangladesh Garment Manufacturers and Exporters Association at a hotel in Dhaka on Tuesday...

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US Trade Representative, BGMEA discuss RMG issues
Bangladesh Sangbad Sangstha . Dhaka 10 December, 2024, 22:33

New Age file photo

US Trade Representative Brendan Lynch and Trade Policy Analyst for South and Central Asia Emily Ashby met with the leadership of the Bangladesh Garment Manufacturers and Exporters Association at a hotel in Dhaka on Tuesday.

The meeting focused on key issues of bilateral trade, with particular emphasis on the US-Bangladesh Trade and Investment Cooperation Forum Agreement.

Administrator Anwar Hossain led the BGMEA delegation. Other members of the delegation included former BGMEA president Faruque Hassan, former senior vice-president Abdullah Hil Rakib, BGMEA support committee members InamulHaq Khan Bablu, Asif Ashraf and ANM Saifuddin, said a press release.

During the meeting, BGMEA Administrator Anwar Hossain provided an overview of the remarkable progress made by Bangladesh’s readymade garment industry in recent years.

The BGMEA leaders also highlighted progress made by the industry in workplace safety, workers’ rights, labour law reforms, and environmental sustainability.

They also reiterated the industry’s commitment to continuing its efforts to ensure that the RMG sector grows responsibly while meeting international standards.

Both the US and BGMEA representatives expressed commitment to continued collaboration, working towards a more sustainable and worker-friendly future for Bangladesh’s RMG sector.

The meeting underscored the importance of productive dialogue through TICFA to further enhance bilateral trade and investment opportunities.​

 

[Saif]

Unrest in RMG sector created: M Shakhawat

Labour and employment adviser M Shakhawat Hussain has said the industrial sector is going through some sort of unrest. In particular, the unrest prevailing in the readymade garment (RMG) sector was created. The ousted government and their friend nation together are creating some problems. The...

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Unrest in RMG sector created: M Shakhawat
Staff Correspondent
Dhaka
Updated: 11 Dec 2024, 19: 56

Labour and employment adviser M Sakhawat Hussain File photo

Labour and employment adviser M Shakhawat Hussain has said the industrial sector is going through some sort of unrest.

In particular, the unrest prevailing in the readymade garment (RMG) sector was created. The ousted government and their friend nation together are creating some problems. The workers too are creating some problems without understanding.

M Shakhwat Hussain made the remarks at an event titled ‘Nagorik Utsab’ organised on voter awareness and civic activism. The Hunger Project Bangladesh and Shushashoner Jonno Nagorik (SHUJAN) jointly organised the event at Bangladesh Investment Development Authority (BIDA) auditorium in the capital’s Agargaon on Wednesday.

Referring to the anarchy in the RMG sector, M Shakhawat Hussain said, “The workers are not creating the problem. They are being used to create problems. It is quite unfortunate. We have to be aware of those who are instigating to create unrest inside the country from outside.”

He also talked about the national election. He said, “So far, the country witnessed four national elections which were more or less acceptable globally.”

Criticising the three national polls held under the Awami League government, the labour adviser said, “You don’t need to go abroad to learn how to ruin an electoral system. These elections were the last nails on the coffin of democracy. We have already seen the consequences. Each and every infrastructure has been destroyed.”

“The general election was considered a festival once. However, the people of the country were deprived of their voting rights. A credible election must be participatory, which means the voters have an active participation in the polls,” he added.

He hoped that the next election will be an exceptional one.

Shakhawat Hussain further said, “Those who will participate in the upcoming polls might have taken lessons from the last three elections. If they hadn’t, that would be unfortunate.”

SHUJAN acting president justice MA Matin said, “We have to raise awareness among the people. People have some birthrights. When the spirit of democracy is prevalent, there is no need for governance and law. When that spirit is dead, then even the laws won’t be enough to uphold that spirit.”

SHUJAN secretary and chief of the reform commission on the electoral system, Badiul Alam Majumder said, “Everybody has some liability for where we are standing today. In this case, politicians have more responsibilities. They didn’t fulfill their commitments. Justice Habibur Rahman said the country was in the hands of gamblers.”

He went on saying, “A reform within the political parties is quite essential to get rid of this situation. And it should not be imposed on them; rather the political parties should come forward with some reform initiatives. However, no attempts will be successful if the citizens do not raise their voice as they are the owners of the state.”

Badiul Alam further said they were expecting the caretaker government system to be resumed through a court verdict on 17 December. Everyone should act as watchdog so this system does not get discarded ever again, he said.​

 

[Bilal9]

9% salary increment for RMG workers, effective from 1st December, 2024​

BTJ News Desk
11/12/202401
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Government of Bangladesh has announced a 9% wage increment for ready-made garment workers, effective from 1st December. This decision follows extensive negotiations between employers, workers, and government representatives, aiming to resolve wage-related unrest in the garment sector.

The agreement was finalized during the fifth meeting of the committee on minimum wage revaluation and annual wage increases, chaired by Additional Secretary Md. Sabur Hossain. Initially, workers demanded a 10% increment while employers proposed 8%. A consensus was reached at 9%, with all parties signing a joint declaration.

The meeting included representatives from various stakeholders, including the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Bangladesh Garment Manufacturers and Exporters Association (BGMEA), and labor unions. Labor Secretary AHM Shafiquzzaman emphasized that the decision aligns with the previously agreed 18-point plan to enhance labor standards in the sector.

Union leader Babul Akhter urged workers to return to work and maintain production, emphasizing unity against potential conspiracies. The wage increment reflects a collaborative effort to address workers’ demands and stabilize the industry, contributing to improved labor conditions in Bangladesh’s vital RMG sector.

 

[Bilal9]

RMG net export earnings exceed 70%​

BTJ Desk Report
03/12/2023
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For the third consecutive quarter ending in September 2023, Bangladesh’s net export earnings from the shipment of readymade garments (RMG) constituted over 70 % of gross export receipts. In July-September of fiscal year 2023-24, the net export receipt of the RMG sector reached $8.2 billion, making up 70.78 % of the total gross export earnings of $11.61 billion during that period. This indicates an increasing trend, with net export earnings rising from 51.49 % in the same period of the previous fiscal year.

The expansion of the backward linkage industry, reducing the need for imported materials, has contributed to this positive trend, according to the Bangladesh Bank. The BB report highlighted the challenges faced by the RMG sector, including domestic political unrest, global geopolitical conflicts, energy price hikes, and cotton price fluctuations. Despite these challenges, the RMG sector contributed 10.35 % to Bangladesh’s gross domestic product.

The top destinations for Bangladesh’s apparel exports during this period were the United States, Germany, the United Kingdom, Spain, France, the Netherlands, Italy, Canada, and Belgium. Going forward, the central bank review anticipates challenges for apparel exports due to subdued economic activities, higher inflation, higher interest rates, geopolitical uncertainties, weak productivity growth, and a complex financial environment.

 

[Saif]

USAID recognises 25 RMG factories for empowering women workers

USAID’s Women Thrive in Bangladesh Activity organised a Suppliers’ Roundtable and Champions Award Ceremony at Hotel Le Meridien, Dhaka yesterday

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USAID recognises 25 RMG factories for empowering women workers

USAID's Women Thrive in Bangladesh Activity organised a Suppliers' Roundtable and Champions Award Ceremony at Hotel Le Meridien, Dhaka yesterday.

The event brought together attendees to share lessons learned and best practices from the activity implementations as well as recognizes factories for their achievements in providing life and professional skills training to women workers in Bangladesh's ready-made garment (RMG) sector.

A total of 25 PVH supply chain factories received Thrive Champions Awards for demonstrating significant, measurable, and evident achievements in implementing the Personal Advancement and Career Enhancement (PACE) training programme.

The PACE training programme provides women workers with market-oriented soft skills, like negotiation and communication, to support career advancement while also helping them overcome social norms and gender barriers.

USAID's Women Thrive in Bangladesh Activity presented these awards to not only recognise the factories' efforts in empowering women workers but also to inspire others, promote positive competition, and strengthen accountability in implementing the PACE programme.

Blair King, Deputy Director of USAID's Office of Democracy, Human Rights, and Governance graced the occasion as chief guest. Najeeb Sayed, Senior Director and Country Manager of PVH Bangladesh, and Ram Das, Country Director of CARE Bangladesh, also spoke as special guests.

Bushra Binte Baten, Corporate Responsibility Manager at PVH Corp., Sazzad Kamal, Project Management Specialist at USAID; and Aamanur Rahman, Chief of Party for USAID's Thrive Activity contributed to the discussions. Senior officials from PVH Corp. and its leading supply chain factories, CARE Bangladesh, and partner NGOs, among others, attended the event.

Implemented by CARE Bangladesh, USAID's Women Thrive in Bangladesh activity collaborates with the global brand PVH to empower women in the ready-made garment sector.

The activity provides a combination of professional skills and leadership development training for women ready-made garment workers in PVH Corp.'s supply chain factories and in the communities.

The activity aims to train more than 100,000 women workers in RMG factories and adjacent communities by 2026.​

 

[Saif]

Price of garments exported to the US fall

The prices of major garment items exported to the US declined year-on-year in the January-October period this year as American consumers are yet to recover from heightened inflationary pressures..During the 10 months, the price of men’s cotton woven trousers declined by 7.7 percent, accor

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Price of garments exported to the US fall

The US's overall apparel imports from the world fell by 0.33 percent year-on-year to $67.04 billion in the January-October period this year. China ranked first in apparel shipments to the US, with Vietnam in second place. Bangladesh retained its position as the third-largest garment exporter to the US. File Photo

The prices of major garment items exported to the US declined year-on-year in the January-October period this year as American consumers are yet to recover from heightened inflationary pressures.

During the 10 months, the price of men's cotton woven trousers declined by 7.7 percent, according to data from the US Office of Textiles and Apparel (OETXA).

Meanwhile, prices of women's cotton woven trousers declined by 4.4 percent, men's cotton woven shirt by 3.8 percent, cotton knitted sweater by 7 percent and cotton knitted t-shirt by 3.9 percent.

This resulted in 3.33 percent decline in garment shipments from Bangladesh to the US, hitting $6.14 billion.

The US's overall global apparel imports fell 0.33 percent to $67.04 billion in the same period.

China ranked first in apparel shipments to the US while Vietnam took second place.

Bangladesh retained its position as the third-largest garment exporter to the US.

Both the prices and volume of garment export to the US, Bangladesh's single largest export destination, declined as the world's largest economy slowly recovers from persistent inflation, with retail sales growth increasing gradually.

Additionally, due to some domestic problems, the export prices of the garment items declined.

For instance, the garment sector faced massive spates of labour unrest in recent months, meaning many factories could not ship goods on time. So, they had to provide big discounts, reduce prices, or face work order cancellations.

Faruque Hassan, former president of the Bangladesh Garment Manufacturers and Exporters Association, added that the negative import growth of clothing items by US retailers and brands also impacted the volume and value of Bangladeshi garments.

"But on the bright side, the US market is rebounding gradually. Shipments have been showing a bit of an upward trend," Hassan told The Daily Star over the phone.

The garment and textile sectors must be supplied with adequate gas and power so that those can run at full capacity, recover their exports and ensure timely shipments, he added.

The taka's sharp depreciation against the US dollar is another reason, with the per unit price of local garment items falling. The taka has lost 36 percent of its value against the greenback since January 2022.

Another reason outlined by the former BGMEA chief is that local manufacturers are now booking work orders at lower prices to keep factories running since they have to incur big losses if machines remain idle.

Local garment factories have been facing challenges such as massive labour unrest and factory closures following the deferral in timely production and shipment.

Very often, factories were shut down in major industrial zones like Ashulia, Savar, Zirani and Zirabo because of the labour unrest, which affected the production and shipment of goods, exporters said.​

 

[Saif]

Apparel exports to EU rise by 33.78pc in Oct

Bangladesh’s apparel exports to the European Union in October recorded highest growth of 33.78 per cent year-on-year, marking the strongest performance in the first 10 months of 2024...

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Apparel exports to EU rise by 33.78pc in Oct
Moinul Haque 19 December, 2024, 23:07

A file photo shows female workers sewing clothes at a readymade garment factory in Dhaka. | New Age photo

Bangladesh’s apparel exports to the European Union in October recorded highest growth of 33.78 per cent year-on-year, marking the strongest performance in the first 10 months of 2024.

The EU’s apparel imports from Bangladesh in October increased to 1.75 billion euros compared with those of 1.31 billion euros in the same month of 2023, according to data from Eurostat, the statistical office of the EU.

Exporters said that the flow of work orders from global buyers had been increasing but nearly 34 per cent surge in exports to the EU in October was abnormal.

They said that the shipments halted in July and August, caused by political instability and labour unrest, were likely deferred to September.

This backlog of shipments contributed to the surge in export growth in October, they said.

According to the EU data, Bangladesh’s readymade garment exports to the EU faced steep declines early in the year 2024 but managed to rebound in the August, September and October.

The country’s RMG export growth gained momentum in August with a 4.2 per cent increase, strengthened further in September with 7.4 per cent growth.

From January to October of 2024, Bangladesh’s apparel exports to the EU saw poor growth of 0.76 per cent, reaching 15.19 billion euros, up from 15.08 billion euros during the same period in 2023.

This limited growth was primarily due to significant declines in exports during January, February and March.

Former Bangladesh Garment Manufacturers and Exporters Association vice-president Mahmud Hasan Khan Babu said that although global buyers were placing more orders in Bangladesh, the surge in export by nearly 34 per cent in October seemed unusual.

He said that shipments of many consignments were halted in July and August due to the student-led mass uprising and labour unrest in the country, with the goods being shipped later.

Babu said that this backlog of shipments from previous months might have contributed to the surge in export growth in October.

Regarding the current business trend, he said that the flow of orders had remained encouraging and that if the law and order situation improved, Bangladesh would receive more global orders.

The Eurostst data showed that the overall apparel imports by the EU from different countries in the first 10 months of 2024 decreased by 0.16 per cent to 71.47 billion euros from 71.58 billion euros in the same period of the previous year.

The EU’s apparel imports from China in January-October of 2024 grew slightly by 0.24 per cent to 20.03 billion euros from 19.98 billion euros in the same period of 2023.

The EU’s apparel imports from Turkey in the first 10 months of 2024 declined by 6.18 per cent to 7.90 billion euros from 8.43 billion euros in the same period of 2023.

The EU’s apparel imports from India increased by 0.54 per cent to 3.68 billion euros in the first 10 months of 2024 compared with those of 3.66 billion euros in the same period of the past year.

Vietnam’s apparel exports to the EU in January-October period of 2024 grew by 2.46 per cent to 3.27 billion euros from 3.19 billion euros in the same period of 2023.

Pakistan’s apparel exports to the EU grew by 10.81 per cent in the first 10 months of 2024, increasing to 2.88 billion euros from 2.60 billion euros in the same period of 2023, the Eurostat data showed.​

 

[Saif]

Govt increases annual increment of garment workers to 9pc

The circular also said the new increment will come into effect from December 1 and the workers will receive the salary with 9 percent annual increment in January

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Govt increases annual increment of garment workers to 9pc

Representational photo: Star/file

The government increased the annual increment of garment workers at 9 percent from 5 percent, according to a circular from the labour and employment ministry yesterday.

The circular also said the new increment will come into effect from December 1 and the workers will receive the salary with a 9 percent annual increment in January.

The other service benefits of the workers will not be cut because of the increase of the annual increment, the circular also said.

Earlier, the minimum wage board recommended the government last month to increase the annual increment by four percent along with existing five percent to make it 9 percent.

With a massive labour unrest in August and September, the government adopted 18 point demands in September including the review of the annual increment to cool down the unrest.

Finally, the annual increment has been fixed at 9 percent instead of 10 percent, the percentage the workers demanded.​

 

[Saif]

EU garment import rose by 1.43pc in Jan-Oct period

Importantly, unit prices declined for most suppliers in 2024 compared to 2023, reflecting competitive pressures within the global apparel industry

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EU garment import rose by 1.43pc in Jan-Oct period

Worker efficiency in the garment sector has been affected by external inefficiencies, such as power shortages and port and road congestion, industry insiders said. Photo: Star/file

The European Union's garment import from Bangladesh grew by 1.43 percent in the January-October period, despite a modest increase in quantity at 6.68 percent, indicating 4.92 percent decline in prices.

Importantly, unit prices declined for most suppliers in 2024 compared to 2023, reflecting competitive pressures within the global apparel industry.

The EU's import price from China declined by 8.63 percent in the mentioned period, according to data from the Eurostat.

The data suggests that while the EU's overall demand for apparel remains strong, the competitive landscape is shifting, with some suppliers gaining ground while others, including Bangladesh, are experiencing challenges.

The EU's apparel imports during January-October 2024 shows sign of recovery despite price pressures.

From January to October 2024, the EU's apparel imports experienced a mixed trend. The EU's apparel imports totalled USD 77.78 billion during this period, a slight increase year-on-year by 0.58 percent.

This brings EU's year-to-date clothing import to a positive side, from negative 2.02 percent growth in January-September 2024.

While overall import value and quantity increased slightly, a closer look reveals a complex picture across different sourcing countries.

China, a major supplier, saw a slight increase in the value of apparel imports to the EU in the mentioned period, which is 1.14 percent suggesting a potential shift in the global apparel market.

Other major suppliers like Vietnam and Cambodia experienced growth by 3.31 percent and 20.66 percent respectively.​

 

[Saif]

Automation replaced 31% of garment workers: study

Automation has reduced the need for human labour in the production process of the garment sector by nearly 31 percent by mostly replacing helpers, according to a study.

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Automation replaced 31% of garment workers: study

Worker efficiency in the garment sector has been affected by external inefficiencies, such as power shortages and port and road congestion, industry insiders said. Photo: Star/file

Automation has reduced the need for human labour in the production process of the garment sector by nearly 31 percent by mostly replacing helpers, according to a study.

Sweater factories saw the highest decline of 37 percent, while woven factories 27 percent per production line, it said.

Automation in the cutting process led to the highest reduction of 48 percent, while sewing 26.57 percent, it added.

Solidaridad Network Asia, Bangladesh Labour Foundation, and BRAC University jointly conducted the study titled "Assessment of Technological Transition in the Apparel Sector of Bangladesh and Its Impact on Workers".

The findings were made public through a programme at Amari Dhaka yesterday.

Automation does bring several positive impacts on workers, said Shahidur Rahman, a professor of the economics and social sciences department of BRAC University, at the programme.

It also poses significant challenges to workers, especially women and those who are past their prime, have low literacy, are unskilled, and lack confidence, he said.

The advent of semi and fully automatic machines led to some job losses while others were trained to operate those machines or shifted to other sections to undertake new roles, he added.

Reassignment to other sections is commonly seen only in large factories, while others cannot afford to do so, said Rahman.

As factories rely on automation, workers are finding that their previous skills are no longer as valuable, raising concerns over job security, he said.

Adoption of automation has already begun, Sultan Uddin Ahmed, chairman of a recently formed Labour Reform Commission, said at the event.

"Now, it is time to think about how to cope with the process and become competitive among peer countries," he said.

"So, we need proper planning and the first step of our preparation is finding out the number of workers we can retain in this sector," he added.

"It won't be fair to say that our workers would not be able to cope with the arrival of the machines.

Rather, we have to take preparations on how to utilise the existing workforce," he added.

The entrepreneurs, governments, and trade unions can jointly contribute to this process, he added.

He also underscored the importance of research for utilising the country's workforce.

"Now many reputed NGOs (non-governmental organisations) are setting up resorts in Gazipur on huge areas despite there being an opportunity of establishing jackfruit research centres," said Ahmed,

"By setting up more industries, we have to ensure a close relationship between automation and workers," he said.

Miran Ali, a member of the Bangladesh Garment Manufacturers and Exporters Association's support committee, echoed this sentiment, saying that automation does not come about overnight.

"We have to move gradually through partial automation as well as work to improve worker efficiency," he said.

However, worker efficiency in the garment sector has been affected by external inefficiencies, such as power shortages and port and road congestion, he said.

"Our workers are paying the price for the inefficiencies from other issues. This is not actually fair. They should be compensated for their contributions," added Ali.

"If we can address these issues, worker efficiency will be better than the current level," he added.

"I agree that our workers' payment scale is quite low. But our other input costs are much higher than that in other countries," he said.

Ali also suggested that the government focus on introducing automation not only in production processes but also within its own bodies, including the labour ministry, to enhance overall efficiency in the sector.

"We have no option to avoid automation. If we don't embrace it, the country will suffer. The garment sector will suffer," AHM Shafiquzzaman, secretary to the labour and employment ministry, said as the chief guest.

He also called upon workers to stay aware of automation.

The ministry is planning to establish an "Employment Department" to address fluctuations in the labour market's demand and supply, he said.​

 

[Saif]

Union leaders demand emergency fund for laid-off RMG workers

They made the demand in a meeting with the Labour Reform Commission

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Union leaders demand emergency fund for laid-off RMG workers
They made the demand in a meeting with the Labour Reform Commission

A group of union leaders of the garment sector today urged the government to form an emergency fund to provide financial benefit to the laid-off workers, as many are still deprived.

The union leaders made the demand at a meeting with the members of the Labour Reform Commission at the Department of Labour in Dhaka.

To press home their multiple demands, the leaders gave an example of over 40,000 laid-off workers of 16 textile and garment factories of Beximco Group.

They said the Beximco workers will now face trouble in obtaining the service benefits as the group has been struggling to pay the workers since the arrest of its vice chairman, Salman F Rahman.

The Beximco management announced the termination of workers, citing a lack of international work orders as the reason.

Many other factories may also lay off workers amid the current economic situation, the leaders said.

Uncertainty about accessing service benefits increases when workers are laid off in such circumstances, and an emergency fund could be of great help in ensuring these workers receive their deserving service benefits, they said.

The leaders emphasised that neither the government nor the owners alone can fully cover the service benefits; instead, a fund jointly formed by the government and the owners can serve this purpose.

The Labour Reform Commission has been holding a series of meetings with the workers, and 12 meetings have so far been held, said Syed Sultan Uddin Ahmed, chairman of the commission.

The commission will hold 60 meetings with different sectors to receive recommendations for the legal protection of workers of all sectors and setting a national minimum wage, he said.

In today's meeting, the union leaders said the workers are not properly getting help from the central fund, which was set up for garment workers' welfare in 2016 where the country's apparel makers contribute 0.03 percent of their export proceeds in each fiscal year.

The leaders also spoke about establishing a better working environment and introducing a rationing system for the workers, said the chief of the commission, the tenure of which will come to an end in mid-February next year.

The labour law should be reformed to ensure that workers receive justice, he said.

Closing factories is not a solution, and established factories need assistance to remain operational, he also stated.

The government should also be aware that many may close factories and terminate workers in order to receive bank loan waivers, Ahmed said.

The government should identify whether the owners are laying off the workers willingly or there is any valid reason, he said.

In the meeting, Montu Ghosh, president of Garments Workers' Trade Union Centre, suggested introducing strong provision in the labour law so that the workers get payments in time and their jobs remain secured even if they get involved in trade unionism.

Kazi Md Ruhul Amin, general secretary of the Bangladesh Trade Union Centre, recommended ensuring the safety of workers' lives at the workplace, improving industrial relations, and developing labour laws that meet global standards.​

 

[Saif]

How our RMG sector can thrive in 2025

Beximco's problems are evidence of a number of ongoing problems in the garment industry.

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How our RMG sector can thrive in 2025

Workers of 16 factories owned by Beximco block the Nabinagar-Chandra highway in Gazipur for five hours on December 21, 2024, demanding the reopening of the factories. PHOTO: COLLECTED

The recent layoffs of approximately 40,000 workers across 15 apparel units of Beximco Group, one of Bangladesh's largest garment manufacturers, have sent shockwaves through the industry because of their timing and sheer scale. Such a significant workforce reduction, attributed to a lack of work orders and difficulties in opening letters of credit for raw material imports, is evidence of the ongoing challenges in the country's ready-made garment (RMG) industry. There are also, however, some issues that are unique to Beximco, so it would be a mistake to be too alarmed by this news, as concerning as it might be to many.

As I see it, Beximco's problems are evidence of a number of ongoing problems in the garment industry. The layoffs have resulted in significant labour unrest, with workers protesting for unpaid wages and job security. Such disruptions not only affect the immediate workforce but could also potentially deter international buyers concerned about ethical labour practices.

On this front, my hope is that we are through the worst of the worker unrest, and now we can, as an industry, put these issues behind us in 2025.

The political upheaval following the ouster of Sheikh Hasina's regime has led to disruptions in factory operations and supply chains. Such instability risks eroding buyer confidence, resulting in order cancellations. It is difficult to say how much impact this situation has had on the economy as there are many variables at play in the global economy.

However, it was recently reported that Bangladesh's RMG sector recorded export earnings of $35.88 billion in the calendar year of 2023, according to the revised data from the Export Promotion Bureau. Initially reported at $47.38 billion, this correction points to an $11.50 billion decrease in export earnings compared to what was previously published.

For context, the garment exports hit $46.99 billion in FY2022-23, an increase from $42.613 billion in FY2021-22 and $31.456 billion in FY2020-21.

The FY2020-21 figure is an outlier as it reflects the tail-end of the pandemic when orders were down across the board. What we are looking at is a fall of around $11 billion over a 12-month period, which is clearly a cause for concern. In this context, the job losses at Beximco come as no surprise.

It should be noted that in the past year we have seen a change of president in the US, a key market, as well as major political and economic instability in many European countries such as Germany, France and the UK. While not in recession, the European Union has witnessed sluggish growth in the past 12 months. Many countries are implementing net zero plans which are causing short-term pain as countries attempt to balance growth with environmental commitments.

Despite these issues, I still believe there are ample opportunities for Bangladesh to grow substantially in 2025. But to capitalise on these, the government and the industry must take proactive steps.

The government's decision to provide liquidity support to Beximco for wage payments demonstrates a welcome commitment to stabilise the industry. Such interventions can prevent immediate crises and provide a buffer for companies to restructure and adapt. More support like this may be required if other flagship companies find themselves in a short-term liquidity crisis.

Moving beyond basic garment manufacturing to high-value products, such as technical textiles and sports apparel, will ultimately be key to opening new markets and reducing dependency on traditional buyers. This shift requires investment in technology and skills development but promises higher profit margins and market stability.

Strengthening industrial relations will also be critical moving forward. The International Labour Organization (ILO) has proposed key reforms to resolve labour unrest, emphasising the importance of constructive social dialogue. Implementing these reforms can lead to a more harmonious industrial environment in Bangladesh, enhancing productivity and worker satisfaction.

In summary, while it is always difficult to see job loss at a major manufacturer, there are steps we can take to mitigate its impact while ensuring that it does not become endemic across the industry. The year 2024 as a whole has been something of an annus horribilis for Bangladesh—a year in which political instability combined with an uncertain global economy have combined to create the perfect storm for garment manufacturers. We must hold our nerves as we approach the end of this intense period. The fundamentals of our industry—our safe factories, our capable workforce, and world-class production methods—remain robust.

Let's all work together—industry, government and global stakeholders—to bounce back stronger than ever in 2025.

Mostafiz Uddin is managing director at Denim Expert Limited. He is also the founder and CEO of Bangladesh Denim Expo and Bangladesh Apparel Exchange (BAE).​

 

[Saif]

Garment exports to EU rise slightly

The revenue generated from Bangladesh’s garment sales to the European Union (EU) in the January-October period was 1.43 percent higher than that in the same period last year.

www.thedailystar.net

Garment exports to EU rise slightly

Although garment exports from Bangladesh to the European Union were 1.43 percent higher year-on-year in the January-October period, prices declined by 4.92 percent. Photo: Star/file

The revenue generated from Bangladesh's garment sales to the European Union (EU) in the January-October period was 1.43 percent higher than that in the same period last year.

However, a larger amount of goods was exported, specifically 6.68 percent more year-on-year.

This indicates that prices had declined by 4.92 percent.

Unit prices declined for most suppliers this year, reflecting competitive pressure within the global apparel industry.

In case of imports from China, the EU had availed 8.63 percent lower prices, according to Eurostat, the country group's statistical office.

The data suggests that while the EU's overall demand for apparel remains strong, the competitive landscape is shifting, with some suppliers gaining ground while others, including Bangladesh, are experiencing challenges.

The EU's apparel imports in the 10 months showed mixed trend, including signs of recovery, despite price pressures.

It totalled $77.78 billion, which was 0.58 percent higher year-on-year.

This brings EU's clothing imports since January this year till date in the positive, from a negative 2.02 percent growth in the January-September period.

While overall value and quantity of the imports increased slightly, a closer look reveals a complex picture across different sourcing countries.

China, a major supplier, saw a slight increase in the value of apparel exports to the EU in the mentioned period, 1.14 percent to be precise, suggesting a potential shift in the global apparel market.

Other major suppliers like Vietnam and Cambodia experienced growths of 3.31 percent and 20.66 percent respectively.​

 

[Saif]

Top 10 foreign companies that source garments from Bangladesh

Thousands of foreign buyer companies and brands purchase ready-made garments from Bangladesh. Among them, the top ten account for nearly 29 per cent of the exported ready-made garments. Sweden's multinational retail company H&M leads the list of buyers, followed by Spain's Inditex and Ireland's...

en.prothomalo.com

Top 10 foreign companies that source garments from Bangladesh
Masud Milad &
Shuvonkar Karmokar
Published: 23 Dec 2024, 14: 39

RMG workers at a factory File photo

Thousands of foreign buyer companies and brands purchase ready-made garments from Bangladesh. Among them, the top ten account for nearly 29 per cent of the exported ready-made garments. Sweden's multinational retail company H&M leads the list of buyers, followed by Spain's Inditex and Ireland's Primark in second and third places, respectively. In the outgoing fiscal year, these three companies together purchased nearly $6 billion (600 crore USD) worth of ready-made garments from Bangladesh.

This list of top garment buyers for the 2023-24 fiscal year was compiled by Prothom Alo after analysing data from the National Board of Revenue (NBR) and buyer information. The analysis covered approximately 2.1 million shipments exported in the previous fiscal year, including details of imports by both parent companies and their affiliates. The data included information from 1,264 affiliate companies of the top 10 buyers, but did not account for garments purchased through buying houses or agents.

According to NBR data, Bangladesh exported $3.637 billion worth of ready-made garments to thousands of buyers in the last fiscal year. Of this, the top ten buyers purchased garments worth $1.05 billion, which accounts for 29 per cent of total exports. These multinational companies primarily sell the garments in major markets, with the United States being the largest market for Bangladeshi garments.

After H&M, Inditex, and Primark, the remaining buyers in the top ten list include Bestseller from Denmark, Marks & Spencer from the UK, C&A from the Netherlands, Uniqlo from Japan, LPP from Poland, Next from the UK, and Pepco from Poland. One of the world's largest buyers, Walmart, purchased $400 million worth of garments from Bangladesh in the past fiscal year. However, Walmart also buys a large amount through buying houses, which could not be tracked. The US company has chosen not to disclose its purchasing information, meaning it did not make it to the top ten list.

When asked about this, Walmart's Director of Corporate Affairs (Global Communication and Sourcing), Blair Cromwell, stated in an email that they do not publicly release statistics. However, he emphasized that Bangladesh has been a crucial supplier for Walmart for many years, and the strategy for purchasing garments from Bangladesh remains unchanged.
Bangladesh's factories mainly export low-cost garments, which is why the top ten multinational companies typically purchase relatively inexpensive products from the country. On average, these companies pay $3 per piece of clothing. Among the top ten buyers, Uniqlo paid the highest, at $5.41 per piece.

No direct data was found for high-end brands like Louis Vuitton, Dior, Chanel, Gucci, or US's Nike purchasing garments from Bangladesh in the last fiscal year. However, Adidas, a German sportswear brand, did buy garments from Bangladesh, spending $25.6 million. The average price per garment was $23.5 (Tk 2,834). Though in smaller quantities, other well-known buyers like Ralph Lauren from the United States and Lululemon from Canada also sourced garments from Bangladesh. These luxury brands purchase limited garments, with export prices ranging from $300 to $500 per piece.

Prothom Alo has contacted senior executives from five of the top ten buyers, all of whom confirmed the accuracy of the direct garment purchase data, although they declined to comment officially due to company headquarters' restrictions.

Top buyer H&M

H&M is the largest buyer of Bangladeshi-made garments. In the last fiscal year, this company sourced "Made in Bangladesh" garments from over 1,000 outlets across 44 countries. While people in 60 countries can purchase H&M garments online, the highest sales of Bangladesh-made garments are in Poland, Germany, and the United States.

Last year, H&M bought $259 million worth of garments from Bangladesh. The company sourced these garments from over 200 factories in the country. Every day, H&M's garments are part of the shipments exported from Bangladesh. On average, 2,042 shipments of H&M products are loaded onto ships or planes daily. These shipments include clothing for people of all ages, from newborns to adults.

H&M, which started with a single store in 1947, now operates 4,298 sales centres worldwide. Last year, the company sold products worth $21.32 billion. The company is listed on the NASDAQ Nordic Exchange, and its main brands include H&M, Cos, Weekday, Monki, Cheap Monday, Afound, and & Other Stories.

According to H&M's published list, they source garments, home textiles, shoes, and cosmetics from 916 suppliers across 41 countries. H&M has been sourcing ready-made garments from Bangladesh for three decades and has been one of the leading buyers for many years. In the 2021-22 fiscal year, H&M purchased the most garments from Bangladesh, totaling $290 million. Although the amount slightly decreased the following year, they remain among the top buyers.

When contacted, H&M's Global Communications Press Officer and Communications Specialist Albin Nordin in an email told Prothom Alo, "Bangladesh is an extremely important garment-producing country for us. Since 1983, H&M Group has had a presence in Bangladesh with our own production office. Having a dedicated team in our key product-producing country is always advantageous."

When asked if they plan to expand their business in Bangladesh, he did not give a direct answer but mentioned, "Bangladesh is a very important market for us."

Inditex surpasses $2 billion in purchases

Inditex, the second-largest buyer of Bangladeshi-made garments, is a Spanish multinational company. They have been increasing their garment purchases from Bangladesh every year. Last year, they bought $2.18 billion worth of garments from Bangladesh. This is the first time they purchased garments worth more than $2 billion in a fiscal year.

Inditex ships garments to sales outlets in 13 countries, with Spain being the largest market, receiving $1.87 billion worth of garments. The company's main brands include Zara, Pull & Bear, Bershka, Stradivarius, Oysho, and Massimo Dutti. Their purchases from Bangladesh include everything from underwear to overcoats. The garments are supplied by 250 factories in Bangladesh.

Primark purchases low-cost garments

Primark, an Irish multinational retailer, is listed among the buyers of Bangladeshi-made garments who purchase over $1 billion million annually. Last year, the company bought $1.12 billion worth of garments from Bangladesh, making it the third-largest buyer.

Primark has 451 sales outlets in 17 countries. In the fiscal year ending in September, the company generated €9.44 billion in revenue. Primark's main markets are Europe and the United States. They purchase a significant portion of their garments for the UK market from Bangladesh.
A Primark official, speaking on the condition of anonymity, informed Prothom Alo that the company plans to expand its business in Bangladesh.

Bestseller purchases garments at $4.50 each

Bestseller, a Danish multinational company, is the fourth-largest buyer of Bangladeshi-made garments. Last year, they bought garments worth nearly $790 million from Bangladesh. The average price per piece was $4.66, the second-highest among the top ten buyers.
These garments were supplied by 95 factories in Bangladesh and are sold in 11 countries where Bestseller operates.

Marks & Spencer expands business

British multinational company Marks & Spencer (M&S) is the fifth-largest buyer of Bangladeshi-made garments. Last year, they purchased $780 million worth of garments, totaling 210 million pieces. The average price per garment was $3.74.

The main brands of the company are Marks & Spencer and Autograph. Ninety-one per cent of the garments bought from Bangladesh are sent to M&S's sales outlets in the UK. Last year, the company sourced garments from 51 factories in Bangladesh. Like other British brands, M&S is increasing its garment purchases from Bangladesh, according to a company official.

C&A sources half of its garments from Bangladesh

C&A, a retail company based in the Netherlands, has significantly increased its share of garments sourced from Bangladesh. In 2020, 36 per cent of their total garment purchases came from Bangladesh. By 2022, this figure had risen to 51 per cent. According to the company's sustainability report, C&A buys 13 per cent of its garments from China, the second-largest source.

Founded in 1841 by two brothers in the Netherlands, C&A is the sixth-largest buyer of Bangladeshi-made garments. Last year, they bought nearly $720 million worth of garments, totaling 20 million pieces. The average price per piece was $3.62, and the garments came from at least 50 factories in Bangladesh.

Uniqlo purchases expensive garments

Uniqlo, a Japanese multinational company, bought garments worth $715 million from Bangladesh last year, totaling 132.1 million pieces. The average price per garment was $5.41, the highest among the top ten buyers.

Uniqlo's parent company, Fast Retailing, operates seven brands, including Uniqlo, GU, Theory, and J Brand, with 3,595 sales outlets worldwide. The garments sourced from Bangladesh are sold in 24 countries. Last year, 26 factories in Bangladesh supplied garments to Uniqlo, with 32 per cent of the supply coming from Pacific Jeans Group.

LPP sources garments from 250 factories

Polish multinational company LPP purchased $654.4 million worth of garments from Bangladesh in the last fiscal year. These garments were supplied by nearly 250 factories in Bangladesh. LPP opened its branch office in Dhaka in 2015.

According to information on LPP's website, the company sells garments from its five brands in 40 countries worldwide. These brands are Reserved, Cropp, Mohito, House, and Sinsay.

Next purchases half a billion dollars' worth of garments

UK-based multinational company Next, which is 160 years old, buys half a billion dollars' worth of garments from Bangladesh each year. Last year, they purchased 160 million pieces of clothing worth $530 million, meaning Next paid an average of $3.24 per piece.

Pepco purchases low-cost garments

Polish multinational retailer Pepco purchases garments from Bangladesh at the lowest prices among the top buyers. In the last fiscal year, Pepco bought $460 million worth of garments, totaling 260 million pieces. The average price per garment was just under $1.75, the lowest among the top ten buyers.

Pepco operates over 4,500 sales outlets across 21 European countries. The main countries where Pepco sources its garments are Bangladesh, China, and India. The company markets garments under four brands: Pepco, Poundland, PGS, and Dealz.

When asked, Faruk Hassan, the former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told Prothom Alo, "Bangladesh produces garments for over 1,000 buyer companies, both large and small. This is what strengthens our garment industry. Since, except for a few, most buyers source garments from Bangladesh, it can be considered a strong branding asset. In addition to garments, there is a great opportunity to sell other products from Bangladesh to these buyers."​

 

[Saif]

Impact of automation in apparel sector

The latest development in the readymade garment (RMG) factories of the country, courtesy of limited automation, has sent mixed signal to all concerned. Particularly, the workers are alarmed, for it means loss of their livelihood. Already close to 31 per cent workers, mostly helpers, in the producti

thefinancialexpress.com.bd

Impact of automation in apparel sector
FE
Published :
Dec 24, 2024 22:04
Updated :
Dec 24, 2024 22:04

The latest development in the readymade garment (RMG) factories of the country, courtesy of limited automation, has sent mixed signal to all concerned. Particularly, the workers are alarmed, for it means loss of their livelihood. Already close to 31 per cent workers, mostly helpers, in the production process of the RMG units, have reportedly lost their jobs as a result of automation. Similarly, the cutting section of the RMG units have experienced the biggest (nearly 50 per cent) job cut. In comparison, the sewing process suffered the least with about 27 per cent retrenchment. But factory owners, on the other hand, are elated since automation has enhanced the industry's productivity. No doubt, higher productivity is the most sought-after development of the RMG industry in the interest of gaining competitive edge of its products in the international market. However, one cannot also be oblivious of the plight of the workers who have already lost jobs including those who are going to face similar reality in the future due to increased automation in this industry. The emerging realities in the RMG sector call for striking a balance between these two mutually conflicting developments.

These are the findings of a recent study, titled "Assessment of technological transition in apparel sector in Bangladesh and its impact on the workers" conducted by local and international non-profit organisations and a local private university. The study brought to light how different segments of the apparel sector such as the sweater factories saw the highest number of job cuts followed by the woven factories. In a similar vein, the study also show women, who overwhelmingly dominate the workforce in the apparel industry, are getting a raw deal in terms of job-loss at 62 per cent as the fallout from automation. However, in the case of some larger apparel factories, the women risking automation-related unemployment have been reassigned, that is, transferred to other sections. But this is a temporary answer to the challenge for some of the female workers who are already in employment. But those women, especially from the countryside, who have been looking for employment in the garment industry will now be left with fewer opportunities.

Against this backdrop, since the RMG sector gained a global reputation as a model job creator for women in Bangladesh, it has a stake in continuing in that role. In that case, the RMG industry needs to find ways to avoid firing workers, more particularly the female among them, to maintain its positive image. There is yet another group of workers who are also the victims of automation. They are the aged, the unskilled, the less educated workers. While there is no question of opposing automation which is but the way forward for industries in the future, one cannot also leave the retrenched workers in the lurch. To get around this dilemma, the best way is to upskill workers, both women and men, who are already in employment in the apparel sector so they may keep up with the pace of automation at their workplaces. At the same time, both the government and the industry should create training facilities where members of the new generation of workforce might learn the skills required for jobs in the automated apparel factories.

What is important to note here is that it is not only the apparel industry that is facing this transformational challenge. In fact, the trend is all-embracing. In that event, preparations should be there for the government and the industry so the working class might tide over the crisis automation is going to bring with it.​

 

[Saif]

Automation but no wastage of human capital

It is indeed a good development that the country's labour-intensive apparel industry is advancing along the path of automation to accelerate the production process and reduce the cost of production. Automation has gained greater importance for Bangladesh when its competitors such as China and Vietn

thefinancialexpress.com.bd

Automation but no wastage of human capital
Sarker Nazrul Islam
Published :
Dec 24, 2024 22:03
Updated :
Dec 24, 2024 22:03

It is indeed a good development that the country's labour-intensive apparel industry is advancing along the path of automation to accelerate the production process and reduce the cost of production. Automation has gained greater importance for Bangladesh when its competitors such as China and Vietnam are far ahead in the introduction of robotics and artificial intelligence in the production of readymade garments. The more Bangladesh advances in adopting automation, the more it is likely to remain on a par with or gain competitive edge over its rivals. But automation is not all about development of the sector; innovative fashion designs and switch over to manmade fibre are vitally important to achieve the objective. Upskilling workers, as demanded by new technology, is a formidable challenge before the apparel sector.

Apparel industries have started reaping benefits of automation. Quoting survey findings conducted by Solidaridad Bangladesh, Bangladesh Labour Foundation and BRAC University, The Financial Express reports that because of introduction of advanced machines, efficiency has increased by 3.0 per cent to 5.0 per cent; knit polo shirts productivity also increased to 140 from 90 per hour and rejection reduced from 10 per cent to zero per cent, which is no doubt a remarkable achievement that substantiates the benefits of automation. Weekly overtime has also dropped from 20 hours on an average to 11 hours mainly due to faster production cycle enabled by automation. A factory now requires only one person for spreading fabrics instead of seven in times of manual process. Data automation also enables manufacturers to track production metrics, energy use and maintenance schedules.

Production automation has already proved to be a boon for the industry. But, despite a host of positive impacts of automation on overall productivity in this industry, this is not a case of unmixed blessing, particularly for millions of unemployed girls. Upgrading of technology has eliminated more than 30 per cent jobs from the country's apparel industries. The cutting section of the RMG industries saw more than 48 per cent job cut, the highest in the sector, while it is about 27 per cent in the sewing section where majority of the workers, especially women are employed.

Due to data discrepancies, it is very difficult to find the exact number of unemployed youth in Bangladesh. The number of the unemployed aged between 15 and 29 is likely to be around 2.6 millions. Their number is swelling with the joining of around 2.0 to 2.2 million working-age people to the job market every year. But generation of employment opportunities is far below the demand level due to stagnancy or sluggish growth of industries and the service sector. Introduction of automation is likely to further aggravate the unemployment situation. However, this is not an argument against the necessity of automation in industrial production. Despite introduction of automation, the situation of unemployment must not be allowed to worsen; it must be averted through adoption of pragmatic strategies aimed at reaping the benefit of demographic dividend.

Women are still the majority of RMG workers. Employment in the garment factories created an opportunity for them to live a worthy life. Their participation in production was a significant step in the direction of women empowerment. But, with the introduction of automation, they are going to be more affected than their male counterparts. According to the above survey, in the process of automation women were replaced either by reassigning to different roles or, in some cases, dismissed. Alternative job opportunities should be created for them instead of retrenching them and thus depriving them of their financial liberty. Automation is a must for faster growth of the economy but surely not at the cost of demographic dividend.​

 

[Bilal9]

Did Vietnam really overtake Bangladesh’s 2nd spot as an RMG exporter?​

Bangladeshi apparel manufacturers said they only rely on the official data published by the World Trade Organization (WTO) regarding global trade
https://www.dhakatribune.com/369185


Photo: Mahmud Hossain Opu/Dhaka Tribune


Publish : 26 Dec 2024, 06:22 PMUpdate : 26 Dec 2024, 07:17 PM

A Vietnamese news portal, Voice of Vietnam (VOV) claims that Vietnam has surpassed Bangladesh to become the world’s second-largest apparel and textile exporter, ranking only behind China.

The Vietnamese news outlet cited Hoang Manh Cam, spokesperson for the Vietnam National Textile and Garment Group (Vinatex), one of the largest Vietnamese textile companies, who briefed the Vietnamese journalists on Wednesday.

He said that the Vietnamese textile and garment industry seized a significant number of orders shifting from Bangladesh in 2024, contributing to the industry’s revenue milestone of $44 billion, representing 11%, while Bangladesh, Vietnam’s most potent rival recorded a 3.7% decline in textile and garment exports in 10 months to only $27.7 billion.

However, the RMG manufacturers of Bangladesh refuted Cam's statement, saying Vietnam includes apparel and textiles as a single product in its overall export earnings, while Bangladesh separates apparel, home textiles, and textiles into three different products. So, Vinatex’s data does not represent authentic data.

Moreover, Vinatex is not a government entity; it is a private RMG and textile manufacturer, so their data can not be regarded as official data.

What does official data say?​

Meanwhile, the data presented by Vinatex even contradicts the official export data of the General Statistics Office (GSO), the government’s official statistics organization of Vietnam.

According to the GSO, Vietnam earned $30.57 billion from exporting textile and apparel items in the first ten months of 2024 (January-October), meaning lone income from apparel or sewing products was indeed below $30 billion.

However, Vinatex reported that Vietnam earned $44 billion in January-October 2024.

According to World Trade Organization data, in 2023, the Southeast Asian country earned $33.32 billion from its global destinations by exporting textile and sewing products, while earnings from apparel or sewing products were $31 billion.



On the other hand, Bangladesh earned $31.41 billion by exporting only apparel items in the January-October period of 2024, while Vinatex said the world’s second-largest exporter earned $27.7 billion, which the apparel manufacturers turned down.

Only WTO’s data is reliable​

Bangladeshi apparel manufacturers said they only rely on the official data published by the World Trade Organization (WTO) regarding global trade. WTO usually publishes global trade data titled “World Trade Statistics: Key Insights and Trends” in August of every year.

Talking to Dhaka Tribune, Mohiuddin Rubel, former director of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said they only rely on WTO data.

“Vietnam’s exports will always be higher than ours as they include all types of textile products along with apparel. We categorize apparel as a single product. Our earnings will once again supersede Vietnam if we include earnings from home textile and textile sector along with apparel,” he added.

He also said that Bangladesh will officially be the world's second-largest apparel exporter until the publication of the WTO data on 2024 trade trends in August 2025, and they are working hard to retain the position.

WTO Data 2023​

In the first week of August of this year, the WTO published its “World Trade Statistics 2023: Key Insights and Trends,” which showed that Bangladesh has maintained its position as the world’s second-largest apparel exporter and exported apparel items worth $38 billion to its global destinations.

In 2023, Bangladesh's global apparel market share was 7.4%.

In the same year, Vietnam, Bangladesh’s arch-rival in RMG exports, secured third position with a market share of 6% and exported apparel items worth $31 billion.

Among the major RMG exporters, China remains the largest exporter of RMG products in the global market, with a 31.6% market share. The country exported RMG goods worth $165 billion in 2023.

Meanwhile, the VInatex spokesperson also said that despite having a product range and geographical advantage similar to Bangladesh, India benefited the most from the trend of orders shifting away from Bangladesh in the past year.

Other leading exporters, such as Sri Lanka and Turkey, also benefited from the shift in orders from Bangladesh.

However, Cam warned that these results may only last for a certain period, noting that Bangladesh’s exports have been recovering market share in September and October. Therefore, there is a possibility that Bangladesh will soon recover its textile exports, and competition will return.

The garment industry is expected to continue the momentum from the end of 2024 and see some positive growth signals in the first half of 2025 as key markets such as the US and the EU recover economically.

 

[Saif]

Charting a path ahead for the RMG sector

Bangladesh has emerged as an economic success story, primarily through its booming ready-made garments (RMG) sector.

www.thedailystar.net

Charting a path ahead for the RMG sector

Bangladesh's economy relies heavily on the RMG sector, which faces numerous challenges. FILE PHOTO: STAR

Bangladesh has emerged as an economic success story, primarily through its booming ready-made garments (RMG) sector. The country's exports in this industry surged from $23.5 billion to $47.38 billion between 2013 and 2023, lifting millions out of poverty and gaining international recognition. Key factors driving this growth include a cost-effective workforce, dedicated entrepreneurs, strong financial systems, and political stability, resulting in a remarkable seven percent annual growth rate. Bangladesh is now the world's second-largest apparel exporter, solidifying its status in the global fashion market.

The Covid pandemic, global supply chain disruptions, and the Russia-Ukraine conflict have revealed the vulnerability of Bangladesh's economy, which relies heavily on a single industry. This dependence has resulted in insufficient revenue from other sectors to meet financial obligations. The country is facing high inflation and unemployment, largely due to poor policy decisions and a lack of economic diversification. Overall, Bangladesh is grappling with significant economic challenges.

Despite significant growth in the RMG industry, Bangladesh faces numerous challenges, particularly its impending transition from Least Developed Country (LDC) status by 2026. Following this graduation and a subsequent three-year grace period ending in 2029, Bangladesh will lose its duty-free, quota-free, and preferential Rules of Origin benefits for apparel exports to the European Union, a crucial market that represents nearly half of its RMG exports.

The loss of LDC-specific trade preferences will raise Bangladesh's effective tariffs by approximately 5.7 percent, potentially causing a 14.3 percent drop in apparel exports, equating to a loss of $5.37 billion annually. In response, Bangladesh has launched an ambitious plan to reach a $100 billion annual export target by 2030. This optimism is supported by the country's strong historical growth, policies to enhance backward linkages, product diversification, and a stable political environment, which collectively suggest a promising future for its export sector.

To achieve its policy goals, the nation must strategically enhance value addition, particularly in the RMG sector. Currently, value addition has stagnated at 50-65 percent over the past decade. By increasing the use of domestic fabrics and yarns, Bangladesh could elevate this figure to 70-75 percent, which would significantly boost net export earnings.

Bangladesh produces 85 percent of the yarn needed for knitted cotton fabrics, but only meets 35 percent of the demand for woven garments and man-made fibre (MMF) based apparel domestically. The country faces challenges with limited domestic production of MMF materials. Enhancing the production of woven and non-cotton yarns and fabrics could significantly increase Bangladesh's export earnings.

Bangladesh can boost its apparel manufacturing sector by leveraging MMF, such as polyester, to meet the growing global demand for non-cotton textiles. Currently, MMF constitutes 77.6 percent of global fibre production, while natural fibres, including cotton, account for 22.4 percent. This trend is driven by consumer preferences for functional and stylish clothing, which MMF-based garments can provide. Additionally, MMF products typically command higher prices and can yield greater export revenue compared to cotton-based apparel.

Bangladesh currently holds a modest 16.9 percent share of MMF apparel exports, significantly less than China (42.8 percent) and Vietnam (46.9 percent). To enhance its position in the growing MMF market, Bangladesh needs to improve its MMF manufacturing capabilities. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) aims to increase MMF-based garment production to 40 percent by 2030. By expanding MMF production, Bangladesh can better meet global demand, diversify its ready-made garment sector, and enhance domestic value addition in the supply chain.

The rapid scaling of MMF production by 2030 faces three main challenges: the need for significant foreign capital investment, a shortage of specialised knowledge and skills in Bangladesh to operate the required capital-intensive machinery, and a lack of incentive programmes to attract investors to MMF manufacturing facilities.

The remarkable growth in MMF apparel exports of countries like China and Vietnam was significantly driven by foreign investment. Foreign investment brings in foreign currency, machinery, technology, and expertise to develop high-value industries like the MMF. In Bangladesh, the Bangladesh Investment Development Authority (BIDA) is responsible for attracting investment and should serve as the central coordinating body to streamline bureaucratic processes and instil confidence in foreign investors. BIDA should analyse successful markets and devise a comprehensive and best-in-class strategy. A major challenge for foreign investors in Bangladesh is the absence of downstream liquidity in the capital markets, which hinders their ability to exit or diversify their investments. BIDA should spearhead collaboration between government agencies and the private sector to address this issue.

Saleudh Zaman Khan, managing director of NZ Textile and a vice president of the Bangladesh Textile Mills Association, shared in an interview how Bangladesh can rapidly gain a foothold in the highly competitive MMF apparel market, which is currently dominated by China and Vietnam. "Bangladesh government must adopt a fast-track strategic approach and offer substantial incentives to encourage the manufacturing of MMF and MMF-based garments," he said. "The incentive programmes must ensure the long-term sustainability of MMF manufacturing facilities by providing additional incentives to compete against foreign competitors, especially China and Vietnam," added Saleudh. He also emphasised that these incentives should be extended to both local and foreign investors in the MMF production sector, in-order-to promote and reinforce the domestic supply chain.

Bangladesh's dependence on imported cotton and MMF poses risks such as price fluctuations, supply chain issues, and geopolitical tensions. To mitigate these challenges, establishing a strategic reserve for cotton and MMF is recommended, allowing for a reliable raw material source during disruptions. This reserve would require specific storage facilities for at least a six-month supply and could be developed without direct investment by incentivising suppliers to store their inventory within the country. This approach would help spinning mills access materials quickly and cost-effectively, saving on inventory costs while ensuring prompt delivery.

Finally, Bangladesh needs to broaden its economic base, and the government should enhance research funding in science and technology to reduce dependence on the garment sector. Bangladesh's graduation from LDC status will allow the country to diversify its product offerings and strengthen its supply chain for higher-value goods. This transition encourages the use of advanced technology and automation to boost productivity and profitability. To comply with stricter origin requirements, particularly the "double transformation" criterion for the EU market, establishing strong backward linkages will be essential once preferential trade access ends.

Dr Quamrul Ahsan is managing director of Sarah Textile Mills Ltd, and a former faculty member at BUET.​