[🇧🇩] Textile & RMG Industry of Bangladesh

[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

www.thedailystar.net

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

www.thedailystar.net

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.

www.thedailystar.net

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.

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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.

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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.​

 

[Saif]

Vietnam may surpass Bangladesh in garment export: report

Vietnam is set to generate $44 billion this year through garment exports, surpassing Bangladesh, which is currently the world’s second-largest garment exporter, according to a Vietnamese media report.

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Vietnam may surpass Bangladesh in garment export: report

Workers are seen at a garment factory in Hung Yen province of Vietnam. Photo: Reuters/file

Vietnam is set to generate $44 billion this year through garment exports, surpassing Bangladesh, which is currently the world's second-largest garment exporter, according to a Vietnamese media report.

Bangladesh's export goal is $4 billion lower than Vietnam's.

Vietnam's apparel and textile sector is set to earn an export revenue of $44 billion this year, up 11 percent year-on-year, and will likely surpass Bangladesh to become the world's second-biggest exporter in the sector.

Meanwhile, Bangladesh set a target of $40.48 billion for garments, out of a total of $50 billion for overall exports, with an 11.99 percent growth for fiscal year 2024-25. Bangladesh does not set garment export targets on the basis of calendar year.

The export target for knitwear and woven items is $21.7 billion and $18.78 billion respectively.

At a press meeting on Wednesday, Cao Huu Hieu, CEO of Vietnam National Textile and Garment Group (Vinatex), the country's biggest garment maker, announced the $44 billion export target.

He stressed that the sector's performance was weak in the first half of 2024 as the global economy underperformed, and the sector received few orders with strict conditions.

However, the sector recovered and thrived in the second half of this year, not thanks to the growing demand, but because of the political issues in Bangladesh promoting firms to make orders in Vietnam. This is a "fortune" for the sector amid challenges, he added.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said there was no doubt that Vietnam would surpass Bangladesh as the east Asian country's apparel industry faces no bottlenecks.

He stated that Vietnam finds it easy to increase exports of garment goods because there was no labour unrest, gas crisis, or tax issue there.

However, he continued, Bangladesh faces numerous issues that make it difficult for exports to increase.

Even though labour costs are lower than those of Vietnam, exporters of garments encounter challenges at every turn, making it impossible to take the initiative to increase production, he said.

Given that the Trump administration will impose high tariffs on Chinese goods, Hatem even mentioned the possibility of obtaining new investment from China.

He added that although there was potential to draw Chinese investment in attempts to avoid high duties in the US market, there are a number of barriers that prevent Chinese investment from coming here.

Bangladesh fetched $36.15 billion through garment exports last fiscal year, which was 5.22 percent lower than that in the previous fiscal year.

Of the total export earnings, the knitwear sector earned $19.28 billion while woven garments around $17 billion.​

 

[Saif]

No growth in RMG exports to non-traditional markets

Bangladesh’s readymade garment exports to non-traditional markets slightly declined in the July-November period of FY2024-25 due to reduced knitwear shipments, while earnings from...

www.newagebd.net

No growth in RMG exports to non-traditional markets​

Staff Correspondent 28 December, 2024, 23:58

Bangladesh’s readymade garment exports to non-traditional markets slightly declined in the July-November period of FY2024-25 due to reduced knitwear shipments, while earnings from traditional markets, including the United States and the European Union, saw significant growth in the period.

The country’s export earnings from the nontraditional market in the first five months of FY25 fell by 0.77 per cent to $2.76 billion from $2.78 billion in the same period of FY24, according to the Export Promotion Bureau data.

Woven garment exports to nontraditional markets in the period grew by 11.26 per cent to $1.36 billion while knitwear exports declined by 10.23 per cent to $1.40 billion.

The country’s export destination other than the US, the EU, the UK and Canada considered as nontraditional market.

Although the RMG exports to nontraditional markets decreased slightly, the earnings from Japan, India, South Korea, Turkey and Mexico registered a moderate growth in the first five months of FY25.

Bangladesh’s RMG exports to Japan in July-November of FY25 increased by 3.69 per cent to $496.20 million from $478.57 million in the same period of FY24.

RMG exports to India in the five months of FY25 grew by 16.48 per cent to $325.06 million from $279.06 million in the same period of past financial year.

The country’s apparel exports to Turkey in July-November of FY25 increased by 50.54 per cent to $181.85 million while the shipment to Brazil grew by 30.06 per cent to $66.04 million.

RMG exports to Russia in the period fell by 9.34 per cent to $115.04 million while the export earnings from the United Arab Emirates declined by 15.44 per cent to $98.27 million.

EPB data showed that nontraditional markets contributed 17.11 per cent to total RMG exports in the first five months of FY25, down from 19.37 per cent in FY24.

According to the government data, RMG exports to the EU grew by 13.74 per cent while the exports to the US increased by 17.44 per cent in July-November period of FY25.

It also showed that RMG exports to the UK market in the first five months of FY25 recorded growth of 5.84 per cent while the shipment to Canada increased by 13.22 per cent in the period.​

 

[Saif]

Can apparel industry weather any storm? 2024 offers clues

For the local apparel industry, 2024 was a year marked by challenges, recoveries and a renewed sense of hope as the global market began to brighten -- proving once again the resilience of Bangladesh’s apparel might.

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Can apparel industry weather any storm? 2024 offers clues

For the local apparel industry, 2024 was a year marked by challenges, recoveries and a renewed sense of hope as the global market began to brighten -- proving once again the resilience of Bangladesh's apparel might.

Energy crises, dollar shortages, supply chain disruptions, labour unrest centring pay hikes, political uncertainty and a slack law and order situation: the list of domestic challenges for apparel-makers in 2024 was extensive.

In a positive development, Western buyers began returning to Bangladesh following the fierce nationwide movement and political changeover, as inflationary pressures eased and the world recovered from the pandemic and war fallout.

Consequently, Bangladesh's apparel shipments to major export markets like the EU and the USA rebounded. In the July-November period, the country's shipments grew by 16.25 percent year-over-year to $16.11 billion.

"This indicates that the future is brighter now than a few months ago," said MA Jabbar, managing director of DBL Group, whose top clients include Walmart-George, Puma, Esprit, and G-Star.

"I can see a very positive outlook for garment exports," Jabbar added.

The local apparel industry, which fetches the lion's share of the country's export earnings, began 2024 just after emerging from pay hike movements and with increased wages.

Amid the Covid recovery, global markets were then reeling from inflationary woes and the Russia-Ukraine war. There was also the Red Sea crisis and conflict in the Middle East.

Then, in June, the quota reform movement began, blocking apparel shipments to foreign markets.

In July and August, government-imposed internet blackouts and curfews intensified the situation, culminating in a violent political changeover.

This caused deadline delays for apparel-makers, many of whom had to offer discounts to compensate for late shipments.

Amid this struggle, massive labour unrest erupted in major industrial belts on the outskirts of Dhaka in July and continued until October, affecting both production and shipments following the nationwide student movement.

Labourers left production lines, blocked roads and streets and chanted slogans for pay hikes and increments, disrupting the already struggling local apparel manufacturing.

Due to unrest, vandalism and fires, factories in major industrial belts like Gazipur, Savar, Ashulia, Zirani and Zirabo were shut down for several months.

In September, factory owners, labour leaders and workers agreed on a resolution for their 18-point demand.

The minimum wage board increased the annual increment for garment workers to 9 percent from previous 5 -- one of the key labour demands in the 18-point.

The new increment took effect in December and the other demands, except for the amendment of the labour law, have been met too. The government has promised to amend the law by March next year.

For many, the resolution after the unrest meant production resumption, but for a few, it was worse.

For instance, Beximco Group laid off over 40,000 workers from its 16 textile and garment units.

The outgoing year involved correcting export data, as export earnings were previously overstated due to incorrect calculations.

In a final calculation, the central bank said that the garment sector's earnings in fiscal 2023-2024 were $36 billion, rather than the $47 billion calculated by the state-owned Export Promotion Bureau (EPB).

The outgoing year was challenging but also a time for business recovery as work orders rebounded with political stability, said Faruque Hassan, a former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Hassan said international retailers and brands are now returning with work orders as sales in the USA and EU have grown with the rebounding of retail sales.

According to BDL Group's Managing Director Jabbar, 2024 was one of the highest-exporting years, as they received massive work orders from international clothing retailers and brands.

"Now we really need to do more for better growth of the sector," Jabbar told The Daily Star over the phone.

He recommended establishing a dedicated EPB-like institution for the garment sector and ramping up investment in man-made fibre and sportswear segments to capture more global markets.

Meanwhile, Rizwan Rahman, a former president of the Dhaka Chamber of Commerce and Industry (DCCI), called for political stability for business growth.

He said the law and order situation has not improved to the expected level and is still affecting the business environment.

According to former BGMEA president Hassan, apart from political and labour unrest, the perennial power and energy crisis severely impacted investment inflow into the sector. As a result, many jobs could not be created in the sector this year.

Hassan also suggested investing more in man-made fibre to get better prices and increase exports, as the demand for specialised garments is increasing worldwide.​

 

[Saif]

RMG workers withdraw protests in Ctg

Workers and staff of various units of Pacific Jeans Ltd at Chattogram Export Processing Zone today withdrew their two-day protest after the owner pledged to meet their demands

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RMG workers withdraw protests in Ctg

Photo: Md Rajib Raihan

Workers and staff of various units of Pacific Jeans Ltd at Chattogram Export Processing Zone today withdrew their two-day protest after the owner pledged to meet their demands.

CEPZ Executive Director Md Abdus Sobhan said the managing director of the company met with the workers around 2:30pm.

The management announced a holiday for today and urged all the workers and staff to join work tomorrow, he said.

Earlier, thousands of workers continued their protests for a second consecutive day today, pressing for additional demands beyond those addressed by the company yesterday.

Following daylong demonstration by workers on Saturday, Managing Director Syed M Tanvir issued a circular saying that the company has agreed to halt forced resignations and inter-unit transfers, meeting two of the workers' demands.

The workers today demanded to fulfil their other demands including termination of some senior officials of the management, raise in different allowances including tiffin and transport allowances, full presence bonus and over time for the staff (team leaders)​

 

[Saif]

Home textile exports bounce back

The export of home textiles is on the path to recovery after nearly one year because of the devaluation of the local currency, increased production capacity and improvement in gas supplies to some extent.

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Home textile exports bounce back
Taka devaluation, increased production capacity boost shipment

The export of home textiles is on the path to recovery after nearly one year because of the devaluation of the local currency, increased production capacity and improvement in gas supplies to some extent.

Home textile exports grew by 7.85 percent year-on-year in the July-December period of the current fiscal year to $410.81 million while it was in the negative even two to three months ago.

Apart from garment items, home textile is one of the three new sectors whose exports crossed $1 billion recently. The two other sectors are jute and jute goods and leather and leather goods.

Home textile exports showcased strong growth of 20.47 percent year-on-year in December to reach $83.98 million, according to data from state-run Export Promotion Bureau (EPB).

Home textile mainly refers to carpets, rugs, floor coverings, curtains, cushion covers, napkins, towels, bedspreads, furnishing fabric, table linen, bed linen, sheets and pillowcases, blankets, shower curtains, aprons, and wallpapers.

Its export fell sharply almost year-round in 2023 and 2024 as the local exporters did not book new work orders for an abnormal price hike of gas.

The Bangladesh government suddenly hiked gas prices by 150.41 percent in February 2023, from Tk 11.98 per unit to Tk 30 per unit, and a good volume of work orders shifted to Pakistan.

Work orders for home textile are booked for one or two seasons in bulk quantities.

With the abnormal gas price increase, exporters could not manage the cost of production, and they did not run their units at full capacity and refused some work orders, which went to Pakistan.

However, the devaluation of the local currency against the US dollar, increased spinning capacity and improvement in gas supplies to some extent helped pull back the business confidence of local exporters.

The shipment of home textile is also returning to its previous volumes gradually.

Also, the fall of inflation in Europe and the US has also been helping to recover home textile exports, said Md Shahidullah Chowdhury, executive director of Noman Group, which accounts for more than 70 percent of Bangladesh's home textile exports.

"We also increased our capacity to an extent with the improvement of gas supply, and exports from the company are growing now," Chowdhury said.

Last month, total home textile exports from his group reached nearly $27 million while it was worth $22 million in the previous month.

He also said the gradual restoration of normalcy in Bangladesh and political unrest in Pakistan also played a role in the restoration of home textile exports.

The country's home textile exports had crossed $1 billion in FY21, registering a whopping 49.17 percent year-on-year growth.

That momentum continued the following year, with exports rising by another 40-odd percent to $1.62 billion.

However, the gas crisis upended that trend the following year, with home textiles fetching $1.09 billion, down by almost a third.

Bangladesh was struggling to recover lost work orders in the home textile segment, a significant volume of which was shifted to Pakistan nearly two years ago.

This shift occurred mainly due to the sudden doubling of gas prices in Bangladesh and significant devaluation of the Pakistani rupee against the US dollar.

More recently, labour unrest in industrial belts and months of political unrest in Bangladesh have contributed to lower receipts.

Moreover, Pakistan possesses some inherent advantages, such as being the world's seventh-largest producer of cotton, according to Statista.

Pakistan also enjoys benefits under the EU's Generalised Scheme of Preferences Plus (GSP+) while Bangladesh only enjoys standard GSP facilities.

The number of home textile mills has also increased, especially smaller units, said Monsoor Ahmed, former chief executive officer of the Bangladesh Textile Mills Association (BTMA).

For instance, previously six to seven major textile mills used to export home textile, but the number of home textile exporters is more than 25 now, including the small units, he added.

Khorshed Alam, chairman of Little Group, a textile miller, said the production of home textile increased and exports also grew.

At the same time, a few mills stopped production as they were losing work orders during the shifting of work orders to Pakistan.

BTMA President Showkat Aziz Russell said the devaluation of the Taka against the US dollar was the main factor for the improvement in the home textile sector, which helped the exporters to be more competitive.

Moreover, more than 9 million new spindles have been installed over the last few years, which boosted the production in the textile sector.

The target is to install 15 million spindles, and it is expected that the installation of more than six million more spindles can be completed by the end of this year, which will also boost the production of primary textile, including home textile, he added.

"The gas supply improved to a bit, but it is not consistent yet," Russell said, adding that if the gas supply was restored at an adequate pressure, the primary textile sector's investment and production would also grow.​