[🇧🇩] Textile & RMG Industry of Bangladesh

[Saif]

Tariff commission flags textile smuggling ahead of Eid

With festivities in full swing ahead of Eid-ul-Fitr, the Bangladesh Trade and Tariff Commission has emphasised the importance of safeguarding the local textile industry against the growing influx of imported garments.

www.thedailystar.net

Tariff commission flags textile smuggling ahead of Eid
Proposes critical steps to safeguard industry

A woman browses through the apparel selection at an Aarong outlet in Dhaka. With festivities in full swing ahead of Eid-ul-Fitr, the Bangladesh Trade and Tariff Commission focused on the need for urgent intervention to protect the domestic market for textiles, especially in the face of increasing competition from imports. The photo was taken recently. Photo: Prabir Das

With festivities in full swing ahead of Eid-ul-Fitr, the Bangladesh Trade and Tariff Commission has emphasised the importance of safeguarding the local textile industry against the growing influx of imported garments.

As demand for apparel spikes during the country's largest shopping festival, the commission proposed several critical steps yesterday to counter the rising trend of imports, smuggling, and duty evasion that is threatening locally produced textiles.

According to a survey by the Bangladesh Shop Owners Association (BSOA), business worth around Tk 170,000 crore is conducted ahead of Eid-ul-Fitr, with over Tk 37,000 crore spent on clothes.

However, smuggled garments often infiltrate shopping hubs, undercutting local producers, during this lucrative time.

In its recent report, the tariff commission focused on the need for urgent intervention to protect the domestic market for textiles, especially in the face of increasing competition from imports.

The Bangladesh Jamdani Manufacturers and Exporters Association (BJMEA) raised concerns about the rising availability of imported sarees, three-piece suits, "lehengas", and other garments, which could jeopardise the livelihoods of local weavers and manufacturers.

The commission's report revealed that a significant amount of apparel enters the market through both legal and illegal channels.

The analysis shows that saree imports from India alone reached 3,300 tonnes in fiscal year 2022-2023, valued at Tk 28.26 crore, before dropping to 2,526 tonnes in FY24, valued at Tk 25.89 crore.

Similarly, in FY24, imports of three-piece dresses and "lehengas" hit 37,676 tonnes, valued at Tk 1,531.56 crore. Until December 9 of this fiscal year, 16,506 tonnes, valued at Tk 658.43 crore, were brought in.

The commission further noted that the average net price per piece of imported garments appears lower than current market prices.

Some foreign sarees and "lehengas", which should be worth over Tk 1 lakh in the local market, are being sold well below those prices, suggesting oversupply and possible links to duty evasion or smuggling.

To ensure that the actual value of these imports is properly reflected, the commission has recommended that the National Board of Revenue issue special instructions to import clearance stations for garments, including two-piece outfits, three-piece dresses, "lehengas", and sarees.

The commission also called for all garment products to come under inspection during customs clearance.

These inspections should involve relevant customs officers and third-party agencies to prevent false declarations and guarantee compliance with regulations.

Furthermore, the commission urged the Ministry of Home Affairs, in collaboration with the Directorate of Customs Intelligence and Investigation, to take strict legal action against smuggling and duty evasion.

Special operations led by Border Guard Bangladesh, police and anti-smuggling district task forces are essential to protecting the domestic market from illegal foreign textiles.

Bangladesh imports apparel from countries like India, Pakistan, China, Myanmar, Hong Kong, Vietnam, Thailand, and Japan.​

 

[Saif]

Bangladesh beats competitors in RMG export growth to US

Bangladesh has outperformed competitor countries to attain the highest year-on-year growth in apparel shipments to the US market in January, as American retailers and brands are placing large volumes of work orders here to capitalise on the favourable tariff regime.

www.thedailystar.net

Bangladesh beats competitors in RMG export growth to US

Bangladesh has outperformed competitor countries to attain the highest year-on-year growth in apparel shipments to the US market in January, as American retailers and brands are placing large volumes of work orders here to capitalise on the favourable tariff regime.

In January, garment exports to the US from Bangladesh increased by 45.93 percent year-on-year to $799.65 million, according to data from the Office of Textiles and Apparel (OTEXA) of the US.

Exporters said this happened as the Trump administration raised tariffs on imports from China and Mexico, creating an advantage for Bangladesh in the US market.

In the run-up to the presidential election, Trump had declared that he would impose high tariffs on goods imported from China, Mexico, and other countries if elected.

Right after taking office, he increased the tariff on Chinese goods from 25 percent, which he had set during his last tenure as US president, to 35 percent.

On the other hand, Bangladeshi exporters have long faced a 15.62 percent duty on exports to the US. Under the current circumstances, Bangladesh has the opportunity to increase exports to the US.

In January, the US imported garment items worth $7.20 billion from all over the world, marking a year-on-year growth of 19.46 percent.

Meanwhile, China's apparel exports to the US rose by 13.72 percent to $1.60 billion.

Correspondingly, Vietnam secured 19.90 percent growth to reach $1.44 billion, India 33.64 percent to $473.27 million, Indonesia 41.70 percent to $419.95 million, Cambodia 29.95 percent to $324.99 million, and Mexico 1.20 percent to $193.70 million.

For Pakistan, it was 17.50 percent to $179.73 million, whereas for Korea, it was 5.54 percent to $16.43 million. Honduras witnessed a decline of 26.10 percent to $112.02 million, according to the OTEXA.

In the July–February period of the current fiscal year 2024–25, Bangladesh's garment exports worldwide totalled $26.80 billion.

This represents substantial growth of 10.64 percent from the $24.22 billion attained during the same period last fiscal year.

This increase signifies the resilience and dedicated efforts of the industry towards promoting sustainability and continuous economic advancement, said Faruque Hassan, former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

It is significant, considering that the global market experienced a 5 percent year-over-year decline in 2024, he said.

Breaking it down further, Bangladesh's woven exports rose by 10.22 percent, increasing from $11.30 billion in FY 2023–24 to $12.46 billion in FY 2024–25.

The knitwear sector experienced even more significant growth of 11.01 percent, with exports climbing from $12.92 billion to $14.34 billion.

"While we celebrate these achievements, our month-by-month analysis indicates some challenges ahead," Hassan said over WhatsApp.

"Following a period of strong growth in the second quarter of FY 2024–25, we observed a deceleration starting in January 2025, which continued into February," he said.

In February this year, garment exports reached $3.24 billion, marking modest growth of 1.66 percent, with woven exports slightly declining by 0.44 percent while knitwear exports grew by 3.77 percent.

"As we look ahead, we recognise the dual nature of our path—both opportunities and challenges. There are significant internal factors that the government is earnestly working to address, and the industry itself is making proactive adjustments," he said.

Declining price levels remain a major concern that necessitates strategic actions to remodel the business, said Hassan.

Conversely, the potential for growth in various items, fibres, and markets, alongside trade diversification due to geopolitical tensions and trade wars, presents immense opportunities for Bangladesh, he added.​

 

[Saif]

The rise and fall of Dhaka muslin

Dhaka muslin: a fabled fabric from Bengal, prized worldwide, vanished quickly.

www.thedailystar.net

The rise and fall of Dhaka muslin

A demonstration proving true a claim passed through the generations that Muslin fabric is so fine that a six-yard sari could be passed through a ring. Photo: Star file/ Rashed Shumon

I grew up reading many Greek myths—whether it was about Sisyphus's exercise in futility, Prometheus's gift of fire to humanity, or Orpheus's fatal mistake of looking back at his beloved in the underworld. Those myths may be far-fetched, but what felt real enough to touch were the myths around the fabled fabric—Dhaka muslin. Something about living in the world's largest delta through which the Meghna River flows made it so. The river being shrouded by fog, young women with nimble hands weaving away and singing sweet melodies, and the supple softness of the fabric that was believed to be made under water—all these made for perfect conditions for any passerby to spin the myth of mermaids melodising in the mist.

The entire process of its production, from extracting the cotton fibre from a yellow flowering plant, Phuti karpas, that grew along the Meghna River to the fabric adorning royalty, involved 16 very elaborate steps that were carried out in different areas around Dhaka. The fibre was carefully cleaned using boal fish teeth attached to its jawbone. Bowls of water were scattered around during the process of spinning as it aided in the moistening of the air-humidity being a key ingredient to stretch it. The spinning would often take place in boats when humidity was at its peak, in early mornings and late afternoons. Young women carried out this task with their supple fingers and enviable eyesight. The fabric travelled the rich lands of Bengal and the hands of both the old and young before travelling the world. The Mughals refused to have their portraits drawn adorned in anything else but muslin. To the East, it went to Java and China, where in the early 14th century, the traveller Ibn Battuta wrote that it was highly prized. This fabric was what members of high society in Europe wore and scandalised entire courts by being accused of indecency in public. As such a fine fabric was unheard of and seldom seen in the West—it captivated the likes of Queen Marie Antoinette, Empress Joséphine Bonaparte, and the esteemed author Jane Austen. However, as quickly as the fabric took the aristocrats of the East and West by storm, it also disappeared in a blink of an eye.

My experience of seeing pieces of Dhaka muslin in the Victoria and Albert Museum in London was a conflicted one. A part of me was glad to see the fabled fabric so beautifully preserved. So many wonderful epithets given to muslin by historians played in my head, like "vapours of dawn," and "woven wind." But another part of me was pained, thinking about the "kothis," the Mughals put muslin artisans into that subjected them to extremely harsh conditions, and the unrelenting greed of British colonialism that made this pride of Bengal go extinct. I have heard from disgruntled uncles sipping their late afternoon tea saying that the British cut off the thumbs of the muslin workers to ascertain the production of muslin dried up sooner than their blood spilled to the ground. Aunties discussed, while chopping vegetables, that acres of this fabric could be tucked into their less-than-modestly sized engagement rings.

The capitalist East India Company had no regard for the convoluted nature of how the muslin was made, it only cared that the demand was met. Hence, pressure was put on the artisans of muslin till they cracked. Moreover, the British took advantage of the demand for muslin and hard launched the discount "muslin" produced in the cotton mills of dreary England.

Unfortunately, the cheaper prices they could offer far outweighed the need for the finesse of the real deal. This resulted in the cotton industry of Bengal coming to a screeching halt, and muslin artisans sought employment elsewhere. Fuel was added to the ravaging fire with the famines orchestrated by the terrible policies of the British colonisers in Bengal, which killed off many of these talented artisans. With their death, the intricate technique of weaving muslin was buried. Perhaps to mourn such a misfortune, Phuti karpas went extinct along the banks of Meghna.

The fabled fabric reached up to 1200 thread counts and today's rendition of "muslin" comes nowhere close—like an underachieving son making a mockery of the family name. However, there have been noteworthy efforts to revive the lost art of muslin weaving, which serves as a glimmer of hope for us to perhaps one day be adorned by this "woven wind," which has been a favourite topic of every textile historian. Moreover, Dhaka and its surrounding areas later developed the traditional art of "jamdani" weaving fortunately, which has been protected as a form of intangible cultural heritage in 2013 by UNESCO.

As is quite evident, the success of the Bangladeshi garment industry, which is worth $47 billion today is not without precedence. But perhaps the rise and fall of muslin serves as a cautionary tale of artisans being squeezed to their limits and also that the extreme industrialisation of any product will result in those crafts being endangered and ultimately going extinct.

Raina Sabanta is a barrister.​

 

[Saif]

Prices of garments shipped to US, EU see a decline

In recent months, Bangladesh’s garment shipments to major markets such as the European Union (EU) and the US have rebounded strongly, but the price per unit has declined.

www.thedailystar.net

Prices of garments shipped to US, EU see a decline

If Bangladesh can ensure better quality and timely delivery, buyers will be willing to pay more, said Faruque Hassan, a former president of the BGMEA. Photo: Star/file

In recent months, Bangladesh's garment shipments to major markets such as the European Union (EU) and the US have rebounded strongly, but the price per unit has declined.

International clothing retailers and brands consistently pressure local suppliers to lower prices, even while paying higher rates for sourcing garments from other countries.

For instance, in January this year, the unit price of garments shipped from Bangladesh to the US decreased by 2.20 percent, according to data from the Office of Textiles and Apparel (OTEXA) of the US. However, the value of exports grew by 45.93 percent year-on-year in January, reaching $799.65 million.

In January, the volume of exports to the US increased by 49.21 percent from Bangladesh, 17.05 percent from Vietnam, 9.36 percent from China, and 18.49 percent globally.

Similarly, the unit price of locally made garments shipped to the EU decreased by 4.84 percent in the January–December period last year, according to the latest data from Eurostat, the statistical office of the bloc.

Bangladesh's garment exports to the EU grew by 4.86 percent to $19.77 billion last year. By volume, exports increased by 10.18 percent in the same period, while China recorded a rise of 12.05 percent. The EU's total apparel imports grew by 8.98 percent.

The unit price of the EU's global apparel imports fell by 6.83 percent, significantly influenced by China's 8.43 percent price reduction. Price cuts by Vietnam and Cambodia were also notable.

A free trade agreement (FTA) between the EU and Vietnam, in effect since 2021, has granted Vietnam the preferential benefit of a gradual removal of tariffs, exporters said.

Historically, Bangladeshi garment exporters have received lower prices than those in competing countries.

"The overall price of garment items traded globally declined last year and continues to do so this year," said Faruque Hassan, managing director of Giant Group and a former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

This decline is due to a drop in the prices of raw materials such as cotton, yarn, fabrics, and freight charges, he added.

The volume of work orders from international clothing retailers and brands is now increasing as major economies like the EU and the US rebound, Hassan said.

Bangladesh's lead time is high, and local manufacturers primarily produce low- and mid-price-range garment items, for which retailers and brands pay lower prices, he noted. However, an increasing number of local manufacturers are now exporting high-end garment items that command higher prices.

"If the country can ensure better quality and timely delivery, buyers will be willing to pay more. Additionally, unhealthy price competition among local manufacturers is another factor behind the low prices paid by buyers," Hassan said.

Mohiuddin Rubel, managing director of Bangladesh Apparel Exchange, said the competitiveness of local exporters remains lower than that of competing countries, which weakens their bargaining power.

In the July–February period of the current fiscal year, Bangladesh's garment exports grew by 10.64 percent to $26.79 billion, according to data from the Export Promotion Bureau (EPB).

Of this amount, exports to the EU—accounting for 50.10 percent of Bangladesh's total RMG exports—were valued at $13.42 billion.

Meanwhile, exports to the US reached $5.06 billion, representing 18.91 percent of the total share. Canada's exports totalled $845 million with a 3.16 percent market share, while the UK market accounted for $2.93 billion, representing 10.94 percent.

The value of RMG exports to the EU grew by 11.53 percent year-over-year, while exports to the US saw a strong increase of 16.38 percent and Canada 14.12 percent. However, RMG exports to the UK exhibited a more modest growth rate of 3.74 percent, according to EPB data compiled by the BGMEA.

Bangladesh's RMG sector also recorded 6.23 percent growth in non-traditional markets, reaching $4.52 billion and accounting for 16.90 percent of total exports.​

 

[Saif]

RMG value addition wanes, yet to rise to pre-pandemic level

Value-addition to Bangladesh's ready-made garments (RMG) that has been fluctuating in recent years has yet to reach the pre-pandemic level, as higher cost of raw-material imports eats into the export gains. Exporters mainly blame the rise in raw-material imports, especially that of yarn, for such

thefinancialexpress.com.bd

High raw-material import costs, low product prices
RMG value addition wanes, yet to rise to pre-pandemic level
Quick switch to MMF fabrics seen as booster
Monira Munni
Published :
Mar 15, 2025 23:45
Updated :
Mar 15, 2025 23:45

Value-addition to Bangladesh's ready-made garments (RMG) that has been fluctuating in recent years has yet to reach the pre-pandemic level, as higher cost of raw-material imports eats into the export gains.

Exporters mainly blame the rise in raw-material imports, especially that of yarn, for such subdued returns as prices of locally made garments have also been declining in the post-Covid period.

Local RMG items' value addition remained almost static between 60 per cent and 64 per cent since fiscal year (FY) 2012-13 until FY2018-19, according to Bangladesh Bank data.

But a data analysis shows a fluctuating trend, with a decline to 56.49 per cent in FY20 while a rise up to 59.13 per cent in FY21. The rate again dipped to 54.38 per cent in FY22 while rose to 58.11 per cent and 60.13 per cent in FY 23 and FY 24 respectively.

In FY24, Bangladesh received US$36.13 billion from apparel exports, while it imported raw materials worth $14.40 billion. Thus, the country's net value of RMG exports stood at $21.72 billion in FY24, showing a 60.13-percent value addition.

The percentage remained static at 60.09 per cent during the first half (H1) of the current fiscal of 2024-25, as net RMG exports amounted to $11.94 billion against total exports worth $19.88 billion and raw-material imports worth $7.93 billion.

The value addition remained lower than the pre-pandemic 64.32 per cent in FY19, data showed.

The central bank considered the main head value of the components (raw cotton, synthetic/viscose fibre, synthetic/mixed yarn, cotton yarn, textile fabrics, and accessories for garments) instead of only raw materials - brought through back-to-back LCs, according to its latest quarterly report.

Meanwhile, industry-insiders have said Bangladesh is largely dependent on imported raw materials, such as cotton, petro-chemicals and chemicals, despite being the second-largest exporter of garments.

"The value addition in the knitwear sub-sector is higher than in the woven segment, as the former sources 80 per cent of its necessary raw materials from local market, while woven is largely dependent on imported fabrics," says one of the sources.

When asked, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) executive president Fazlee Shamim Ehsan said that prices of locally made garments have been decreasing over the years while costs of imports increasing.

He, however, said they were now producing many high-value-added items, and because of producing these items, their dependence on imported raw materials also increased as Bangladesh does not produce all the required fabrics, especially those of man-made ones.

As a result, value addition in RMG still remains pegged in the current position.

Otherwise, the value-addition rate would have been much lower, as prices of garment items have not increased in line with prices of raw materials and cost of production, the exporter notes.

"Value addition to knit items is higher compared to that of woven," he said, explaining that it is because they mostly manufacture products after total processing-yarn manufacturing, knitting and dying-in the country.

On the other hand, buyers have their own nominations - mostly for fabric sourcing, washing and embroidery from third countries - in case of woven garments, he notes.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) former President Faruque Hassan explains that yarn import last year increased significantly, putting an impact on value addition.

He, however, says value addition in the processes of knitting, dyeing, finishing, printing and embroidery has increased though it is yet to reach the requisite level.

Asif Ashraf, former vice -president of BGMEA, however, differs on this score. He says that value addition is not decreasing in recent years.

He, however, says last year cotton import decreased and yarn import increased as spinners couldn't produce yarn mainly because of gas shortage.

"On the other hand, India has been exporting yarn here in the country at a dumping rate," he notes, adding that if yarn import rises, value addition would fall.

Besides, the global demand for garment items made of non-cotton or man-made fibres has been on the increase, whereas Bangladesh largely produces cotton-based items, the apparel-sector leaders noted.

Government policy support is needed to attract investment in producing man-made fibre-based garments - not only to increase value addition but also to face the post-graduation challenges and remain competitive, they added.

Sector leaders have requested the government for providing required policy supports, including cash incentives, for non-cotton or man-made fibre production as well as soft loan to attract investment in this segment.

According to Bangladesh Textile Mills Association (BTMA), yarn imports witnessed a significant surge in 2024.

Bangladesh imported 680.43 million kilograms of cotton yarn under bonded facility last year, which was 39.16-percent higher than the 2023 figure of 488.96 million kgs.

Besides, the imports of woven and knit fabrics recorded a 20.02-percent and a 38.35-percent rise, respectively, in 2024.​

 

[Saif]

RMG exports to major destinations increase

The exports of the country’s readymade garment items witnessed substantial growth to its major destinations in the past eight months (July-February) of the current financial year 2024-25...

www.newagebd.net

RMG exports to major destinations increase
Staff Correspondent 15 March, 2025, 22:39

A file photo shows a female worker works at a garment factory in the capital. The exports of the country’s readymade garment items witnessed substantial growth to its major destinations in the past eight months (July-February) of the current financial year 2024-25. | New Age photo

The exports of the country’s readymade garment items witnessed substantial growth to its major destinations in the past eight months (July-February) of the current financial year 2024-25.

According to the country-wise detailed export data of the Export Promotion Bureau and compiled by the Bangladesh Garment Manufacturers and Exporters Association, Bangladesh exported RMG items worth $26.8 billion in July-February of FY25, a moderate increase of 10.64 per cent, from $24.22 billion in the same period of FY24.

Apparel exporters said that, thanks to the growing demands of brands and retailers, export earnings maintained a growth momentum despite the political transition since August 5.

In the July-February period of FY25, Bangladesh bagged $13.42 billion from the European Union countries, the largest market of Bangladeshi manufacturers. This is 11.53 percent higher than the $12.03 billion earned in the same period of FY25. The export earnings from the EU accounted for 50.10 per cent of the total earnings.

Export earnings from the US witnessed a robust growth of 16.38 percent to $5.07 billion, up from $4.35 billion in the July-February period of FY24. The US, the largest single destination for exporters, represented an 18.91 per cent share of the total earnings.

Fetching a positive growth of 3.74 per cent, Bangladeshi apparel exporters earned $2.92 billion in July-February of FY25 from the UK, higher from $2.82 billion in the same period of FY24, the EPB data stated.

From Canada, the RMG sector earned $845.55 million in July-February of FY25, 14.12 per cent more than the $740.91 million earned in the same period of FY24.

Germany remained the largest export destination within the EU countries, from where Bangladeshi RMG manufacturers bagged $3.38 billion in July-February of FY25.

Followed by Germany, the export earnings from Spain stood at $2.35 billion, France at $1.43 billion, Italy at $1.05 billion, Poland at $1.13 billion, and the Netherlands at $1.43 billion, the EPB data stated.

Regarding apparel exports, countries like the US, Canada, the UK, and the EU are considered traditional markets, while other countries are deemed non-traditional. Japan, Australia, Russia, India, China, South Korea, UAE, Malaysia, Brazil, and Mexico are major non-traditional export destinations.

Export earnings from the nontraditional market also demonstrated positive growth, with an overall surge of 6.23 percent reaching $4.52 billion, which was $4.26 billion in the FY24 period.

The nontraditional market represented 16.90 per cent of Bangladesh’s total RMG exports. Among these markets, Japan led with imports worth $839 million from Bangladesh, followed by Australia at $582 million and India at $478 million.

Moreover, RMG exports to Turkey and Mexico also witnessed significant earnings, amounting to $305 million and $229 million, respectively.

EPB data showed that export earnings from almost all major destinations experienced a double-digit growth rate during the July-February period.

Talking to New Age, Mohiuddin Rubel, former director of the BGMEA, said that Bangladesh’s ongoing growth in exports significantly depends on the EU and USA, which continue to be its main markets.

The moderate growth in the non-traditional market underscores the importance of further research and focus in this category, as it possesses substantial growth potential, which will also help to balance reliance on traditional markets, he added.

He also said there should be a dedicated emphasis on investing in backward linkages to bolster and enhance the RMG sector’s competitiveness and growth potential, as remaining competitive throughout is always essential.​

 

[Saif]

BGMEA seeks Tk 500cr from unpaid incentives

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) yesterday urged the government to release Tk 500 crore in due export incentives to help small and medium enterprises (SMEs) pay workers’ bonuses and other dues ahead of the upcoming Eid-ul-Fitr.

www.thedailystar.net

BGMEA seeks Tk 500cr from unpaid incentives
Will use it for Eid payment

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) yesterday urged the government to release Tk 500 crore in due export incentives to help small and medium enterprises (SMEs) pay workers' bonuses and other dues ahead of the upcoming Eid-ul-Fitr.

The finance ministry agreed in principle to release Tk 325 crore soon, said BGMEA Administrator Anwar Hossain over the phone after meeting finance ministry officials at the secretariat in Dhaka.

Hossain also requested the banking division secretary of the finance ministry not to adjust the incentive with bank loans before Eid payments, as SMEs lack financial capacity due to the sluggish economic situation.

To facilitate payments to workers, the finance ministry and the central bank last week disbursed Tk 2,000 crore in cash incentives on export receipts to garment exporters.

Hossain said the upcoming Eid is unique in terms of salary payments. "This is not a good time for businesses, as they are facing various difficulties."

"Moreover, factories must pay salaries for February, half of the salary for March, and the full Eid-ul-Fitr bonus. So, although business has not been good, expenses remain high," the BGMEA administrator added.

The labour and employment ministry last week instructed factories to clear all arrears, salaries, and bonuses by the 20th day of Ramadan.

According to intelligence reports and the BGMEA's assessment, nearly 150 factories are in a vulnerable position regarding worker payments ahead of Eid due to financial constraints, Hossain said.

However, the BGMEA and concerned banks are continuously working on the issue. The disbursement of cash incentives last week solved the problem to a great extent, he said.

Now, the BGMEA is working to resolve the financial issues of 42 factories. It appears that the disbursement of Tk 325 crore will address major problems plaguing these factories, he added.

Ultimately, only three to four factories will face difficulties due to their dire financial condition, Hossain said.

This year, many factories, the majority being garment units, either faced closure or shut down temporarily due to political and labour unrest following last year's political changeover.​

 

[Saif]

It’s time Bangladesh built its own global apparel brand

Why can’t Bangladesh have its own global apparel brand?

www.thedailystar.net

It’s time Bangladesh built its own global apparel brand

File photo: Star

Several years ago, while preparing for one of our brand management classes at Dhaka University, we searched for a suitable example of a brand that significantly contributes to a country's GDP. We found a few well-known brands from the US, such as Coca-Cola, Google, and Amazon. However, their contributions to GDP were not substantial, given the vast size of the American economy. One brand that caught our attention in Asia was Samsung, which seemed to have a significant impact on South Korea's GDP. According to a 2015 article published in The New York Times, the Samsung brand accounted for one-fifth of South Korea's exports and contributed approximately 17 percent of its GDP. Reflecting on the considerable impact of a single brand on a country's economy, we began to contemplate Bangladesh's RMG industry. The RMG industry contributed about 82 percent of total exports and 12.69 percent of our GDP in FY2015-16. We tried to identify notable brands from the sector, but could not find any. Consequently, we intended to raise this point during the next brand management class discussion, but unfortunately, it was unsuccessful.

After further investigation, we realised that Bangladesh primarily manufactures products for others, concentrating significantly on lower-value-added goods. While the sector does produce some higher-value-added products for major brands, the quantities are relatively small. Further analysis indicated that we have substantial expertise in both lower- and higher-value-added manufacturing, as the sector has been operating for over 35 years, and we possess the necessary hard and soft resources to produce all types of RMG products. This encouraging discovery led to some questions: when we are highly equipped, why do we only produce for others? Why can't Bangladesh have its own global brand? We only get paid for stitching; the company that owns the brand enjoys the major share of the pie.

In 2017, Dhaka University hosted a seminar outlining the roadmap for Bangladesh to achieve its $50 billion target for the RMG sector by 2021. We posed a question to the chief guest, who was both an RMG businessman and the state minister of an important ministry. We asked how realistic and sustainable the roadmap could be without our own Bangladeshi brand. He replied that we are not yet at a stage where we can have our own brand. This made me wonder why, despite having a mature industry and exceptional expertise in both hard and soft resources, we do not recognise the significance and necessity of establishing Bangladeshi RMG brands for the international market. Later, while conducting an ILO-funded research in the RMG sector, we asked the same question to several decision-makers from major RMG firms in Bangladesh. Most of their responses were along the line of "creating a brand is expensive and demands a significant time commitment. It also entails considerable risks, as we are collaborating with big brands. We certainly want to avoid threatening our existing business."

The insights they shared are indeed true. However, Bangladesh has a comparative advantage over other nations from both the supply and demand sides. We have the necessary infrastructure, manufacturing efficiency, and the presence of feeder industries; thus, the upstream value chain is mostly well-established, except for occasional vulnerabilities in yarn supply. Additionally, Bangladesh is familiar with the downstream value chain as it effectively utilises it for its buyers. Consequently, establishing this chain would be less challenging, aside from the need for acceptance from independent international retailers and their willingness to feature Bangladeshi brands on their shelves, as well as consumer preference for these brands.

Bangladesh is strongly positioned to gain preference from both retailers and consumers. This is because these key downstream actors recognise that Bangladesh can produce high-quality products as a country of origin. Bangladesh has been manufacturing top-notch clothing for brands like Tommy Hilfiger, Giorgio Armani, Hugo Boss, Zara, and H&M, with "Made in Bangladesh" tags on the clothing that customers see. Therefore, the country-of-origin-based points of differentiation are already acknowledged by both retailers and end customers. If customers encounter a new brand that is of good quality and carries a "Made in Bangladesh" tag, they are unlikely to dismiss the brand outright. Besides those who are hardcore loyal to a particular brand, many customers will certainly be interested in trying the new brand from Bangladesh.

According to Bangladesh Garment Manufacturers and Exporters Association (BGMEA), our apparel exports worldwide reached $38.48 billion in 2024. Although we still have considerable progress to make to achieve the previously set $50 billion target, there are ample opportunities to extend this goal within the $1.84 trillion global market. Unfortunately, without owning brands and benefiting from the premiums that established brands command in the value chain, it will be challenging for Bangladesh to capitalise on the available opportunities in the global clothing market. Creating and sustaining a brand in the international market is an expensive endeavour. However, a few companies have the financial capacity to do so. If it seems too costly and risky for major RMG players, a consortium could be established to create and develop a Bangladeshi apparel brand, allowing for shared risks. BGMEA could lead this initiative.

Let us conclude with the Samsung story. Samsung has inspired other South Korean brands like SK, Hyundai, and LG, and nearly half of South Korea's GDP comes from Samsung and its success-inspired brands. These companies compete globally—most are going head-to-head and succeeding in their respective industries. They are sometimes viewed as the frontrunners of innovation in their fields. When will Bangladesh witness a day when it can proudly say our apparel brands are the market leaders and innovators in the global apparel industry?

Dr Muhammad Ismail Hossain and Dr Nasrin Akter are professors in the Department of Marketing at the University of Dhaka.​