[🇧🇩] Textile & RMG Industry of Bangladesh

[Saif]

RMG export to US falls in Jan-July

Bangladesh’s apparel exports to the United States in January-July of 2024 witnessed a significant fall both in value and volume while the other competing countries, such as China and Vietnam, performed well in the market...

www.newagebd.net

RMG export to US falls in Jan-July
Staff Correspondent 05 September, 2024, 22:37

A file photo shows workers sewing clothes at a readymade garment factory in Narayanganj recently. Bangladesh’s apparel exports to the United States in January-July of 2024 witnessed a significant fall both in value and volume while the other competing countries, such as China and Vietnam, performed well in the market. | New Age photo

Bangladesh’s apparel exports to the United States in January-July of 2024 witnessed a significant fall both in value and volume while the other competing countries, such as China and Vietnam, performed well in the market.

The country’s apparel exports to the US, the largest export destination for Bangladesh, declined by 10.27 per cent to $4.10 billion in the first seven months of 2024 compared with that of $4.57 billion in the same period of 2023, according to the data released by the Office of Textiles and Apparel under the US Department of Commerce.

In terms of volume, Bangladesh exported 1.33 billion square metres of apparel from January to July period of 2024, a 4.55-per cent decrease from 1.39 billion square metres exported during the same period of the previous year.

Exporters said that the US buyers decreased their orders in Bangladesh due mainly to long shipment time.

Due to a shortage of gas and electricity, as well as complexities in banking and customs procedures, the shipment of export goods has been delayed, they said.

Negative growth in apparel export earnings from the US market persisted, as the underlying issues remained unresolved, Bangladesh Knitwear Manufacturers and Exporters Association president Mohammad Hatem told New Age on Thursday.

He said that the persistent shortages of gas and electricity, combined with the complexities of opening letters of credit with banks and delayed customs procedures, were continuing to cause shipment delays and adversely affected overall export performance.

Hatem, however, hoped that the apparel exports to the market would get momentum in the coming months as the interim government was working to improve the situation.

The OTEXA data showed that overall US apparel imports declined by 4.65 per cent to $43.63 billion in the first seven months of 2024, down from $45.76 billion in the same period of 2023.

Apparel imports by the US from China in January-July period of 2024 declined by 4.22 per cent to $8.76 billion from $9.14 billion in the same period of the previous year.

Vietnam’s apparel exports to the US totalled at $8.09 billion in the first seven months of 2024, reflecting a 1.54-per cent year-over-year decrease, according to the data.

The OTEXA data, released on Wednesday, showed that Bangladesh’s position remained unchanged as the third-largest apparel exporter to the US market with 9 per cent share while China and Vietnam occupied the first and the second highest positions with 21.09 per cent and 18.54 per cent share respectively.

The OTEXA data revealed that the US apparel imports from Cambodia grew by 5.96 per cent to $1.91 billion in January-July 2024 compared with that of $1.8 billion in the same period in 2023.

In the first seven months of 2024, India’s readymade garment exports to the US market decreased by 2.21 per cent to $2.85 billion.

Meanwhile, Indonesia saw a decline of 7.86 per cent, with exports totalling at $2.28 billion during the same period.​

 

[Saif]

RMG work orders shifting to India amid unrest in BD

A latest spate in labour unrest in Bangladesh's readymade garment factories prompted global apparel brands to shift work orders to neighbouring India. The unrest follows Sheikh Hasina government's fall in a student movement. Factory owners and labour leaders allege that the unrest, apparently cre

thefinancialexpress.com.bd

RMG work orders shifting to India amid unrest in BD
Monira Munni
Published :
Sep 06, 2024 09:21
Updated :
Sep 06, 2024 09:21

A latest spate in labour unrest in Bangladesh's readymade garment factories prompted global apparel brands to shift work orders to neighbouring India.

The unrest follows Sheikh Hasina government's fall in a student movement.

Factory owners and labour leaders allege that the unrest, apparently created at the instigation of outsiders, has forced hundreds of their units to close for the last couple of days.

As a result, the buyers were reportedly shifting their orders to India, they said.

In addition to the closed ones, hundreds of garment factories suspended their operations for the last four days, beginning from Monday over the worker protests.

The Economic Times of India on Thursday reported that the Tiruppur knitwear export hub has swung export orders worth 4.50 billion rupees in the last two weeks from Bangladesh due to the political unrest there.

Quoting KM Subramanian, president of Tirupur Exporters' Association (TEA), it also noted that global apparel brands like KiK from Germany, Zeeman from Netherlands, and Pepco of Poland, among others, placed orders to be delivered before the Christmas and New Year and the average price of the garment ordered is to the tune of $3.0 per piece.

According to another report by Times of India, Raymond Ltd Chairman and Managing Director Gautam Singhania said on Tuesday last that the company has been receiving "massive inquiries" for garments supply after the political crisis erupted in Bangladesh over the last two months.

"Bangladesh has no fabric capacity... Fabric goes from India to Bangladesh. With the current crisis in Bangladesh, if a customer comes to us, we are giving them integrated supply, both the fabric and the garment, thus saving time.

"The perception has changed against Bangladesh. This is the time when we are getting massive inquiries. We invested 2.0 billion rupees last year to increase our capacity, which has come online and is available," the report quoted Singhania.

Global Data, a leading data and analytics company, on August 19 revealed that the ongoing political and economic instability in Bangladesh, a global hub for textile and apparel manufacturing, became the focal point of discussion among the industry experts and influencers on social media platform "X".

Influencers highlight that the disruption in Bangladesh's textile sector offers India a chance to capitalise on the potential shift in global apparel manufacturing.

They believe India's market share in apparel exports could increase as global brands seek to diversify their supply chains, revealed the Social Media Analytics Platform of Global Data.

GlobalData's Social Media Analytics Platform captured a few popular influencer opinions in this regard.

"Someone's crisis is someone else's opportunity. Bangladesh has been a major exporter of textiles. Now that Bangladesh is going through huge instability, India should make use of the opportunity to bring that business to our country. More so, Tamilnadu should use this opportunity as the state with the number one share of textile exports," GlobalData statement quoted D Muthukrishnan, a certified financial planner.

"India's market share in apparel exports has been 3.0 per cent for a long time. Disruption in Bangladesh along with wage revision is making global labels think of diversification… Lot of Indian companies could be benefitted inking term," it quoted Gurmeet Chadha, chief investment officer at Complete Circle Wealth.

"Bangladesh's loss (textiles) will be Bihar's gain," said Saurav Jha, founder and director of Delhi Defence Review.

Prashant Nair deputy executive editor at CNBC-TV18 was quoted as saying: "A quick point on textile stocks rallying - while the Bangladesh situation may benefit Indian mills. I reckon it will be a temporary bump. Textile exports are Bangladesh's mainstay. Whoever takes charge won't let it slip."

Shreyasee Majumder, Social Media Analyst at GlobalData, commented: "Influencers express a mix of optimism and caution regarding the potential benefits for India's apparel industry amid the Bangladesh's textile sector disruptions."

There is a widespread perception that this is a promising short-term opportunity, predicting a rally in textile stocks and an increase in India's market share, she said.

Many believe that Bangladesh, given the critical importance of textiles to its economy, will prioritise restoring its industry, potentially reclaiming its position sooner than anticipated, she added.​

 

[Saif]

RMG unrest will hurt exports and industrial output

Govt must prevent further disruptions, minimise damage

www.thedailystar.net

RMG unrest will hurt exports and industrial output
Govt must prevent further disruptions, minimise damage

VISUAL: STAR

We are concerned about the outcome of recent disruptions in the ready-made garments (RMG) industry. This vital sector—which last year fetched an all-time high of about $47 billion from exports—could be in for a rude shock this year after being rocked by frequent protests, factory closures, and vandalism over the past month or so. This is already having an impact, with many international buyers who regularly visit Bangladesh to finalise work orders cancelling their trips, affecting their planning for upcoming seasons. Citing a representative of a major European buyer, a report by this daily even said that many requests for value-added garments have already been cancelled or postponed.

In an environment of uncertainty and insecurity, it is natural that buyers would have a Plan B for sourcing apparel from alternative destinations where they can safely place orders. As well as supply-chain disruptions, buyers also have to think about reputational risks arising from placing orders in restive countries. There is already a concern among some buyers that about 5 to 10 percent of their work orders placed in Bangladesh could be affected by the latest unrest and other hurdles. What this means for local producers is that they are having to deal with concerns not just about future orders but also the profitability of existing ones, as they may now have to provide discounts and expensive air shipments because of supply delays.

Ironically, the problems in Bangladesh have raised hopes for rival apparel suppliers, including India, who are expecting a boost in their work orders. Even though India's apparel exports remain significantly lower than Bangladesh's, the country's offer of various incentives and policy supports to its garment hubs and manufacturers contrasts the frequent challenges facing our manufacturers. This shows how our position as the world's second-largest garment exporter could be upended if we don't ensure stability and competitiveness fast enough. True, Bangladesh can still turn around. Its competitive pricing, improved safety and environmental compliance, and increased capacity for diversified products are still a potent mix. But to prevent the recent incidents of work orders being shifted elsewhere from becoming a trend, we must significantly improve safety, support our manufacturers, and remove all hurdles in the supply chain.

A lot has been said about the recent protests by workers. At a recent press conference, the IndustriALL Bangladesh Council, which represents 18 trader unions, blamed local youth gangs, garment waste traders, and unemployed individuals for instigating the demonstrations in Savar, Ashulia, and Gazipur. Going forward, we must approach these disruptions in a manner that both addresses the genuine grievances of workers—including delayed wage payments and unlawful dismissals—and persistent security issues. The interim government has reportedly set a 12.65 percent export growth target for this fiscal year, but without fixing the problems in our biggest export sector, such targets cannot be reached successfully.​

 

[Saif]

We must stop the infighting to retain buyers

To maintain its position as a global leader in the garment industry, Bangladesh must prioritise unity and stability.

www.thedailystar.net

We must stop the infighting to retain buyers

A female worker inquires at the gate of a closed factory in Ashulia when it would reopen. FILE PHOTO: AKLAKUR RAHMAN AKASH

Bangladesh has been through an extremely challenging situation recently, especially with the change of leadership brought forth by a student-led mass movement. As a business community, we should now be looking forward to the coming months with a sense of optimism. For the ready-made garment (RMG) sector, this is a crucial period as apparel manufacturers look to complete autumn and winter orders.

Therefore, it is frustrating to see that pockets of unrest continue, leading to closures of garment factories, which are already under tremendous pressure of completing their work orders. This is taking place at a time when the nation is facing numerous economic challenges. When foreign exchange reserves are a big concern, creating trouble in the garment sector will deal a heavy blow to the economy and the country as a whole.

The recent labour unrest in garment factories of Dhaka's Ashulia and Gazipur has been attributed to a power struggle between local thugs with differing political allegiances. Some ringleaders are allegedly attempting to assert dominance after the regime change and their rivalry has intensified the unrest.

According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the protests began at the Dhaka EPZ gate, where demonstrators demanded jobs. The unrest spread to nearby factories, although initial impacts were minimal.

On August 31, workers from a major exporter began vandalising factories, according to industry insiders, workers, and law enforcement reports. They forced other factory owners to close their factories and urged workers to join the protests. Violence erupted as owners and workers resisted the shutdown, resulting in more vandalism. Some unrest has persisted since then, with some factory closures. Garment manufacturers have held separate meetings with government officials and law enforcement agencies since then.

Industry insiders believe the police should ensure factory security, but some officers were involved in violent crackdowns during the student uprising, which may have left them feeling hesitant to confront workers. Although the Bangladesh Army has been deployed nationwide, it is more challenging for them to manage the situation without sufficient police support.

So, what now? My personal perception is that global apparel buyers have faith in the Yunus-led government, and orders continue to be placed. However, it is frustrating to see that a vested group is attempting to further destabilise the garment sector.

Moreover, these ongoing tensions between political factions in Bangladesh pose a significant threat to Bangladesh's reputation, especially at a time when it must present a unified and stable front to retain the trust of international fashion buyers.

The RMG sector, which accounts for over 80 percent of Bangladesh's export earnings, is the backbone of the nation's economy. Any instability in this industry directly impacts not only the livelihoods of millions of workers but also the broader economic prospects of the country. For global fashion brands, who rely on consistency, reliability, and timely delivery from suppliers, such infighting sends the wrong message.

Political unrest, labour strikes, and factory closures signal an unpredictable business environment. International buyers, operating in a highly competitive market with tight deadlines, cannot afford disruptions in their supply chains.

This does not bode well for Bangladesh, especially when other nations such as Vietnam, India, and Cambodia, are emerging as competitors in the global garment industry. These countries present themselves as stable, reliable alternatives, further exacerbating Bangladesh's challenges in maintaining its market share. Infighting within the RMG sector weakens the industry's competitive edge by diverting attention away from productivity and innovation and toward internal strife. The situation is particularly concerning given the country's dependence on international buyers, many of whom have voiced their support for ethical and sustainable sourcing practices.

To maintain its position as a global leader in the garment industry, Bangladesh must prioritise unity and stability. The government, industry leaders, and political factions must work together to create an environment conducive to business, signalling to the world that Bangladesh is a trustworthy and dependable partner. If the country fails to present a unified voice, it risks losing the confidence of global buyers, leading to devastating economic consequences for millions of workers and the nation as a whole.

In the past few weeks, buyers, NGOs, and rights groups have urged fashion brands to stand by Bangladesh amid its change of leadership. But we must repay this loyalty by providing a stable and reliable business environment. Major customers are supportive of our efforts but there is only so much they will tolerate before saying: enough.

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

 

[Saif]

Textile millers want immediate improvement in gas supply

Textile millers yesterday urged the interim government to take immediate steps to improve gas and power supply to production units, as most are now running at only 30 percent capacity.

www.thedailystar.net

Textile millers want immediate improvement in gas supply

Textile millers yesterday urged the interim government to take immediate steps to improve gas and power supply to production units, as most are now running at only 30 percent capacity.

They also urged the authorities to restore law and order urgently as garment factories are facing challenges in running operations.

They demanded that yarn imports from India be stopped through all land ports as large quantities are entering without proper documentation and quality testing, deteriorating sales of the domestic primary textile sector, where $22 billion has been invested.

The millers said yarn imports can be allowed through the Chattogram port as it contains facilities for quality testing.

They also urged to stipulate that any yarn which is sought to be imported from India needs to undergo quality tests at the Bangladesh University of Engineering and Technology.

In most cases, double the quantity mentioned in letters of credit is being imported through misdeclarations, said leaders of the Bangladesh Textile Mills Association (BTMA) at a press conference at its office in Dhaka.

Over the last eight months, textile millers at Bhulta, Gausia, Rupganj and Narayanganj areas have been suffering a lot because of low gas pressure in the supply lines, said BTMA Vice-President Md Saleudh Zaman Khan.

The textile mills are being run with alternative fuels such as diesel, methane-based compressed natural gas and liquified petroleum gas, which is composed of propane, butane, propylene, butylene, and isobutane, he said. This is also increasing the cost of production.

The mills are running at only 30 percent capacity and falling behind in competition with Indian companies as the latter get adequate gas supply alongside government incentives, he added.

Moreover, gas prices in Bangladesh have been hiked by over 400 percent in the past 2-3 years, he said.

BTMA President Showkat Aziz Russell said they have already written to Muhammad Yunus, chief adviser to the interim government, to review whether Bangladesh is truly qualified to make the United Nations country status graduation from a least developed country to a developing nation in 2026.

This is because, during the tenure of the last government, state data miscalculations led to export figures being inflated by around $14 billion to nearly $48 billion in fiscal year 2022-23, he said.

He also urged banks to provide loan rescheduling facilities as businesses suffered due to political unrest over the past two months.

Moreover, the interim government should provide incentives to the primary textile sector to make the domestic industry more competitive, he added.

Russell hoped for improvements in the law and order situation, saying it was especially necessary for the smooth operation of garment factories. He and other BTMA members accused "outsiders" of recent vandalism at garment factories.

The BTMA leaders said no textile mill had been attacked so far, although hundreds of garment factories have been facing trouble for labour unrest over different demands.​