[🇧🇩] 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

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

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

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

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

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

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

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

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

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

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

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

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

 

[Saif]

Automation replaced 31% of garment workers: study

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

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Automation replaced 31% of garment workers: study

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

He also called upon workers to stay aware of automation.

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

 

[Saif]

Union leaders demand emergency fund for laid-off RMG workers

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

[Saif]

How our RMG sector can thrive in 2025

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

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How our RMG sector can thrive in 2025

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

[Saif]

Garment exports to EU rise slightly

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

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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.​