[🇧🇩] Textile & RMG Industry of Bangladesh

[Saif]

Top 10 foreign companies that source garments from Bangladesh

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

en.prothomalo.com

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

RMG workers at a factory File photo

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

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

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

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

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

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

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

Top buyer H&M

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

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

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

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

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

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

Inditex surpasses $2 billion in purchases

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

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

Primark purchases low-cost garments

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

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

Bestseller purchases garments at $4.50 each

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

Marks & Spencer expands business

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

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

C&A sources half of its garments from Bangladesh

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

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

Uniqlo purchases expensive garments

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

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

LPP sources garments from 250 factories

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

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

Next purchases half a billion dollars' worth of garments

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

Pepco purchases low-cost garments

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

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

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

 

[Saif]

Impact of automation in apparel sector

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

thefinancialexpress.com.bd

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

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

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

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

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

 

[Saif]

Automation but no wastage of human capital

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

thefinancialexpress.com.bd

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

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

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

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

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

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

 

[Bilal9]

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

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


Photo: Mahmud Hossain Opu/Dhaka Tribune


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

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

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

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

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

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

What does official data say?​

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

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

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

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



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

Only WTO’s data is reliable​

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

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

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

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

WTO Data 2023​

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

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

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

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

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

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

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

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

 

[Saif]

Charting a path ahead for the RMG sector

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

www.thedailystar.net

Charting a path ahead for the RMG sector

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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