Bangladesh – A Hub Of Garment Manufacturing

There is no doubt that Bangladesh has emerged as a powerful garment manufacturing country in the past decade. What is it that brought Bangladesh’s apparel industry where it is today? Let’s find out!

Bangladesh is the world’s second largest Readymade Garment (RMG) exporter, just behind China. Country’s 81% of exports come from the RMG sector, and the textile and Apparel sector contributes around 20% to Bangladesh’s GDP. It employs around 20 million people in the country and is the major driving force of the country’s economy.

Bangladesh plans to get the middle-income country status by 2021 and RMG sector is going to play a major role in it. Bangladesh has set itself a target of achieving apparel exports worth $50 billion by 2021, and it seems to be on the right track. In the last financial year, FY18, the Export Promotion Bureau (EPB) states that Bangladesh’s overall exports grew by 5.81%, reaching $36.67 billion, owing to the growth in apparel exports. The garment exports as per EPB registered an 8.76% growth in this fiscal year, which was 1.51% higher than the set target.

Bangladesh’s RMG sector has many factors that attract global attention:

  • Major industrial force & an established buying hub.
  • Traditional strengths – locally availability of raw materials, low labor cost, duty & VAT exemption.
  • A very strong industry in the fields of textile products, information & technology, computer software.
  • Cost effective production.
  • Good workmanship.
  • Centrally located & great logistics support.
  • Fully developed manufacturing and industrial infrastructure.
  • Large range of raw material specially fabrics.
  • Understanding of international fashion trends.
  • Large production & timely deliveries.
  • Lot of textile specialized working in the Bangladesh market form the other country.

Associations & Chamber of Commerce:

We have following Associations & Chamber of Commerce in Bangladesh & we have Strong network with Associations member:

  • Bangladesh Garment Manufacturers and Exporters Association(BGMEA).
  • Bangladesh Knitwear Manufacturers & Exporters Association (BKMEA).
  • Bangladesh Garment Buying House Association (BGBA).
  • Bangladesh Level Manufacturer & Exporters Association.
  • Bangladesh Textile Mills Association (BTMA).
  • Bangladesh Textile Mills Corporation.
  • The Federation of Bangladesh Chambers of Commerce & Industry (FBCCI).
  • The Dhaka Chamber of Commerce & Industry (DCCI).
  • Metropolitan Chamber of Commerce & Industry (MCCI).
  • Foreign Investors’ Chamber of Commerce and Industry.
  • American Chamber of Commerce in Bangladesh.
  • Chittagong Chamber of Commerce & Industry.
  • Bangladesh Chamber of Industries.

Quick Returns

The biggest factor being the quick returns this segment offers the investors. This is the only sector in the country that gives returns in 3 to 5 years. Also, being the second biggest apparel exporter globally, there are huge growth opportunities that the sector offers.

Labor Availability

The biggest strength that Bangladesh has over its competitors is its cheap and vast workforce. The minimum wage in Bangladesh is lower than that in China, Cambodia, India, and Vietnam. Also, there are around 37 private and public universities producing textile graduates in the country every year, further adding to the skilled manpower for the segment. Moreover, favorable government policies, bank facilities (for raw material purchase), and strengthening backward linkage supporting industries create a strong case for the sector.

The Duty-free Advantage

Bangladesh has Least Developed Country (LDC) status that qualifies it for duty-free market access or reduced tariff facilities to many developed and developing nations, globally. Bangladesh enjoys duty-free access to around 52 countries, including countries in the EU, the USA, Australia, Switzerland, Japan, Turkey, Russia, Norway, New Zealand, China, South Korea, Thailand, Malaysia, and India, for the trade of many products.
Bangladesh has also signed many trade deals offering Bangladesh exports a preferential treatment, like SAARC Preferential Trading Arrangement, Asia-Pacific Trade Agreement, Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Co-operation, South Asian Free Trade Area, and the Trade Preferential System among the OIC member states.

Technology Adoption

Bangladesh has attracted many major global retail brands, and with the technology and quality compliance parameters has also seeped in Bangladesh’s apparel manufacturing systems. Moreover, Bangladeshi manufacturers and exporters have built excellent vertical capacities, which only China could offer before, which help global brands to ensure more transparency and coordination in their supply chains.
The country has henceforth adopted the most sophisticated apparel manufacturing and management technologies to cater to their international customers. This has resulted in a substantially high rate of quality achievement and technical compliance in Bangladesh’s RMG sector.

Future of Bangladesh’s RMG Sector

Bangladesh has three financial years left to match its annual apparel exports target of USD 50 Bn. This requires the sector to grow at a war footing at a rate above 60%. The year 2016–17 showed a sluggish growth for the country, owing to the slowing down of trade with the US. The 2017–18 shows more promise, but the current trends make it difficult for Bangladesh to achieve the set target, but it is not yet impossible.