Thanks to value added products, government policy support, capacity enhancement and completion of 90 per cent of the factory remediation work set by Accord and Alliance, the country is readymande garments (RMG) sector is continuing its positive trend in export earnings, say industry experts.
Bangladesh apparel exports to global markets have seen a 12.59 per cent rise to USD 28.50 billion in the first 10 months of the current fiscal year.
According to Export Promotion Bureau (EPB) provisional data, the RMG sector earned USD 28.49 billion in the in July-April period of the current financial year, up by 12.59 per cent from USD 25.30 billion during the same period of the previous fiscal year.
Of the total export earnings by the apparel sector, knitwear products earned USD 14.08 billion, which is 12.32 per cent higher than the USD 12.54 billion earned during the same period of FY2017-18.
Woven products earned USD 14.40 billion, up by 12.85 per cent from the earning of USD 12.76 billion during the same period of the previous fiscal year.
The specialised textile sector saw a 36 per cent growth to USD 125 million from USD 92 million, while home textile products saw a negative growth of 3.74 per cent to USD 723.60 million, down from USD 752.67 million.
Talking to The Independent, Siddiqur Rahman, former president of the Bangladesh Garment Manufacturers’ and Exporters’ Association (BGMEA), said the three months from December to March was the peak season for apparel shipments. So, the future prospect is even higher and brighter for garments shipment, he added.
“Our capacity has also increased, and we can produce any quantity of garments items as we have expanded our operations over the years” he said.
"But the work order flow is not so good. We are not getting enough price from buyers,” he addded.
The government announced a cash incentive to the non-traditional market back in 2010, which eventually boosted the two-digit export growth rate, he said.
Explaining the reason, Rahman said apparel-makers earlier did not want to go to those markets because of the difficulties involved and the time spent to enter a new market. But owing to the duty-free access and cash incentives, garments owners have started exploring new destinations and markets.
“China, the world’s largest apparel supplier, has started importing products from us because the Chinese government has allowed duty-free access to over 5,000 Bangladeshi products. This has eventually enhanced the export growth of the apparel sector,” he added.
In total, 40-50 crore people in China belong to the high-middle income group, said Rahman.
The inspection of Accord and Alliance has helped remediate garments factories and prompted factory owners to emphasise workplace safety, which eventually lift the country’s image in front of foreign buyers, he added.
Eighty green garment factories in operation are completely LEED-certified certified and 300 more are in the process of getting the certification. Among the top 10 green garment factories in the world, first seven are located in Bangladesh, said former BGMEA president.
However, Chattogram port needs to facilitate more in order to perform better, said the former BGMEA president.
“We’ve invested around USD 4 billion for ensuring workplace safety and occupational health,” he added.
Khondaker Golam Moazzem, research director of Centre for Policy Dialogue (CPD), told The Independent that the double-digit growth has been a positive sign for the apparel sector.
When asked about it, Centre for Policy Dialogue (CPD) research director Dr Khondaker Golam Moazzem told The Independent: “In the last four months, our exchange rate has devalued to 1 per cent—it helps exporters to get better prices for their products.”
Pointing out another reason, Moazzem said that port facilities have improved, especially loading and unloading of readymade garments (RMG) containers in the Chattogram port, and it has reduced the lead time as well.
It is indeed difficult to adjust the new cost arising from the new wage structure, irrespective of whether buyers would increase their prices or not, he observed.