Top apparel buyers open offices in Dhaka
March 25, 2010
Most global retail brands have opened their offices in Dhaka in recent times for direct sourcing of Bangladesh’s quality clothing items at reasonable prices.
Buyers say the liaison offices here will raise their capacity to follow up on supply chain management for the Bangladesh-made apparels collected at a cost comparatively lower than other countries.
After China, the world’s largest supplier of apparels, Bangladesh emerges as a lucrative place for the renowned retailers like US giant Wal-Mart, JC Penny, Zara, Tesco, IKEA, Marks and Spencer, H and M, Uniqlo and Li & Fung.
These firms have already established their branches in the Bangladesh capital with an aim for business expansion, as they now take much more interest in Bangladesh’s readymade garments than they are keen on such items from China, India and Pakistan..
Previously, major foreign buyers used to source Bangladesh’s RMG either from Delhi or Hong Kong or from Islamabad or through the local buying houses representing them.
According to a major supplier, major brands like Puma, G-Star Raw and Espirit are likely to have their branches in Dhaka soon, although they still source ready-to-wear products from other countries.
An official of the Swedish company IKEA points his finger at Bangladesh’s low-cost but quality apparels, which pushed up buyers’ interests.
Moreover, recently Bangladesh improved a lot in compliance issues and made the garment factories free of child labour, he added.
“Recently many owners have established effluent treatment plants (ETP) in their factories, as it is mandatory for protection of environmental and ecological balance,” the IKEA official also pointed out.
Cheap labour cost is another factor that helped grow buyers’ keenness, said an official at the Dhaka office of another retail brand.
On the objectives of opening its branch office, he said, “Certainly we can now follow-up the supply chain management, compliance issues, product quality and design and efficiency of the suppliers very closely.”
The country is in an advantageous position with cheap and quality apparels because its competitors like China, Pakistan and India are losing out their market share for their higher cost of production, industry insiders say.
Higher cost of production and shifting to high-end products have driven China out of the apparel market, while Pakistan lost its reputation because it has long been a trouble-torn country, apparel makers added.
Meanwhile, Export Promotion Bureau data shows around $3.55 billion knitwear exports in seven months to January of the current fiscal year, a 6.85 percent decline compared to the corresponding period a year earlier. EPB also points out that this figure is also 13.62 percent below the target for this period.
Woven exports also slowed 6.99 percent to $3.15 billion during July-January.
Home textiles and textile fabrics also maintained a negative growth, as their exports totalled $165.65 million and $42.30 million respectively.
When his attention was drawn to such export decline, Anwar-ul-Alam Chowdhury Parvez, former president of Bangladesh Garment Manufacturers and Exporters Association, said the financial meltdown worldwide has led to this situation, as major export destinations like EU and USA have been badly affected by the recession.
“Apparel exports will rebound soon as there are signs of recession-recovery,” Parvez hoped. However, he insisted on developing Bangladesh’s basic infrastructures to take the growth in apparel exports to an optimum level.
In this context, he suggested the government ensure regular adequate supply of gas and power to RMG units so that manufacturers can maintain in-time production and lead-time.
Source: http://www.thedailystar.net
More apparel buyers look to Bangladesh
March 25, 2010
A worker is seen at a garment factory in Dhaka. Foreign buyers are now shifting orders to Bangladesh for readymade products as the global financial meltdown shows some signs of recovery. Photo: Epyllion Group
Dhaka looks to WTO meet to win African LDCs’ support
October 13, 2009
Bangladesh is now in talks, both bilateral and multilateral, with the African least developed countries (LDCs) to drum up support from them in winning a zero tariff facility for its major exportable items in the US market.
Officials said it targets the WTO mini-ministerial meeting in Tanzania on October 14-16 to unite all 49 LDCs to mount pressure for such duty-free access.
The Tanzania meet will be, in fact, a groundwork for the Bangladesh team joining there to have positive responses from the Africans to the country in the upcoming WTO Summit. Read more
Govt slaps scanning fee for export-import containers
September 27, 2009
Exporters and importers will have to bear the cost of inspection of their goods at the Chittagong seaport after the authorities slapped a fee of US$5.0 on scanning every container.
The fees would come into effect in the current month after finance minister AMA Muhith approved a National Board of Revenue (NBR) proposal last week, an official said Monday.
The NBR said the scanning charges have been imposed to raise the maintenance and operational cost of the scanners the authorities have installed early this month. Read more
Insulating the RMG sector
July 7, 2009
A number of readymade garments (RMG) factories in Narayanganj were ransacked not very long ago by the workers to press their demand for a pay hike. They later urged the workers of other factories to join the vandalism. When they refused, a fight erupted between the two groups to aggravate the violence.
In another incident around the same time, workers of an RMG industry blockaded the Dhaka-Aricha highway at Savar to vent their grievances over wage arrears. A good number of vehicles were damaged though their owners had nothing to do with the workers’ demand.
Winter RMG orders buoyant
March 10, 2009
International buyers are placing a substantial number of bookings to collect winter clothing from Bangladeshi companies at cheaper prices as the major competitors are losing markets to the country amid global recession, apparel exporters said.
Bangladesh has already turned into a lucrative destination for the buyers for its cheaper clothes.
The exporters said the flow of orders indicates that exports of readymade garments (RMG) would pick up from the next few months although the prices offered are low.
Some recent Indian newspaper reports also supported such indication, saying the major competitors are losing markets to Bangladesh for its cheaper production costs.
The reports said Indian garment manufacturers have already been adversely affected by a steep fall in demand from the US and European countries, and Indian garment exporters may lose out to low-cost competitors.
Garment exports from India showed no sign of pickup this autumn-winter season following a gradual shift of international buyers to low-cost neighbouring countries, the reports said.
Bookings for Indian garments dropped sharply although exporters slashed prices by 11-12 percent.
“Major global buyers like Wal-Mart, JC Penney, Li & Fung, GAP and Target have indicated plans to cut offtake from India by 12-15 percent this year, while they are increasing their offtake in neighbouring countries,” Rahul Mehta, president of the clothing manufacturing association of India, was quoted as saying in a report.
Garment exports from India would be lower than Bangladesh, Vietnam, Indonesia and Cambodia, the reports said.
India is expected to end up exporting garments worth $9 billion this fiscal year, down by almost 10 percent compared to a year back, while Bangladesh is poised to export worth $12 billion garments, the reports said.
Currently bookings for Indian garments are 20-25 percent lower than the same season last year and sentiments are weak because of a gloomy outlook of its textile industry.
“Our export target for the current fiscal year was $9 billion. But due to the present market condition, we will be able to close the year with exports of only $8-$8.5 billion,” Confederation of Indian Apparel Exporters President Amit Goyal said.
Meanwhile, top local RMG makers are optimistic about meeting the export target in the current fiscal year although exports of some other products from Bangladesh declined in July-December period.
Executive Director of Ananta Garment Ltd Badius-Salam said the flow of orders is still high compared to those of other competing countries.
“I hope to meet our targeted 15 percent sales growth this year. Last year the company exported products worth $26 million and this year it will increase,” Salam said.
“But the offered prices are too low,” he added.
A senior official of Opex Group, one of the leading apparel makers, said they have no problem with the flow of orders until now.
“But the problem is low price. The buyers are not offering higher prices for the recession. Now we are trying to make profit by increasing the volume for delivery,” the official said requesting anonymity.
Monir Ahmed, managing director of Abedin Group of Industries, also said orders are satisfactory now although he experienced a relatively low volume of orders in the last three months.
He also vented frustration over the low prices offered by the buyers.
Woven garment surpassed the export target by 2.45 percent, knitwear 2.16 percent, terry towel 10.96 percent and textile fabrics by 8.16 percent during the July-December period of the current fiscal year, according to Export Promotion Bureau.
Bangladesh exported woven garment worth $2.805 billion against the target of $2.738 billion, knitwear $3.240 billion against $3.172 billion, terry towel $66.39 million against $59.83 million and textile fabrics $41.63 million against the target of $38.49 million in the period.
The export trend shows that the target of exporting woven and knitwear worth $12.267 billion for the current fiscal year is quite achievable, exporters said.
Exploring new markets pays rich dividends
February 2, 2009
The Bangladeshi garment industry adopted the strategy of diversifying their global markets after the unfolding of recessionary trends in the global markets leading to a slowdown in exports of apparel which is the biggest export revenue generator for the country.
Infact, diversifying of the markets had begun long before the crisis exploded. The exporters had started seeking East European and the sub-Saharan African markets from the beginning of 2008. But, now that strategy is paying dividends.
Among the new markets to which the garment exporters have started shipping their products are Brazil and Mexico. The volumes to these new markets is increasing at a steady pace, leading to a lesser dependency on the key markets of the US and EU.
After being able to penetrate these new markets to a certain extent, these garment exporters are now on the lookout for other un-explored new markets like Russia, South Africa and Japan, as, if at all exports are being done to these markets as on date, it is in nominal volumes.
Our spoke to Mr Zahidul, Vice President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), who was very optimistic when he said that, “Yes, in spite of on going recession we are able to survive.
Reason for the same is we have found new destinations for our RMG export. We have now started exporting to different countries like Japan & Russia. This change started in middle of year 2008.”
“Our export to Japan is now more than US $15 million. Although we are also facing some banking problems in exports to Russia, we are also making serious affords it. We are also facing a language problem in Japan, but we will try to overcome the same too”, he asserted by saying.
RCC launches garments training
December 12, 2008
The Rajshahi City Corporation (RCC) Thursday launched a training programme for creating employment for women in the garments sector.
RCC Mayor AHM Khairuzzaman Liton formally opened the programme here as the chief guest.
Business Point-2, a garment manufacturing company, has been extending the technical and other necessary support for conducting the training activities.
Mayor Liton said that skilled manpower could bring economical change of the region and proper training is indispensable for the purpose.
He sought all-out cooperation from all quarters particularly the civil society members and the elite for making his five- year mayoral tenure a total success.
Exporters seek crisis management fund
November 7, 2008
The country’s leading exporters have urged the government to create a ‘crisis management fund’ to stave off any impact of global financial crisis.
Around 72 stakeholders held an inter-ministerial meeting Monday in the commerce ministry to set an export strategy under the present circumstances, an official said.
The exporters, including those of ready-made garments, frozen foods, leather and agro-processed industry, fearing the adverse effect on leading export sectors have made a number of pleas to sustain in the crisis period.
“The ministry of commerce will hold a national seminar to discuss the recommendations of exporters in the first week of November,” the official said.
In the meeting, exporters said sharp decline in oil price in the international market will help the government save around Tk 1.0 billion a year.
The government could easily create a crisis management fund for exporters with the money saved from import of fuel, said an exporter who attended the meeting said.
The exporters also demanded separate rate for electricity bills for off-peak and peak hours. Currently, they have to pay peak hour rate for their industries.
They have urged the government to double the rate of cash incentives against their export earning.
Commerce ministry officials said the government is also actively considering finding out a strategy to maintain smooth flow of export from the country.
Sweater exports mark rapid rise
September 3, 2008
Sweater item exports are increasing rapidly as Bangladesh has become a lucrative destination for readymade garments (RMG) outsourcing on the appreciation of Chinese currency and increase in workers’ wages in competing countries, according to industry insiders.
The item manufacturers said orders from buyers are huge, as many RMG manufacturing countries are now reluctant to make sweaters because production of the item is more labourious than other garments.
Many Chinese apparel makers have recently either switched over to other business or suspended the production on a decline in buying orders and higher cost of doing business due to a hike in workers’ wages
Export Promotion Bureau (EPB) data shows sweater products worth US$1.47 billion were exported in the immediate past 2007-08 fiscal year (FY) against $1.24 billion exports in FY 2006-07.
Meanwhile, many RMG factory owners have enhanced their capacity, or opened up new factories to cope with the growing demand for sweater items from foreign buyers.
SQ Group, one of the largest sweater exporting factories, has already signed a joint venture agreement with the UK-based Crystal Martin Group, a sweater factory, to produce the export item in the country.
The joint venture unit is expected to go into production next month, said Shah Nawaz Mohammad Sabbir, a senior manager of the SQ Group.
“The SQ Group has already four sweater factories in operation. It has a plan for further expansion shortly to meet the buyers’ growing demand,” he added, pointing to the fact that foreign buyers like Bangladesh’s sweaters because of better quality in stitching and good finishing.
Dragon, Tupa, Starlight and Diganata groups are some other major players in sweater manufacturing. In Bangladesh, the February-September period is the peak season for sweater production
Wal-Mart, Marks and Spencer, GAP, Tesco, H and M, JC Penny and Zara are the major buyers of Bangladeshi sweater products, industry people said.
“We expect the overall exports of the item to cross $2 billion mark this fiscal,” said Shahidul Islam, managing director of Rupa Group.
Shahidul, also the vice-president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said at present there are 680 sweater factories across the country.
He said in most cases designs are supplied by buyers as attractive designs are yet to be developed here.
EPB said the country fetched US$14.110 billion from overall exports in FY 2007-08, registering a 15.87 percent growth over the previous fiscal.
Of the total export earnings, only woven and knitwear, the two sub-sectors of RMG, fetched $10.699 billion during the last fiscal.