Bangladesh primed for $8b monthly RMG export

Garment manufacturers are confident about supplying garment products worth $8 billion a month to international buyers after Bangladesh consolidated its place in the global supply chain by remaining open for businesses even during the peak of the coronavirus pandemic.

The government's bold move contrasts to many garment-producing countries that kept shut factories to tame the raging virus. What is more, apparel and textile entrepreneurs in Bangladesh have kept expanding to meet the growing demand as economies return to normalcy.

Now, local apparel manufacturers are flooded with orders and many global retailers and brands have moved orders to Bangladesh from its competitor countries.

"Bangladesh is gradually getting ready to cater garment work orders worth $7 billion to $8 billion every month. At present, we are not capable of supplying products worth $7 billion to $8 billion, but we are expanding our capacity," said Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

The target would be double the current level.

For the first time in the history of Bangladesh, the monthly export of garment items crossed $4 billion in December, helped by a surge in demand in keeping with the global recovery from the severe fallouts of Covid-19.

Hassan shared his views at an event styled "ERF Dialogue" at the conference room of the Economic Reporters' Forum (ERF) in Dhaka yesterday.

The pandemic is far from over, and what is more, Omicron, the latest variant of Covid-19, is spreading fast across the world although it has not proved to be fatal like that of the Delta variant.

But the virus is sweeping across Europe and the US, the two main export destinations of Bangladesh and home to more than 80 per cent garment shipment from the country.

But Hassan is unflinching.

"Garment exporters are not worried as no work order has been cancelled or suspended because of Omicron so far. Only a few buyers have demanded deferred shipments for a handful of consignments for 10 to 15 days." The reason for Hassan's bullishness is some export destinations are increasingly becoming major buyers. And he is hopeful that shipment to a number of Asian markets, including India, China, South Korea, and Japan will surge in the near future as buyers are placing more orders.

In Asia, only Japan has turned into a $1-billion market for Bangladesh. But India, China, and South Korea would soon follow suit, he said.

Since the garment export is on the rise, a lot of investment will flow to the spinning, weaving, dyeing and other primary textile sectors in 2022, according to the entrepreneur.

The spinning sector witnessed a major jump in investment last year as entrepreneurs set up 26 new mills to meet rising demand. Entrepreneurs pumped Tk 5,970 crore in the new manufacturing plants.

"The current trend of garment exports will continue up to April this year as we are booked with a huge quantity of orders," said Hassan. Garment export from Bangladesh to the US is also rising.

And Hassan called on the US to reinstate the Generalised System of Preferences (GSP) as manufacturers had improved the workplace safety and compliance in sync with global standards and the conditions set by the American government.

The US suspended GSP for Bangladesh in June 2013, citing serious shortcomings in labour rights and workplace safety.

The BGMEA chief stated that there were some issues related to the National Board of Revenue, the customs department and the port that should be resolved through discussions for maintaining the current positive course of exports. Despite the major strides made by the garment sector in Bangladesh in recent years, both the number of workers and active factories have declined. Hassan, however, could not say immediately how many factories were closed and workers lost jobs.

The BGMEA is carrying out three studies on technical garment products, fibre diversification and the post-Covid-19 roadmap to lift the industry to the next league.

"The studies are aimed mainly at finding out the potential markets and how to shift the production base to high-end garment items and technical clothing items," Hassan added.

SM Rashidul Islam, general secretary of the ERF, moderated the dialogue, which was chaired by M Shafiqul Alam, acting president of the association.