Dyeing sector can’t keep up with robust apparel

No  new dyeing factory was set up in Bangladesh last year although the  segment is crucial to supporting the roaring apparel sector looking to  double its exports.

As local exporters are increasingly embracing  man-made fibres and producing high-end items, the country will need  more dyeing facilities and high-quality textile clothing chemicals to  cater to demand in the coming years.

Industry people say  entrepreneurs, however, are not interested in pouring money in the  dyeing industry because of complicated production process, large  investment requirement, dearth of local experts, and lower demand from  weavers and spinners.

Dyeing is a critical process to colour  fabrics and yarn for finished garment items. It involves a lot of  technical people and expensive chemicals.

Two kinds of dyeing  processes are required mainly -- solid dyeing that means colouring  fabrics and yarn dyeing for making fabrics.

But not a single new  dyeing factory was established last year although the spinning segment  witnessed the highest amount of investment in a single year of Tk 6,000  crore as entrepreneurs set up 26 new units because of high demand for  the yarn from the knitwear and woven garment exporters.

"Dyeing  industry needs a lot of primary capital and is expensive to run effluent  and water treatment plants," says Monsoor Ahmed, chief executive  officer of the Bangladesh Textile Mills Association, the platform for  the primary textile sector.

"Entrepreneurs feel discouraged from  setting up dyeing factories because of a requirement of a lot of  capital, higher chemical prices and dearth of expertise in the  industry," said Abdullah Al Mahmud Mahin, chairman and managing director  of Mahin Group.

The group runs one of the biggest dyeing units in  Bangladesh. It can dye 30 lakh metres of fabrics a month, which  includes 15 tonnes of yarn a day.

"We are overbooked with orders  from local garment exporters for next four months as international  retailers and brands are placing a higher volume of orders with  Bangladesh," said Mahin.

There are 70 large dyeing units in  Bangladesh with Tk 400 crore investment in each factory, according to  the Bangladesh Dyed Yarn Exporters Association.

These large units  have a combined capacity of dyeing 70 lakh pound of fabrics and yarn a  day against current requirement of 50 lakh pounds. The market size of  clothing chemicals, mainly caustic soda, salt and other colour  chemicals, is $900 million.

There are many small dyeing units  that are not the members of the Dyed Yarn Exporters Association, said  Salah Uddin Alamgir, president of the trade body.

Annual  consumption of clothing chemical is growing at 30 per cent as local  dyers use more chemicals adding more value to export-oriented garment  items, according to Syed Mohammad Ismail, country manager of Archroma  (Bangladesh) Ltd, a US multinational chemical company.

Archroma (Bangladesh) has a market share of 12.5 per cent.

He says chemical prices are not responsible for the lower inflow of investment in the dyeing segment.

Last  year, chemical prices rose 30 per cent mainly because of a 400 per cent  hike in sea-freight charge and an increase of prices of other raw  materials caused by the supply shortage and supply chain disruption  owing to the coronavirus pandemic.

"Despite a lot of challenges,  many spinning, weaving and dyeing units are expanding their capacity  because of an inflow of orders from global retailers and brands," Ismail  said.

Although no new dyeing factory was set up in 2021, many  large textile groups expanded their capacity eyeing a big investment in  spinning and weaving sectors, he said.

Mahin said previously, a  lot of dyed polyester, cotton and blended fabrics used to be imported  from China, India and Pakistan. Now, local mills are capable of dyeing  all kinds of fabrics and yarn.

It costs at least Tk 1,200 crore to Tk 1,500 crore to set up a dyeing and weaving unit.

Bangladesh  needs more investment in man-made fibre as the demand for artificial  fibre-made garment items is on the rise worldwide because of changes in  weather, fashion and designs, said Alamgir.

"Bigger industries  have expanded their capacity to meet the rising demand. In future, the  dyeing industry may grow as investment is taking place in the spinning  and weaving at a faster rate," said Monsoor Ahmed.