ARSHAD JAMAL Bgmea North South Textile Summit 2

7/31/2019 ARSHAD JAMAL Bgmea North South Textile Summit 2

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Presentation By

Arshad Jamal (Dipu)

Director-BGMEA & Chairman-Tusuka Group

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Bangladesh RMG Industry- striving for Excellenceby

Vertical production chains in Textile and Apparel Sector

between India & Bangladesh

Leading Bangladesh to Prosperity


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Competitive

Advantages

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STRENGTHS OF BANGLADESHS APPAREL INDUSTRY

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Competitive Price International standard Quality Control process Bangladesh has 30 years of experience in garment

manufacturing Superiority in the lower end niche, as well as handful

of suppliers doing brand items Rapidly developing backward linkage industry Increase in direct sourcing by the Brands through

local offices at Dhaka. Bangladesh is the 3rd largest apparel exporting

country in the world (WTO, 2008)


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M/B KNIT SHIRT SWEATER MMF M/B TROUSER M/B SHIRT W/G BLOUSE

China 50.25 68.18 70.96 78.29 58.4

India 39.71 85.36 77.95 85.44 62.63

Vietnam 41.25 145.5 64.85 59.98 42.65

Bangldsh 20.99 31.71 54.52 48.92 39.2

0

20

40

60

80

100

120

140

160

US IMPORT PRICE FOR SELECT APPAREL ITEMSUS$/DOZEN

Source: OTEXA


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Source: EUROSTAT 6

T-SHIRTS SWEATER M/B TROUSERS M/B SHIRTS W/G BLOUSES

CHINA 14.92 21.76 16.95 18.92 33.7

INDIA 18.96 19.62 20.16 21.97 33.35

VIETNAM 11.13 14.25 17.77 24.88 23.22

BANGLADESH 10.3 15.64 13.58 14.18 20.71

0

5

10

15

20

25

30

35

40

EU IMPORT PRICE FOR SELECT APPAREL ITEMSUS$/KG

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Design Sup port Services

PatternmakingPrototype SamplesSalesmen Samples

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In house quality inspectionMost of the factories have received quality

certificate from buyers

Certifications like ISO, WRAP, OEKO-TEX, SA 8000etc.

Most of the factories have their own Quality Controldepartment where highly skilled professionals areemployed to increase efficiency and reduce reject.

International Consulting companies train theemployees to provide International standardrequirements.

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INCREASING SOURCING BY WORLDS TOP FASHION RETAILERS


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Largest Democracy with independent Judiciary

Continuous GDP growth of 5%-7%

Stable currency and no major fluctuations over the last

three years

Bangladesh has always fulfilled its debt obligations

57.3% of the population is under 25 years of age.

Highly flexible workforce

Both JP Morgan and Goldman Sachs have includedBangladesh among their shortlists of transitional states

likely to succeed.


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China moving to high-end and secondary industries

Rising production costs in China

Labor shortages causing wage increases

Revaluation of Yuan

Largest impact on labor intensive industries

Bangladesh represents a clear alternative to China in someparticular product and market segment


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Source: EPB

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4.584.91

5.696.42

7.90

9.21

10.70

12.35

5.996.55

7.60

8.65

10.53

12.18

14.11

15.57

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

RMG

Total

HISTORICAL RMG EXPORT TREND OF BANGLADESH

In Billion Us Dollar

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% Share of Global Exports

0.40% to Australia

Approx. 35% to USA

and Canada

Approx. 58.5% toEuropean Union

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Apparel

USA 82.94%

European Union 82.29%

Canada 90.64%

Source: EPB

%Growth in Exports between 2004-05 and

2008-09

BANGLADESH'S APPAREL MARKET SHARE% (FY 2008-09)Market Concentration

EU,58.46%

USA,29.91%

Canada,4.75%

Japan,0.60%

Australia,0.40%

Others,5.88%

0.60% to

Japan


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29.91%

17.30%

9.90%

7.85%

7.35%

4.75%

4.23%

2.05%

16.65%USA

Germany

U.K.

France

Netherlands

Canada

Italy

Belgium

Others

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21Source: BTMA, Ministry of Jute & Textiles

Bangladesh is the second largest cotton importing country in the world

Sub-Sector No. of

Mills

Sub-Sector Installed

MachineCapacity

Unit Production

Capacity/Year(in million)

Public Sector

Spinning 24 Spindle 460000 Kg 40

Private Sector

Spinning (Cotton) 312 Spindle 8230104 Kg 1495

Spinning (Synthetic Yarn) 27 Spindle 673276 Kg 180

Total (Public & Private) 363 Spindle 9363380 Kg 1714

Weaving Mill (large,medium & small)

1131 Shuttle/Shuttle-lessLoom

48659 Meter 2011

Handloom 148342 Handloom 498000 Meter 837

Terry Towel 72 Terry/Power Loom 1896 Meter 34

Sub-Total 149545 548555 Meter 2882

Dyeing & Finishing 359 Finished Fabric 6755 Eqv. Meter 6084Sweater 607 Flat & Jachard 306848 Pcs 6568

Ready-made Garments

Woven 1382 Sewing Machine 391723 Pcs 3508

Knitwear 462 Over Lock 148448 Pcs 5378

Sub-Total 1844 540171 8886

Knitting & Knit Dyeing 822 Knitting & Dyeing 12891 Eqv. Meter 7414

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Ve rtic a l p ro d uc tio n c ha ins in

Textile a nd Ap p arel Sec torbetween India & Bangladesh

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Win-Win situation

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1. Bangladesh is a Big Market for Woven Textile.

2. Potential to Enhance the EU GSP Utilization Rate.

3. India Could Contain its Textile GSP Graduation Loss.

4. China Plus Sourcing Strategy of Buyers.


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Win-Win situation

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Other reasons to Support the Vertical Supply Chainconcept

As Bangladesh occupies about 3% of world apparel market

share, and we have a very strong prospect to grow in apparel

trade (15% average annual growth), and as India being acotton growing country has a very strong primary textile

base; the idea of vertically integrated supply chain should

work well between these two countries.


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Bottle Necks

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Bi-lateral Trade Issues to be Taken Care of:

Bangladesh India Trade Gap.

The 8 Million Pieces Garment Experience:

Utilization 2009: 52.77%(CVD+Eu+ others)

Non-Tariff Barriers.

Sensitive list.

Currency Exchange Rate.

Complicated Visa System.

Trust Issue. stoppage)


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Snapshot: Bi-lateral trade

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Product

codeProduct label

India's exports to

Bangladesh

Bangladesh's imports from

world India's exports to world

Value in US$ million Value in US$ million Value in US$ million

2006 2007 2008 2006 2007 2008 2006 2007 2008

52 Cotton 271.06 288.99 711.37 1218.02 1595.98 2410.88 3916.82 4408.54 4548.48

54

Manmade

filaments 16.78 16.02 44.64 211.74 242.88 365.46 1025.81 1234.31 1587.63

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Manmade staple

fibres 47.89 39.79 44.63 947.46 417.64 622.45 1046.98 1295.19 1396.06

60

Knitted or

crocheted fabric 0.43 0.56 9.26 29.24 36.67 319.67 76.15 80.10 112.26

Source: ITC


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Bangladeshs Textile and Apparel Trade Prospect with India:(Bangladeshs import from India 2008)

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Product code Product label Value US$ million % of BD

Import

Indian export to BD is

% of Indian export to

world

52 Cotton 21.06 29.51% 15.64%

54 Manmade

filaments

44.64 12.22% 2.81%

55 Manmade staple

fibres

44.63 7.17 3.20

60 Kmitted or

crocheted fabric

9.26 2.90% 8.24%


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BGMEA is one of the largest apparelexporters trade bodies in Bangladesh.BGMEA started its journey in Dhaka in1983 with only 134 members and nowthe number of members of BGMEA is4925.

BGMEA set up its regional office inChittagong in 1985 considering itsstrategic importance of being the port cityand the gateway for all RMG exports.

BGMEA Complex, Dhaka

BGMEA


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SHARE (%) OF BANGLADESH'S RMG EXPORT SUB-SECTORS (IN US DOLLAR VALUE)

Source: EPB29

Woven: 100%, Knit:50%, Sweater: 99% BGMEA members


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Social Sustainability30


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BGMEA has its own compliance cell with 39 officials trained by brand buyers

like Wal-Mart, SEARS, Carrefour, Hennes & Mauritz (H&M) and ILO

Health Center & Hospital: BGMEA runs 12 health centers with its own

resources in Dhaka and Chittagong. Through these centers garment free

treatment and medicine for garment workers.

Mandatory Group Insurance: BGMEA made Group Insurance scheme

mandatory for the garment workers working in the Member factories in

May 2002.

Labor Arbitration: BGMEA started free labor arbitration facilities for

garment workers in 1998 under the chairmanship of a retired judge Mandatory Building Code: BGMEA made mandatory for all its Member

factories to follow the Building Code to set up factories.

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Fire and Safety Cell: BGMEA has established a fire and safety cell in 1997 to tackle

the fire related emergency problems

BGMEA Institute of Fashion & Technology (BIFT): Offers degrees in fashion and

Merchandizing.

Human Resource Skill Development: Provides training to unskilled people and

place them in the industry. Till now 15,000 people were placed

Promotion of Reproductive Health Awareness, program on Gender equity &women empowerment is run in collaboration with UNFPA

Scholarship and Stipend Program: To encourage primary education for the

workers children BGMEA has been providing stipends to the meritorious children of

workers

Free Schooling: BGMEA is running three free schools for the workers children and

spouse of the RMG sector.

Free Eye Camp: To mark the World Sight Day-2009 BGMEA in association with

Grameen phone, Islamia Eye Hospital and Sightsavers International organized free

eye camps for the garmentworkers

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Bangladeshs garment sector is free of

child labor and forced labor according to

USDOL Report (Sep, 2009)

122 goods were identified produced with

forced labor, child labor, or both, in 58countries.

The most common goods listed are

cotton, sugarcane, tobacco, coffee, rice,

and cocoa in agriculture; bricks, garments,carpets, and footwear in manufacturing;

and gold and coal in mined or quarried

goods.

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Environmental

sustainability34


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Respect for nature Effluent Treatment Plants has been mademandatory for effluent discharging factories above ph 8.5 level. Green-

building, water recycling and using renewable energy has been getting

increased attention among the entrepreneurs. BGMEA has been running

several projects to promote energy efficiency in garment factories.

Sustainable use of resources The garment industry in Bangladesh have

already gained significant progress in lean production. In order to bring

all factories under this practice BGMEA runs projects like waste recycling

with IFC-SEDF.

Healthy products Most factories run their own textile testing labs

which are accredited by large fashion retailers like H&M, M&S, Puma, JC

Penny, etc. Tests are done as per various international standards like

ISO/AATCC/BS/OEKO-TEX. Most of the companies have awards from big

fashion retailers for good product & Quality.
http://www2.marksandspencer.com/thecompany/plana/healthy.shtmlhttp://www2.marksandspencer.com/thecompany/plana/materials.shtmlhttp://www2.marksandspencer.com/thecompany/plana/waste.shtml


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ARSHAD JAMAL Bgmea North South Textile Summit 2