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BGMEA UNIVERSITY OF FASHION & TECHNOLOGY
SUB: CUTTING ROOM TECHNOLOGY CODE: 1100
SUBMITTEED TO:Rafiqul Islam Manik
SUBMITTD BY: Md. Salman Bhuiyan Md. Arafath Hossain Md. Forhad Hossain Md.Ariful Islam Khaled Mohammad Ridwan Md. Nafiz Ahsan
Introduction RMG means Ready Made Garments. The readymade garments industry
acts as the backbone of our economy and as a catalyst for the development of our country. We take pride in the sector that has been fetching billions of dollars as export earnings and creating jobs for millions of people in the country.
History• The RMG business in Bangladesh started in the late 70s with merely a casual & cursory effort. The first consignment of knitwear export was made in 1973 while the first shipment of woven was made in 1977. In 1981-82 the contribution of woven garments to total exports was about 1.10%....
But with the passage of time from agrarian to manufacturing transformation Bangladesh developed significantly in areas of poverty alleviation, employment, women empowerment, industrial growth and economic diversification - thanks solely to labor intensive RMG sector. Since MFA phase out in 2004 the growth of Bangladesh knitwear has escalated rapidly as statistically supported export volume adduces adequate proof to it despite its somewhat cluttered and shoddy start with absence of rudimentary plans and evolutionary industrial mechanism.
In fact, from fiscal year 2007-08 Bangladesh knitwear continues to capture lion’s share in national exports (38.77% in FY 2012-13) what was slightly 7.64% in the two decades back, thereby slanting the economy towards knit garments.
• Supported with strong backward linkage and Generalized Systems of Preference (GSP) benefit, Bangladesh has showed remarkable agility over time for a prosperous future eschewing the hiccups in areas of overall management and infrastructures in this industry.
• At present, our apparel sector continues adding fresh ideas and modules like business intelligence, state-of-the art technology, modern management practices and production technique. These are indeed the manifestations of our relentless efforts to the global standards what was once considered unparallel to emulate techno-based advance economies.
Present of RMG• Over the decades the growth of knitwear sector
has been rising over 20% at CAGR base and continuously grabbing more portions in the export pie of Bangladesh. This recent robust growth is partly achieved owing to preferential support from the European Commission’s GSP & Relaxation of Rules of Origin (ROO) and the Duty Free Quota Free (DFQF) access granted by Canada, Australia, Japan and members of European Free Trade Agreement (EFTA). Along this growth momentum favorable policies from the government of Bangladesh in the form of export subsidies i.e. cash incentives also contributed greatly for making it the most attractive sourcing hub.
Traditionally, the exports basket of Bangladesh has been leaning towards EU and the USA. So far the EU is the largest destination for Bangladesh knitwear, worth of value $7.3 billion with share of 69.74% exported in the year 2012-13 followed by the USA with $1.13 billion and a share of 10.79%. The one-stage transformation requirement of ROO in 2011 boosted signs for market penetration in the EU further; hence a growth of 46.63% in the FY 2010-11 over 2009-10 was remarkably noticeable.
• Bangladesh RMG sector mainly comprises of Knit and woven garments competing vigorously to surpass each other for taking up the leadership yoke within the economy. It was in FY 2003-04 the knit garments for the first time exceeded woven wear and became the leader in terms of quantity exports with 91.6 million dozens as against 90.48 million dozens of woven garments. And from FY 2007-08, knitwear continues to widen the gap with woven both in terms of value and quantity.
One of the biggest challenge currently faced by our RMG industry is to ensure workplace safety and better working conditions for the millions of garment workers.Two major accidents, the Tazreen fire and the Rana Plaza collapse, have brought the issue of workplace safety to the fore and led all stakeholders to act accordingly. Following the unfortunate incidents, various platforms such as the Bangladesh Accord on Fire and Building Safety, the Alliance for Bangladesh Worker Safety and National Plan of Action have been formed to improve building and fire safety of Bangladesh’s garment industry.
Sector Highlights Cost and quality of products that are
produced on time, reliably and very competitively with a highly skilled labor force.A unique regional location for expansion into key Eastern and other markets.Favored trading status with the EU and the USA.Clusters of companies providing a local supplier base with real depth in skilled labor, training and technical development facilities.
RMG and Backward Linkages• The phenomenal growth in the ready made
garment (RMG) sector in the last decade created many new factories and employment opportunities. Having enjoyed more than 70% of total investments in the manufacturing sector during the first half of the 1990s, RMG and knitwear now account for about 4,825 factories and a workforce of 3.1 m -80% of which are women. This sector now employs over 50% of the industrial workforce and accounts for 79% of the total export earnings of the country.
Investment Opportunities and Government SupportEnormous investment opportunities exist in this sector. In the RMG industry demand for fabric significantly exceeds local supply and so is currently being met by imports. Backward linkage is a significant trading opportunity and is supported by a government backed incentive: 15% cash subsidy of the fabric cost to exporters sourcing fabrics locally.
We have seen many agitations in the streets, for delayed payments, lack of increments, not paying bonuses, etc. All this agitation, had forced the Government and the RMG owners associations negotiate with workers representatives – to raise the minimum wage – without any regard to productivity increases.
The Government here has had no supportive interventions, in fact has been making it more and more difficult for these factories to make a profit by adding new and higher costs, raising minimum wages, raising factory compliance standards etc. Ultimately the buyers will also ONLY conduct business with factories that have better and legal working conditions yet able to meet their low price demands.
The industry that has been making crucial contribution to rebuilding the country and its economy is none other than the readymade garment (RMG) industry which is now the single biggest export earner for Bangladesh. The sector accounts for 81% of total export earnings of the country.When our lone export earner – the jute industry – started losing its golden days, it is the RMG sector that replaced it, and then, to overtake it.
Future of RMG sector: • According to the study, the US-based fashion
companies are expected to boost their sourcing from Bangladesh in the next two years. McKinsey, a global management consulting firm, described Bangladesh as the next hot spot in apparel sourcing. The renowned firm forecasts export-value growth of 7-9% annually and our apparel export will double by 2015 and nearly triple by 2020 provided that we can successfully overcome a few challenges including developing infrastructure and skill workforce.
It is the responsibility of all of us to protect the interest of this industry which has given our economy a strong footing, created jobs for millions of people, especially for women, lifted them from the abyss of chronic poverty and given them a dignified life. Now what we need to do is deal with all the challenges facing our garment industry, paving the way for its further development.The main highways namely Dhaka-Chittagong, Dhaka-Mymensigh, Dhaka-Tangail through which our apparel products and the raw materials for apparel and textile are transported from factories to port, are being widened (from two lanes to four lanes) and drive-worthy for tapping our export potential. This work needs to be completed as urgently, preferably by December 2014.
Connection of gas to the factories and uninterrupted power supply are prerequisite for the steady growth of the industry. So, the government should consider giving gas and electricity connections to RMG and textile units as the top priority. Producing the required number of skilled workers is another challenge and overcoming it will determine whether the country will be able to sustain the boom that is waiting to happen.Although BGMEA along with the government and other international organisations has taken the initiatives of developing skills of workers, yet more initiatives as such are required to meet the demand of the industry and enhance the productivity of the industry. The budget allocation of the government for the skill development also needs to be increased.
BGMEA University of Fashion and Technology (BUFT) is offering graduate and post-graduate degrees to students on fashion design, knitwear technology and apparel merchandising related subjects. Nonetheless, to meet the current shortfall of competent professionals in the mid-level of our garment factories, fashion, textile and industrial merchandising related departments need to be established at all of our major public and private universities.
Bangladesh mainly produces five products – T-shirts, sweaters, trousers, men’s and women’s shirts. Moreover, we are dependent mainly on two markets namely the EU and North America (the US and Canada). Though we reduced our dependency on these two markets from 93% to 85% in last five years (From fiscal 2009-10 to 2013-14), we need to diversify the destinations of our apparel export and concentrate on high-end products like suits, lingerie, etc more for the sustained growth of our apparel industry.
It is really a matter of great interest to many – how the economy of Bangladesh continues to grow at a steady pace, sometimes even when rowing against the tide. Now we envision Bangladesh achieving the middle-income country status by 2021. We firmly believe that our dream will come true within the stipulated time and the RMG industry will certainly play a crucial role in materialising the dream.
Inadequate infrastructure, bureaucratic inefficiency and corruption are still the major problematic factors in industrialisation and for growth of an industry. These are also increasing entrepreneurs’ cost of doing business. We are also losing price and delivery competitiveness to our business competitor. The last but not the least, political stability of the country is the key to steady growth of the industry.Starting from scratch, Bangladesh has come a long way and is now one of 10 new emerging countries in the world. The macroeconomic stability, 6% annual average GDP growth, robust performance of remittance and export, strong foreign currency reserve, and remarkable social and human development over the past decade – all reflect our underlying strengths.
Given the dominance of the RMG industry in the overall economy of Bangladesh, we have to protect this sector. Rather than basking in the glory we should work hand in hand to retain sustainable growth and competitive edge of this industry.
THANK YOU
