Bangladesh Textile Industry Sees Growth In Knits, Wovens And Denim
January 27, 2009 Textiles play an important role in the economic life of Bangladesh. The sector, in addition to meeting the demand of fabrics and apparel domestically, contributes significantly in the export trade of textile and clothing (T&C). Currently, more than 78% of the country’s export earnings come from T&C. The sector provides employment to 4.5 million people, and contributes 40% value addition to the manufacturing sector. Textiles as a whole play the most significant part in the alleviation of poverty, provision of employment to rural women and economic empowerment of women.
Since T&C occupies this important economic position, significant support has been provided by the Bangladesh government to meet the challenges of globalization as well as the negative effect of the abolition of the Multi Fibre Arrangement. The government initiated some positive efforts in enhancing the competitiveness of the T&C to bring the sector on par with competing countries. As a result, large investment has been made in the last few years in the spinning sector, which has been shown in Table 1. With increase in investment, level of productivity has also increased, providing support to local exported-oriented ready-made garment (RMG) units to compete in international markets.
The table “Export of Textile Products” below shows that the export of knitwear items has almost overtaken woven garments in recent years. Although all textiles listed have achieved continued growth over the last half a decade, the growth rate in knitwear has been phenomenal. This has been attributed to the availability of raw materials domestically due to expansion of the spinning sub-sector and the active marketing approach of the entrepreneurs, supported by a favorable policy package. Sweaters and T-shirts have led the growth in knitwear, with $1.78 billion (USD) in T-shirts and $1.04 billion in sweaters exported in 2006.
For woven RMGs, trousers rank first in terms of export value and have experienced great growth in recent years. Although woven shirts rank second, their growth rate has not been significant compared to the export of the last five years. On the other hand, jackets have a fluctuating trend going up and then again falling. During the past several years, Bangladesh has exported RMG to the E.U., U.S. and Canada, and the greatest share of textile fabrics and yarns consumed domestically. According to the Bangladesh Export Statistics, the E.U. receives the most exports in knitwear, wovens and home textiles, followed by the U.S.
Denim Production Develops
Bangladesh has emerged as the number one supplier of denim clothes to the European market, commanding 27% of imports during the half of 2006. Exporters said that increasing availability of locally produced denim fabrics and enhanced ability to offer the most competitive prices helped Bangladesh gain greater market share. Restrictions on certain apparel of some Asian countries in the E.U. market have also benefited from the Bangladesh denim sector. In terms of earnings, Bangladesh ranked third due to exporters’ concentration on low cost denim dresses. The latest data shows that during January-June 2006, Bangladeshi manufacturers shipped about 24 million pairs of men’s and boys’ denim jeans to European importers. The export volume during the period increased by 26.15% and stood on top with 26.76% of total European imports of denims. On average, Bangladesh denim exporters charged $5.86 unit price for men’s and boys’ jeans, whereas the global average was $11.38 per unit.
In women’s and girls’ categories, exporters saw volume increase more than 91% to about 17 million pairs, topping the list in this category with 18.59% of the market share, more than double from a year ago. However, Bangladesh lagged behind in earnings from women’s and girls’ denim clothes. Local capacity for producing denim fabrics enhanced significantly in recent times, and this has helped apparel manufacturers cater to the demand from European buyers.
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