Bangladesh has emerged as a regional apparel industry development hub in the Asian continent and the reason are quite specific. It has a vast availability of low-cost manpower and it has one of the most competitive energy costs. Not just this, it also has a proven track record in apparel production and exports.
While the Asian region is witnessing rapid increase in labour wages and raw material prices, Bangladesh has survived the position of the most suited destination for international apparel majors for sourcing world class fabric and finished clothes.
Between 1995 and 2016, the exports for Bangladesh have doubled due to the success in garments catering to EU and the US markets. More rapid export growth depends on capturing higher market shares in the basic garments of both current and newer dynamic markets of Bangladesh.
In order to achieve a target of $50 billion RMG exports by 2021, Bangladesh is expecting an 8% share of the global apparel market. The demand for apparel in the global market at present is about $450 billion and it will reach $650 billion by 2021. The current share of Bangladesh is around 5% of the total global apparel demand.
Export growth in the future would depend on the capturing of new markets and increase of the market share with the existing products. More than 13% of the GDP of Bangladesh is contributed by the RMG sector and as per the latest survey report of the McKinsey, Bangladesh is going to be the No.1 hotspot for the apparel sourcing within five years.
The Bangladesh Textile Mills Association (BTMA) with total investment of over $6 billion controls around 424 spinning mills, 794 fabrics and 241 dyeing, printing and finishing units. The main source of earning foreign exchange in the country is the textile industry which plays a vital role for the growth of the economy. The textiles and clothing industry is a rapidly growing sector here that ranges from spinning to weaving, knitwear to leisurewear and high street fashions.
A unique competitive edge is offered by the economy thereby supporting profitable expansion into new strategic markets. A substantial portion (around 75%-90%) of the demand for yarns by the RMG industry is fulfilled by the local spinning industry.
As the ideal destination for investment in textiles and garment industry, Bangladesh gets the favourable trade status with the EU. In the RMG industry, there is huge yarn and fabric demand-supply gap which is met by imports. Thus, for a huge textile industry that is capable of supplying over 3 billion yards of fabrics a year to the export oriented garment industry, the portential for the backward linkage industry.
With the increase in fabric requirement at 20% per annum, Bangladesh is awaiting an optimistic future for the ready-made garment industry.
Image Source: www.thedailystar.net