DIU Blog

RMG sector in Bangladesh

Bangladesh is an emerging economy of the world. High capacity garments industry and integrated primary industry is playing the leading role in building the growing economy. In fact Bangladesh has become somewhat like a hub for the world apparel industry. The ‘made in Bangladesh’ tag has also brought glory for Bangladesh, making it a prestigious brand across the glob.

Export Promotion Bureau (EPB) published recent data showing that during the July-January period of FY 2021-22, Bangladesh readymade garments (RMG) export earned $23.98 billion – which grew by a staggering 30.3%. Of the amount, knitwear exports earned $13.27 billion, up 32.89% year-on-year, and woven products exports earned $10.71 billion, increasing by27.23% in the July-January period of 2022. EPB data also showed that in January 2022 month alone, the RMG export fetched $4.09 billion, up by 42.5% from the same period 2021 – which was $2.87 billion. Commenting on the matter, Humayun Salim, MD, Khantex Group said, “The current order scenario in the market is really good. Most of the knit and woven factories are overbooked at the moment. And at the same time, most of the big RMG factories are increasing capacity. Depicting a bright future ahead.” While, Bangladesh Garment Manufacturers and Exporters Association, President Faruque Hassan opined to media that the big jump in garment exports is expected to continue as the apparel industry has had more work orders this year compared to last year. Moreover, during the July-January period of the current FY, Home textile export recorded a 30.1% growth to $831 million. And specialized textile export earned $216 million, which was $76 million last FY.

Despite the epic growth of our RMG industry and it’s biggest prospects, challenges are still there- One of the biggest challenges currently faced by our RMG industry is to ensure workplace safety and better working condition for the millions of garments worker. Political unrest, cancel of GSP facilities by USA, inadequate gas and power supply, poor port management, shortage of trained workforce, high lead time, labor unrest, corruption and poor law and order situation, lack of technical and market research facilities, environmental problem are also our changes to face to recover.

We have these scopes to improve our situation such as- product diversification, market diversification, Backward integration, Policy regime of government, Infrastructure impediment, Labor productivity, Research and training.

Product diversification: In the globalized economy and ever-changing fashion world, product diversification is the key to continuous business success. Starting with few items, entrepreneurs may diversify product base ranging from ordinary shirt, T-shirt, trouser, shorts, ladies and children wears to sophisticated high value items like quality suits, branded jeans, jackets, sweaters, embroidered wears, etc.

Market diversification: Bangladeshi RMG products are mainly destined to the US and EU. In FY07, a successful turnaround was observed in exports to third countries. It is anticipated that the trend of market diversification will continue and thus help maintain growth momentum. The country will maintain good export growth for the export of apparel to new destination like Japan, India, Turkey, South Africa, Australia, Brazil, Mexico, Russia, China and Korea.

Backward integration: RMG sector can be a catalyst for further industrialization in the country. However this vital industry still depend on imported facilities heavily for increased market access, there is no alternative but to produce textile items competitively, at home through the establishment of backward linkage with the RMG industry.

Infrastructure impediments: Factors constraining competitiveness of Bangladesh’s RMG export include the absence of adequate physical infrastructure and utilities, improving which may be an exellent advantages.

Labor productivity: Bangladesh labor productivity is known to be lower when it’s compared with of Srilanka, South Korea and Hong Kong. Bangladesh must look forward to improve the productivity of it’s labor force it wants to compete regionally as well as globally, which can make the RMG sector highly optimistic.

Research and training: The country has no dedicated research institute related to the apparel sector. RMG is highly fashion oriented and constant market research is necessary to become successful in the business.

About the Writer: Sharmin Akter, Lecturer, DIU. Cherishing the vision to become a prominent academic and research scholar, Sharmin Akter is currently serving as Lecturer in the Department of Textile Engineering at Daffodil International University. She joined the Department of Textile Engineering in May, 2016.Prior to this, she worked as Management trainee at Interstoff Apparels Ltd. for almost two months where she taught in the areas of Textile production planning.Before that, she worked as intern at Epillyon Group. (one of the largest RMG exporting industry in Bangladesh), where she was engaged in raw materials sourcing, consumption. She has completed her B.Sc and M.Sc in Textile Engineering from Bangladesh University of Textiles with reflective and outstanding academic records.