Sunday, February 19, 2012

Friday, October 28, 2011


Bangladesh’s Textile and Clothing Sector:
 The textile and clothing sector is the largest manufacturing activity in Bangladesh.It provides direct employment to about than 5 million people, which accounts for 45 per cent of all industrial employment in the country. The sector contributes 10 per cent of the country’s GDP, 40 per cent of industrial value addition, and 78 per cent of export earnings. Major readymade garments exported by Bangladesh are knitted and woven shirts and blouses, trousers, skirts, shorts, jackets, sweaters and sportswear, and other fashion apparel.

Table 3.1 provides a profile of Bangladesh’s textile and clothing sector. The sector can
broadly be divided into primary textile sector (PTS) and export-oriented readymade
garment (RMG) making sector. The PTS comprises spinning, weaving, specialised textile
units, traditional handloom sector and knitting and dyeing subsectors. Currently, there are
now 350 spinning mills, 400 weaving firms, 310 dyeing and finishing units, and 4,500 garment factories.



Table 3. 1 The Textile and Clothing Sector at a Glance



Sub-sector
Numberof units
Installed machine capacity
Production capacity
Employment
Textile spinning
350 7.5 million

spindles
(0.2 million rotors)
1,800 million
kg

400,000
Textile weaving
400
25,000
shuttleless/shuttle
loom
1,600 million
meter
80,000
Specialised textile
and power loom
1,065
23,000
shuttleless/shuttle
loom
400 million
metre
43,000
Handloom
148,342
498,000 looms
837 million
metre
1,020,000
Knitting, knit dyeing
2,800
17,000 knit/Dy/M
4,100 million
metre
324,000
Dyeing and finishing
310
--
1,720 million metre
33,000
Export oriented
readymade garment
(clothing)
4,500
---
475 million
dozen
2,000,000
Other related sectors
---
----
----
600,000
 
History of the Textile Industry in Bangladesh
When Bangladesh gained its independence from Pakistan in 1971, the new government nationalized the textile industry. All of the country's textile factories were then nationalized and organized under the Bangladesh Textile Mills Corporation, or BTMC. 
The government  gradually denationalized the production of textiles after 1882 for various problems such as low productivity in the labor force, lack of planning, indiscipline, lack of accountability, and poor machine maintenance and operation resulted in a lack of profits.
 Factories were privatized, beginning with the dyeing and weaving units. Since that time, much of the industry has been privatized through auctions and other means.  After privatization, the quality of the fabrics produced improved significantly, leading to a great increase in the demand for Bangladeshi textiles in both the international market, as well as the export oriented garment industry of Bangladesh.

Readymade Garments Industry and its Growth
In 1978 the RMG industry was established in Bangladesh with nine enterprises. In addition, Bangladesh's garment exporters enjoy the privilege of quota-free entry into the European Union, or EU, whereas their major competitors, such as China, India, Indonesia, Pakistan, Sri Lanka, and Thailand, are subjected to the restrictions of an assigned quota. As a result Bangladesh is able to export everything that it produces, while its more developed competitors are limited to specific amounts assigned through quotas.

The Current Position of the Textile Industry in Bangladesh
Today, the textile industry of Bangladesh can be divided into the three main categories: the public sector, handloom sector, and the organized private sector.

Public Sector  :
The factories in the public sector enjoy certain privileges such as government funding.  In addition, the equipment in this sector is not well maintained, as much of the money allocated for this purpose is not spent as planned, but is wasted through corruption and poor accounting.

Handloom Sector :
However, the inferiority of their machinery, mostly due to their narrow width, means that the fabric production is slow, and usually falls short of the quality needed for export.

Private Sector
The most productive of the three categories is the private sector.
Since the owners of such factories are directly affected by their performance, they take an active part in planning, decision making, and management. Most of these factories also have machinery that is superior to those in the two other sectors because the owners are well aware of the connection between their equipment and their profits.

Demand Supply Gap
Only 21% of the total demand for yarn is met locally in Bangladesh.  The figures for grey are not much better as only 28% of the total demand is met locally.

Some of the problems
All sectors of the textile industry face many of the same challenges. These main problems include lack of power, obsolete technology, low capacity utilization, lack of machinery maintenance, a workforce that is not adequately trained, problems with labor unrest and militancy, political unrest causing disruption such as hartals, and a lack of working capital. The problems with electricity was evident to me on my visit to the Rahim Textile Mills; I think that it is more efficient to power the factory continuously by a generator, instead of letting production be hampered by power failures. In addition, each of the sub-sectors face various other problems.

The Future of the Textile Industry in Bangladesh
As the population is growing and the standard of living is increasing in Bangladesh, the demand for textiles is increasing rapidly. The weaving and knitting sub-sectors will also need to expand at a rapid rate, as there is a large demand-supply gap in the country. With increased investment in the sub-sectors and modernized machinery, Bangladesh could profit greatly from larger and more competitive weaving and knitting sectors.
As the current dyeing facilities are mostly dependent on imported fabrics, they are expanding at a rate which is not dependent on any of the other sectors. However, as local grey becomes more competitive, and its production is increased, the dyeing, printing, and finishing sub-sector will also need to expand to accommodate for the increased supply.
The reduction of such problems will automatically improve the market position resulting in improved opportunities for the expansion of the Bangladeshi textile industry.

Conclusion
The importance of the textile industry in the economy of Bangladesh is very high. Furthermore, the industry is expected to be the catalyst in the industrialization of Bangladesh, and has been declared as a thrust sector by the government.
However, over the course of my Senior Project investigations, I have realized that Bangladesh's low labor cost, skill development potential, a presently expanding market, and favorable conversion cost can be used to turn the challenges of the quota-free market into a window of opportunity. In addition, most developed countries are turning away from industries like the textile industry and investing in other sectors, thus creating a vacuum in the market.

I have also developed some idea of the types of solutions necessary to overcome the problems faced by Bangladesh's textile industry.
The bank charges and interests interest rates for loans are extremely high; as a result it is very difficult to gather the capital to set up and maintain any type of factory especially textile units which require much expensive equipment. A reduction of the interest rate would not only encourage entrepreneurs to expand their current facilities but should also attract new investors. The handling charges for shipping are also extremely high, which adds to the cost of the materials that are imported and exported.
There is currently a serious lack of coordination among the various government agencies that are connected in some way with the textile industry.
The Bangladesh Tariff Commission, or BTC should place greater emphasis on textiles and should develop more of its policies around the industry.




Friday, March 11, 2011

PRESENT TEXTILE SECTOR OF BANGLADESH

Textile sector

Bangladesh's textile industry, which includes knitwear and ready-made garments along with specialized textile products, is the nation's number one export earner, accounting for 80% of Bangladesh's exports of $15.56 billion in 2009. Bangladesh is 3rd in world textile exports behind Turkey, another low volume exporter, and China which exported $120.1 billion worth of textiles in 2009. The industry employs nearly 3.5 million workers. Current exports have doubled since 2004. Wages in Bangladesh's textile industry were the lowest in the world as of 2010. The country was considered the most formidable rival to China where wages were rapidly rising and currency was appreciating.
After massive labor unrest in 2006 the government formed a Minimum Wage Board including business and worker representatives which in 2006 set a minimum wage equivalent to 1,662.50 taka, $24 a month, up from Tk950. In 2010, following widespread labor protests involving 100,000 workers in June, 2010, a controversial proposal was being considered by the Board which would raise the monthly minimum to the equivalent of $50 a month, still far below worker demands of 5,000 taka, $72, for entry level wages, but unacceptably high according to textile manufacturers who are asking for a wage below $30.On July 28, 2010 it was announced that the minimum entry level wage would be increased to 3,000 taka, about $43.
The government also seems to believe some change is necessary. On September 21, 2006 then ex-Prime Minister Khaleda Zia called on textile firms to ensure the safety of workers by complying with international labor law at a speech inaugurating the Bangladesh Apparel & Textile Exposition (BATEXPO).

Bangladesh: A Growing Textile Economy

Bangladesh’s textile industry is comprised of a mix of small- to large-scale privately and publicly owned companies.

By T.C. Malhotra

T he textile industry has played an important role in Bangladesh’s economy for a long time. Currently, the textile industry in Bangladesh accounts for 45 percent of all industrial employment and contributes 5 percent to the total national income. The industry employs nearly 4 million people, mostly women.

A huge 78 percent of the country’s export earnings come from textiles and apparel, according to the latest figures available. Bangladesh exports its apparel products worth nearly $5 billion per year to the United States, European Union (EU), Canada and other countries of the world. It is the sixth largest apparel supplier to the United States and EU countries.

Major products exported from Bangladesh include polyester filament fabrics, man-made filament mixed fabrics, PV fabrics, viscose filament fabrics and man-made spun yarns. Major garments exported include knitted and woven shirts and blouses, trousers, skirts, shorts, jackets, sweaters and sportswear, among other fashion apparel.
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Bangladesh-map
Textile and apparel firms in Bangladesh are mostly concentrated around the capital city of Dhaka.

A Picture Of Bangladesh's Textile Industry

Bangladesh’s textile industry can be divided into three main categories: public sector; handloom sector; and the organized private sector. The private sector is the fastest growing sector in the country.

The handloom industry provides employment for a large segment of the population of Bangladesh and supplies a large portion of the fabric required by the local market.

Mahmud E. Alam, managing director, Famano Textile Mills Ltd., said about 20 percent of existing mills in Bangladesh are large-scale mills, roughly 30 percent are medium-scale mills, and the remaining 50 percent are small-scale mills. Alam said the number of spinning mills in the country is increasing day-by-day.

The textile quotas under the Multi-Fiber Arrangement of January 2005 have been moderate in Bangladesh and the industry is divided on their impact. While industry analysts say Bangladesh’s garment and textile manufacturers will have to face steep competition from countries such as India, Pakistan, China and Thailand as a result of new policies, the textile companies see no impact on their business.

Alam feels the lifting of quotas is not going to affect his business. “The future of the textile industry here is very bright,” Alam said. “Even the lifting of quotas is not going to affect the industry as was worried,” he said.

Mostafizur Rahman, managing director, Pawrob, also is of the view that lifting quotas is not going to have very much of an effect, but he fears China will affect the Bangladesh textile industry in the long run.

“The main reason behind this is the leap factor,” Rahman said. “Chinese companies have an edge of 30 days over Bangladeshi textile companies.”

nationalmemorial jamunabridge
nationalparliament shaheedminar
Top to bottom: National Memorial in Savar, 35 kilometers from Dhaka; Jamuna multipurpose bridge, which connects two detached parts of Bangladesh; Shaheed Minar, which commemorates the Language Martyrs of 1952;
and Bangladesh's National Parliament (Sangsad Bhaban), designed by American architect Louis Kahn

Combined, the textile and apparel sectors consist of 3,600 firms. There is a concentration of manufacturing activity in and around the capital city of Dhaka and a growing garment manufacturing presence in the country’s export processing zones.

Bangladesh Textile Mills Association Secretary General Taufiq Hasan said that because textiles and ready-made garments are the two largest export sectors and employers in Bangladesh, government support will continue and there are no restrictions on repatriation of profits and investment or tax-free imports of machinery and raw materials for export. The government also is liberal toward work permits.

According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the total fabric requirement in the captive market is about 3 billion yards, of which roughly 85 to 90 percent is imported from countries such as China, India, Hong Kong, Singapore, Thailand, Korea, Indonesia and Taiwan. Fabric demand is increasing at the rate of 20 percent per year.

Although the industry is one of the largest in Bangladesh and is still expanding, it faces serious problems, principally because the country does not produce enough of the raw materials necessary for the industry to expand. The primary materials used in the spinning sector are raw cotton and man-made fibers such as viscose and polyester staple fibers. Unfortunately, none of these raw materials are produced in Bangladesh.

Most spinning mills in Bangladesh produce low-grade yarn. Available figures show that current yarn production satisfied only 22-percent of the total yarn demand. In spite of this drawback, as many as 116 new spinning mills, each having the capacity of 25,000 spindles, will be established in the near future.

The weaving sector also is plagued by a lack of organization and coordination. The existing weaving capacity in Bangladesh can meet only about 40 percent of fabric demand; the rest is imported. However, the increasing trend of expansion in the weaving sector is clear from the fact that 223 modern weaving plants, each with an annual capacity of 10 million meters, will be set up in the near future.

The knitting and hosiery sectors look brighter than weaving, and about 80 percent of garment accessories like cartons, threads, buttons, labels, poly bags, gum tapes, shirt boards and neck boards now are being produced within Bangladesh and contribute to the the national gross domestic product. However, the textile industry is just budding.

Bangladesh Textile Mills Corporation

When Bangladesh gained its independence from Pakistan in 1971, the new government nationalized the textile industry. All of the country’s textile factories were then organized under the Bangladesh Textile Mills Corp. (BTMC).

The role of BTMC within Bangladesh’s textile industry has substantially been altered since the denationalization of a large number of public sector textile mills over the last decade and a half. Prior to denationalization, BTMC enjoyed a near-monopoly within the yarn and fabric market in Bangladesh.

At present, there are 21 textile companies under BTMC. They operate 24 spinning facilities with an installed capacity of 490,892 spindles and 1,036 looms. Out of that total, 13 of the companies — which operate 16 plants — utilize 320,228 spindles under the service charge system producing different counts of yarn in the range of 32/1 to 80/1. Another five companies have 128,088 spindles in operation.

Among the 21 mills, Valika Woolen Mills Ltd., Nasirabad, Chittagong, is the only specialized BTMC company, producing knitting wool, woolen suiting, men’s and women’s woolen shawls, and woolen blankets.

webroll womenwithhats
menworking manwithsuits
The government-owned Bangladesh Export Processing Zones Authority promotes foreign and local investment in its export processing zones, which were developed to provide potential investors a business environment free of complicated procedures.
Other leading textile associations in the country include the BGMEA, Bangladesh Jute Mills Association, and Bangladesh Knitwear Manufacturers and Exporters Association.

According to Bangladesh’s Textile Minister Shajahan Siraj, the government had initiated various policy measures such as rationalization of tariffs and taxes on imports of capital machinery, raw materials, dyes and chemicals, and reduction of interest on long- and short-term loans.

Mahmudur Rahman, executive chairman of Bangladesh’s Board of Investment, said in a recently published interview that in the next five years, the country needs an investment of US $3 billion in the textile sector. He said the country’s textile market, during the last fiscal year (July 2004-June 2005) totaled $21.5 billion, compared to $3.2 billion 20 years ago. Rahman predicted the market could grow to $23 billion in the next fiscal year.

The Bangladesh government offers great incentives for encouraging the use of local fabrics in the export-oriented garment industries. To encourage textile export, companies can import capital machinery duty-free. Cotton also may be imported duty-free. Moreover, the government recently has implemented several policy reforms to create a more open and competitive climate for foreign investment.

Rising garment export trends from Bangladesh, along with some benefits provided by the government, have created concerns for Pakistan's government. Textile tycoons in Karachi are thinking about shifting their business to Bangladesh.


Investment In Bangladesh

As reported by Bangladesh news agencies, the Bangladesh textile sector acquired an investment influx of Tk 622 crore (approximately US $95 million) between January and May of 2005. Twelve textile mills — primarily spinning mills located in Dhaka — benefited from the investment, which is said to be the largest investment in textiles in a five-month period since Bangladesh became an independent country.

tc03_Copy_3
Badsha Spinning Mills recently purchased 20 Trützschler TC 03 cards.

One of the recipients of this investment, Badsha Spinning Mills Ltd., recently purchased a blow room and 20 TC 03 cards from Germany-based Trützschler GmbH & Co. KG. The Trützschler equipment will be used to produce sliver for Ne 30 hosiery yarns in Badsha’s ring-spinning plant. Nepcontrol NCT, featured on all of the cards, monitors neps, seed coat fragments and trash particles on-line. According to Trützschler, Badsha Spinning, which will export the majority of the yarns it produces, selected Trützschler equipment because high yarn quality is important.