Exporters see silver lining
Rejaul Karim Byron and Refayet Ullah Mirdha
Garment exporters and major buyers say the global economic crisis will not affect Bangladesh’s readymade garment sector as it exports mainly basic products.
“Buyers will flock to Bangladesh for cheaper RMG products as major competitors such as China, India and Vietnam make mainly high-end garments,” said an official of a buying house, requesting anonymity.
He said the sales of cheaper RMG products increased both in Europe and the US by 20 percent following the global financial turmoil.
Manufacturers said only 5 percent of Bangladesh’s readymade garments are high-end.
KI Hossain, a local buyer, said the global financial recession might be a boon for Bangladesh and a bane for competitors.
“The number of orders we are receiving from foreign buyers is still high as the buyers now look to cheaper RMG products,” he said.
“I don’t see any negative impact of the financial turmoil on the export of Bangladeshi readymade garments,” said a senior official of an international buying house in Dhaka.
Talking to The Daily Star, Ghulam Faruque, chairman of SQ Group, one of the largest sweater exporting groups in Bangladesh, said: “Till now, the situation is good as the flow of foreign orders has been the same. It was rather higher in some cases”
“The bad impact of the global recession may be felt in February or March if the situation in the western financial markets does not improve,” Faruque said.
KM Rezaul Hasanat, managing director of Viyellatex Group, said the buyers of high-end readymade garments of India and China would now outsource products from Bangladesh.
The orders are usually low from August to October and start peaking up from November. “So, we should not be worried about orders,” Hasanat said.
He cautioned that some ‘so-called’ buyers might want to take the opportunity of the recession.
“They may demand rebates or concession. We must handle such a situation smartly,” Hasanat said. He said he did not receive any fewer orders than before.
A recent study of the International Monetary Fund (IMF) said Bangladesh’s abundant and relatively low-cost labour made it an attractive destination for investors.
“Its success in the garment industry, which was the starting point in the industrialisation process for many of the East Asian economies, will make it attractive to investors as will its growing domestic market and good access to the huge Indian market,” said the IMF study report.
According to the study released a week ago, “Although competition is becoming more intense, Bangladesh’s strong market position does not look like diminishing in the short term.”
Bangladesh set an export target at $16.298 billion for fiscal 2008-09, with the readymade garment sector to earn the highest amount of foreign currency. Of $16.298 billion, $12.267 billion is expected to come from two main sub-sectors of RMG: knitwear and woven.