Category Archives: Textiles/Ready Made Garments/Accessories/Footwear/Sports Goods

H&M to raise apparel sourcing from BD

H&M to raise apparel sourcing from BD
B&F Report

A Sweden-based clothing retailer Hennes & Mauritz (H&M) has announced to increase its sourcing from Bangladesh, said Dow Jones Newswires quoting H&M Head Helena Helmersson. It also intends to launch a trial programme for the current and next year, the news agency stated.

H&M head said they have already informed the Bangladesh Government, its other stakeholders and clothing producers regarding their growth plans. However the ongoing labour unrest in the country is restraining suppliers from planning production, as strikes and protests often hamper production and cause delays, she added.

She said that a stable market would prove to be greatly beneficial for the company as well as its suppliers and workers.

The firm intends to utilize its power to build pressure on its suppliers in Bangladesh to improve work conditions, and push for constitution of democratic labour committees that can negotiate with factory workers on wages and working conditions.

Operating a network of more than 2,500 retail outlets in 44 markets across the world, with a staff of 94,000 people, H&M is a leading buyer of garments from Bangladesh. It currently sources around 25 percent of its products from Bangladesh and it intends to raise this volume in future.

Bangladesh has now emerged as a reliable readymade garment-sourcing destination for leading global retailers, due to its competitive prices.

A recent study undertaken by McKinsey, a leading research company in US, states that Bangladesh’s apparel exports are expected to grow almost two-fold by 2015 and three-fold over the next 10 years. This is because leading buyers from China are shifting to Bangladesh as capacity constraints and rising labour costs in China are eroding their profit margins.


RMG exports may grow 15pc in FY12

RMG exports may grow 15pc in FY12
Author / Source : Staff Reporter

Dhaka, Jan 3: Readymade garment (RMG) exports are likely to grow by around 15 per cent this fiscal year (FY), compared to the volume a year earlier, experts say.
Export Promotion Bureau data on July-November exports show that the country’s overall exports have grown by 18 per cent year-on-year against the 40 per cent growth a year ago. In July 2011, exports rose by 28.7 per cent, followed by a rise by 32.4 per cent in August. However, the growth rate declined to 2.29 per cent in September, 15.44 per cent in October and 2.4 per cent in November.

Shubhashish Bose, vice chairman of EPB, told fibre2fashion website, “Bangladesh’s export target for FY 2011-12 is $26.5 billion, and from July to November 2011 we exported $9 billion worth RMG. We hope we will be able to achieve our targets.”

RMG sector constitutes about 70-80 per cent of Bangladesh’s total exports, he added.

Mustafizur Rahman, executive director of Centre for Policy Dialogue (CPD), told fibre2fashion, “The exceptional growth rate of 40 per cent was registered because of rising global demands.

But, such high rate cannot be expected every year.

Considering this, 18 per cent growth is remarkable.”

Rahman also said prices of raw materials, i.e. cotton and yarn, have come down by 50-60 per cent compared to the last year, which resulted in lower price level and margin.

In light of these factors, the growth rate can be termed “significant”. “The demand in the US and Europe market was lower. But there were some shifting orders from China and India has also offered zero tariff access. All these factors favoured exports,” he told the website.

Rahman said that it is uncertain how the Eurozone crisis will develop and whether it will degenerate in recession, but predicted an overall growth. “I foresee a double digit growth rate with the overall growth at around 14-15 percent this fiscal,” he said.

Bose said Bangladesh mainly exports basic apparels, which are not high-value but basic necessities.

“Even if there is recession in Europe or the US, people will buy these apparels. Bangladesh can look forward to a double digit growth and achieving the export target,” he said.

GARMENTECH expo begins Jan 12

GARMENTECH expo begins Jan 12
Author / Source : STAFF REPORTER

DHAKA, Jan 2: The four-day 11th edition of country’s premier apparel machinery and technology trade show GARMENTECH Bangladesh 2012 will start in the capital from January 12.

Accommodating over 750 booths, the trade show for garment machinery, yarn and apparel fabrics, garment accessories and packaging machinery will be organised at the Bangabandhu International Conference Centre. Finance minister Abul Maal Abdul Muhith is expected to inaugurate the show.

It was announced at a press conference organised by the trade show’s organiser ASK Trade and Exhibitions Pvt. Ltd at the National Press Club on Monday.

Bangladesh Corrugated Carton and Accessories Manufacturers and Exporters Association president Rafez Alam Chowdhury, spoke at the press conference, among others.

Exporters ride past global downturn

Ready Made Garments
Exporters ride past global downturn

Workers are pictured at a garment factory in Gazipur. Apparel buyers look to Bangladesh as a future sourcing hotspot as orders are moving out of China. Photo: Amran Hossain

Refayet Ullah Mirdha

Bangladesh exports survived the global financial crisis in 2008, helped by basic garment products. In the following years, the country’s ready-made garment exports weathered out fallout from the global recession and grew nearly 42 percent in fiscal 2010-11.

The growth rate was highly appreciated at a time when the world was in economic pain; Bangladesh was one of the few countries that witnessed exports in the positive territory.

At the same time, the country turned into the world’s second largest apparel supplier, after China. Garment exports stood at $17.91 billion in fiscal 2010-11, taking up more than 78 percent of overall exports.

Of total apparel exports, knitwear accounted for $9.49 billion, while woven was $8.43 billion in fiscal 2010-11.

In the first five months (July-November) of the current fiscal year, Bangladesh exported knitwear goods worth $4.0 billion and woven garments worth $3.57 billion.

However, exporters are predicting a double-dip recession for the debt crisis in the EU, which might hurt the growth of exports to the Eurozone, the largest garment export destination for Bangladesh.

Exporters aim to achieve apparel exports above targets, beating the debt crisis, riding on exports to new destinations — Japan, South Africa, Russia, Brazil, Chile, Mexico, New Zealand, Australia and India.

Moreover, product diversification and arrival of high-end customers like Adidas, Hugo Boss, Tommy Hilfiger, s.Oliver, Olymp and Next will play a positive role in helping exports grow above the target for 2012.

Having enjoyed a significant rise in exports in fiscal 2010-11, the commerce ministry set the target higher at $20.36 billion — knitwear garments at $10.80 billion and woven products at $9.56 billion.

Garment makers said export growth depends on the adequate supply of gas and power, a pool of skilled manpower for mid-level management and efficiency in port management and good infrastructure.

Exporters also often complain about the frequent hikes in petroleum prices, higher transportation costs, traffic congestion, workers’ unrest, soaring inflation, and internally, the list is seemingly unlimited.

Along with the internal factors, some external factors that may affect garment exports are the European debt crisis, proposed duty-waiver facility for 75 Pakistani products to the EU, higher prices of raw materials like cotton and yarn, and different tariff, para-tariff and non-tariff barriers to new export markets like India and Russia.

The year 2012 will be a determining period to grab the exporter orders shifting from China, the largest exporter of apparels globally, as countries like Bangladesh, Vietnam, Indonesia and Cambodia are likely to be benefited.

China is losing its market to competitors for higher costs of production and a shortage of workers in the sector.

Bangladeshi garment exporters are eyeing to be the number one supplier in the coming years, although the country does not have basic raw materials and machinery backup.

In the beginning of the year, EU-relaxed the Rules of Origin (RoO) under the Generalised System of Preferences (GSP) from January 1 — it became a boon for garments and a bane for the primary textiles sector.

Similarly, Japan, Norway and Switzerland also relaxed the RoO for the least developed countries (LDCs) in the beginning of the current calendar year.

In February-April, cotton and yarn prices went up to record levels at $2.35 a pound and yarn at $7.0 a kilogram.

In the middle of this year, Bangladesh bagged a duty-free entry for garment products to India. The opened a window of opportunity for local apparel makers.

In October, the US again granted a GSP facility to its market for some selected products, like sleeping bags, at the end of September.

Both the primary textiles sector and RMG sectors witnessed a sluggish investment trend in 2011, mainly for the inadequate supply of gas and power. Many industrial units cannot go into operations for the lack of gas and power connections.

The government announced an additional five percent cash incentive for the spinners who incurred losses importing high-priced cotton from the world market.

KM Rezaul Hasanat, chairman and managing director of Viyellatex Group, said at the end of the current fiscal year, garment export growth might cross 15 percent, slightly above target.

But growth will speed up from January, as orders from China are shifting to Bangladesh. “The year 2012 will be the determining year to double garment exports within the next few years,” he said.

Anwar-ul-Alam Chowdhury Parvez, former president of Bangladesh Garment Exporters Association, said five to six percent growth might take place at the end of the year for a volatile global economic situation. But he is hopeful about a rise in apparel exports from May-June.

“I do not expect a higher growth rate in 2012. A moderate growth rate hovering around 16 to 18 percent is possible, as the EU debt crisis is yet to be overcome,” Zaid Bakht, research director of Bangladesh Institute of Development Studies (BIDS).

RMG exports to India buoyant on duty waiver

Ready Made Garments
RMG exports to India buoyant on duty waiver
Refayet Ullah Mirdha

Garment exports to India will surge, thanks to the duty-waiver given by the Indian government to Bangladesh, exporters said. All depends on a proper use of duty-waiver for all garment products from Bangladesh, they said.

In July-October, Bangladesh exported woven garments worth $16.41 million, which was $8.31 million in the same period last year.

Knitwear exports stood at $6.69 million in July-October, which was $2.52 million in the same period a year ago, data from the Export Promotion Bureau showed.

India’s growing middle-class consumers are the main customers of the basic garment items from Bangladesh, industry insiders said.

In 2010-11, Bangladesh exported goods worth $512 million to India, 68 percent up from $304 million in 2009-10, EPB data showed. Of the total amount, woven and knit garment items accounted for $80 million.

Knitwear exports to India stood at $2.54 million and woven garments at $9.99 million in 2009-10, while it was $1.7 million and $10.25 million in 2008-09, EPB data showed.

M Nasir Uddin, chairman of Pacific Jeans that has been doing business with India for a long time, said garment exports to India are increasing from Bangladesh, especially after duty-waiver.

If a smooth supply chain management system is introduced, the export of garments from Bangladesh will increase manifold to India, he said.

“If India allows retail chains like Wal-Mart and Tesco into its market, the export of garment items from the country will see amazing growth,” he added.

The Indian government recently backtracked on its decision to allow the entry of multi-brands in Indian retail marketing. Both the governments should work to smooth trade by removing some barriers, the chairman of Pacific Jeans said.

Bangladesh should explore the vast Asian markets also, besides the traditional EU and the US markets, he said, adding that China is losing its competitiveness in the apparel business for higher costs of production and a shortage of workers.

As a result, four countries, including Bangladesh, Vietnam, Indonesia and Cambodia, will be benefited, he added.

Javed Chaudhury, managing director of Generation Next Fashion Ltd that has business with India, said garment exports from his company are not picking up at expected level.

“It might be a weakness of marketing of the company in India, as the company is busy with other markets,” he said. But, definitely, there is immense potential for exports to the India market, he added.

He said Bangladeshi garment exporters can be benefited by the devalued rupees against the greenback by exporting garments, he added.

India will be a big market for Bangladeshi garment products, as the export is increasing mainly for two reasons — the duty waiver facility and massive reforms in the Indian retail marketing system — said Faruque Hassan, vice-president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

A high-powered business delegation paid a visit to India on November 24-25 to explore the Indian market, Hassan said, adding that local industrial conglomerates like Reliance and other groups are opening a significant number of retail outlets across India.

As a result, the potential for garment exports to India is high. He said at the end of the current fiscal year, garment exports to India will cross $100 million and within five years, it will cross the one billion dollar mark. The Bangladeshi team also visited other major retail outlets in India, he said.

During his visit in September, Indian Prime Minister Manmohan Singh announced a duty-waiver for 46 garment items from Bangladesh and later opened up the market fully to the LDCs.

Demand for shirts is high in India although India itself is one of the strong players in global ready-made garments.

Turkish firm to increase apparel imports

Turkish firm to increase apparel imports
Business Report

Tema Group, a leading Turkish company, has said it would raise its annual woven and knitwear imports from Bangladesh over the next few years to cross the US$ 500 million-mark by 2015.

However, the nearly US$ 1 billion Group urged Bangladeshi apparel suppliers to focus on quality aspect to rule out delays in shipments.Report from Istanbul said Edward Southall, an Executive Member of Tema Group, said it is no longer enough to be good for both Tema and Bangladesh to remain competitive.

Problems like quality weakness to late delivery of goods are resulting in an increase in the cost of sourcing apparels. He said quality assumes importance at a time when the demand for apparels is declining owing to the eurozone crisis and fears of recession.

The Tema Group’s apparel imports from Bangladesh would increase owing to the weakening of Bangladesh currency Taka and sourcing from China becoming costlier,  Southall said.

Indian denim takes Bangladesh route to reach China

Indian denim takes Bangladesh route to reach China
Author / Source : STAFF REPORTER

DHAKA, DEC 19: Indian denim fabric is reaching China, getting stitched on the route in Bangladesh amidst a plethora of reasons like depreciation of Indian rupee, appreciation of the Chinese currency, rising cost of labour in China, slowdown in Western economies, and less cost of labour and power in Bangladesh. Since June, Indian rupee has witnessed a depreciation of around 20 per cent against the US dollar. During the same period, the Chinese currency Yuan has appreciated by 4 per cent against the US dollar.

As a result, making jeans in China has become costlier as China imports cotton from India to make its denim. Moreover, there is an increase in wages in China. Also, there is a rise in domestic consumption.

Owing to all these factors, the Chinese are finding it more economical to buy Indian denim compared to their domestically produced denim. Hence, China has started importing denim from India for its own domestic use as well as for export to other countries.

Explaining the demand situation for denim, Vikram Oza, director-finance, Jindal Worldwide, an Ahmedabad-based denim manufacturer, explains, “The overall demand from the US and Eurozone is declining due to slowdown in their economies. On the other hand, the denim market has not penetrated to the extent required in other economies having large population like China and India.”

“In the US, the per capita consumption of denim is around 8 pairs per annum. In comparison, it is 0.3 in India and less than 1 in China. So, there is a demand in India and China to come up to the average level of 2 or 2.5 pairs per person,” he adds.

Briefing about the route taken by Indian denim to reach China, he informs, “Labour cost in China is rising these days. So, their route is through Bangladesh and Vietnam, more particularly Bangladesh.”

He said, the fabric produced in India is first going to Bangladesh. There the minimum wage is around Rs 2,250 per month, whereas in India it is Rs 7,000 per month. Next factor is the power costs. Power cost in India is Rs 5.50 per unit while it is around Rs 3.50 per unit in Bangladesh. The slowdown in the European market is also helping diversion to China because of the growing demand for denim there, he added.