History Of Textile Industry In Bangladesh

History Of Bangladesh Textile And Apparel
Sector
And
Trade And Trends Of Bangladesh Apparel
Market In The World Economy
Prepared By : Mazadul Hasan sheshir
ID: 2010000400008
13th Batch (session 2009-2013)
Department : Wet Processing Technology
Email:
Blog : www. Textilelab.blogspot.com (visit)
Southeast University
Department Of Textile Engineering
I/A 251,252 Tejgaon Dhaka Bangladesh
Prepared By :
Total Textile Process at a Glance
Initial level of Textile
Sector in Bangladesh
Initial level RMG Sector in
Bangladesh
History

There were only 9 export oriented garment manufacturing
industry in 1978, earned only 1 million dollar.

Some of them were very small, produced RMG for local
market as well.

Four such small and pioneer garments were Reaz garments,
Paris garments, Jewel garments and Boishakhi garments.


Reaz garments established in 1960, as a small tailoring
outfit, named Reaz store in Dhaka. Served only domestic
market of its initial 15 years.

In 1973, it changed its name to Reaz Garments Ltd and started to export by selling 10
000 pieces of shirt to France, valued 13 million franc in 1978.That was the first direct
export of apparel.

Desh Garments Ltd., first joint venture in Bangladesh, Technical and marketing
collaboration with S. Korean Daewoo Corporation, established in 1979.


First 100% export oriented company.

In 1980, Youngone (49%) and Trexim (51% equity) formed a company named
younone Bangladesh exported first consignment of padded and non padded jackets
to sweden in dec 1980.

It had trained 120 operators including 3 women in S. Korea Went to the production in
1980.
History

Till to the end of 1982, there were only 47 garment manufacturing units.


Break through occurred in 1984-85 when numbers of garment factories
increased to 587.

In 1999, there were 2900 garment factory in the country.


Average growth rate of garment export is 22%.

Now, the numbers of garment manufacturing units in Bangladesh is 5500.
History

External Reasons:
1. GATT Approved multi fiber agreement (MFA)
2. Quota,
3. As a LDC, get preferential access in EU.
4. GSP
Reasons of Growth

Internal Reasons:
1. 5% cash incentives
2. No import duty
3. Bonded warehouse facilities
4. Back to back L/C
5. Concessionary rates of interests
6. FDI of Joint venture facilities
7. Concessionary duty on imported machinary
8. EPZ facilities
Reasons of Growth
Value Chain

Michael Porter in 1985 introduced in his book ‘ The Competitive
Advantage: Creating and sustaining Superior performance’ the
concept of the Value Chain.

Michael Porter suggested that the organization is split into ‘primary
activities’ and ‘support activities’.


Primary activities: Operation, Logistics, marketing, Service,

Support Activities: Procurement, Technology development, Human
resource mgt, Infrastructure.

Almost complete value chain

Some of the factories fully vertically integrated : Spinning to finished
garment.

Competitive wage, Easily trainable workforce, Expanding supply side
capacity, government supporting policy helped to gain competitive
advantage.

Core strength is backward linkage.

90%-95% knit fabric produced locally
Value Chain: Knit

Net export is higher than woven.

In FY 2006-07, Export share of knit and woven
were 37.39% and 38.25% respectively.

Cumulative average growth of knitwear is 27%.

Advantages of Bangladeshi Knitwear:

Self sufficient – 95% fabric and accessories

collected Locally.
Integrated
Good capacity exists
Unbeatable in price
Cheap labor with high stitching capability
Good reputation of Bangladeshi Knit
apparels all over the world.
Value Chain : Knit

Only a few weaving factories that offer quality product.

So, majority of fabrics has to be imported – higher purchasing cost,
dependency on external supplier, pricing disadvantages.

Can meet only 15% of fabric demand.

More than 220 modern weaving mill need to be set up, each with an
annual capacity of 10 million yards.

Annual Consumption of fabric: 3 billion yards.
Value Chain : Woven
•
Supporting Industry
•
Spinning, weaving/knitting, dyeing, finishing Industries.
•
In addition to these, Interlining, labels, buttons, sewing threads, packing and
packaging materials, zippers, draw strings all are backward linked industries.
•
70% of accessories collected locally.

•
Share of BB L/C in total export dropped from 68.33% in FY 1995 to 45.1% in
the first eight months of FY 2001.
•
Total investment in backward linkage is US$ 2B.
Backward Linkage

Strength:

Competitive price advantage due to cheap labor and Governmental Assistance

Skilled Human Resource

Duty and Quota free access and GSP in EU

Integrated Supply Chain, Specially in Knitwear

International Image of a reliable supplier of basic Products.
SWOT Analysis

Weakness :

Weak Structure, in particular production efficiency, product development, marketing skill,
customer service, controlling, planning, management skill, technical know how

Producing mainly basic products,

Heavily depend on importing woven fabrics, low value addition

Poor image of adapting international and Corporate social standards


Political, Social and worker unrest.
SWOT Analysis

Opportunities:

Potential for higher value addition by developing backward linkage.

Reduce lead time by developing infrastructure of transportation, faster custom
clearance, strong backward linkage

Improved image by adapting environmental and social standards

Diversifying apparel product; switching from basic product to fashionable product.

May get preferential access in USA and Canadian market in near future.

SWOT Analysis

Threats:

Risk of loosing competitive advantages-development steps required.

Poor political and investment climate leading declined interest of importers

Poor capital formation

Risk of loosing know-how transfer, staff qualification,

Totally depend on others for raw materials as Bangladesh produce neither natural

fiber nor MMF.

Increased international competition

Woven sector requires huge investment

Single market concentration
SWOT Analysis
The government of Bangladesh undertook significant steps during the 1980s. Consequently there was
a tremendous increase in the export of ready-made-garments and knitwear, which garnered
maximum foreign exchange for the country. Cheap labor and low conversion costs are the major
factors behind the growth of Bangladesh’s garment industry. Over 3 million Bangladeshis (90%
women) are employed in this industry. Bangladesh shares excellent trade relations with the US,
showing noteworthy trade surplus with the latter. The country is an active partner of the Asia Pacific
Trade Agreement and the World Trade Organization. A number of export processing zones have been
set up by the government to enhance economic growth by attracting foreign investment.
Bangladesh Trade
Export of Woven and Knit
1. Exports in Bangladesh increased to 3024.30 USD Million in July of 2013 from
2705.50 USD Million in June of 2013.
2. Exports in Bangladesh is reported by the Bangladesh Bank. Bangladesh Exports
averaged 3267.27 USD Million from 1995 until 2013, reaching an all time high of
15565.20 USD Million in June of 2009 and a record low of 1024 USD Million in
October of 2009.
3. Bangladesh exports mainly ready made garments including knit wear and
hosiery (75% of exports revenue).
Trade and Trends of Apparel Market
Trade and Trends
At first we want to give a special thanks to our Sir for giving us this kind of
assignment. Textile and Apparel sector is the backbone our economy. As a

developing country our improvement cannot be ignored but to sustain in
the cutting edge of the competitive Apparel & Clothing market, the
apparel industry of Bangladesh has to minimize production and
distribution time. So we need to take necessary steps to utilize this sector
effectively.
Conclusion
Reference
www.google.com
www.bgmea.com
www.tradingeconomics.com