Bangladesh is one of the leading exporters of ready-made
garments in the world and earning nearly 76% of its foreign
currency through exporting textiles and ready-made garments. We
mainly produce and export two types of textile products e.g.
woven and knit goods produced from woven fabric and knit fabric
respectively. Presently, almost 100% export oriented knitted
fabrics are being produced in the country while more than 60% of
the export oriented woven fabric is imported resulting in
drainage of huge amount of foreign currency. Apart from woven
fabric, we have to import 100% of dyes, chemicals, spare parts
and machinery. In recent years, the garment business became very
volatile. Some of these problems are worker unrest for low
salary for which manufacturers have problem in meeting schedule,
import of Indian yarns and competing with other South East Asian
countries. At present Vietnam is offering the most competitive
garment price in the world. Though, like Bangladesh, Vietnam
also imports cotton from other countries and the labor cost in
Vietnam is more than that of Bangladesh. They must have
established some ways to minimize the cost in order to be
competitive in the world market. So it is very clear that, to
sustain in the business in world market on a long term basis,
Bangladesh should improve its export oriented textile and RMG
sector (EOTRS). Some of the following suggestions were put
forward to improve the overall performance of the textiles and
RMG sector of Bangladesh.
Development of Research & Development (R & D) Facility
Most of our competitor countries have very well established
textiles and RMG research facilities. An R & D facility can
contribute to the following main aspects
(i) By R & D, it is possible to find ways to reduce waste
and cost of production to maximize profit.
(ii) Increase productivity by improving process
performance and product quality.
(iii) New product, market and business ideas can be
investigated for further expansion.
(iv) Generation of tax revenue due to maximization of
(v) Monitor and control textile RMG business at national
(vi) Safeguard and secure our business interest at
In many cases we are not able to manufacture certain specialty
fabric or quality of some of our woven or knitted products are
not up to the buyer's requirements. As a consequence we have to
import those specialty fabrics. In such cases the proposed R & D
center can do some research on those special products and help
the manufacturer to produce them. This type of capability is
required in all fields of textile manufacturing. It is also
essential to standardize or calibrate our own processing
capability in order to estimate minimum waste to be generated.
This information is important because if manufacturers know
their waste % and manufacturing cost as well as their
corresponding standard values then it becomes very easier for
them to decide whether they need to improve their processing
further or not. Also it will indicate if our manufacturing cost
is competitive with competing countries. An R & D centre is also
very useful to help business owners by providing ideas about
product diversification, development of new products and markets
The following is a demonstration of how the R & D can contribute
to the cost of a garment. Every textile product has two major
cost components; (a) Raw materials cost and (b) Conversion cost.
Through Effective R & D it is possible to achieve contribution
from R & D to (i) to (iii) mentioned above and it will be
possible to reduce the conversion cost.
The cost of fabric of a garment is nearly 50-60% of its total
cost. If we can reduce the conversion cost at each stage i.e. in
spinning, weaving, knitting, dyeing printing and finishing, then
we will be able to reduce the cost of fabric and the finished
Who Can Conduct R & D?
Individual Industries: R & D facility could be set up by
industries themselves in order to get maximum benefit by
evaluating own problems and implement the result in a short
period of time. But the overhead cost is very high and only very
large organization can afford that.
Business associations like BTMA, BGMEA & BKMEA: R & D
would be very cost effective if a group of organizations like
BTMA, BGMEA & BKMEA set up a facility and finance all the
research work to solve the problems faced by the industry.
Government: Since the Government receive huge amount of
money from this sector in the form of tax and vats. To make this
sector more productive, Government could help to develop and
manage an R & D facility. Since it would take significant amount
of time in planning and development. Presently, it is possible
to use facilities like National Institute of Textile Training
Research and Design and Bangladesh Jute Research Institute if
equipped with some additional equipment for conducting textile
Universities: Universities like College of Textile
Engineering at Tejgaon, Ahsanullah University of Science and
Technology (AUST) etc could also make some contribution by doing
the research work using the expertise of experience professors
if the fund is provided by either Government or industries.
These places are equipped with state of art and world class
textile laboratory instruments. It also helps creating more
knowledgeable and experienced working force who could contribute
a lot while serving these industries.
Value to our Products
Value addition is one of the best ways to maximize profit. Value
addition means increasing sales value. There are various ways by
which value can be added to a product. If we consider two
different shirts both of same size and produced from similar raw
materials but may be sold in the markets with substantial
difference in prices. The reason could be one of many e.g.
brand, quality control, dyeing or finishing processes used,
special finishes like moth proof or fire proof, attribution of
art works like embroidery and attachments etc. Since we have
comparatively cheap labor and electricity available in
Bangladesh we should consider those products which involve more
labor and can add more value to a product.
Different types of apparel products require different types of
manufacturing infrastructures. If the infrastructure for making
shirts could be used to produce suits, it would also be a kind
of value addition to the infrastructure. In fact, during
production, the higher the processing steps required by the
customers, the higher would be the value addition. Some of the
high value added products are costly products like high quality
sports wear, shirts, suits, jackets etc. An organized R & D can
precisely help in attributing value addition as well as finding
value added new products and markets. Presently, Bangladesh is
mainly producing cheaper textile and apparel products. By R & D
it will be possible to say which products will maximize profit
and accordingly the marketing and merchandising people of the
factories can be guided to target those products.
Study of export patterns suggests that Bangladesh is mainly
manufacturing garments items made from 100% cotton fiber.
Bangladeshi spinning mills produces nearly 90% cottons yarns and
only 10% blended yarns, but the global scenario is quite
different. China produces the cotton products is only one third
of its total volume of export. Similar trend is found in our
competitor countries like Pakistan and India. Also, in
Bangladesh, the volume of export of apparel products is also
very low in comparison to that of non apparel products like bed
sheets, bed covers, pillow cases, pillow covers, towels, quilts,
Only 33% apparels are produced from 100% cotton fiber and rest
of the apparels are produced from synthetic and other fibers.
Bangladesh is mainly concentrating on 33% share of the world's
apparel market and does not have any share in the rest 67%
synthetic apparel market. Small amount of blended apparels are
being exported from Bangladesh but the raw materials, like
fabric are imported since quality of the local polyester yarn is
not up to the mark. Only several factories are producing
synthetic polyester filament yarns and these yarns are consumed
locally. Further research and expertise is required to add value
to the existing polyester fibers. Bangladesh should seriously
think about increasing its activities in the field of synthetic
apparel market to have more growth in textile sector and
maximize the profit.
our Synthetic Capability
As was earlier mentioned, 67% of the world's apparels are
produced from synthetic fiber known as Man Made Fibers (MMF).
In Bangladesh, we only manufacture 100% cotton products. If we
can manufacture synthetic fibers as well as dyes and chemical
in our country then we will be able to produce woven fabrics
locally at much cheaper costs. Synthetic yarns provide better
yield and productivity. The cost will further decrease if we can
manufacture our own accessories for main machines.
Study of the export pattern of some Asian countries shows some
interesting discrepancy between the strategy of textile export
of Bangladesh and other countries particularly China, the leader
in textile export. The quantity of non-apparel export of all the
surveyed Asian countries is almost double of that of apparel
export. The volume of Non-apparel export from Bangladesh is also
very low in comparison to China and other Asian countries.
Therefore Bangladesh should try to explore its non-apparel
The export pattern of 100% cotton and MMF products to the US
market in the year 2006 shows that export of China's non apparel
products is exceptionally higher than apparel export. The
scenario is exactly opposite for Bangladesh, i.e. quantity of
apparel export is much larger than that of non apparel products.
Bangladesh should try to explore its MMF market to have greater
access to textile business. MMF is also environmental friendly.
Develop Woven Sector
At present, nearly 60% of the export oriented woven fabrics
are imported. The woven production has some advantages as well
as disadvantages over knit production. The advantages are (i)
very vast market, (ii) woven products are value added pro-ducts
and costly so that profit margin is better than knit garments.
The disadvantages of woven products are (i) production, dyeing
printing and finishing of woven fabric require lot more
expertise and experts than required in the knit fabric
manufacturing (ii) cost of weaving plants are much higher than
that of knitting plants.
But there is enormous opportunity for woven sector as there is a
huge demand in local export oriented garment factories. The
garment manufacturers will definitely prefer local fabrics in
order to avoid the problems with the overseas fabric sup-pliers
and to minimize production time. Unfortunately very few
entrepreneurs are interested to invest on this vast market.
Woven factories are relatively more profitable industry due to
the demand in world market. In china, most of the big garment
manufacturers have their own weaving and in some cases spinning
facility. In case of woven fabric different types machines are
used to make certain quality of fabric. If the garment factory
owners have their own weaving facility then participating in
world market becomes relatively easier as the marketing people
knows very well what type of fabric they needed to produce to
fulfill the demand Therefore it is strongly recommended that if
possible the garment manufacturers should develop their own
weaving facility themselves.
Developing the weaving sector not only our foreign currency
retention will be increased as well as our garment business will
be better secured. Import of fabric for export market is not a
healthy for business as are too many risks associated with this;
e.g. (i) lead time is very high, (ii) if the imported fabric is
too much defective or of any sort of mismatching arises, then
there is no way of compensation in such short period of time. If
import of woven fabric is disrupted, the garment business will
collapsed in overnight loosing lots of money and leaving
millions of garments workers jobless. To avoid this kind of
uncertainties and garment manufacturer imports certain excess
fabric. It is quite uncertain whether additional fabric will be
required or not. Cost of additional fabric definitely is
included in the cost of garment. If the fabric is produced
locally, this kind of uncertainty can be handled efficiently.
If the export oriented woven sector is developed, we could
export woven fabrics. There is also a big advantage of having
strong woven sector in the domestic apparel market because huge
amount of fabrics as well as garments are imported for our local
consumption. If local woven sector is developed, the amount of
domestic import of fabric and garment will be less.
Due to some reasons, the woven sector could not flourish well.
Some of these reasons and their remedies are discussed below.
i. Very high initial investment: Woven projects are
associated with very high investment, only large entrepreneurs
are interested in woven projects. Government can encourage
entrepreneurs by providing advantages like soft loans, tax
holidays, tax free import of machinery etc. Other sectors like
spinning, dyeing printing and finishing and garment
manufacturing sectors should not be comparable with this sector.
This is required to manufacture woven fabric locally at lower
price so that the cost of garments will be decreased and profit
will be increased.
ii. Introduce blend processing: The main requirement of
yarn for weaving is its strength. During weaving the yarns are
subjected to various types of stretching forces. To counteract
these forces yarns are sized. Yarn breaks during weaving due to
low strength. Bangladesh processes 100% cotton yarns whose
strength is much lower than blended yarns. Blended yarns are
produced by mixing cotton and synthetic fiber like polyester.
iii. Special Woven market: Weaving and woven dyeing need
special type of marketing. The variety of woven fabric is large
in comparison to the knitted fabric. Due to continuous change of
fashion and quality, particulars of woven fabric changes on a
continuous basis. If the Garment manufacturers themselves set up
woven and woven dyeing factories, the aspect of fashion change
can be managed efficiently. In China, most of the garment
manufacturers have their own woven factories.
iv. Proper R & D may be helpful: One of the important
problems faced by many weaving factories is the sample
development. A well organized R & D center will be very helpful
in developing samples as well as improving quality. A separate
institute can be set up to deal with R & D and training on
weaving and woven sector.
i. Training for the operator: BGMEA could run several
training centers where the fresh operators will be trained up to
get satisfactory performance by hiring some highly skilled
instructors. BGMEA factories can recruit these people with
ii. In-service training for the freshly recruited technical
personnel: Apart from the operators, export oriented textile
and garment factories recruit various types of technical people
having qualifications like diploma and degrees. These freshly
recruited experts should be trained by skilled personnel (of
the relevant field). At present none of the training institutes
in Bangladesh have this type of in-service training facility.
Therefore a separate training institute can be set up to train
freshly recruited graduates as well as in-service training
necessary for improving performance.
Production of Viscose Can be a
Breakthrough in our Export Oriented Textile and RMG Sector.
Every year Bangladeshi spinning mills import cotton fiber worth
billions of dollars and also the local consumption is also very
high (nearly 14 crore Kg). It would be breakthrough, if viscose
rayon can be developed and added to our export oriented textile
and RMG sector. In the past, Bangladesh used to produce viscose
rayon in the Karnaphuly rayon mills Ltd. at Chittagong. But at
that time the quality of viscose fiber was not very good. Over
the years, technology has improved a lot, now viscose has lot of
advantages over cotton fiber. It would be profitable if Textile
and RMG sector think seriously about producing viscose rayon.
Develop Local Dye & Chemical
The cost of dyes and chemicals that are incurred in textile
processing plants are substantial. We do not have any dyes,
chemicals and auxiliaries manufacturing facility in Bangladesh
therefore we have to import them using foreign currency.
Therefore we should develop our own manufacturing facility to
reduce our cost of production.
Develop Facility for Machinery &
Most of our competitors like China, India and Pakistan
manufacture their own spare parts as well as some machinery. In
general, Bangladesh does not produce any spare parts at all
machinery except simple weaving machines like shuttle loom..
Bangladesh is heavily involved with textile business;
manufacturing of textile machinery could be a very big and
profitable industrial sector.
Bank Interest Rates Should be
If the bank interest rate is lower like other developing
countries, it could be a big incentive for increasing industrial
Access to the Import Data.
Export Promotion Bureau (EPB) maintains a details list of
products exported from Bangladesh. Similarly a detail list of
imported items may be developed and made available when needed.
This will be helpful in attracting investors (both local and
overseas).. Investment on production of products that are on top
of the list will perhaps attract lot of investors; also the risk
of marketing will be less.
All the concerned authorities may carefully examine the
suggestions that are made here. The benefits of the all the
suggestions particularly R & D may not be visible in short
period of time. Some of them may take even years to get the
benefits. In the international market, we cannot play too much
with the sales prices of our textile commodities; it is the cost
of production where we can play. It seems that by implementing
the above suggestions and recommendations we will be able to
reduce the cost of fabric and garment. ¨