Friday, June 9, 2017

Bangladesh Textile Industry: Present Scenario, Future Prospects and Challenges

Introduction:
Textile and clothing sector plays a vital role in the growth of economy; generation of more than 65% of the country’s industrial employment and 81% of the export earnings. The industry employs about 5 million workers of whom 80% are women. Until the liberation of Bangladesh, the textile sector was primarily an import-substitution industry. It began exporting ready-made garments (RMG) including woven, knitted and sweater garments in 1978, which grew spectacularly during the next two and a half decades from US$3.5 million in 1981 to US$10.7 billion in FY 2007. Apparel exports grew, but initially, the RMG industry was not adequately supported by the growth up and down the domestic supply chain (e.g. spinning, weaving, knitting, fabric processing, and the garment accessories industries). Until FY 1994, Bangladesh’s RMG industry was mostly dependent on imported fabrics- the primary textile sector (PTS) was not producing the necessary fabrics and yarn.
Bangladesh textile industry
Fig: Bangladesh textile industry
It is essential to identify and analyze the problems of primary sectors. Supporting basic textile industries such as spinning, weaving/knitting, dyeing and finishing industries are known as backward linkage industries. RMG sector and printing and packaging sector are known as forward linkage industries. From study of textile sectors; it was found that:
  • Most of the textile mills are running with poor capacity utilization.
  • We are always dependent on the foreign machinery as well as technicians.
  • We have to borrow engineers/ experts from other countries; but this cannot be a long tern solution for the economic and technological growth of our country.
  • It is the well known to all of us that Bangladesh lacks of necessary adequate research and development facilities.
Structure of the Textile Industry in Bangladesh:
There are two types of textile industry in Bangladesh. They are as following:

A. Backward linkage industries:
Supporting basic textile industries such as spinning, weaving/ knitting, dyeing and finishing industries are known as backward linkage industries.

B. Forward linkage industries:
RMG sector, printing, and packaging sector are known as forward linkage industries. Most of the textile industries are in the private sector.

According to constructional building design, there are two types of textile mill. They are as following:

i. Horizontal oriented textile mill:
This factory or mills are constructed in ground floor based industry. Generally heavy weight large machineries are placed at this type of factory.

ii. Vertically oriented textile mill:
This factory or mills are vertically constructed as a multistoried type building. Normally they are five to eight stored building. Generally light weight machinery is placed at top floor and heavy machinery is placed in ground to first floor. Process sequence or manufacturing steps are arranged according to product out put. RMG is a vertically oriented factory.

Major Textile Sector and Its Product:
Major textile sectors of Bangladesh and its products are given in following table:

Table-1: Sector wise textile products
Sector
Products
Spinning
Yarn
Weaving
Grey woven fabric
Knitting
Grey knit fabric
Dyeing and finishing
Dyed or printed fabric
Apparel or garments
Men, women and baby wear
Jute
Carpet, twine, hessian, and sacking.
Sericulture
Silk yarn and silk fabric
Hand loom
Sharee (jamdani and banarosi), lungi and gamsha.
Power loom
Sharee, lungi, gamsha and different woven cloth.
There are also some composite mills in our in country. Two or more than two different mills are combined under one administration is called composite mill.

The combination of composite mills can be following:

  • Weaving and dyeing finishing
  • Knitting and knit dyeing
  • Dyeing, printing and garments
Bangladesh export-oriented ready-made garments manufacturing and primary textile (spinning , weaving, knitting, dyeing)sector with back up support of the accessory (trimming and packaging) industries, contribute 81 percent to total export earning of the country.

The domestic textile industry has made appreciable contribution to the rapid growth of Bangladesh RMG industry. International RMG buyers preferred Bangladesh mainly for two reasons:
  1. Competitive prices of high volume lower end products and
  2. Presence of a growing primary textile industry capable of ensuring sizable supply of inputs to RMG industry. In fact, the value addition of the RMG units using the inputs supplied by the local primary textile industry is much more as compared to those dependent totally on the imported inputs.
But the export oriented RMG industry is now at stiff competition because of global trade liberalization under WTO rules and agreement on textiles and clothing (ATC), in the quota free world. It is widely believed that the development of an effective backward linkage along with a well designed road map for future growth would have provided safeguard measures to retain and expand the Bangladesh textile and RMG export in the quota free world.

Development of the textiles and RMG industries calls for preparation of a pragmatic road map with synchronized strategic action plans in respect of technology, inputs, HRD, quality, productivity, compliances and other trade promotion aspects. Preparation of road map essentially requires up-to-date information in aspect of past performances to analyze past and present situation and draw out conclusions that would serve as a basic for future courses of action for development of the sector. On the other hand, the issues related to quality, productivity, compliances and cost minimization depend on sustainable supply of skilled man power to the sector.

The requirement of yarns (Cotton, polyester, CVC, PC, mélange, acrylic, viscose), fabrics (woven, knit) and RMG are vast compared to available capacity. To fill up the demand supply gap, there needed a huge amount of investment (DDI/FDI), capacity utilization of the existing m/c, skilled manpower (textile engineers).

At present, the DOT (Department of Textile) has established MIS and website to complement the objective of the ministry’s need in respect of information and database. Updated information about current scenario of textile and RMG sectors of Bangladesh is available that website. Data were collected from following organizations:
  1. Bangladesh Textile Mills and Exporters Association (BTMEA)
  2. Bangladesh Garments Manufacturers and Exporters Association (BGMEA)
  3. Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA)
  4. Specialized Textiles & Power Loom Manufacturers and Exporters Association
  5. Terry-Towel Linen manufacturers and Exporters Association
  6. Bangladesh Dyed Yarn Exporters Association (BDYEA)
  7. Different textile institutes and universities.
Importance of Textile Industry in Bangladesh:
The textile has been an extremely important part of socio-economic development for a very long time for a number of reasons:
  • The textile industry is connected with meeting the demand for clothing, which is a basic necessary of life.
  • It is an industry that is more labor intensive than any other in Bangladesh, and thus plays a critical role in providing employment for people.
  • It has contributed to employment creation, poverty reduction as well as women empowerment.
  • More than 81% of export earning comes from textile sector.
  • Contributes over 13% of GDP, 40% industrial value addition comes from the textile sector.
  • Provide huge opportunities for the supporting industry banking, insurance, shipping, transport, toiletries, cosmetics, hotel and other related economical activities.
  • Provide 55 lakh of employment where 80% are women
  • 150 lakh of peoples in support industries depend on this trade.
  • Provides 2 lakh jobs in waste recycling industry related to textiles.
Present Scenario of Textile Sector in Bangladesh:

A) Spinning sector:
Different types of yarns are produced at this sector. 100% of yarn is used in domestic and exported oriented weaving and knitting mills in Bangladesh. The situations of spinning sectors are given bellow:
Spinning sector of Bangladesh
Fig: Spinning sector of Bangladesh
Table-2: Number of spinning mills
Ring spinning
97
Ring spinning with open-end capacity
195
Rotor/open-end
51
Synthetic yarn mills
30
  • No. of spindle- 87 lakh
  • No. of rotor- 2.3 lakh
  • Production capacity-205.0 core Kg
  • Employment- 4 lakh
Spinning sector is facing stiff competition from the competition like India due to the price fluctuation of raw cotton.

B) Weaving section:
There are various designs and structure oriented woven fabric are produced by this sector. Mainly plain weave fabric is major production. This sector can produce only 40% of woven fabrics for woven RMG. The situation of weaving sectors of Bangladesh are given below:

Table-3: Weaving mills
Woven
561
denim
21
Home textiles
18


  • Looms -17,000 shuttle less and 13,000 shuttle
  • Production capacity- 215 core meter
  • Employment -80,000
C) Power loom sector:
Mainly synthetic and specialized products are produced. Share, lungi, and gamcha also produced at this sector. Local primary textile industry meets 90% of domestic fabric demand.
  • No. of units – 1065
  • Production capacity – 40 core meter
  • Employment -43,000
D) Hand loom:
This sector is very old and traditional sector of Bangladesh. Jamdani, and banarosi like luxurious share are produced by this sector. The hand loom industry provides employment for a large segment of the rural population of Bangladesh. It also helps in self employment of rural women.
  • No. of units – 1,83,512
  • Production capacity – 837 core mtr.
  • No. of hand looms – 5.05 lakh
  • Employment – 10.2 lakh (50% female)
  • The industry also supplies a large portion of the fabric required by the local market.
  • Bangladesh hand loom board looks after the sector.
E) Knitting, knit dyeing:
There are two types of knitting and knit dyeing factory in Bangladesh. Some factory produce fabric for export demand and large no. of factory produce knit fabric for domestic need. Local knit sector can supply 80% of knit fabric for knit RMG.

No. of units-
  • Export oriented 800
  • Local 2000
Production capacity -
  • Export 360.0 meter.
  • Domestic 50.0 core meter
Employment- 60,000

F) Dyeing and finishing sector:
These mill process the grey woven and knit fabric and produce different colored dyed and printed fabric. During wet processing of fabric these mills consume a huge amount of underground water and produced waste water (effluent).
  • No. of units – 320
  • Production capacity – 172.0 core meter.
  • Employment – 33,000 
Dyeing sector of Bangladesh
Fig: Dyeing sector of Bangladesh
G) RMG sector in Bangladesh:
  • No. of units – 5063
  • Production capacity – 22.323 core dozen
  • Employment 36 lakh, where 80% are female workers.
Ready-made garment sector of Bangladesh
Fig: Ready-made garment sector of Bangladesh
Contribution of RMG sector in national economy of Bangladesh:
  • In fiscal 2010-11, the contribution of RMG (woven and knitwear) to national export was 78.14 percent or $17.91 billion compared with 77.12 percent or 412.50 billion in fiscal 2009-11.
  • Total export was $22.93 billion in 2010-11.
  • Knit wear export $9.49 billion (41.79%)
  • Woven garments export $8.43 billion (36.79%)
  • In home textile, terry towel and specialized textile were included in the RMG sector, the share of the total export would cross 80 percent in fiscal 2010-11.
  • In 2010-11, earnings from home textile export were worth $78.88 core, (3.44%) while terry towel earned 412.0 core (0.52%).
Bangladesh RMG export earning
Fig: Bangladesh RMG export earning (Source: BKMEA)
The garment manufacturing sector in Bangladesh has a new slogan: “$50 billion by 2021.” It’s an ambitious vision to reach $50bn in exports by 2021, the 50th anniversary of the Republic of Bangladesh.

RMG market:
All country of European Union (EU) and USA are the major buyer of the RMG of Bangladesh. There are 52% RMG export in EU and 26% in USA. Mainly EU is knit RMG market and USA is a woven RMg market. Among all of export in USA 86% is RMG, in which 42% of total woven export and 12% of total knit export.

H) Sericulture sector:
This sector is related to the production of silk worm, cocoon, silk yarn and fabric. Cultivation of mulberry trees for feeding of silk worm is closely associated to development of sericulture sector. Bangladesh sericulture board looks after this sector and concentrated mainly in Rajshahi area of Bangladesh. This sector contributes to the rural economy of women folk.

  • Silk yarn production – 6.94 lakh kg
  • Cocoons production – 117.26 kg
  • Employment -6.0 lakhs
  • No. of small and large scale factory- 72
I) Jute sector:
Jute was a golden fiber of Bangladesh. Before 1980 jute earn a huge amount of foreign currency and the economy of Bangladesh was depend on jute. The market of jute was decreasing for low price of synthetic polyethylene. Till today jute is used at different sectors due to environmental friendly reason.

Total jute fiber production – 50-60 lakhs bale
Export: in 2009-10:

  • Raw jute – 44.70 lakhs bale
  • Jute products -9.05 lakhs ton
Export earning:
  • Raw jute - TK 1357 core
  • Jute product – TL 3697 core
  • In 2010-11: jute export $1.0 billion- 4.36% of total export.
Future Prospects and Challenges in Bangladesh Textile Sector:
  1. As the population is growing and the standard of living is increasing in Bangladesh, the demand for textiles is increasing rapidly.
  2. Moreover, growth rate of RMG export will continue as Bangladesh has edge over other competitors due to low labor cost.
  3. This present an urgent need to dramatically increase capacities in spinning, weaving, knitting, dyeing, printing and finishing sub-sectors.
  4. This will require the adoption of the most modern and appropriate technology to ensure quality products at competitive prices.
  5. To be competitive in the global market both in terms of cost and quality.
  6. Production and export of high value added products for higher retention of foreign exchange.
  7. To get free excess to the USA market.
  8. Diversification of export items and finding new destination for export.
  9. To keep up the high growth rate of RMG export.
  10. Expansion of infrastructure such as road, port, and railway capacities to accommodate import and exports.
  11. Shortage of gas and power supply.
  12. Environmental pollution.
  13. Financial new textile projects and high cost of borrowing.
  14. Lack of technical and market research facilities.
  15. Shortage of skilled manpower.
Way forward:

1. Attaining self sufficiency in yarn and fabric production to ensure that the export oriented RMG industries fabric needs can be meet locally.

  • To ensure higher retention
  • To create employment opportunity
  • To eliminate dependability of technician from overseas countries.
2. Giving more emphasis on research for
  • Production development for export diversification and export of higher value added product.
  • Process development for cost minimization and quality improvement.
  • Market research for finding new destinations of export and for sustainable growth of exports.
3. Ensuring the sub-sectors of the industry is better articulated resulting in a more synchronized development in the industry.

4. Govt. policy supporting

  • The spinning sector to stay competitive and sustainable.
  • Reduction of import duty on machinery, raw materials and dyes and chemicals.
  • Financial support to establish new textile industries in soft term.
5. Improvement of the road and the communication infrastructure.
6. Ensuring power and gas supply.
7. Diplomatic efforts to ensure duty free access to USA market and the finding new destinations of export.
8. Emphasis on quality textile education to supply skilled manpower.
9. Appropriate steps ensuring protection of environmental pollution.

Table-4: Textile sector of Bangladesh at a glance


Type of mill
No. of unit
Production
Employment
Spinning
385
205 core kg
4 lakh
Weaving
721
215 core meter
80,000
Knitting
2800
410 core meter
60,000
Powerloom
1065
40 core meter
43,000
Handloom
1,83,512
837 core meter
10.2 lakh
Dyeing Finishing
310
172 core meter
33,000
Garments
5063
44.4 core dozens
36 lakh
Sericulture
72
6.94 lakh kg
6 lakh
Jute

9.05 lakh ton

References:
  1. https://en.wikipedia.org/wiki/Textile_industry_in_Bangladesh
  2. http://www.ritsumei.ac.jp/acd/re/ssrc/result/memoirs/kiyou33/33-05.pdf
  3. http://www.cpd.org.bd/pub_attach/DR-18.pdf
  4. https://en.wikipedia.org/wiki/Bangladeshi_RMG_Sector
  5. http://textilelearner.blogspot.com/2014/07/rmg-leading-earning-sector-in-bangladesh.html
  6. http://www.academia.edu/6833098/Role_of_Textile_Industry_in_the_Economic_Development_of_Bangladesh_and_Prospects_of_Textile_Sector
  7. http://www.manufacturebd.com/images/state_of_cotton_and_textile_industry_in_bangladesh.pdf
  8. http://dspace.ewubd.edu/bitstream/handle/123456789/1651/Md._Atiqur_Rahman.pdf?sequence=1
  9. http://textilelearner.blogspot.com/2015/02/prospects-of-garments-industry-in-Bangladesh.html