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Future of Textile Industry in Bangladesh after a Decade of Improvement

Future of Textile Industry in Bangladesh after a Decade of Improvement

Bangladesh’s garment sector has every potential to survive as the world’s largest ready-made garment manufacturer and to further consolidate its position.

Bangladesh is currently one of the world’s leading exporters of readymade garments due to its dynamism in production, modernization and improved working environment. However, in order to meet the challenges posed by the epidemic and the changes in the world market, the industry needs to innovate, improve and diversify.

McKinsey & Company, an international management consulting firm, has published a research paper entitled ‘What is the future of Bangladesh’s garment industry after a decade of improvement?’ It has been said here that the epidemic crisis has stopped the country’s garment industry at the last minute. At the same time, the change in the search for the source of fashion in the world market has put Bangladesh’s position in the supply of products at risk.

The UK-based fashion portal ‘Just-Style’ quotes writers like Achim Berg, Harsh Chaparia, Saskia Hedrick and Carl-Hendrick Magnus as saying that in order to successfully advance the garment industry in Bangladesh, it must now focus on resilience, sustainability, labor development and resilience. Will.

Mohammad Fazlul Haque, managing director of Plumi Fashions Limited, the world’s largest eco-friendly factory, said, “The change in sourcing model has created a challenge in the garment industry, but it is not a threat to Bangladesh’s garment industry.” People working in the garment industry in Bangladesh are aware of this challenge. But I think we should give more importance to this issue. “

The reason why Bangladesh has a huge advantage in the garment industry is that it has a number of eco-friendly factories in the sector and they aim at environmental and social compliance which other countries have not yet done, Haque said. He is also the former president of the Bangladesh Garment Manufacturers and Exporters Association.

He added, “If we can overcome the challenges mentioned in the report, then these are the opportunities that will come before us. How much we can benefit from here is up to us. At the same time, we need to make some changes at the policy-making level and in our attitude. “

‘The Covid-19 crisis has taught us a lot and we have also made changes in how to adapt to this new normal. For example, we adhere to strict hygiene practices in our manufacturing operations,” said Haque.

Referring to Bangladesh’s development over the past decade in the report, Haque said, “But at the same time, we have missed out on some opportunities that could have put Bangladesh in a better position.”

 

Improvement in Textile Industry in a decade

Ten years ago, McKinsey reported an 8-9 per cent improvement in the sector. During this period, Bangladesh’s growth in garment exports has doubled. Whereas in 2011 it was 14.6 billion US dollars, in 2019 it stood at 33.1 billion US dollars. As a result, the annual growth rate stands at 7 per cent.

During this period, the share of the Bangladesh textile industry in global garment exports has increased from 4.6 per cent to 7.8 per cent.

The authors of the study said, ‘This is within the range we predicted in our report. But the garment sector in Bangladesh has not improved as much as we had hoped. ‘

Due to the epidemic, both the lives and livelihoods of the workers of Bangladesh are at great risk. Many small factories have shut down their operations and competition with small orders has increased, the report said.

According to the report, in the first year of the epidemic, exports of Bangladesh’s ready-made garment industry fell by 16 per cent. This resulted in a loss of revenue of more than 5.6 billion dollars.

 

Development vs. Challenge

Despite the losses, the report said Bangladesh has made “significant progress” in the ready-made garment industry over the past decade and has overcome many challenges. Bangladesh has performed well, especially in diversifying buyers and products, improving suppliers and the workplace environment, and sustainable quality improvement.

For example, the use of synthetic fibres in Bangladesh is currently very high. The country now also makes relatively complex products such as outerwear, sewn clothing items, underwear and offers good quality prints and laser finishes.

In order to make these new types of products in compliance with the rules laid down by the European Union, it is possible to use fabrics imported from foreign countries for this purpose. There has also been a slight increase in the top integration of the supply chain and as a result, many suppliers can now offer less than 90 days.

According to McKinsey, many Bangladeshi factories have not yet taken advantage of these opportunities and are reluctant to invest as much as they need to. The report shows that T-shirts, trousers and sweaters are still influencing the country’s export market.

The second biggest challenge in this sector is staff empowerment and gender inequality. Despite the increase in wages, there is still a huge gap in the protection of workers’ rights. However, gender inequality has become an issue in terms of career advancement from an early stage.

One of the issues in the readymade garment industry is infrastructure. To make progress in the garment industry in the future, Bangladesh needs to digitize transportation, energy and infrastructure, McKinsey said.

 

Stand up with the challenge

Bangladesh’s garment sector has every potential to survive as the world’s largest ready-made garment manufacturer and to further consolidate its position. Although at the moment there are many storms in the country’s clothing sector; However, the authorities will have to make some final decisions to retain the top spot in the sector, McKinsey reports.

McKinsey added that Bangladesh’s garment sector needs to stand tall in order to meet the challenges of biased trade. And for that, the traditional buyer has to meet the declining demand of the market and lean towards finding more demand-based sustainable sourcing models.

Just-Style has learned from talking to some international buyers that they think Bangladesh’s garment industry is not yet dynamic enough. The rest, however, are relatively positive and think that the resilience and adaptability that Bangladeshi manufacturers have already shown can be expected to transform the country’s ready-made garment industry as needed, although structural change is impossible here.

Some sourcing executives have also mentioned the shift in sourcing volume towards foreign-owned companies in Bangladesh, especially in the case of more composite and technological products and synthetics. They are looking for suppliers who invest in sustainability, labour-friendly and transparency.

The report suggests that if the Bangladesh government adopts new strategies to attract foreign investors in the sector, it could be beneficial for the country.

Over the past decade, Bangladesh’s ready-made garment industry has made remarkable progress by overcoming various obstacles. The garment industry is currently facing various new challenges amid the epidemic crisis. In the years ahead, the sector should follow the overall transformation in partnership with producers, international buyers, business representatives, governments and shareholders.

McKinsey’s report concludes, ‘As international buyers work in a rapidly changing form, they want to work with more modern and advanced suppliers. And for that, they need to build deeper and more practical strategic partnerships and move forward, leaving behind the shrinking pace of the global retail market over the past decade. “

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