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Bangladesh sweater exports rise, stable policies needed to sustain growth

"The industry attributes growth to expanding winter season in the western hemisphere as well as technological upgrades in manufacturing sweaters. Additionally, favourable conditions such as political stability and low cost funds are aiding the growth of sweater exports. In fact, industry leaders opine export growth could be even greater if there is enough logistical support at ports and in the transportation sector. They also hoped exports earnings will contribute $8 billion annually by 2021, if the government provides proper infrastructure and policy support."

 

Bangladesh sweater exports rise stable policies needed to sustain growth 001Data from the Bangladesh Export Promotion Bureau (EPB), for the fiscal 2017-18, reveals the country earned $3.67 billion in exports, which is 9.32 per cent higher than the $3.36 billion it earned in FY16-17. The country’s export earnings from sweater products grew 9 per cent to $3.67 billion in the last fiscal year. Sweaters contributed nearly 12 per cent to the total RMG exports of $30.61 billion of FY17-18.

Growth drivers

The industry attributes growth to expanding winter season in the western hemisphere as well as technological upgrades in manufacturing sweaters. Additionally, favourable conditions such as political stability and low cost funds are aiding the growth of sweater exports. In fact, industry leaders opine export growth could be even greater if there is enough logistical support at ports and in the transportation sector. They also hoped exports earnings will contribute $8 billion annually by 2021, if the government provides proper infrastructure and policy support.

The second growth driver, according to the BGMEA is upgrading of manufacturing machines from manual toBangladesh sweater exports rise stable policies needed to sustain growth 002 automatic. This has not only increased production capacity but also boosted worker productivity. Global climate change has also impacted Bangladesh with the winter season in the western hemisphere expanding beyond its normal period. This has increased demand for winter clothing.

Shift in focus

Rising worker wages in China has led to manufacturers shifting their businesses to include higher-end products whereas buyers are searching for new sourcing destinations. Bangladesh offers a quality product at reasonable prices, this in turn, creates an opportunity for the country’s manufacturers.

Manufacturers say, global buyers are offering lower prices for their products, whereas the cost of production has gone up. To meet global demand, therefore they have to invest in automation, pushing production cost further up. However, the price of sweaters has not increased; rather, buyers have further reduced the prices of finished goods.

In order to grab a larger market share, Bangladesh has to increase port capacity to reduce lead-time. Inefficiency of infrastructure is another impediment that the country needs to be addressed. Bangladesh is unparalleled in product quality, so there is room to grow in the global market. However, there are challenges, including the lack of raw materials to produce high-end goods, technical expertise, and latest technology. Only about 60 per cent workers here can make higher-end products.

A stable and long-term policy, which would provide all out facilities to create a business friendly atmosphere, can pave the way to remove obstacles that stand in the way of new investments. The policy should be comprehensive and unified in order to ensure a level playing field for all.

 

 
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