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Bangladesh: RMG exports to the world sees steady rise

"Bangladesh's RMG exports to the global market rose by over 9 per cent to over $26 billion from Jan-Nov 2016. This growth rate is not sufficient to attain the $50 billion export target by 2021 as the sector needs over 12 per cent growth to realise the vision. Experts attributed remediation process, which helped improve safety standards-to the increased production capacity. Upon completion of remediation, some RMG units have received more orders from buyers who were satisfied with the safety progress, they argued."

 

 

RMG exports to the world sees steady rise

 

Bangladesh's RMG exports to the global market rose by over 9 per cent to over $26 billion from Jan-Nov 2016. This growth rate is not sufficient to attain the $50 billion export target by 2021 as the sector needs over 12 per cent growth to realise the vision. Experts attributed remediation process, which helped improve safety standards-to the increased production capacity. Upon completion of remediation, some RMG units have received more orders from buyers who were satisfied with the safety progress, they argued.

As per World Trade Organisation (WTO), the global clothing export market has contracted by around 7.8 per cent to $445 billion in 2015. In 2014, the global apparel export was $483 billion while the global RMG export market is expected to reach $650 billion by 2021.

Production to get a boost

Bangladesh RMG exports to the world sees steady rise

 

According to the data of Export Promotion Bureau (EPB), during January-November 2016, Bangladesh earned $26.09 billion, exporting clothing products, which is 9.03 per cent higher compared to $23.93 billion a year ago. Knitwear products fetched $12.56 billion with an 8.22 per cent rise compared to $11.60 billion in the previous year while woven products earned $13.53 billion, which is 9.78 per cent higher compared to $12.32 billion a year ago.

Exporters Association of Bangladesh President Abdus Salam Murshedy expects a double digit growth as the production capacity as well as the volume of work orders have increased because of safety improvement and remediation completion in most factories. Last year production was hampered due to the ongoing remediation to improve safety standard in workplaces for ensuring workers' safety. After the full-fledged completion of Corrective Action Plans (CAPs), the work order flow would increase and it would be possible to attain a double-digit growth, added the business leader.

According to Mahmud Hasan Khan Babu, VP, BGMEA, the sector has seen less investment as manufacturers had to spend a lot on remediation and safety improvement. Experts feel that in order to expand, RMG sector requires investment to increase production capacity for gaining more global market share. Gas connection is a big challenge for Bangladesh's RMG. The country has to work on technology up-gradation and high-end products. Bangladesh has to now focus on capacity building and set strategies to move to high-end and branded fashion segments. Currently, about 79 per cent of Bangladesh export items are concentrated in five basic products – trouser, t-shirt, sweater, shirts and jackets mostly made of cotton.

Another priority area is market diversification as Bangladesh's apparel exports are mostly concentrated on EU and North America. Non-traditional market is the key element to enlarge the export volume. The contribution of non-traditional markets to total export was 2 per cent in FY2005-06, which has increased to 15 per cent in FY'16.

 
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