arshad jamal bgmea north south textile summit 2
TRANSCRIPT
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Presentation By
Arshad Jamal (Dipu)
Director-BGMEA & Chairman-Tusuka Group
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Bangladesh RMG Industry- striving for Excellenceby
Vertical production chains in Textile and Apparel Sector
between India & Bangladesh
Leading Bangladesh to Prosperity
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Competitive
Advantages
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STRENGTHS OF BANGLADESHS APPAREL INDUSTRY
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Competitive Price International standard Quality Control process Bangladesh has 30 years of experience in garment
manufacturing Superiority in the lower end niche, as well as handful
of suppliers doing brand items Rapidly developing backward linkage industry Increase in direct sourcing by the Brands through
local offices at Dhaka. Bangladesh is the 3rd largest apparel exporting
country in the world (WTO, 2008)
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M/B KNIT SHIRT SWEATER MMF M/B TROUSER M/B SHIRT W/G BLOUSE
China 50.25 68.18 70.96 78.29 58.4
India 39.71 85.36 77.95 85.44 62.63
Vietnam 41.25 145.5 64.85 59.98 42.65
Bangldsh 20.99 31.71 54.52 48.92 39.2
0
20
40
60
80
100
120
140
160
US IMPORT PRICE FOR SELECT APPAREL ITEMSUS$/DOZEN
Source: OTEXA
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Source: EUROSTAT 6
T-SHIRTS SWEATER M/B TROUSERS M/B SHIRTS W/G BLOUSES
CHINA 14.92 21.76 16.95 18.92 33.7
INDIA 18.96 19.62 20.16 21.97 33.35
VIETNAM 11.13 14.25 17.77 24.88 23.22
BANGLADESH 10.3 15.64 13.58 14.18 20.71
0
5
10
15
20
25
30
35
40
EU IMPORT PRICE FOR SELECT APPAREL ITEMSUS$/KG
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Design Sup port Services
PatternmakingPrototype SamplesSalesmen Samples
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In house quality inspectionMost of the factories have received quality
certificate from buyers
Certifications like ISO, WRAP, OEKO-TEX, SA 8000etc.
Most of the factories have their own Quality Controldepartment where highly skilled professionals areemployed to increase efficiency and reduce reject.
International Consulting companies train theemployees to provide International standardrequirements.
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INCREASING SOURCING BY WORLDS TOP FASHION RETAILERS
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Largest Democracy with independent Judiciary
Continuous GDP growth of 5%-7%
Stable currency and no major fluctuations over the last
three years
Bangladesh has always fulfilled its debt obligations
57.3% of the population is under 25 years of age.
Highly flexible workforce
Both JP Morgan and Goldman Sachs have includedBangladesh among their shortlists of transitional states
likely to succeed.
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China moving to high-end and secondary industries
Rising production costs in China
Labor shortages causing wage increases
Revaluation of Yuan
Largest impact on labor intensive industries
Bangladesh represents a clear alternative to China in someparticular product and market segment
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Source: EPB
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4.584.91
5.696.42
7.90
9.21
10.70
12.35
5.996.55
7.60
8.65
10.53
12.18
14.11
15.57
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00
2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009
RMG
Total
HISTORICAL RMG EXPORT TREND OF BANGLADESH
In Billion Us Dollar
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% Share of Global Exports
0.40% to Australia
Approx. 35% to USA
and Canada
Approx. 58.5% toEuropean Union
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Apparel
USA 82.94%
European Union 82.29%
Canada 90.64%
Source: EPB
%Growth in Exports between 2004-05 and
2008-09
BANGLADESH'S APPAREL MARKET SHARE% (FY 2008-09)Market Concentration
EU,58.46%
USA,29.91%
Canada,4.75%
Japan,0.60%
Australia,0.40%
Others,5.88%
0.60% to
Japan
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29.91%
17.30%
9.90%
7.85%
7.35%
4.75%
4.23%
2.05%
16.65%USA
Germany
U.K.
France
Netherlands
Canada
Italy
Belgium
Others
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21Source: BTMA, Ministry of Jute & Textiles
Bangladesh is the second largest cotton importing country in the world
Sub-Sector No. of
Mills
Sub-Sector Installed
MachineCapacity
Unit Production
Capacity/Year(in million)
Public Sector
Spinning 24 Spindle 460000 Kg 40
Private Sector
Spinning (Cotton) 312 Spindle 8230104 Kg 1495
Spinning (Synthetic Yarn) 27 Spindle 673276 Kg 180
Total (Public & Private) 363 Spindle 9363380 Kg 1714
Weaving Mill (large,medium & small)
1131 Shuttle/Shuttle-lessLoom
48659 Meter 2011
Handloom 148342 Handloom 498000 Meter 837
Terry Towel 72 Terry/Power Loom 1896 Meter 34
Sub-Total 149545 548555 Meter 2882
Dyeing & Finishing 359 Finished Fabric 6755 Eqv. Meter 6084Sweater 607 Flat & Jachard 306848 Pcs 6568
Ready-made Garments
Woven 1382 Sewing Machine 391723 Pcs 3508
Knitwear 462 Over Lock 148448 Pcs 5378
Sub-Total 1844 540171 8886
Knitting & Knit Dyeing 822 Knitting & Dyeing 12891 Eqv. Meter 7414
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Ve rtic a l p ro d uc tio n c ha ins in
Textile a nd Ap p arel Sec torbetween India & Bangladesh
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Win-Win situation
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1. Bangladesh is a Big Market for Woven Textile.
2. Potential to Enhance the EU GSP Utilization Rate.
3. India Could Contain its Textile GSP Graduation Loss.
4. China Plus Sourcing Strategy of Buyers.
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Win-Win situation
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Other reasons to Support the Vertical Supply Chainconcept
As Bangladesh occupies about 3% of world apparel market
share, and we have a very strong prospect to grow in apparel
trade (15% average annual growth), and as India being acotton growing country has a very strong primary textile
base; the idea of vertically integrated supply chain should
work well between these two countries.
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Bottle Necks
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Bi-lateral Trade Issues to be Taken Care of:
Bangladesh India Trade Gap.
The 8 Million Pieces Garment Experience:
Utilization 2009: 52.77%(CVD+Eu+ others)
Non-Tariff Barriers.
Sensitive list.
Currency Exchange Rate.
Complicated Visa System.
Trust Issue. stoppage)
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Snapshot: Bi-lateral trade
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Product
codeProduct label
India's exports to
Bangladesh
Bangladesh's imports from
world India's exports to world
Value in US$ million Value in US$ million Value in US$ million
2006 2007 2008 2006 2007 2008 2006 2007 2008
52 Cotton 271.06 288.99 711.37 1218.02 1595.98 2410.88 3916.82 4408.54 4548.48
54
Manmade
filaments 16.78 16.02 44.64 211.74 242.88 365.46 1025.81 1234.31 1587.63
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Manmade staple
fibres 47.89 39.79 44.63 947.46 417.64 622.45 1046.98 1295.19 1396.06
60
Knitted or
crocheted fabric 0.43 0.56 9.26 29.24 36.67 319.67 76.15 80.10 112.26
Source: ITC
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Bangladeshs Textile and Apparel Trade Prospect with India:(Bangladeshs import from India 2008)
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Product code Product label Value US$ million % of BD
Import
Indian export to BD is
% of Indian export to
world
52 Cotton 21.06 29.51% 15.64%
54 Manmade
filaments
44.64 12.22% 2.81%
55 Manmade staple
fibres
44.63 7.17 3.20
60 Kmitted or
crocheted fabric
9.26 2.90% 8.24%
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BGMEA is one of the largest apparelexporters trade bodies in Bangladesh.BGMEA started its journey in Dhaka in1983 with only 134 members and nowthe number of members of BGMEA is4925.
BGMEA set up its regional office inChittagong in 1985 considering itsstrategic importance of being the port cityand the gateway for all RMG exports.
BGMEA Complex, Dhaka
BGMEA
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SHARE (%) OF BANGLADESH'S RMG EXPORT SUB-SECTORS (IN US DOLLAR VALUE)
Source: EPB29
Woven: 100%, Knit:50%, Sweater: 99% BGMEA members
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Social Sustainability30
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BGMEA has its own compliance cell with 39 officials trained by brand buyers
like Wal-Mart, SEARS, Carrefour, Hennes & Mauritz (H&M) and ILO
Health Center & Hospital: BGMEA runs 12 health centers with its own
resources in Dhaka and Chittagong. Through these centers garment free
treatment and medicine for garment workers.
Mandatory Group Insurance: BGMEA made Group Insurance scheme
mandatory for the garment workers working in the Member factories in
May 2002.
Labor Arbitration: BGMEA started free labor arbitration facilities for
garment workers in 1998 under the chairmanship of a retired judge Mandatory Building Code: BGMEA made mandatory for all its Member
factories to follow the Building Code to set up factories.
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Fire and Safety Cell: BGMEA has established a fire and safety cell in 1997 to tackle
the fire related emergency problems
BGMEA Institute of Fashion & Technology (BIFT): Offers degrees in fashion and
Merchandizing.
Human Resource Skill Development: Provides training to unskilled people and
place them in the industry. Till now 15,000 people were placed
Promotion of Reproductive Health Awareness, program on Gender equity &women empowerment is run in collaboration with UNFPA
Scholarship and Stipend Program: To encourage primary education for the
workers children BGMEA has been providing stipends to the meritorious children of
workers
Free Schooling: BGMEA is running three free schools for the workers children and
spouse of the RMG sector.
Free Eye Camp: To mark the World Sight Day-2009 BGMEA in association with
Grameen phone, Islamia Eye Hospital and Sightsavers International organized free
eye camps for the garmentworkers
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Bangladeshs garment sector is free of
child labor and forced labor according to
USDOL Report (Sep, 2009)
122 goods were identified produced with
forced labor, child labor, or both, in 58countries.
The most common goods listed are
cotton, sugarcane, tobacco, coffee, rice,
and cocoa in agriculture; bricks, garments,carpets, and footwear in manufacturing;
and gold and coal in mined or quarried
goods.
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Environmental
sustainability34
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Respect for nature Effluent Treatment Plants has been mademandatory for effluent discharging factories above ph 8.5 level. Green-
building, water recycling and using renewable energy has been getting
increased attention among the entrepreneurs. BGMEA has been running
several projects to promote energy efficiency in garment factories.
Sustainable use of resources The garment industry in Bangladesh have
already gained significant progress in lean production. In order to bring
all factories under this practice BGMEA runs projects like waste recycling
with IFC-SEDF.
Healthy products Most factories run their own textile testing labs
which are accredited by large fashion retailers like H&M, M&S, Puma, JC
Penny, etc. Tests are done as per various international standards like
ISO/AATCC/BS/OEKO-TEX. Most of the companies have awards from big
fashion retailers for good product & Quality.
http://www2.marksandspencer.com/thecompany/plana/healthy.shtmlhttp://www2.marksandspencer.com/thecompany/plana/materials.shtmlhttp://www2.marksandspencer.com/thecompany/plana/waste.shtml -
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