International

Presentations Class ofInternational Business27th August 2016

NEEL NODSanjad Khonodokar 1402010017Maher Afrose 1402010012MD.Abu Taleb 1402010014Tarequl Islam 1402010009Tanzina Islam 1402010054Sumi Akter 1402010034Sazia Islam 1402010029Kamrul Islam 1402010054

Ready-made Garments Industry

Presentation TopicImpact of Globalization : Bangladesh Perspective

Introduction The Ready-made Garments sector has emerged as the biggest earner of foreign currency. The Ready-made Garments exponential growth since the 1980. Provides employment to around 4.2 million Bangladesh.

History Till to the end of 1982, there were only 47 garments manufacturing units. Break through occurred in 1984-85 when number of garments factories increased to 587. In 1999 there were 2900 garments factory in the country. Average growth rate of garments factory export is 22%. Now the number of garments manufacturing units in Bangladesh is 5500.

Process of RMG Cottons 6) YarnSized yarn 7) WeavingWet pretreatments 8) Dying & pricingGoods preparation 9) Retail StoreConsume

Employment Directly around 60 lakhes. 150 lakhes in supporting industries. 2 lakhes in waste recycling industries.

Environment & Workforce A safe work environment ensures the pleasure for work. The health & physical security enhances the motives to work in garments. The friendly work environment intensifies the capacity of the huge productivity. The expansion of Ready-made Garments industry has caused noticeable social change by bringing more than 1.2 million women into labor force. The economic environment of these working women has changed their status in the family.

Women in the Ready-made Garments Garments sector in the largest employee of women in Bangladesh. This has given women the chance to be financial independent & have a voice of family. To provided employment opportunities to women from the rural area.

Prospect of Ready-made Garments Sector Market diversification. Product diversification. Backward integration. Flow investment.

Perspective of Ready-made GarmentsOwnersWorkers Corruption. Political instability. Unskilled workers. Gas & Energy crisis. Higher bank rate. Growing competition. More than 80% Cheap labor cost. Lack of security.

Low wage scale. Lack of Life Safety. Lack of security. Unskilled Management. Profit hungry owners.

Trade and Business 81% of export earning. Contributes over 13% of GDP. Also helps supporting industries (shipping, transport, banking insurance)

Ready-made Garments Sector at Present 80% of total export. 2nd largest exporter (Report 2011). Export US $21.515 billion during 2012-13 session. Nearly 3.5 million people are involved. Minimum wage US $68.

Investments & GDP FDI records to invest $1136.38 million in 2011. 89 new & joint venture project. Total GDP of Bangladesh in the financial year of 2012-13 was $122.70 billion in this year Ready-made Garments sector contributed approximate 18% in total GDP.

Technological National science & technology policy. IT gives direction to science & technology. The national council for science & technology.

Ready-made Garments Sector (The Golden Goose) Experienced exponential growth since 1980. More than 73% of total textile export. 13% of GDP.

Scope for Bangladesh in Ready-made Garments Current trends on the buying side. China is losing its attractiveness for new & established buyers. Foreign buyers are keen to invest because of the cheap labor. Bangladesh Ready-made Garments are maintaining good quality for years.

Economic 48th largest economy. Economy growth rate 6-7%. Deposited rate 9-6%.

Infrastructure Infrastructure is the largest issue that obstacles Bangladesh Ready-made Garments industry. The transportation problem road congestion, gas scarcity, sea-port inefficient create hardly for Ready-made Garments industry. Government has planned to expand the Dhaka-Chittagong high way & doubled the train container capacity.

Reasons of growth

Internal Reason 5% cash incentives. No import duty. Bonded warehouse facilities. Back to back L/C. Concessionary rates of interests. FDI of joint venture facilities. Concessionary duty on imported machinery. EPZ facilities.

External Reasons GATT approved multi fiber agreement(MFA). Quota. As a LDC , get preferential access in EU. GSP.

Advantages Of Ready-made Garments & Uniqueness The Ready-made Garments in Bangladesh accounts for 45 percent off all industrial employment. A huge 78 percent of the country's export earnings come from Ready-made Garments sector & apparel. It contributes 5 percent to the total national income. It helps mitigate the unemployment problem. Highest Ready-made Garments exporting country. Competitive pricing is the unique revenue strategy. Competitive advantage on cost of labor. EPZ manufacturing & lower cost of energy.

Limitations No safety standards in place to product the employees. Conversion of many old, ill equipped building into factories. Raw materials. Unskilled workers. Improper working environment. Wages/Political crisis. Insufficient of loan. Working hours. Safety problems.

Economy and Political Instability Corruption is the main hurdle in Bangladesh. High interest rates is an obstacle to invest in Ready-made Garments sector. Political unrest & strikes are the highest risks in sourcing from Bangladesh. Government intervention may cause political instability.

SWOT Analysis

Strength Competitive price advantage due to cheap labor & governmental assistance. Skilled human resource. Duty & quota free access & GSP in EU. Integrated supply chain, specially in knitwear. International image of a reliable supplies of basics products.

Weakness Weak structure in particular production efficiency , product development making skill, customer service, controlling, planning, management skill, technical knowledge. Producing mainly basic product. Heavily depend on importing woven fabrics low value addition. Poor image of adapting international & corporate social standards. Political, social & worker unrest.

Opportunities Potential for higher value addition by developing backward linkage. Reduce lead time by developing infrastructure of transportation, faster custom, clearance, strong backward linkage. Improved image by adapting environmental & social standards. May get preferential access in USA & Canadian market in new future.

Threats Risk of loosing competitive advantages development steps required. Poor capital formation. Increases international competition. Woven sector requires huge investment. Single market concentration.

Recommendation Policy regime of government. Infrastructural impediments. Labor productivity. Research training. Supportive governance policy. Suggestion regarding fire safety. Investment in education requires broad initiatives. A long term strategy should be developed to secure the raw materials supply as well. Ensure fair wages incentive schemes. Provide structured in-house training for workers & managers.

Backward Linkage Supporting industry. Spinning, weaving/knitting, dyeing, finishing industries. In addition to these interlining, labels button, swing threads, packing & packaging materials, zippers, draw strings all are backward linked industries. 70% accessories collected locally. Share BBL/CIN total export dropped from 68.33% in FY 1995 to 45.1% in the first eight month of FY 2001. Total investment in backward linkage is US $28.

Bangladesh Ready-made Garments:Crisis & Challenges Owners factories building BGMEA. Relevant government agencies. International buyer brand retailer.

Tragedy of Bangladesh Ready-made GarmentsTazreen garments - 2012Rana plaza - 2013

Conclusion The Ready-made Garments industry is increasing day by day due to changes of fashion in day to day life. Ready-mades of specific brands have become not only a status symbol; these have brought a more contemporary style in offices as much as in social circles.