Fueled by global economic recovery, coupled with China's ballooning labour cost and currency appreciation against dollar, the local garments industry is set for hitting a high growth track in the current fiscal, said industry insiders.
They said fast declining competitiveness of China, the world's largest textile and apparel exporter having an export base of US$ 185 billion, diverted global buyers to Bangladesh that helped local exporters in bagging enhanced rate of export orders.
"Besides, other rival countries like India and Pakistan are struggling to compete with Bangladesh due to rapid increase in cost of production," said an exporter.
He said the export orders have started shifting from China to Bangladesh due to competitiveness and following this an increase of 30-40 per cent quantity of export order was witnessed in the recent months.
"All the garment units are fully occupied now and workers are busy in cutting and making of garments," the exporter added with a note of joy.
Reputation in producing high quality but low cost garments helped Bangladesh to gain buyers' confidence, he added.
However, available official data shows that garments export marked a significant rise of 30 per cent ($644.9 million) during the first quarter of the ongoing fiscal compared to the same period of the last fiscal.
Bangladesh fetched $3971.52 million from the shipments of readymade garments (RMG), while it was $3030.76 million in the same period of the previous fiscal.Meanwhile, in a bid to execute import orders many of the global reputed retailers have already opened their buying offices in Dhaka and many foreign buying houses are eying to set up more liaison offices here.
In an attempt to meet the growing overseas contract many companies have made production expansion investments and more than 420 new garment factories came in operation in the last one year, the BGMEA sources said.
However, issuance of utilization declaration (UD) has also been increased, which is averaging 500-550 a day due to increased export orders whereas it was 300-350 last year," said an official of the BGMEA's UD department.
"The garment sector is poised for a quantum leap, but the point is that it will not be easy for exporters to sustain because of squeezing margins due to high raw material price and new wage hike," said analysts.
They said garment exports could be doubled in the next three years, adding more than 3-4 million additional jobs, if infrastructures deficiency could be removed.
"We have received a significant number of export orders from the Western buyers, and hope that the industry will grow more than 30-35 per cent in this year," said a former BGMEA vice-president and chairman of East-West Industrial Park M Harun-Ar-Rashid, whose company has been exporting high-end garments to the EU and the USA.
He pointed out that significant hike in workers' wages in China and currency appreciation against dollar was the main cause for such export growth.
While talking to The New Nation yesterday, BGMEA President Abdus Salam Murshedy said, "We are receiving increased volume of export orders, but the problem lies with the price."
He said the quantity of orders was higher than it was last year but the price is too low to sustain as the buyers were still offering the previous price for the garments. In addition, the recent price hike of cotton put the manufacturers into a deep trouble, as there was a little chance for making profit and in some cases exporters would have to incur loss.
"But we will continue production to stay on competition," he added.
The BGMEA president, who is very upbeat on the country's future prospects for RMG exports, further said, "Exporters will achieve the export target but we have to nourish the industry with the necessary policy support from the government."
He said local exporters were doing business facing various odds like high lending rates, port congestion, energy crisis and infrastructures' deficiency.
"We have to address these problems for a sustainable development of the industry as well as remain competitive in global trade," he added.
On the other hand, quick implementation of recession package that was declared earlier will have more positive impact on the industry.
Apparel industries contribute 80 per cent share of the country's total export trade and fetched US$12.39 billion in FY 2009-10, registering a poor growth of 1.21 per cent against the previous fiscal due to recession fall out.
-New Nation, Sunday 31/10/2010
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