Japanese market is becoming a hottest new export destination for the Bangladeshi apparel exporters. This is no doubt a very good news for our Apparel Industry, and an opportunity to extend our business to this market. On last 13 Augusts 2010, the Daily Star has published an in depth article, expressing the potentiality of Japanese apparel market. For our readers we are publishing this well written article by Refayet Ullah Mirdha of the Daily Star.
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| Image (C): UNIQLO, Japan |
His Gulshan Avenue office is air-conditioned, but yet another power outage has hit, and his generator can only support the PC, internet connection and some lights. His company exported garments worth Tk 175 crore ($27 million) in 2009, and he is determined to keep growth rapid despite the uncertain US economy. He is now negotiating with a Japanese buyer to supply two million T-shirts next year.
"It is just the beginning," says Shibli. "We started exporting to Japan two years ago. A lot of new customers are also coming to Bangladesh to purchase the Bangladeshi-made fine garments."
His interest in Japan is an example of Bangladeshi exporters looking to the Japanese market as the hottest new export destination. Apparel manufacturers and exporters are desperate for merchandisers who can speak Japanese, to get a foot in the door of an apparel market worth more than $35 billion a year.
Currently, Base Textiles is making one million T-shirts for the Japanese buyers. In 2009 it exported 2.5 lakh T-shirts to Japan. It started in 2008, with exports of 60,000 T-shirts.
Apparel exports from Bangladesh started to pick up after the Japanese government announced the China+1 strategy in 2008.
Japan is keen to reduce its dependence on China, the largest supplier of apparel items globally. The China+1 policy promotes shifting production from China to other nations, such as Bangladesh.
Being a member of the least developed countries' group, Bangladesh has duty-free access to Japan for woven product (under the generalised system of preferences, or GSP).
Knitwear faces a duty of 17 percent, as Japan clings to its aging knitwear industry.
Fazlul Hoque, former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said the Japanese government invited the BKMEA leaders to talk about duty-free access for knitwear. The BKMEA had asked Japan to relax rules-of-origin for knitwear items.
Hoque has travelled to Japan several times to woo both Japanese buyers and investors to Bangladesh. If Japan allowed duty-free knitwear, it would be a great opportunity for Bangladesh, he says.
He calls the invitation by the Japanese government "a positive indication." Hoque adds that Dhaka's decision last year inspired exporters with a cash incentive of 5 percent of each apparel shipped to Japan.
The former Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Anwar-Ul-Alam Chowdhury Parvez said Japanese customers are a long-term and stable opportunity.
"We should avail ourselves of the opportunity," Parvez says. "We should handle with them with care, as they rely on quality."
He says manufacturers need separate production lines for the Japanese customers, as they never compromise on quality. On the other hand, Japanese buyers can afford to pay for high quality, the former BGMEA boss says.
Garment exports to Japan maintained roughly a 175 percent growth rate between 2008-10 (though the last two months data are not yet in), according to the Export Promotion Bureau.
Even with the duty, Bangladesh registered a 231 percent rise in knitwear exports to $60 million in the first 10 months of the past fiscal year; and earned $90 million from woven garment exports -- 121 percent growth over the same period a year earlier.
The Japanese textile and clothing investors are also coming to Bangladesh. Three apparel factories -- Maruhisa, Yokohama Tape and TM Textiles -- started business in Bangladesh since 2009.
Three related companies (NI Teijin, CHORI and FVG) have opened liaison offices in Dhaka, and two companies opened quality-control inspection centres (PQC and K2) to meet Japanese national standards. (Japan Industrial Standards, or JIS, differ from ISO standards.)
Japan's Fast Retailing Company Ltd, which owns Japan's casual-clothing chain Uniqlo, signed a $100,000 agreement with Bangladesh's Grameen Bank Group on July 13 to produce garments at the group's factories. Uniqlo opened a liaison office in Dhaka in 2008.
Another major Japanese apparel manufacturer, Onward Holdings Co, launched social-contribution projects in Bangladesh.
In time, the Japanese customers of local RMG factories will come to terms with domestic issues, such as power shortages and other disruptions, as well as low labour costs, observers say.
"It will take time to understand each other, because Japanese customers know Chinese industries," said Takashi Suzuki, representative of JETRO, Dhaka. "They should know other countries, like Bangladesh and Vietnam."
Ultimately, he argues, Bangladesh must increase its productivity growth if it is to remain attractive to the land that brought the world the famous trademark Hello Kitty. Until then, the honeymoon between Japan and Bangladesh's RMG sector seems to be an increasingly happy one.
Source: The Daily Star, Friday, August 13, 2010
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