PRESENTATION ON THE IMPORTANCE OF THE BANGLADESH PRIMARY TEXTILE SECTOR A. Matin Chowdhury Managing Director, Malek Spinning Mills Ltd. Southeast University Seminar Hall, Dhaka To To Fresher’s Reception Program Fresher’s Reception Program School of Science & Engineering School of Science & Engineering Southeast University Southeast University
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PRESENTATION ONTHE IMPORTANCE OF THE BANGLADESH PRIMARY
TEXTILE SECTOR
A. Matin Chowdhury
Managing Director, Malek Spinning
Mills Ltd.
Southeast University
Seminar Hall, Dhaka
7th September , 2009
ToToFresher’s Reception ProgramFresher’s Reception Program
School of Science & Engineering School of Science & Engineering Southeast UniversitySoutheast University
Thank you for inviting me to make a Presentation on the
Textile & Clothing (T&C) Sector of Bangladesh.
T&C has grown and we appreciate the interest of the
University in this Sector.
T&C is the largest employer in the country and is currently
up-scaling its requirement.
Therefore, it is important that the University and the students
consider this, in their H.R. development and career planning.
GROWTH AND CONTRIBUTIONOF THE
T&C IN BANGLADESH
Growth and contribution of the T&C in Bangladesh
After liberation of Bangladesh in 1971: Jute was the only exportable item. Most products including yarn and fabric were imported. Huge shortage of foreign currency.Present Day (2009)
Jute export unfortunately diminished to 2.68% of national export. T&C has rescued the country by:
- Meeting the total domestic needs.- Exporting US$ 12.87 billion – 82.68% of national export.
- Currently running good foreign exchange reserve.
- Huge employment with downstream and supporting industries.
Bangladesh Export Position2007 – 2008 and 2008 - 2009
Sl No.
Item July 07 - June 08
% July 08 - June 09 %
01 Total Export 14,110.80 100.00
15565.19 100.00
02 Textile & Clothing
11,170.76 79.16
12,870.17 82.68
03 Others 29,404.04 20.84
2,695.02 17.32
Sl No.
Item July 07 -June 08
July 08 - June 09 Growth%
01 Knit Garments 5,532.52 6,429.26 16.21
02 Woven Garments 5,167.28 5,918.51 14.54
03 Home textile 357.96 389.83 8.00
04 Terry towel 112.88 132.57 17.44
Total T & C 11,170.76 12,870.17
05 Footwear & Leather 346.92 471.34 (26.39)
06 Frozen Food 534.07 454.53 (14.89)
07 Raw Jute & Jute Goods
483.40 417.42 (13.65)
08 Bicycle 64.28 84.54 31.32
09 Processed Food 40.65 46.68 14.83
10 Ceramic 38.33 31.70 (17.30)Source: EPB
Textile & Clothing Contribution IDevelopment of Textile and Clothing since 1971
A great achievement for the people, government, Labour and entrepreneurs of Bangladesh.
A great achievement for the people, government, Labour and entrepreneurs of Bangladesh.
Local yarn stimulated knit export growthKnit export overtook woven RMG with huge FE retention & employment
Textile & Clothing Contribution IIGrowth
PTS reduced Back to Back L/C from 67% to 32 % Local input increased from $ 739 million to $ 7,511 million
1. Initially focused on stitching only with imported fabric. Developed spinning and local fabrics capabilities after mid 90’s.
2. Has a large textile base with a double digit growth.
3. Big base allows further growth possibilities as many companies have reached economies of scale.
4. Adequate manpower has been developed.
5. Aggressive investors.
6. 3rd largest exporter to the European Union. 5th largest to the U.S. in 2008
- Overtook Mexico for 4th position in 2009.
Will also have a presence in the Asian market as Japan decided to divert 20.00% import from China.
Possibilities for Bangladesh - I
7. Till now produced basic products – Plans now:
- Upgrade 25% product to value added category
which will yield additional $ 2.00 billion.
- Build on existing base by growth of 15% yielding
additional $ 2.00 billion.
- Take on capacities vacated by Mexico, Turkey,
ASEAN & Latin America.
- Chase India & China on Price.
Possibilities for Bangladesh - II
AREAS FOR GROWTH All circular knit products
- move aggressively to synthetics. Sweaters
- with emphasis on upstream activity including yarn. Trousers – Denim
- all ready leader. Need to develop fabric, finishing & washing.
Home Textile- bed sheets, curtains, towels.
Shirts- develop fabric.
Synthetic Garments- import high quality fabric.
Develop value addition with printing, embroidery, embellishment etc.
Develop all types of accessories and packaging.
Possibilities for Bangladesh - III
CHALLENGES
Bangladesh T&C Industry has tremendous prospects. Can very easily take Global second position after China. A difficult task, but achievable and requires concerted and determined effort from all – Government, Entrepreneurs, workers, financiers, etc.
National Aim1. Government of Bangladesh had given initial support to the T&C.
For the last 8 – 10 years withdrawn support. Needs to believe the possibility of T&C and therefore should:
• Draw out a policy• Make a long term plan with targeted products, production and value.• Support the education and training of all levels of personnel involved with the industry.• Activate an export campaign improving the country’s image.
Challenges - I
2. Labour relations and labour productivity: a. T&C is a labour intensive industry and therefore strict regulation on workers
rights and privileges – A Must. b. Strict law enforcement for industrial disputes . c. Disciplined workers and owners. d. Having reached a global level, cannot progress on cheap labour-need training. Therefore, labour productivity and use of equipment, automation has to be encouraged and achieved.
3. Energy: T&C requires a lot of energy and has to go for high capacity utilization. Have time bound commitments- regular and good quality energy is essential. This needs to be solved otherwise all orders and investments will go in vain.
Challenges - II
4. Infrastructures: Ports, roads, industrial estates, etc. need development to cut costs of doing business in this cutthroat competitive environment.
5. Law and order: T&C requires a lot of processing, movement of goods and sub-contracting and also produces a huge amount of salvageable waste. Strict law and order is essential for the security and successes of the industry.
6. Financial costs: The T&C business has a lot of transactions which are made through investments, L/Cs, acceptance, etc. These costs has to be maintained at a sustainable level, otherwise, it will hamper growth.
Challenges - III
1. Government support and private investments into T&C paid
handsomely with exports, employment and FE retention.
2. Best possible product to meet future development and exports, thus
should be planned for growth.3. Competitive Government giving policy advantages to
their industry. We need policy support to balance this.
4. Law and order and labour management must be improved.