Though the RMG sector of Bangladesh has been facing so many challenges in last couple of years, but the

sector has shown excellent export performance in this period. The Disaster of Rana Plaza and the Blaze in Tajrin
has put the RMG sector of Bangladesh in the red line. Buyers from the all over the world are pressuring
Bangladesh to ensure the social, Fire, Electrical and Structural safety in the factory premises also threatening to
give up the sourcing from Bangladesh.

In the meantime, the political turmoil in last two years created new challenges to the industry for on time shipment
of final product and the sourcing of required raw materials to ensure the production. But in those days, the
entrepreneurs of Bangladesh RMG sector, with the help of Govt. of Bangladesh hold the button and kept the flow
of export ongoing with any kind of interruption.

The industry also put tremendous effort on compliance & Fire and Electrical safety related issues like initialization
and implementation of Fire Door, Fire extinguisher, Sprinkler, Other Firefighting equipments in the factory
premises according to the Corrective Action Plan (CAPs) from Accord & Alliance.

These initiatives are shown in the result of McKinsey & Company CPO survey 2015; where we still remain the
first choice as Sourcing Destination of Apparel product to the international buyers in upcoming five years.

According to the Report, for international CPOs Bangladesh remains the top in future Apparel sourcing
destination, as 48 percent of respondents put it in the top-3 up-and-coming sourcing markets. About 62 percent of
the respondents said they intended to increase their sourcing value from Bangladesh over the next five years,
indicating that the forecast annual growth rate of 7 to 9 percent in their 2011 report.

Other top-3 sourcing countries include Vietnam and India, where respectively 59 percent and 54 percent of
responding CPOs plan to increase their sourcing value in the next five years.

In McKinsey’s 2011 apparel CPO survey, respondents were asked to pick “The top 3 country hotspots over the
next five years” for apparel sourcing. More than 80 percent of respondents ranked Bangladesh among the top 3.
But in the McKinsey’s 2013 apparel CPO survey, number has been dropped to 52% due to Safety and other
Compliance related issues, also for the Political Uncertainty.

According to Last 3 Survey of Mckinsey, the share of Bangladesh as the lucrative sourcing destination is
decreasing sharply because of several challenges in terms of political stability, garment industry structure, or
competitiveness.

Though Bangladesh has taken several initiatives to ensure safe working environment including Fire, Electrical
and Structural safety according to the guideline of Accord & Alliance but this result in the report is alarming for the
RMG sector of Bangladesh.

Also increasing wage levels across Asia and the big shifts in foreign exchange rates, as well as global retail
trends and changing consumer behaviors, have complicated the challenge of sourcing for apparel companies
across the developed world.

According to McKinsey, Sub Saharan countries specially Ethiopia and Kenya will become the next Garments
 industry hub for international buyers. The CPOs expects to be sourcing a greater share of their overall portfolio
from the region in 2020 than they are in 2015.

Global buyers’ preferences also indicate real interest in those specific countries, Kenya and Ethiopia. The largest
US brands and retailers, as well as selected European retailers, including some of the influential fast-fashion
players, have begun sourcing in these locations.

Over the next five years, many respondents indicated that these two markets will occupy more share in their
sourcing portfolios.

It is clear from the analysis that Ethiopia has certain advantages in terms of costs, whereas Kenya’s garment
industry has reached higher productivity levels. The free-trade benefits of AGOA frequently as one of the core
advantages for Kenya.

So taking this into account, we can see that a bulk of challenges are waiting for the RMG sector of Bangladesh
including the Restructure and Retrofitting activities, ensuring Fire and Electrical safety, transformation of shared
building into dedicated building which need huge investment. But the Access to finance in Bangladesh is critical
and cumbersome, with a high interest rate.

To ensure the growth of RMG sector and remain Competitive in world market , the comprehensive policy
formation including Market Diversification, Product Diversification, Backward linkage Integration, Improve the
Flow of Investment, Infrastructural Development, Productivity Improvement, Research and Development,
Supportive Government Policy will play the vital role.

Recent News
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source tax
A meeting was held with Finance Minister Abul Maal Abdul Muhith on 15th May at 1.00 pm at the conference room
of Ministry of Finance with the leadership of BKMEA, BGMEA& BTMA.

BKMEA formally inaugurates Training Courses under SEIP

BKMEA has formally inaugurated three training courses under Skills for Employment Investment Program (SEIP
Project) that have been funded by ADB and overseen by the Ministry of Finance, Bangladesh at Dhaka iART center.

IGP holds talk with BKMEA

Inspector General of Police A.K.M Shahidul Hoque holds talk with the leadership of BKMEA, BGMEA & BTMA on
15th May at 3.00 pm at the conference room of police Headquarter.

The Report of MCKINSEY CPO Survey, 2015: Bangladesh still Remain

the Leading Sourcing Destination
Though the RMG sector of Bangladesh has been facing so many challenges in last couple of years, but the sector
has shown excellent export performance in this period. The Disaster of Rana Plaza and the Blaze in Tajrin has put
the RMG sector of Bangladesh

BKMEA Meets With Dutch Multi Stock Holders

An important round table knit was arranged at the residence of Netherland ambassador on 16th June 2015 at 12.30
pm with the leadership of BKMEA & BGMEA. The Dutch Foreign Trade and Development Minister Lilianne
Ploumen, and Infrastructural and Environmental Minister Melanie Schultz van Haegen paid the visit to Bangladesh

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