BANGLADESH GARMENT INDUSTRY

AN APPAREL MANUFACTURING POWERHOUSE OF

SOUTH ASIA
 Content
1. Country Overview

2. Economy Snapshot

3. Bangladesh RMG Industry: Some Facts

4. Bangladesh RMG Exports Year-wise

5. Percentage of RMG Exports of Bangladesh to the World

6. Value of Bangladesh’s RMG Exports in FY ‘17

7. Trade relations with other countries

8. SWOT analysis of Bangladesh RMG industry

9. Possible solutions of the problems in Bangladesh

10. Government initiatives to boost RMG industry in 2018

Country Overview
Population:
166,368,149
Area:
147,570 Sq. Kms

Region:
South Asia

GDP:
US $ 285.81
billion

Capital:
Dhaka
 Economy Snapshot

44th largest Export

Total Exports economy (in oriented
GDP growth ~ US $ 35 nominal Industries:
rate ~ 6.5% billion (as on terms) and garments,
FY ’17 end) 32nd largest jute, leather,
(in ppp terms) frozen food
Bangladesh RMG Industry: Some Facts

The industry contributes The industry contributes

28.1% in the country’s 65% in the total industrial
total GDP development

The industry employs

around 4.5 million people
and 80% of them are
women
Bangladesh RMG Industry: Some Facts

In the FY ’17, it
generated US $
28.14 billion
revenue

Contributes
Target of reaching
81.23% of the
US $ 50 billion by
total export
2021
earnings

RMG Industry
in Bangladesh
Bangladesh RMG Industry: Some Facts

Bangladesh RMG Exports

Denim
Major
industry
The3rd markets are
generates
largest European
around
exporter of Union, US,
US $ 2 billion
garments in Japan and
of export
the world. Australia.
value every
year.
 Bangladesh RMG Industry: Some Facts
Total number of garment factories in Bangladesh
7000
5876
6000
5400
5150
No. of Factories

5000 4482
4222 4296 4328
4000

3000

2000

1000

0
2011 2012 2013 2014 2015 2016 2017
Year
 Bangladesh RMG Exports Year-wise

40
34.2 34.6
35
30.1 31.2
30 28 28.1
Exports of
24.4 25.4
25 RMG (In USD
billion)
20
15
Total exports
10 of Bangladesh
(in USD billion)
5
0
2013-14 2014-15 2015-16 2016-17
Percentage of RMG exports of Bangladesh
to the world

15.09
EU
3.36

US

18.49 Canada
63.06
Non-traditional
markets
 Value of Bangladesh’s RMG exports
in FY 2016-17 (country-wise)

20

15

10 in USD Billion

traditional
US

Canada
EU

Markets
Non-
 Trade Relationship with other Countries

Bangladesh and USA

Longer lead time, Bangladesh’s

lower prices, lesser exports face
imports by US 15.62% duty to the
retailers, inefficient US markets, which The exports to US
The US is the 2nd
port operations, is quite high in declined by 7.47%
largest export
appreciation of the comparison to what on YoY basis to US $
destination for
local currency Bangladesh’s 5.2 billion in FY ‘17.
Bangladesh.
against US $ led to competitors such as
the decline in Vietnam, Turkey,
garment exports to China and India
US. have to face.
 Trade Relationship with other Countries

Bangladesh and EU

The growth was attained

Bangladesh exports to despite speculations
According to EPB data,
European Union, though around Brexit negotiation,
Bangladesh’s exports to
slow, but secured a growth national elections in major
EU reached to US $ 17.75
of 3.49% in fiscal 2016- European countries,
billion in FY ‘17.
17. depreciation of the euro
against the dollar.
 Trade Relationship with other Countries

Bangladesh and China

Bangladesh’s RMG It is predicted by the

exports to China increased China might soon become industry experts that
14.77% to US $ 391.59 the second Asian country export value to China will
million in FY ‘17 due to for Bangladeshi exports. soon cross US $ 1 billion
duty free trade privilege. figure in next few years.
 SWOT analysis of RMG Industry of
Bangladesh

It can offer competitive prices.

The industry is quite versatile with extensive production

capabilities.
Strength

Duty free access to EU, UK, Canada, Japan, Australia

and recently India are big plus.

Financial support from world bank to improve

the country’s RMG industry.

Vertically integrated manufacturing is one of the positives.

 SWOT analysis of RMG Industry of
Bangladesh
Longer lead time for some raw materials.

Poor and underdeveloped infrastructure.

Weakness

Less investment in man made fabrics and warp knitting.

80% of Bangladesh textile exports comprise low value

added products such as trouser, shirt, sweater etc.

Inefficiency in adaptability of fast fashion to survive

in the rapidly changing garment industry
 SWOT analysis of RMG Industry of
Bangladesh
Due to intense use of lean tools the garment
Opportunities industry is getting benefits for longer term.

More engagement and empowerment of local management

teams is possible.

Sustainable pricing as compared to its competitors.

Health, safety & environment and Human resource management

are gradually improving in Bangladesh.
SWOT analysis of RMG Industry of
Bangladesh
Slow working of the Government institutions and corruption in
public services are some reasons that create problems for
companies in Bangladesh.

Inconsistent supply of gas and electricity.

Threats

Tight profit margins due to lower product price and higher cost of
production.

Port capacity is not great so shipment gets delayed

sometimes.
 Possible solutions for Bangladesh’s problems
 Bangladesh should focus on enhancing their human capital as it reduces the cost of
production.
 The industry should focus on a holistic approach for sustainability across textile and clothing
value chain.
 To come out of “cheap product and cheap price” market positioning, Bangladeshi textile
and garment companies should focus on brand positioning. Strong foreign policy and
diplomacy can overcome these reputational threats.
 To maintain competencies in the sector, it is essential to boost the infrastructural
development of the industry.
 Having comprehensive business friendly policies is essential to inspire new entrepreneurs
to come and invest in country’s textile and apparel industry.
 To understand consumer demand, to design new and value-added products, and to analyze
market situations, there should be more emphasis on research and development part.
 Government initiatives in recent years
to boost Bangladesh RMG industry
 The government has commissioned two studies to analyze the feasibility of a floating
terminal and a mid-sized seaport, both near the Chittagong seaport.

 Further, the government has invested US $ 6 billion and has undertaken the
construction of a new seaport the Payra seaport, and the Padma bridge that will help
apparel buyers with better lead times. The Government is investing to enhance
enhancing its power generation capabilities as well.

 The government of Bangladesh is focusing on use of big data. For the same, DIFE
(Department of Inspection for Factories and Establishments), a Bangladesh government
entity, in partnership with ILO, has provided a digitized method of data collection for
safety and compliance issues in apparel manufacturing factories.
 Government initiatives in recent years
to boost Bangladesh RMG industry

 The government initiatives are supporting Bangladesh industry to be more diverse

and specialized. With growing maturity of industry, technical skills are also maturing.

 The government of Bangladesh is focusing on industry to be more eco-friendly. The

top 3 environmentally friendly garments factories in the world are located here.
Bangladesh has 7 out of top 10 LEED factories of the world. The government is
promoting this trend by providing loans at 9% to garment manufacturers that intend
to go green.
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