A slice of Chinese garment export relocating to Bangladesh  

Marksman   | Published: October 09, 2018 21:57:15 | Updated: October 27, 2018 21:15:16

Benefits   from a   stepped-up  US-China trade war -- in the shape of  increased garment export orders --  are reportedly  accruing  to Bangladesh.

By all accounts, an intensified trade war between the US and China is making American apparel buyers tilt towards Bangladesh.  They are  switching  on to Bangladesh RMG sources    to save extra  costs  due to  raised  import  tariff barriers being exchanged  between the US and  China.

Some leading entrepreneurs of the readymade garments sector  have   confirmed  that already Bangladesh  has started  receiving  new buying orders  from the US. Even old  buyer brands or alliances have  increased  manufacturing and supply  orders  by   20-50 per cent, not to mention  the indents, either placed or  in the pipeline  from a   new string of  buyers. For the last two-three months, the factories are not merely witnessing  an  increase in the number of enthusiastic  inquiries but  also  visits from the  buyer representatives  with literally work orders in hand.

So long MB Knit Fashion in  Narayanganj used to work for two American buying  firms  viz. Hemricks and SK Group; but now Knit  Fashion Narayanganj   has received work  orders from a buying firm named  Function Wear. It may be  added that Hemricks has  ordered for 130 thousand T-Shirt pieces  compared with  just  100 thousand pieces it has been  importing per month for the last  several years. In some cases, a three-fold increase is in prospect.

As it is, the US has traditionally been the largest exporter of  apparels  from Bangladesh. After the Rana Plaza distaster, the US market  shrank. Following  a lapse of  15  months, our garments export to the US  has   bounced   back  since January of this year. Actually, in the eight months (from January to August) export worth $3.66 billion was made to the US market  representing   a 4.51 per cent increase  from the corresponding period last year.

One noteworthy   prospect lies in the  type of  import demand we cater  for. The US buyers are   shifting reliance  away  from   China  for   basic and inexpensive  garment/knit items  on to   Bangladesh.

This also  is in sync with China moving to higher technology  and  higher wage bills for  workers, a signal that China gave  for  relocation of  industry  and business  to other  countries. But   we have competitors in the region -Southeast Asia in particular - to contend with.

At any rate, if our entrepreneurs  stay the course, even after the  end of the trade war we  shall be able to  retain  our   advantage  in  basic and  common brands  as though  enjoying  captive markets.

The spurts in work orders are  something  to  be optimistic about but they increase  our obligations  for a rapid capacity-building   beyond the old   levels. Previously, we heard  about  subcontracting  to cope with the peak season  that has all but begun as we approach mid-October. Until  December-January,  from the floor level to backward  linkage  to   merchandising  to   transshipment  and delivery all cogs in the  machinery  must work in unison. We cannot compromise  on quality and  the lead time for  timely  deliveries as well.

Giant  Group's executive director Faruq Hassan has told a vernacular contemporary  that three types of investment have been made in the RMG sector. So he goes on to  confidently  claim that  along with an improvement in work  ecology,  modernisation of  machinery and enhancement of  productive capacity have been effected. So, he thinks we are ready to cope with the  spiked  supply orders.

While we share his optimism, we can't help flag off the imperative  necessity  for   commensurate  efficiency in  terms port handling or air freight capacities.


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