Throwaway RMG wastes can earn billions

Throwaway garment waste can earn Bangladesh minimum US$6.0 billion annually if cheap export is stopped and recycling supported, entrepreneurs say because of the item's growing potential.

Growing numbers of western companies, ranging from fast-fashion retailers to luxury brands, are prioritising clothing made from recycled or other sustainable materials, in view of the magnitude of environmental impacts.

Bangladesh exports clothing items worth about US$47 billion annually from the country's biggest export sector. And the factories churn out some 0.4-0.5 million tonnes of such waste or jhut, primarily consisting of cutting waste, scraps and fluffs, industry-insiders have said.

Around 20,000 to 22,000 traders are engaged in jhut business, who mostly process the waste in an informal way, creating employment for about 0.6 million workers, mainly women. Around 1.0 million people are indirectly dependent on the apparel sub-sector.

An estimated 300 of the traders are doing export business-shipping the item to different destinations at cheaper prices. The buyers make the most of the wastes through recycling and reuse.

Mainly, the wastes are directly exported and only 5.0 per cent are recycled by some readymade garment-manufacturing units that use recycled fibre to produce yarn, fabrics and exportable RMG.

Some 30-35 per cent of the wastes are reused domestically to produce goods like baby wear, pillow, car-seat coating, quilt, mattress and so.

Local apparel and terry-towel exporters and textile millers are, however, against exporting jhut while the exporters demand cash incentives to earn more from exports.

Talking to the FE, Mohammad Nehar, a jhut trader at Mirpur jhut palli for the last 20 years, said local influential people deal with the factories to collect waste by engaging their nominated persons. The collection is followed by sorting colours and categories in the small shops at the Jhut palli.

"Before the Covid pandemic, some 150-250 sacks of wastes used to be produced in a factory while the quantity has declined to 40-50 sacks in recent months," he said, in a hint at sluggish garment-export business.

They usually collect waste in sacks weighing 60-70 kilograms. The jhut prices range from Tk 2.0 to Tk 70 per sack, based on their colours and size of pieces, he said.

Another trader at the Mirpur jhut village says the white-colour jhut has high demand on the export market as the wastes are recycled into cotton by using chemicals and then turned into yarn and fabrics.

According to Bangladesh Textile and Garment Waste Processors and Exporters Association (BTGWPEA), garment wastes worth US$ 500-600 million are exported from the country per annum.

Export Promotion Bureau (EPB) data, however, show jhut exports stood at US$116.54 million in the last fiscal year (FY23), up from $64.68 million in FY 2018-19.

"Bangladesh's garment waste has a high demand in many countries as it is used to manufacture a variety of products. Most of the garment jhut from Bangladesh is exported to India and the EU," says BTGWPEA President Syed Nazrul Islam.

He says the EPB export data don't reflect actual figures as the exporters don't always need EPB certificates.

"The earnings from jhut export would increase further if the traders are provided with incentives," he adds.

According to Mr Islam, 90 per cent of the garment leftovers are exported mostly to the EU, the USA and India while the rest are reused to produce various recycled products for the local market.

Some 20-25 leading members of the association export mainly to Europe, he says.

This business is controlled allegedly by a section of leaders of the ruling political party in their respective areas. That is, the leaders who live in the hubs of the garment industry in Dhaka, Tongi, Gazipur and Narayanganj have contracts with the garment owners on supply of the wastes.

There are multiple stages of middlemen to reach the jhut to the traders or exporters, insiders have said, adding that politicos "are involved in almost every step of trading".

Violent incidents occurred following political groups' lobbying, they said, adding that earlier, the two main political groups often clashed over business sharing, but now the number has decreased.

Currently violence is less because "the entire business is controlled by the ruling-party men", they noted.

An FE correspondent on a visit found four associations at Mirpur jhut palli, while people reluctant to comment or talk about the business.

Asked, Faruque Hossain, president of Mirpur Kata Kapor (scraped fabrics) Babosayi Samobai Samity, said garment factories were shifted to other industrial hubs like Ashulia, Gazipur and Savar during the last decade for a number of reasons.

"So there are only 30-40 traders at Mirpur jhut palli who are engaged in jhut or kata-kapor trade out of 285 shops here," he says.

The rest are accessories, fabrics shops, he said, adding that many left the business after earning a lot of money.

Regarding the four associations he said they were formed previously when there were a good number of garment factories operating here in Mirpur.

Echoing BTGWPEA president's views, Aminul Islam Bacchu, former secretary of the trade body, sought cash incentives and lamented that there are no guidelines for stopping export.

The government has fixed the value of sorted white 'jhut' at $ 600 per tonne and colour un-sorted 'jhut' at $235 per tonne, which was previously $350 and $140 respectively, he mentioned.

"We are also earning millions of dollars worth of foreign currencies from exporting wastes," he says.

Talking to the FE, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) vice-president Md Shahidullah Azim said Bangladesh could earn US$4.0 billion to US$5.0 billion annually by recycling textile wastes if provided with required policy support for value addition locally.

The pre-consumer waste or jhut primarily consists of factory offcuts, scraps and fluffs, he said, and around 400,000 tonnes of recyclable pre-consumer wastes are produced in the country every year.

"The recycling of pre-consumer textile waste provides a lucrative opportunity to Bangladesh, not only economically but also socially and environmentally," says the industry leader about prospect of jhut economics.

According to BGMEA the 400,000 tonnes of micro-fibres and scraps that are disposed of as waste every year can be recycled to produce about 1.0 billion garment products, which have the potential to generate revenue worth about at least US$3 billion yearly.

Less than 5.0 per cent of the textile wastes are recycled locally while over 35 per cent are incinerated in boilers or landfills, Mr Azim says.

The rest or 60 per cent of the textile wastes are exported to India, Hong Kong, Sweden and other countries where they are recycled and sold back to the local readymade garment industry as recycled yarn, at a higher cost, he says about the re-export.

Responding to a question, Mr Azim said jhut is used in boiler mixing with husk as alternative of gas or oil, which pollutes the environment. And this is also why they want to recycle them in a proper way.

But the technology used in waste recycling is very expensive, he notes, seeking policy supports in this regard.

He says there is absence of proper and systemic way of jhut collection and processing while textile millers say they don't get sufficient jhut as raw material to utilise the existing recycling factories capacity.

So, they want jhut not to be exported.

There are already companies that have established recycling plants, like "Recover" from Beximco and "Cyclo" from Simco and many other small facilities that are recycling Jhut in the country.

"However, it is important to incentivize them, and promote the pre-consumer waste-recycling industry in Bangladesh," Mr Azim suggests.

Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) vice-president Fazlee Shamim Ehsan says 12 per cent to 15 per cent of the fabrics go to waste while making garments.

Last fiscal year, Bangladesh exported 2.57 million tonnes of garment products and some 0.31 million or 0.38 million tonnes of jhut were produced, he explains.

According to Bangladesh Textile Mills Association there are more than 20 recycling mills that use cotton wastes and garment jhut as raw materials. The use of recycled fibre would help retain US$1.0 billion locally while such recycling would help keep the environment green and reduce water consumption significantly, resulting in decrease in use of chemicals and carbon emission.

Bangladesh will face post-graduation challenges as high tariffs would be applicable in exporting garments to the European Union while garments produced from recycled fibre would enjoy a 30-percent duty rebate which would make local garments cost-competitive, according to BTMA.

This (duty rebate) would work as an impetus, besides cash support.

Talking to the FE, Dr Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD), said recycling of garment wastes is positive both in terms of environmental aspects and export returns as garments produced from recycle materials give premium price.

The supply chain of jhut is not a formalized one as the collection of the waste from factory, sorting based on cotton, non-cotton, presence of chemicals, its availability in local sources, prices are not done in a systematic way, he pointed out.

"There were many incidents, including death, as the trade is managed by influential or local politicians," says the economist.

He suggests formalisation to bring it in international supply chain by bringing them under registration, ensuring traceability where produce, who collects, how segregation done and prices.

There are some technical aspects-how the jhut is segregated, accessories are removed and chemicals in the jhut are removed-which are also important to take into consideration, he notes, stressing management considering environmental aspects.

The policy researcher says the jhut recycling must be based on waste or jhute produced here in the country and not by allowing post-consumer waste which is used in garments.

"If import of used garments as wastage is allowed, it would pose environmental risks while foreign currency or dollar would be spent at a time of dollar shortage," he notes.

According to a latest study by the US Fashion Industry Association, higher sourcing costs and low profit margins are the top challenges in expanding sourcing of clothing using recycled or other sustainable textile materials.

Sourcing clothing made from recycled textiles requires substantial financial and human resources due to factors such as a very different supply chain and vendor base, the additional complexity of traceability, and meeting unique legal requirements, it noted.

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