Apparel makers making fresh investment as demand grows

Local apparel makers are now making fresh investment in manufacturing value-added items especially lingerie mainly to meet the growing global demand, industry people said.

Besides, shifting orders from China due to rising production costs there and trade war between the US and China have opened up an opportunity for fresh investment, they opined.

DBL Group has invested in manufacturing lingerie items while Knit Concern, among some others, is expanding its existing production capacity, they added.

Chief Operating Officer of Knit Concern Lingerie Ltd M R Russell said they will increase their production capacity to 300,000 pieces per day by 2020 from existing 80,000 pieces per day.

The company is investing $ 30 million in its expansion. "We have also set target to raise our exports to $ 10 million from existing $ 3.0 million once the new project goes into full operation."

Though the value-added items have huge potential, the country is yet to meet 20 per cent of global demand, he noted.

Entrepreneurs mostly focus on manufacturing traditional basic items while export markets are also confined to traditional ones, Mr Russell said, adding that usually they are not interested in taking fresh risk.

He also explained that lingerie manufacturing, a new concept, needs fresh investment in machinery and other setup.

Buyers who have business with Bangladesh are placing orders for lingerie items in the country while new buyers are also getting informed about the capacity local manufacturers have built in the segment, exporters said.

While talking to the FE recently, a representative of a US-based buyer also echoed the same.

Exports of lingerie items are increasing from Bangladesh as they (buyers) are now diverting some of their orders from China due to trade war between the two superpowers-US and China.

Bangladesh is now producing basic lingerie items, mostly cotton-based, he opined.

China is still doing monopoly business in some segments of lingerie especially seamless ones, he noted, adding that only few groups have machinery to produce seamless innerwear.

He, however, said Vietnam is doing well in producing high value-added seamless items.

MA Rahim, managing director of Dulal Brothers Ltd, said they have recently started trial production of lingerie in one of their existing units.

Mr Rahim, also vice-president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), opined that despite having huge global demand, there are not so many lingerie item producers in the country.

Fazlee Shamim Ehsan, owner of Fatullah Apparels, said they are producing nightwear items in one of their new units where they have made investment worth Tk 400 million.

Three lines out of 16 are engaged in value-added items having the capacity to produce 25,000 pieces per day mainly to meet the growing demand in the European market, he noted.

There is no alternative but to go for value-added items manufacturing that helps get better price if "we want to sustain in the long run" as basic items are losing their competitive edge, he observed.

According to the Export Promotion Bureau (EPB) data, exports of lingerie items fetched $ 1.01 billion during the July-March period of the fiscal year 2018-19, registering an 18.92 per cent growth over the corresponding period of the previous fiscal.

Export earnings from lingerie items were $ 856.55 million during the July-March period of FY 2017-18, according to the official data.

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