Bangladesh's woven garments losing competitiveness globally

Bangladesh's woven garments are losing competitiveness on the global market mainly for longer lead time, poor backward linkage, and insufficient gas and port facilities, businesspeople said.

Woven-wear exports to the two major markets -- Germany and the United States -- took a downturn during the first half of the current fiscal year, 2017-18, according to available data.

During the July-December period of the FY18, the woven items fetched $1.03 billion from Germany, recording a 10.84 per cent negative growth compared to the earnings during the corresponding period of last fiscal, the data showed.

Woven-wear exports to the US fell by 1.15 per cent with earnings worth $1.88 billion during the same period.

On the other hand, knitwear exports grew by 10.76 per cent and 9.94 per cent to Germany and the US during the first half of the current fiscal.

The export of woven items grew negatively by 15.89 per cent and 6.95 per cent to Belgium and Denmark while witnessed a slow growth of 2.89 per cent and 9.32 per cent to France and Italy during the period.

Knitwear exporters get strong support from the local backward-linkage industry, which is not available for woven-garment makers as the latter still largely depends on import to meet their fabric requirements, said Mahmud Hasan Khan, vice-president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

"About 40 to 60 per cent of required fabrics for woven items are met through import from China, India, Korea and other countries," he said, adding that longer lead time has now become a major concern for woven makers. Local woven exporters were lagging behind at least 15 days for inefficient port handling in Chittagong while they faced problems in making air shipment, too, he said.

The industry leader added: geographical location can't be changed but 10 to 12 days can be saved by efficient port handling, which means a lot for exports.

"We need 60 to 70 days to make the shipment while our one of the main competitors, especially on the German market-Pakistan-makes the shipment within 30 days as they have their own raw materials," Mostafiz Uddin, managing director of Denim Expert Ltd, told the FE.

European buyers source basic items which have demands all through the years from Bangladesh due to GSP facility whereas there is high duty in the US, the BGMEA leader said.

Agreeing with woven makers, Bangladesh Textile Mills Association secretary Monsoor Ahmed said the backward-linkage industry for woven segment is not capable enough to meet the woven exporters' requirement for fabrics. Entrepreneurs are also discouraged from making fresh investment in woven backward-linkage segment for the risk factors related to availability of imported fabrics with duty-free facility, marginal profitability, scarcity of gas and skilled technical persons, he explained.

[email protected]