“Bangladesh is determined to achieve US $ 100 billion RMG export turnover” – Mohd. Kamal Uddin
Team Apparel Resources (AR) discusses with Mohammed Kamal Uddin, Chairman of BGMEA Standing Committee on Trade Fair, as to how the important pillars – the Industry, Government and the Export Houses – plan to work in cohesion to achieve Bangladesh’s target of US $ 100 billion by 2030.
by
Nitish Varshney 09-August-2022 | 9 mins read
US $ 100 billion is what Bangladesh is aiming to achieve till 2030, the journey of which requires moving beyond the expansion and volume growth. Bangladesh needs to secure an average growth rate of CAGR 12.09 per cent in next 8 years, whereas the country only managed to grow by around 7 per cent in the last decade. Therefore, the roadmap to reach US $ 100 billion needs a definitive game plan.
Team Apparel Resources (AR) discussed the same with
Mohammed Kamal Uddin, Chairman of BGMEA Standing Committee on Trade Fair, as to how the important pillars – the Industry, Government and the Export Houses – plan to work in cohesion to achieve the set target. Here are some excerpts.
AR: How real is US $ 100 billion RMG export target set by Bangladesh?
Kamal Uddin: It is achievable. Bangladesh has proved its worth during the pandemic time and it is determined to do it again. The growth of Bangladesh’s RMG industry has been phenomenal in last two decades. After a shortfall during the pandemic, the grit, determination and resilience of the Bangladesh’s factories have taken our RMG exports to US $ 35.80 billion in 2021 – the HIGHEST ever in any calendar year. In January to June 2022 (H1) period, we have achieved US $ 22.70 billion export revenue which is 43 per cent greater than the export values fetched during H1 ’21. Since most of the factories are booked for the remaining period of 2022, the predictions are that the country will conclude the calendar year with US $ 44-45 billion worth of RMG export turnover.
As exciting as it seems, Bangladesh isn’t stopping here! Vibes are positive because one can see the enhanced synergies between Bangladesh and global apparel buyers in recent times, especially when businesses are moving away from China; Ethiopia is facing sanctions from the USA; Myanmar, Sri Lanka and Pakistan are facing political and economic turmoil. So, Bangladesh has become the preferred destination for the buyers and this will help us take our RMG exports to US $ 100 billion.
AR: To reach this target, Bangladesh needs to earn US $ 8.34 billion revenues every month for 12 months. However, in the peak season like FY ’22 and in the beginning of FY ’23, the average monthly earnings have been US $ 3.50 billion! How do you think this earning can be increased in the next 8 years?
Kamal Uddin: In last couple of months, we are consistently exporting apparels worth more than US $ 4 billion. I agree that it’s not that easy to reach the target; hence we are working on various fronts aggressively. Product diversification, fibre diversification, market diversification and sustainability are the utmost pillars for us to focus on. There is a huge demand for non-cotton apparels worldwide such as MMF-based apparels as the share of such apparels in the global trade is around 75 per cent. The potential of Bangladesh as a sourcing country for value-added sportswear, activewear, outerwear, swimwear and workwear is being recognised by global buyers now who once considered us a hub only for basic cotton garments.
This is why we are looking at Indian market a lot to collaborate with Indian vendors since we do not have expertise in developing such type of fabrics and fibres that India has. Together we can grab the larger market share in the MMF-based apparels.
Automation is another thing that we are opting for. One can see our drastically upgraded factories in last 5, 6 years on technology front as tech-integration is happening in cutting rooms, shopfloors, finishing as well as washing units. This is helping us to reduce our cost and keep productivity high. Time of operations has come down significantly; hence lead time has reduced which is helping us to increase our speed to market.
In addition to this, our Government has made around 100 economic zones and hence our capacities are increasing to accommodate more orders. BGMEA is also stepping in to showcase our products in different countries and make ‘Made in Bangladesh’ a value brand. We have recently come back from a very successful Techtextil fair in Germany where BGMEA and some owners from reputed garment export houses saw positive response for our products. We are making value-added products as much as we can to reach our target.
AR: Skilled labour will be another issue. Bangladesh would need another 6 million skilled workforce, including the mid-management, to achieve the target from the current number of 4.5 million. What are your plans to prepare such a massive workforce in a comparatively short span of time?
Kamal Uddin: To address the manpower issue, BGMEA University of Fashion & Technology (BUFT) has been working aggressively to find talents for our RMG industry. Since the early years of its inception, the university has provided a firm foundation in apparel, textile, knitting, fashion and business education in the domains of manufacturing technology, engineering, design and management. A lot of young people are opting for different courses to get into RMG industry and this will suffice the need of mid-level skilled professionals. BGMEA has been selecting thousands of workers from different clusters who are being trained further in our university. This helps us create better middle management in our workforce. Interestingly, most of these people are the family members of the workers already working in the country’s factories so, unlike other countries, we don’t face a lack of interest of the next-gen in our garment industry rather they are opting for higher education within apparel and textile regime. When it comes to workers, each and every factory has their own training centre in which BGMEA is helping to provide fresh workers training on the much required modules.
AR: Bangladesh’s RMG industry does have majorly home-grown entrepreneurs. Do you think inviting FDI will also be a big boost to achieve the target?
Kamal Uddin: Bangladesh is certainly looking at an increased amount of FDI in RMG sector. As said earlier, we have skill sets in garmenting but we do not have the same expertise in textiles. We are able to fulfil just 30 per cent of raw material requirements from domestic supplies, rest 70 per cent comes from overseas markets. This gap can be filled if Chinese, Korean and Indian companies set up fabric and textile units in our country. This investment will help us to reduce our transit/lead time and this is important as, today, the buyers do not want to give 100-120 days to a factory for their order shipment. They are trying to mobilize their investment and want orders to be dispatched within 60 days. To fetch FDI, BGMEA is working upfront. Recently, our team went to Surat – a dominant hub for MMF and cotton fabrics – and we talked about investment opportunities with the fabric manufacturers there. We assured them that, in Bangladesh, over US $ 40 billion market is ready for them to capture and another US $ 50-60 billion opportunity is being created. Our PM has also announced building 100 EPZs; hence FDI is wholeheartedly welcome. I reiterate that, with India, we have no competition but rather we want to collaborate.