Bangladesh’s home textile share is rising in global market
September 22, 2018
Bangladesh is emerging as one of the leaders in global home textile production and export arena.
Abir Basak
Home textile is one of the first line export sector in Bangladesh also known as decorative textile. Due to quality and diversified range of products, the country’s production of the home textile is being increased day by day. In the mid-nineties, local industry entrepreneurs concentrated in making home textiles, while Bangladesh entered the export market in the 1980s with knit items. This sector, initially has seen losses, has gradually started to return to the growth trend over time. In this fiscal year, the export revenues of this sector can touch billions of dollars – that is the expectation from the concerned people.
Figure 1: Home textile items are displayed at Zaber & Zubair Fabrics Ltd.
Home textile factories in Bangladesh are very less compared to woven or knit garments. 25-30 companies in Dhaka, Gazipur and Chittagong arena are producing home textile items. However, Zaber & Zubair Fabrics, Mosharraf Group, Saad Musa Group, Alltex, ACS Textile, Apex Weaving, Regent, JK Group, Classical Home etc. have established as strong exporters. Among them, Noman Group’s Zaber & Zubair Fabrics is the pioneer home textile marketer in Bangladesh.
In recent times, many entrepreneurs are showing keen interest and they are coming forward to invest in this sector. Big groups are extending their manufacturing plants for home textile. Bangladesh exports different types of home textile products including bed sheets, bedspreads, pillow, pillow covers, cotton table napkins, furnishing fabrics, fancy drapes, window and door curtains, cushion, cushion covers, carpets, table covers, kitchen linen (also kitchen towels and mittens etc.), mattress covers, bath linen, and other home furnishings.
Global home textile market
The home textile market has registered a robust growth worldwide and experts say the demand is expected to reach 160+ billion dollars by 2025. The United States and EU countries import a lion’s share of home textile products, which is 60 to 70 percent of the global market.
The primary exporters of these products are China, India, Pakistan, Turkey and Bangladeshi entrepreneurs. In 2016, global textile and apparel trade stood at US$ 743 billion, while the share of other categories such as fiber, yarn and fabric has decreased. Home textile has maintained its share of 6% over the past five years.
Figure 2: Home textile items are displayed at Mosharraf Group.
According to Technavio, a research firm, the global home textiles trade is valued at US$ 118 billion in 2017 and will reach US$ 131.5 billion by 2020 and US$ 180 billion by the end of 2025, growing at a CAGR of 3.5% or more during 2018-2025. Carpets were the top traded category valued at US$ 14 billion. While table linen, furnishing and carpets have been growing at a negative CAGR of 5%, 2% and 1% respectively, bath/kitchen linen has shown the maximum positive CAGR of 3% and an increase in the share of 1% too.
The top 10 importing nations contribute to about 80% of the home textiles market. EU-28 is the largest market for home textiles with a share of 36% and import value of $17 billion. This is followed by the US with an import value of $11 billion and a share of 24%. Japan, Canada, Australia, UAE, Saudi Arabia, Russia and Thailand constitute the top markets for global home textiles.
Thailand has emerged as a market for home textiles in the last five years with a CAGR of 22% but at a small base value. Japan is the third largest market for home textiles - but is declining with a CAGR of 6% over a period of five years due to the economic downturn and demographic issues. Russia, facing similar issues, has shown a downfall of 18%, thus losing ranks in the list of major markets but is expecting some growth at some point going forward.
The booming Bangladeshi trade
Just a decade ago, buyers thought that home textile products are only produced in China, India, Pakistan and Turkey. However, the situation has changed; the name of Bangladesh has now been added with these countries.
The growth of home textiles consumed locally is also inevitable in the Bangladeshi market as customers desire unique interior designs showcasing their homes and offices, and do not hesitate to spend in this sector.
Bed and bath linen are the most popular segments and contribute to two-thirds of the total home textiles market while kitchen linen, curtains, upholstery and carpets/rugs make up for the rest of the share.
Figure 3: Mosharraf Group also has a range of unique and exclusive home textile products.
According to the Bangladesh Terry Towel & Linen Manufacturers Exporters Association (BTTLMEA) and Export Promotion Bureau (EPB), Bangladesh earned US$ 150 million by exporting home textile products in the FY 2004-05. In addition, this export income has been increased to about US$ 753.01 million in the FY 2015-2016. In the middle years, the export growth had fluctuated, also indicated to earn better revenue as well. Exports of Bangladesh touched the highest revenue of US$ 906.07 million in the 2011-12 fiscal years. EPB has set an export target of US$ 900 million for the home textile sector in the current fiscal year.
Figure 4: Bangladesh home textile exports in million US$. (source: BTTLMEA)
The scenario of Bangladesh’s rival countries
China, Pakistan, India and Turkey are the main competitors of Bangladesh in this scenario where Bangladesh is in 5th position. Vietnam, Taiwan, Cambodia or other manufacturers cannot reach at the level of Bangladesh yet but their gains are remarkable. In 2016, more than $26.86 billion worth of home textiles were imported from outside the EU, according to the data from the European Apparel and Textile Confederation, Euratex. Of the sum, China accounted for 33%, Pakistan 25%, India 16%, and Turkey 11%. Bangladesh’s share was 7-8%.
Figure 5: Contribution (%) of different countries in the global home textile market. (source: Euratex)
According to the South China Morning Post & China Home Textile Association, China exports for home textile items in the world is now valued at around US$ 18 Billion and is expected to grow to a minimum of US$ 32 Billion within the next four years.
Cotton cultivator
The Indian domestic consumption of home textiles contribute US$ 4.8 Billion according to 'statistics', a research firm. Considering the advantages of raw material base, design content, skilled manpower - the home textile industry in India can achieve higher levels of growth than the present.
Pakistan already remains apex in this sector compared to Bangladesh due to having its own cotton and GSP+ facilities. Besides Pakistan government gives some extra subsidy packages for lifting up the industry. Technological advancement brings the country’s revenue up to US$ 6.2 Billion in 2016-17 according to
hometextiletoday.com. On the other hand, the implementation of the China-Pakistan Economic Corridor, the Chinese industrial zone Xinjiang is going to join the Arabian Sea through Pakistan. This means a China-Pakistan export trade is going to be more dynamic.
The Turkish home textile industry is the world’s fourth-largest supplier and the EU’s second largest supplier. As a result, at the end of 2017, the total exports of home textile is recorded as USD 3.6 billion out of USD 25 billion of their apparels & RMG exports, according to Turkish Economic Ministry. To accelerate their business every year Turkey arranges trade fair on home textiles named ‘Evteks’ & ‘Hometex’.
The reasons behind the upcoming lead of Bangladesh
Experts believe that Bangladesh’s position in this sector will reach in the top rankings soon.
Investments in research
New investments in fabrics and garments manufacturing are playing a key role in establishing Bangladesh’s dominance in the US and EU markets. However, manufacturers are also investing in research and development of high-end products, helping them get a better price. Meanwhile, improvement of the safety standard in the apparel industry has also drawn the attention of more global buyers.
Quality and latest technology
Today the Bangladeshi home textile industry is aware of the trend in international markets towards the increasing demand for healthier and more environmentally friendly products and quickly adapts itself to developments in legal and technical regulations. Many manufacturers in the sector are able to produce with quality and environmental management systems, a key EU requirement. Buyers always want quality fabrics when it comes to home textiles products. To manufacture quality fabrics, the latest manufacturing technology is a must for any company.
Some renowned world manufacturers have also started making home textile products in natural fabrics such as soy and bamboo fibre along with silk, polyester, and many others. Bangladesh should also afford more focus on the production of newer diversified products rather than traditional quality and design.
Bangladesh still cannot reach the level of China or Pakistan in this sector, but buyers are naturally starting vote with their orders in their confidence on Bangladesh' manufacturing capabilities in other apparel areas.
Design and Innovation
In a rapidly changing world, the home decoration fabrics field is very sensitive to all changes in fashion trend. That is why the creation of collections with innovative and modern designs and motifs is essential. Bangladeshi home textile manufacturers are very conscious about fashion creation and design, which enables them to gain a special place in international markets. New and modern designs and unique motifs in this specialized sector, created by Bangladeshi intellectual designers, keep a finger on the pulse of world home decoration fashion and meet tastes and preferences.
Figure 6: To cope up with the sensitive nature of the home decorative market, Bangladeshi entrepreneur’s has come up with creativity and innovation.
Although Bangladesh depends more on buyers’ provided OEM design since long, some manufacturing houses have created their own design studios to develop this lagging sector. Industry insiders say, buyers are choosing manufacturer’s design gradually such as 2 or 3 own designs are being selected out of 10 which was stood at zero in previous. Hopefully, it’s a positive sign to uplift the sector and earn revenue growth as well. If Bangladesh can make its footing stronger in developing design and innovation, then the sky is the limit for the local home textile industry.
Sustainable growth
It has to be believed that Bangladesh now considers the maximum sustainable environment to make products. Factories are working to produce numerous products through the sustainable practices, which are being appreciated by the buyers. Therefore, this culture will keep ahead to the home textile business of the country.
Government Support
Bangladesh has a stable and supportive government, which has launched various support schemes for textile and apparel manufacturers to make them globally competitive. The scheme's targets are technology upgradation, infrastructure development, to develop more EPZ zones, export promotion etc.
Various ministries- including industry, commercial, finance, jute & textiles, planning- have also announced their textile policies aimed at attracting investments in the country.
The Bangladeshi government has made focused efforts in improving economic systems to attract foreign investors, enhance international trade, and increase transparency. As a result, Foreign Direct Investment (FDI) inflows into Bangladesh in 2017, 2016 & 2015 calendar year were recorded to be US$ 215 crore, US$ 233 crore & US$ 223 crore respectively, according to United Nation’s Trade and Development Organization named ‘The United Nation Conference on Trade and Development (UNCTAD).
Remaining difficulties
Traders say that there was no expansion of the home textile market since last few years as per expectation. Currently, there is a lot of work orders coming from abroad, but it is not possible to meet them with present production capacity. However, if uninterrupted gas-power and low-interest bank loans continue being available, then it will be possible to easily increase the export earnings in this sector within the next five years.
In Bangladesh, although fiber-yarn, dyes or denim product exhibitions are arranged on a regular basis, a separate exhibition solely for home textile products has not been organized yet. There is no alternative to organize such a fair in this country to showcase local products and to convince the world’s small and large buyers to invest in Bangladesh products.
Some of Europe and America’s major retailing companies sourcing home textile products from Bangladesh include IKEA, Carrefour, ASDA, Littlewood, Maurice Phillips, Wal-Mart and Redcats. As demand is increasing, domestic producers are also increasing their product range, and they’re going to expand industrial output.
However, the price of cotton and its continuous supply for the home textile sector are the biggest issue, said the entrepreneurs. Bangladesh is far behind here than China, India and Pakistan. They can control 40 to 50 percent production costs easily themselves because of their own cotton supply.
Bangladesh has to depend on the fluctuations in the price of the world market. Because Bangladesh can meet only 2 percent of the domestic demand by cotton. The remaining 98 percent is imported. In addition, despite having huge potential in home textile, Bangladesh is slightly unable to expand its market share in the European Union because of duty benefits extended to Pakistan, a cotton grower.
Md. Jahangir Alam, Deputy General Manager (Production) of Zaber & Zubair Fabrics Ltd (Noman Group) discussed this matter with 'Textile Today', “As cotton is a seasonal product, we have to import cotton for five to six months output at the same time. It ties down a huge amount of money. Higher interest rates are accounted for bank loans. Moreover, to import cotton, 5% import shipping cost is another factor. Due to these reasons, the price of our products naturally increases.”
But, Mr. Alam does not simply see the problem of cotton as the main reason. He added, “If we get gas and electricity according to demand, it will never create a barrier. In many factories, it seems huge scarcity of gas pressure almost at the half-time of batch production. If the government reduces the interest rates of bank loans, improves communication and port competency, then it is believed a revolution can happen in this sector.”
Addressing the importance of arranging and participating in international fairs, Md. Jahangir Alam said that home textile product’s exhibition (HEIMTEXTIL) is organized in Germany, China, and Turkey. By participating in this type of exhibition, it is often understood how backward our products are and where we need to develop.
“In Bangladesh, though fiber-yarn, dyes or denim product’s exhibitions are arranged, but only a separate exhibition for home textile products has not been organized yet. To showcase our products and to convince the world’s small and big buyers to invest in Bangladesh, there is no alternative to organize such fair in this country,” he continued.
Bangladesh Terry Towel & Linen Manufacturers Exporters Association (BTTLMEA) has given some suggestions to the government for the promotion of home textile sector. Their proposal asks everyone to show their interest to work with GSP+ instead of GSP so that Bangladesh can increase her ability to survive in export trade with competitor countries-China, Pakistan, Turkey, and India.
Conclusion
Bangladesh’s home textile business has a bright future. However, updated thinking and sufficient research opportunities are needed. New entrepreneurs and investors have to come forward in the sector. At the same time, continuous collaboration by the government and appropriate policy support can boost the earnings in this industrial sector.
