Duty free export of readymade garments (RMG) to India is rising rapidly with export volume reaching 0.3 million pieces over the period from early June to the middle of this month.

The Export Promotion Bureau (EPB) has already issued allocation letters to local exporters for exporting more than 2 million pieces of readymade garments out of the total export target of 8.0 million pieces for the current calendar year. Sources at the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) confirmed this, saying they are hopeful of achieving the targets by year-end.

Although, the export target has been set for the whole year, the delivery of the goods started in early June. But given the pace at which booking of the export orders have been taking place, one source said, exporters might even surpass the target set for the year.

"The Indian market has accepted apparels made in Bangladesh very positively," he said.

One EPB source said exporters are given allocation letters on the basis of first come first serve basis. He said Indian importers place L/Cs, preceded by clearance by the textile committees in Delhi and Kolkata. They also put the import on record once it crosses the Indian customs.

Here in Bangladesh, on receipt of a L/C an exporter would pass it on to EPB for issuance of the allocation letter. The agency also issues tariff rated quota certificate and the SAFTA certificate to exporters to facilitate export to India, which is duty free under a special offer of the Indian government.

About half a dozen big Indian business houses are taking the bulk of the exports, while more buying houses are in the process of placing orders with the local manufacturers, the sources informed.

A source at the ministry of commerce said the RMG export has been on a smooth rise without any impediment. He said both sides have set up mechanisms for implementing the bilateral trade scheme and addressing problems if any.

So far, the delivery is taking place to the satisfaction of both sides, he observed.

 

Source: The Daily Star
July 17, 2008

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The two-day long seminar on ready made garments (RMG )concluded in Dhaka yesterday with a vow to hike both the prices of the prime exportable item and workers' wages.

“We have proposed to international buyers to enhance the prices of products as the costs of production have risen significantly over the last few years,” Faisal Samad, a BGMEA (Bangladesh Garment Manufacturers and Exporters Association) and co-chairman of the seminar, told reporters.

The Multi-stakeholders Forum-Bangladesh (MFB), a co-partner of the global MFA Forum, organised the seminar on 'Building Responsible Competitiveness: Bangladesh in the Global Market Place' at a city hotel.

The issues like RMG workers' minimum wages, hike in the prices of garments and the country's macro-economic situation came up for discussion at the seminar.

MFA Forum was formed in 2005 after the expiry of the Multi-Fibre Arrangement (MFA) facilities by the end of 2004.

Despite the increase in production costs of around 15 percent in the last year intense competition in the sector meant producers had been unable to pass the higher costs on to buyers, the seminar was told.

The Export Promotion Bureau (EPB) data shows in fact, the prices of per unit garment have fallen by between 1.5 percent in the past 12 months.

Faisal Samad said the global MFA Forum and MFB will work on implementation of a proper purchasing practice by the international buyers.

In the seminar the workers' leaders and NGO representatives urged owners of RMG units and the government for more freedom of association and trade unionism to protect the workers' rights.

The demand for uninterrupted supply of gas and power to the garment factories to enhance productivity was also raised by the owners.

“If we cannot increase the productivity we will lose competitiveness. So we urged the government and the buyers to develop training system for the workers,” Samad said.

On the sideline of the seminar, Joyce Kortlandt, policy adviser for labour rights at the Oxfam International, a Britain based global NGO, said the government should allow more freedom of association to the workers and the wage should be increased for them to ensure better price level of Bangladesh made RMG products.

She said the brands should pay more prices for the Bangladesh made RMG products as the costs of production have really gone up over the last one year due to different reasons.

Lauding the food rationing system for the workers, she suggested that this system should be extended. She also said Oxfam can help in this regard if owners and the government want.

She said, “The prices of the locally made RMG products are generally very low where buyers, suppliers and NGOs should sit together to determine the price levels.”

Executives from a significant number of global brands in RMG business attended the seminar from home and abroad.

 

Source: The Daily Star
June 30, 2008

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The National Board of Revenue (NBR) will soon place a proposal to buy container scanners for Chittagong Seaport with the government's purchase committee for approval as the regulator intends to end a protracted course by July.

“The procurement proposal will be sent to the purchase committee and after approval we will finish the work by July,” NBR Chairman Muhammad Abdul Mazid told the news agency yesterday.

The NBR had moved years ago to upgrade the container-handling facilities in the country's prime seaport that handles more than 80 percent of the imports and exports, but the process was stalled over a bidding debacle.

The BNP-led four-party coalition initiated the scheme in 2003 after security agencies seized a huge quantity of arms and ammunition in the port area.

Initially, the Asian Development Bank was supposed to provide US$ 30.06 million in loan under an integrated scheme envisaging installation of the container scanners. Construction of a flyover was another important component of the project.

But a complex situation surfaced later.

The government then wanted to re-tender the installation work. But the ADB was not happy with the move and decided not to provide the fund.

The lending agency's decision has prompted the government to mobilise the fund from domestic sources.

 

Source: The Daily Star
June 29, 2008

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The local ready-made garment (RMG) exporters yesterday urged foreign buyers to follow ethical buying practices to make Bangladesh more competitive in the global market.

The RMG manufacturers and exporters made the plea to the buyers at a two-day Multi-stakeholders Forum-Bangladesh (MFB), which began in Dhaka.

The seminar started with the slogan 'Building Responsible Competitiveness: Bangladesh in the Global Market Place'.

At a press conference after the first day's session, President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Fazlul Hoque, who is also the chair of the MFB, said the continuing cuts in garment making charges by international buyers is hitting profitability of entrepreneurs.

“We want increased prices from the buyers' end, not only for our profit, but also for the workers. If we can make profit the wages of the workers will also increase to an extent,” Hoque said.

Despite the increase in production costs of around 15 percent in the last year intense competition in the sector meant producers had been unable to pass the higher costs on to buyers, Hoque said.

Mentioning the export data of Export Promotion Bureau (EPB) Hoque said in fact unit garment prices have fallen by between 1.5 percent in the past 12 months.

Paul Dearman, trading law and technical manager of Tesco, said the negotiation in sales deal should be very fair and transparent. He said nobody is dictating what the price should be.

Education Secretary of International Textile, Garment and Leather Workers' Federation Steve Grinter and Maritha Lorentzon from H & M among others were present at the press conference.

The meeting brings together public institutions, labour and civil society organisations and businesses.

 

Source: The Daily Star
June 29, 2008

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A new textile policy will be placed before the council of advisers next week with a special focus on challenges stemming from withdrawal of safeguard measures on Chinese exports, a senior government official said on Monday.

"The new policy, Textile Policy 2008, has recommended measures to maintain competitiveness of Bangladesh's apparel products in the global market as the ceiling on exports from China to EU has expired, while the export restriction from China to US will be lifted by the end of this year," said the official at Textile Strategic Management Unit (TSMU).

The safeguard measures were introduced in EU and the US in 2005 following the final phasing out of multi-fibre arrangement for garment and textile exports to minimise trade gap with China.

The official also said the new textile policy will recommend for installing backward linkage industries to enhance the usages of local raw materials for the export oriented RMG products.

At present, country's primary textile sector (PTS) supplies 80 percent of raw materials for knitwear sector and 35 percent for the woven sector.

“We have strongly suggested for setting up Effluent Treatment Plants (ETPs) in the factories,” he said, adding that TSMU suggested the government and businessmen should make businesses more environmental friendly as this is one of the major determinants for future business growth of the country

In the new textile policy the TSMU recommended for 10 percent cash incentives to the exporters of RMG products instead of existing 5 percent, he said.

The TSMU official said the unit recommended for measures to cope with the withdrawal of safeguard measures against China.

The safeguard measures set against China have already been withdrawn from the EU market in January of this year while such measures against China will be withdrawn from US market in 1st of January of next year.

“We have also recommended some measures to enhance the competitiveness of RMG products in the global market through aggressive marketing strategies,” TSMU official said.

The country's textile policy, which has not been changed since its latest adoption in 1995, has proved to be inadequate to fulfill the demands of the current business trends.

The government has responded to this by making amendments to the existing textile policy with recommendations from trade bodies like BTMA, BKMEA and BGMEA, the TSMU official said.

TSMU, a project under the Ministry of Textiles and Jute, has been given the responsibility to prepare the textile policy.

The President of Bangladesh Textile Mills Association (BTMA) Abdul Hai Sarker said although they urged the government for several times earlier to formulate the new textile policy with emphasis on the changing global market scenario, the government did not give any heed.

“Surely, formulation of the new textile policy will be very beneficial for the RMG sector as the business trends in the sector have changed a lot over the last 13 years since 1995,” Sarker said, adding that the change should have come much earlier.

“The new policy is, somewhat, coming late,” he said.

A senior official of the BKMEA said earlier they suggested that the government should make the policy investment friendly in areas such as dyeing and chemical manufacturing to reduce import dependency for those items.

“We also recommended for measures to improve productivity and ensure compliance, both socially and environmentally,” he said.

 

Source: The Daily Star
June 25, 2008

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The decision of fixing the baseline prices of exportable knitwear items will be taken on July 5, as the leaders of the manufacturers are conducting an extensive survey at factory level to know the production costs.

The knitwear manufacturers have been working on the issue of fixing the baseline prices of some basic knitwear items over the last few months, as some factory owners are selling their products with a minimum profit margin creating an uneven competition.

The knitwear exporters are trying to set the baseline prices with the aim to increase the prices of exportable items and enhance workers' wages, said Fazlul Hoque, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

The fixation of the baseline prices of some basic knitwear items will prevent the exporters from selling the items with marginal profit, as they will not be able to sell the items below the baseline prices, industry insiders said.

Hoque said they will hold an extra-ordinary general meeting (EGM) on July 5 to take decision on baseline price fixation of basic knitwear items.

Another important meeting of a specialised sub-committee of the association on price fixation will be held today to discuss the progress in the price fixation matter.

At present, BKMEA is conducting the survey at factory level to know the actual costs of production of per unit of basic knitwear item, as the selling prices will be fixed on the basis of production and other costs.

Talking to The Daily Star, Hoque said they have decided to conduct the survey at 40 to 50 big factories across the country to take the decision.

The BKMEA has already conducted such survey at more than 25 factories to know the production costs of items, Hoque said.

Despite increases in costs of around 15 percent and price fall of the item by 1-2 percent in the last year, intense competition in the sector has meant producers have been unable to pass the higher costs on to buyers.

According to the industry, the erratic gas and power supply, higher freight charges both in local and international markets, the yarn price hike, implementation of the minimum wage for workers, higher transport costs and higher prices of capital machinery were the main reasons for the higher cost of doing business over the last year.

“Sometimes many foreign buyers take advantage of our unhealthy local competition,” Hoque said.

 

Source: The Daily Star
June 19, 2008

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A file photo shows workers busy at a readymade garment factory. As per figures from two of the country's major trade associations the RMG sector is faced with a 25 percent shortfall of skilled workers and it will take several years to set up courses and institutions to provide the necessary human resources. Photo: STAR

The ready-made garment industry, the sector that accounts for 75 percent of the country's exports, is facing an acute shortage of skilled labour, with industry leaders warning the problem will seriously hamper future growth.

According to figures from two of the country's major trade associations the sector is now facing a 25 percent shortfall of skilled workers and it will take several years to set up courses and institutions to provide the necessary human resources.

The alarming figure was revealed in a study by the Bangladesh Knitwear Manufactures and Exporters Association (BKMEA) and backed up by the Bangladesh Garment Manufactures and Exporters Association (BGMEA).

According to factory owners the dearth of skilled workers is due to several factors. They many experienced women workers quit the factories after they marry in order to raise their families. Women make up 80 percent of the RMG workforce.

Skilled men on the other hand often use their solid employment records as a springboard to work abroad.

Labour leader said the willingness of skilled workers to leave the trade reflected the lack of social recognition of garment jobs, low wages and poor working conditions.

Another factor causing the shortage has been the rapid growth of the industry. In the 10 months to April 30th exports of RMG products were up 15 percent as opposed to what it has been a year earlier and factory owners are reporting continued robust orders.

Recently, owners of Noman Group, Standard Group, Nassa Group and Viyellatex Group, few of the country's largest RMG exporters, announced major recruitment drives in order to hit export targets. All have complained that they are not getting skilled manpower for running their factories.

Nurul Islam, Managing Director and Chairman of Noman Group, said the company was seeking to employ an additional 8,000 staff. Although many of these position are for non-skilled and semi-skilled workers many of the key roles need to be filled by skilled workers.

"I am really feeling the shortage of skilled manpower in the local labour market," Nurul Islam said.

"I have had to hire highly skilled workers from Pakistan and the Philippines to run my factories," he said.

President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Anwar-Ul-Alam Chowdhury Parvez said the dropout rate of garment workers is 35 percent a year.

He said the dropout rate is higher in the case of female workers as they go back to their family life after marriage. At present, of the total number of 2.4 million garment workers 80 percent are women workers, he said.

Against this backdrop both BGMEA and BKMEA have set up several training centres

The BGMEA runs 6 training centres in Dhaka, Gaibandha, Bogra and other districts to train up to 120 workers per month in each centre.

“We are going to set up three more training centres in Mymensingh, Sirajganj and Tangail this month to train more workers for the factories,” Parvez said.

Parvez said they have a target of exporting RMG products worth US$25 billion a year by 2013, but this will only be possible if skilled manpower, political stability and smooth supply of gas and power in the factories can be secured.

BKMEA opened a centre in Rangpur last March to train up 120 workers a month and is looking to set up additional centres at Savar.

 

Source: The Daily Star
June 14, 2008

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Bangladesh’s knitwear export continues to grow

The sharp rebound in knitwear exports shows no signs of letting up, with the weak dollar, peaceful political environment and aggressive marketing helping the sector to exceed export targets.

In April exports of knitwear reached $479 million, shot up 47 percent on the same month a year earlier. In the period July-April knitwear exports totaled $4.393 billion, up 20 percent on a year earlier, according to figures from the Export Promotion Bureau.

Knitwear is the country's largest single export item and together with woven products accounts for more than 75 percent of the country's export earnings.

The surge comes following a relatively weak 2006-7 when Ready Made Garment exports failed to reach targets partly as a result of prolonged periods of political and industrial unrest. Things got worse in July, the first month of the 2007-8 fiscal year when the impact of the political disruption earlier in 2007 started to be felt by exporters.

Exports started picking up again from September 2007 due to the restoration of political calm and a sharp reduction in the levels of labour unrest following the implementation of the minimum wage for the garment workers, said a major exporter yesterday.

Another manufacturer pointed to the success in marketing Bangladeshi products to buyers from the US, but also to the new markets that are developing such as Poland, Russia and Uzbekistan.

But key to the success has been the weakness of the US dollar against the currencies of many of Bangladesh's main rivals, China, India and Vietnam.

The export of woven products has also shown a strong improvement since September and in April reached $415m, up 34 percent on the same month a year earlier.

However woven exports now lag knitwear as the latter is able to take advantage of domestically produced inputs such as local yarn. This cuts lead times and makes producers more attractive to international buyers.

In July-April period woven garment products worth $4186 million were exported, up 10 percent on a year earlier.

President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Anwar-Ul-Alam Chowdhury Parvez said buyers were coming back to Bangladesh to import low priced basic garment items.

The restoration of the political stability had allowed foreign buyers to regain confidence in Bangladesh, he said.

“Another thing is that there was no lean period of sweater production for Bangladesh last year. Generally December-March is a lean period, but this year there was no such lean period due to the lengthy winter season,” Parvez said.

He said the country will maintain 20 percent export growth of RMG products up to 2013 provided that there is no political unrest and that a smooth supply of gas and power are provided.

At the end of the fiscal the woven sector may hardly have a shortfall by 1.5 percent against the government set woven export target, as the sector is regaining vibrantly.

 

Source: The Daily Star
June 11, 2008

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Viyellatex Group, a leading apparel manufacturer and exporter, installed the expensive Enterprise Resources Planning (ERP) software yesterday for the first time in the country's textile sector to monitor real time production.

“The import price of the software is US$1 million and it will take another half a million dollars to install it within the next six months,” said Chairman and Managing Director of the Viyellatex Group K M Rezaul Hasanat.

The group, based in Gazipur will start the installation of the ERP Software imported from Germany's SAP, to know the real time data of the business and production in the factories.

He said six software experts from India and Sri Lanka have already arrived in Bangladesh to install the software in the Viyellatex Group, which is going to fulfill its export target of $125 million in 2007-08 fiscal year.

The installation of the ERP will help to improve alignment of the company's strategies and operations enhancing productivity, as all live data will be installed in the server.

He said ERP will also help minimise the waste of the company as the real time data will help to make quick decisions.

At present, multinational companies operating in Bangladesh like BOC and Novartis have been using this expensive ERP Software in their businesses.