The government has raised the maximum wastage rate for raw materials used to produce apparel items, following strong disagreement by stakeholders on the rates fixed earlier.
Apparel manufacturers welcomed the decision by the Commerce Ministry, calling it “commendable,” but said there were opportunities to raise the rate further on some value-added products.
The Commerce Ministry had previously revised the maximum wastage rates on December 19 last year.
However, apparel manufacturers, including the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Bangladesh Garments Manufacturers and Exporters Association (BGMEA), expressed strong disagreement over the rates.
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They also sent a proposal to the ministry, requesting it to increase the maximum wastage rate to 40%.
Following this, representatives of the top two trade bodies of the apparel sector and the Commerce Ministry sat for a meeting on February 9 of this year.
The ministry then refixed the maximum wastage rate for the production of basic knit items — t-shirts, polo shirts, trousers, shorts, skirts, pajamas, and similar products — to 29%, up by 2% from the previous rate.
Apart from the basic items, the authorities also raised the wastage rate for sweaters, socks, jumpers, pullovers, cardigans, vests, gloves and similar items to 16%, which had been fixed at 4% on December 19.
For the first time, the authorities have also created separate categories and set a wastage rate for the above items.
The ministry has also refixed the highest rate to 32% on special items such as rompers, tank tops, dresses, gowns, hoodies, lingerie and similar products, which had been fixed at 30% in December.
Mohammad Hatem, executive chairman of the BKMEA, welcomed the refixed rates, saying the previously fixed ones were “disappointing and concerning.”
But he added that even the new rates have room for improvement for some items, especially for fashionable and value-added items where the wastage rates are higher due to different processing methods.
“Wastage rates are also high for products like flinched jackets. Fabrics made of 65% polyester and 35% cotton are used for these types of products,” he added.
For example, he said, if a striped design product is made of such fabric, the burnout results in the waste of almost half of the polyester or 32.5%.
“Entrepreneurs will be discouraged from producing value-added, diversified, and high-end products if the wastage rate is not increased for some more items,” he added.
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Shahidullah Azim, vice-president of the BGMEA, said they welcomed the new rates, terming them as “fine” for regular items.
“The entrepreneurs are less likely to face losses because of the new rate. However, the situation now is different from when the wastage rate was 16%,” he added.
According to the industry insiders, the government set the maximum 16% wastage rate for producing apparel items in 1998.
Then the government revised the maximum wastage rates to 27% for basic items, 30% for specialized items, and 4% for sweaters and socks on December 19 last year.