Global sellers of textile and garment machinery express optimism regarding their businesses being reinvigorated in Bangladesh, as the worldwide clothing supply chain rebounds from the sluggish trends observed in 2023.
The slowdown in the sales of clothing items last year, mostly because of decreased demand resulting from higher inflationary pressure due to the severe impacts of Covid-19 and the Russia-Ukraine war, is now witnessing a turnaround.
In recent months, international clothing retailers and brands have been actively making inquiries to place work orders with local garment factories, leading to increased business prospects. The surge in garment exports correlates directly with a rise in sales of textile and garment machinery.
At the 18th Dhaka Textile and Garment (DTG) machinery exhibition, held at the International Convention City, Bashundhara in Dhaka, a group of global textile and garment machinery sellers, along with their local agents, shared insights with Dhaka Tribune. In 2023, machinery sales experienced a 50% decline to 8.5 million euros. However, in 2024, the sales are anticipated to rebound to 20 million euros, as local garment and textile millers are actively sending inquiries.
Abu Taleb Bhuiyan (Munna), the CEO of Best Tex International and an agent for six international companies specializing in denim textile and garment machinery, mentioned that his machinery sales were 14 million euros in 2022. Despite the challenging global business environment, Bangladesh stands out as a beacon of hope, with growing business prospects anticipated for the current year.
Hasan Bozkurt from the export department of the Turkish company Karmak affirmed the positive outlook for business in Bangladesh. While global business conditions remain subdued, Bangladesh presents promising growth opportunities. Bozkurt, who has been selling machinery in Bangladesh for the past 10 years, reported an increase in sales from 20 pieces last year to an expected 50 machinery sales this year, particularly in the washing and dyeing segments.
Hasan’s colleague Kazi Tawfiq-uz-Zaman also local garment and textile manufacturers are mainly looking for sustainable machinery which consumes low water and is energy efficient.
Previously, more than 120 litres of water was required to wash a kilogram of denim fabrics but now his company’s machinery can wash with 30 litres or even lower, he said.
The textile sector had little investment over the last year because of lower demand, said Md Harun-ur Rashid, managing director of Textile Associates Limited, the local agent of Swiss company Rieter.
“We are hopeful that the global supply chain will turn around this year,” Rashid said, adding the business was normal up to mid-2022. But the last year was not good as the demand for clothing items fell globally, he added.
Md Tanzilur Rahman, senior assistant manager of Pacific Associates Ltd said the business situation is not bad here as it is rebounding gradually. Last year his company’s sales target was $80 million but could achieve $38 million. Before Covid-19 his company could sell machinery worth $78 million, he said.
In 2024 the target of his company in Bangladesh was $74million as the inquiries increased and the business was growing. He sells machinery from Germany, Italy, Spain, China, Hong Kong and Japan.
Indonesia-based Asia Pacific Rayon (APR) Vice President Tapan Sannigrahi said that in just five years, Bangladesh has become APR's second-largest market outside Indonesia, holding a 55% share in Bangladesh's viscose fiber market.
“We are actively introducing Lyocell as a sustainable alternative,” he added, saying that the textile sector is an important contributor to a growing Bangladesh economy.
Mohammad Ali Khokon, president of Bangladesh Textile Mills Association (BTMA) at a sideline discussion on innovation said that they accepted the hike of gas price by 178% in 2023 as they were assured to get uninterrupted supply, but the authority failed to supply the gas.
President of BTMA, Mohammad Ali Khokom, acknowledged the 178% increase in gas prices in 2023, emphasizing that they accepted the hike with the assurance of receiving an uninterrupted gas supply. However, the authorities failed to fulfill this commitment, prompting Khokom to urge stricter actions against loan defaulters, whom he referred to as "dacoits."
He criticized these loans as clear instances of looting, asserting that true entrepreneurs are suffering due to the actions of these individuals. Khokom called for concerted efforts to attract both local and foreign investment, while also encouraging potential entrepreneurs to contribute to new investments in the textile sector.
During the inauguration, Salman F Rahman, the private industry and investment adviser to the prime minister, acknowledged the anticipated challenges for businesses in 2024. He highlighted the impact of global economic turmoil and the rise in interest rates in major destinations like the US on the country's export sector.
Rahman assured that the government is actively working to create a favorable atmosphere for the industrial sector. Addressing gas issues, he mentioned ongoing efforts to address the problem, emphasizing that the gas price in Bangladesh remains lower than that of competitors. He discussed the establishment of an LNG terminal to resolve the issue, acknowledging the past mistake of selling gas at a very cheap rate.
Regarding the cut in export subsidies, Rahman suggested discussions with the finance minister to explore opportunities for reform. He advocated for gradually phasing out the culture of subsidies, emphasizing the importance of focusing on logistics, product quality, and market diversification to enhance competitiveness globally. He also highlighted the need to expand the tax net and reduce the tax burden on existing taxpayers, pointing out that the Tax-GDP ratio in Bangladesh is lower than that of neighboring countries.
Other speakers at the event included BKMEA Vice-President Mohammad Hatem, FBCCI Senior Vice President Amin Helaly, and various business and expo leaders. The 4-day exhibition, jointly organized by BTMA, Chan Chao International Company Ltd, and Yorkers Trade & Marketing Services Co Ltd, features 1,100 exhibitors from 33 countries showcasing machinery in 1,600 booths.