According to data from the Export Promotion Bureau (EPB), in the fiscal year 2017-18, Bangladesh earned $3.67 billion, which is 9.32% higher compared to the $3.36 billion it earned in FY16-17
Bangladesh’s export earnings from sweater products has grown by 9% to $3.67 billion in the last fiscal year, thanks to technological upgrades.
According to data from the Export Promotion Bureau (EPB), in the fiscal year 2017-18, Bangladesh earned $3.67 billion, which is 9.32% higher compared to the $3.36 billion it earned in FY16-17.
Sweaters, a sub-sector of ready-made garments, contributed nearly 12% to the total RMG exports of $30.61 billion of FY17-18.
Speaking to the Dhaka Tribune, people involved in the industry attributed the expanding winter season in the western hemisphere as well as technological upgrades in the manufacture of sweaters for the rise in export earnings.
Additionally, there have been favourable conditions in the country such as political stability and low cost funds, though these are yet to implemented, sector people said.
The export growth could be even greater if there was enough logistical support at ports and in the transportation sector, they added.
They also expressed hope that these earnings will contribute $8 billion annually by 2021, if the government provides proper infrastructure and policy support.
“Sweater manufacturers have upgraded machinery from manual to automatic, which has increased production capacity as well as worker productivity,” Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Vice President Mohammed Nasir told the Dhaka Tribune.
In recent years, the winter season in the western hemisphere has expanded due to global climate change. This has had a positive impact on Bangladeshi sweater exports, as the demand for winter clothing has increased. As a result, export earnings have shown better performance compared to the previous year, said the BGMEA leader.
Opportunity to grow
There is a huge scope to expand export earnings as Bangladesh has more production capacity than the existing demand. Also, China’s business shifting is a great opportunity for Bangladesh to grab more of the market share of sweaters.
Due to rise in workers’ wages in China, manufacturers are shifting their businesses to include higher-end products, and buyers are searching for new sourcing destinations. As Bangladesh offers quality products at a reasonable price, this will create an opportunity for the country’s manufactures, Exporters Association of Bangladesh (EAB) president Abdus Salam Murshedy told the Dhaka Tribune.
In taking advantage of China’s shift, manufacturers have to move diversified products and upgraded technology, said Salam, a former president of BGMEA.
The government has to take measures in exploring new markets, while manufacturers have to focus on alternative products, he added.
Price cut a big concern
As claimed by manufacturers, global buyers are offering lower prices for products, which is a concern for exporters. On the other hand, the cost of production has gone up.
To meet global demands, manufacturers have made investments in automation, which pushed the production cost up. However, the price of sweaters did not increase; rather, these buyers have reduced the prices of finished goods, said Nasir.
He called for an ethical buying practice by the global retailers to ensure a better price for products.
Amid hope, there are challenges
In order to grab a larger market share, Bangladesh has to increase port capacity to reduce lead-time, while inefficiency of infrastructure is another impediment that needs to be addressed.
“We import spin from China and it takes eight to ten days to reach Chittagong port, but it takes 16 days to reach the factory premises from the port,” Md Kamal Uddin, managing director of Diganta Sweaters Limited told the Dhaka Tribune.
It should be a six-hour journey from Dhaka to Chittagong when carrying finished goods for shipment, but it takes up to 24 hours to reach the port city, he claimed
“Bangladesh is unparalleled in product quality, so there is room to grow in the global market. However, there are also challenges, including the lack of raw materials to produce high-end goods, technical expertise, and latest technology. Only about 60% workers here can make higher-end products,” said Md Moshiul Azam Shajal, managing director of Posmi Sweaters.
A stable and long-term policy, which would provide all out facilities to create a business friendly atmosphere, can pave the way to remove obstacles that stand in the way of new investments. The policy should be comprehensive and unified in order to ensure a level playing field for all, said Moshiul.