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Markets in the US, EU: Bangladesh’s denim exports see healthy growth, beating China

  • Published at 10:11 pm November 4th, 2018
web-denim-syed zakir hossain-Dhaka tribune
Bangladesh denim products include Blue Denim Trousers WG, Blue Denim Trousers MB, Blue Denim Skirts, Blue Denim Jackets, Blue Denim Suit Type Coats MB, Playsuits and Sun suits Syed Zakir Hossain/ Dhaka Tribune

According to statistics from the Directorate-General of the European Commission,  Eurostat, Bangladesh has earned €917.14 million from exporting denim products to EU countries during January-August period of 2018, which is 4.23% higher from exports earned in the corresponding period of last year

Bangladesh’s denim manufacturers have seen a healthy rise in export of denim products in the markets of the US and European Union (EU), beating its biggest competitor China as the world’s second largest economy posted only a moderate growth.

From January to August of 2018 Bangladesh’s denim export saw steady growth both in US and the EU markets. The EU consists of 28 countries and is the largest destination for Bangladesh’s denim goods.

Denim exports in the US during 2018

According to the US Office of Textiles and Apparel (OTEXA), from January-September period of 2018 the country saw a 14.20% rise in export earning i.e. $419.21 million, which was $367.10 million during the same period of 2017.  

China on the other hand earned 1.3% more than 2017 summing up a $683 million export earnings, while Mexico has seen 1.08% increase in export from 2017 to $595.40 million.   Vietnam, a close competitor of Bangladesh in US market earned 41.95% more i.e. $205.43 million which was $144.72 million during 2017. While Cambodia saw a 30.85% rise in export to $88.34 million.

Exports in EU countries during 2018

According to statistics from the Directorate-General of the European Commission,  Eurostat, Bangladesh has earned €917.14 million from exporting denim products to EU countries during January-August period of 2018, which is 4.23% higher from exports earned in the corresponding period of last year.

Turkey, the second largest exporter of denim goods to EU has seen an 11% deficit in earning to €687.28 million, which was €772.93 million in 2017. Pakistan saw a 4.83% rise to €500.56 million, while China’s exports saw a 14.30% fall to €304.79 million, which was €355.68 million in the same period of 2017.

Bangladesh denim products include Blue Denim Trousers WG, Blue Denim Trousers MB, Blue Denim Skirts, Blue Denim Jackets, Blue Denim Suit Type Coats MB, Playsuits and Sun suits.

Reasons for Bangladesh’s steady growth

Trade analysts and the people involved in the denim industry said the reasons for Bangladesh’s steady growth in exports earnings are because of improved technology in fabrics manufacturing, improvement of safety standards in the apparel sector and the trade war between China and the US.

Anwar-Ul Alam Chowdhury, managing director of Argon Denims, while speaking to the Dhaka Tribune said: “After the announcement of Trans-Pacific Partnership (TPP), US retailers wanted to go to different manufacturers for sourcing apparel goods, rather than Bangladesh. But they changed their decision after US president Donald Trump dismissed the idea of joining the TPP.”

“On the other hand, China is shifting their business due to environmental hazards, especially in washing and dyeing. Bangladesh has taken this advantage in the EU and US markets, as it has the capacity to fulfill their demands.

“There is no such unified, safe and secure sector in the world other than Bangladesh. That is why, Alliance for Bangladesh Workers, a platform of American buyers has certified Bangladesh as a safe place, which also boosted buyers’ confidence for sourcing products from here,” Anwar added. 

Shahidul Hasan, director of Amber Denim Limited said: “Buyers go to different places because of competitive price rates. US retailers are the ones who sought more price competitive market. Since, we have quality products at a reasonable price; they are sourcing from here,”

BGMEA Senior Vice President Faruque Hassan said: “In the EU markets, Bangladeshi denim products are doing much better for its quality and competitive price rates. In the recent time, production cost in China and other countries have gone up due to wage hike. As a result, EU manufacturers are moving to Bangladesh for sourcing denim products. 

“On the other hand, Bangladesh has increased its production capacity in doth denim fabrics manufacturing and other denim products. The Bangladeshi manufacturers have also moved to introduce latest technologies for improved quality of products.”

Md Badsha Mia, managing director of Pioneer Denim Limited said: “Bangladesh is very strong in knitwear manufacturing due to its strong backward linkage industries. At the same time, it is highly dependent on import of woven fabrics. 

“In recent times, Bangladesh has seen the establishment of state of the art denim fabrics manufacturing plants, which has increased production capacity. This has helped to attract more workorders from the US buyers, as well as EU, as a result, the manufacturers can supply the orders within much shorter time compared to previous ones.”  

US-China trade war also boosted export earnings

The US is the single largest importer of clothing products and China is the largest exporters of apparel goods in the world. The trade war between these two giants has brought more number of orders for Bangladeshi denim manufacturers.    

Abdus Salam Murshedy, Md of Envoy Textiles Ltd (a LEED Platinum certified green factory in the world) said: “Chinese products are becoming costlier due to rise in workers’ wage. As trade war between China and US is a threat for the US  importers over duty imposition. Bangladesh is benefitting the most from this trade conflict.”

“While China is shutting down factories due to rise in pollution So, ultimately these workorders will go to Bangladesh, Vietnam or Cambodia.” 

Former finance adviser to the Caretaker Government AB Mirza Azizul Islam said: “The US-China trade war is definitely a plus point for Bangladesh. To grab the US and EU market, Bangladesh has to move to reduce the lead time and improve port efficiency.

“The manufacturers should also improve the quality and concentrate on product diversification and value added products.”

According to Bangladesh Textile Mill Association (BTMA), Bangladesh currently has 31 denim fabric manufacturing factories, which produce over 400.40 million metres of fabrics every year. And there are around 400 denim product manufacturers in the country. 

According to people involved in this sector, Bangladesh has already made an investment of Tk15,000 crore in denim fabrics manufacturing.    

The major global retailers in the world to which Bangladeshi entrepreneurs supply denim products are  H&M, Uniqlo, Tesco, Walmart, Levi's, Diesel, Wrangler, G-Star, s.Oliver, Hugo Boss, and Gap.

In 2107, Bangladesh was the largest exporter of denim products to EU markets with 27% market share, while the third largest exporter to US with 14.20%.