Woven exports handicapped for want of local raw materials

The global hub for clothing, Bangladesh is still burdened with its high dependency on the woven fabrics from other countries. 

The recent disruption in the supply chain due to the pandemic has exposed the constraint wide open for the country and dragged down its exports of woven products by 20 per cent to $13.2 billion in 2020.

Local fabrics manufacturers can meet only 35 per cent of the demand for woven fabrics, while 90 per cent of knitwear fabrics demand are fulfilled domestically. 

Bangladesh has always focussed on knitwear products, which is popular in the European markets while woven products are more in demand in the US market, said Sayeed Ahmad Chowdhury, director of Square Denim.  

Investment is increasing in the woven sector with the knitwear fabric segment being saturated for more than seven years, he added. 

The money flowing into the sector is not enough to meet the growing demand, said several industry experts. 

Bangladesh has to import both cotton and yarn for woven fabrics, which discourage manufacturers. 

Many are shying away from investing in the sector because the return is very slow and the profit margin is small, said Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association. 

It costs about Tk 500-1,000 crore to establish a textile mill for woven fabrics and also has to add dyeing facilities to make the investment viable, he said. 

Additionally, investors have to invest in Special Economic Zones while many owners who have already invested in lands are not getting the necessary permissions. 

Uninterrupted electricity is required for the computerised technology-driven manufacturing unit for woven fabrics and such quality power supply is still not readily available with captive power and special economic zones not fully ready, Khokon said. 

Gas connection is another constraint that needs to be addressed, said Abdus Salam Murshedy, managing director of Envoy Textile. 

Lack of innovation, research, skilled workforce and technicians are issues that discourage investment.  

Furthermore, the manufacturers will also have to ensure the fabric quality because garment exporters will not use locally manufactured fabrics from misused bonded warehouse facilities. 

Bangladesh is competing with China and Pakistan, which have better access to raw materials, said Saiful Islam, manager (marketing) of Ha-Meem Denim. 

Thus, it is very crucial for Bangladesh for making investments in research and innovation to develop fabrics and train its people accordingly, said Islam.  

Attracting direct foreign investment may be a solution for transferring knowledge within the industry, he added.

“We lack the capacity in backward linkage industry and yet the relative progress in the primary textile sector is impressive,” said Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association.

Vertical integration of the garment units or standalone manufacturing facilities in the primary textile industry, especially in the woven sector, is a need of the time, not only to be cost and time competitive but also to be equipped to face the double transformation rules of origin in the post-LDC era, Huq said. 

Most of all the future investments in the textile industry should have the priority on material diversification since the global market is shifting its focus more toward non-cotton because of functionality and sustainability, she added. 

As of 2019, there are 430 yarn manufacturing mills, 802 fabrics manufacturing mills, and 244 dyeing-printing finishing mills in Bangladesh, along with 32 denim fabrics manufacturing mills and 22 home textile manufacturing mills, according to the BTMA