Global buyers and stakeholders in the denim industry say they are confident in Bangladesh's denim industry, despite ongoing political instability, labour unrest, and a deteriorating law and order situation.
They say the industry will recover amid these internal and external challenges such as inflationary pressures, economic turmoil, and energy shortages.
They also said that Bangladesh is the second largest manufacturer of readymade garment (RMG) products and has a strong position in the denim subsector.
The country is the prime investment destination for global investors thanks to its quality, capacity for bulk production, and pricing advantages. Businesses demonstrate resilience and adaptability in navigating market fluctuations while maintaining a global presence.
The global businesses in the RMG sector shared their views on the sidelines of the 17th edition of Bangladesh Denim Expo, which began on Monday at the International Convention City in Bashundhara, Dhaka.
Bangladesh has developed significantly and has become irreplaceable in RMG manufacturing.
However, local manufacturers said they faced challenges such as political turmoil and economic issues, which resulted in some orders being redirected.
Calling the shifting orders a “short-term contingency plan” for global buyers, they urged the government to prioritize establishing law and order to ensure the factories can operate without any hindrance.
Manish S Chauhan, co-founder of Noize Jeans, a multinational company based in Hong Kong, said that Bangladesh is an irreplaceable destination for business investment, especially in the garment industry, where no other country—such as India, Vietnam, Cambodia, Pakistan, or Indonesia—can compare.
“China is the market leader in the world, but its dynamics do not apply to Bangladesh's competitive advantage," he added.
He also said that it was improbable that other nations would drastically take over Bangladesh's market share, as they might only take a tiny percentage—between 10% and 20%.
Bangladesh has unrivalled capacity thanks to its robust infrastructure and extensive manufacturing capacity. Despite being a close rival, he added that Vietnam's expansion is constrained by the current issues facing the global retail industry, including economic recession and inflation.
He also expressed concern about the recent political upheaval Bangladesh's growth rate could change due to unforeseen circumstances or difficulties.
“I believe that even though there are logistical challenges, like time to port, they can be effectively managed with proper planning,” he added, mentioning his 20 years of experience in Bangladesh, which included nine years of operating two factories that produce fabric and denim items.
He also said that although Bangladeshi workers are often disciplined and labour unrest is typically short-lived, agitation can be caused by outside forces or sporadic false information.
“I now speak with my employees directly to learn about their needs in order to preserve stability. This proactive approach effectively mitigates labour issues,” he added.
Bossa, a Turkey based premium-quality denim fabric manufacturer, has been doing business with several Bangladeshi denim exporters for the past 15 years.
Yilmaz Demir, a representative of the company, said that business has been slower over the past two to three years, partly due to increased domestic fabric production in Bangladesh.
However, he said the company continues to supply the Bangladeshi market and maintains a strong position compared to European competitors.
“The current economic slowdown in Bangladesh is temporary and influenced by global factors, including post-pandemic inflation, economic crises, and geopolitical conflicts involving Russia and Israel,” he added.
He said that the future market conditions would be challenging, particularly with the potential impact of the upcoming US elections.
Despite these uncertainties, Demir expressed his hope that the business situation in Bangladesh would improve in the coming days.
Muhammad Mansoor Bilal, senior vice-president of Pakistan-based fabric manufacturers Naveena, said that Bangladesh is a dynamic destination for their business and is a business-friendly country.
“Political instability is common in every corner of the world. We have to work around it,” he added.
Naveena has been doing business with Bangladesh for the past 10 years, and his factory produces five million square meters of fabric per annum.
Syed M Tanvir, managing director of Pacific Jeans, said that challenges such as political turmoil and economic issues were causing some orders to be redirected, primarily as a short-term contingency for customers rather than a sustainable long-term strategy.
“Although some orders are still being sent to countries like Pakistan, Sri Lanka, or Vietnam, this is not a viable approach for the future. However, the overall situation is improving, leading to a sense of stability, which is expected to be reflected in customers' plans for the upcoming season,’” he said.
Regarding sustainability, he said that sustainability and due diligence are also opportunities rather than challenges.
“The issues with lower orders depend on the situation; things could change at any moment. It is important for us to keep an eye on whether these problems are being properly addressed," he added.
Mostafiz Uddin, founder and CEO of Bangladesh Denim Expo, said that foreign investors viewed Bangladesh as a preferred destination and had no objections to operating there; however, the investors were losing confidence due to the deteriorating law and order situation.
He said that global buyers had options, and without stability and effective administration, it would be challenging for Bangladesh's RMG sector to secure global orders.
Mostafiz said that it had become challenging for the business community to connect with government officials to address their concerns.
He urged the government to establish effective engagement with businesses to address the ongoing challenges.
“If these initiatives are implemented effectively, the business could potentially grow from $50 billion to $100 billion or even $200 billion,” Mostafiz mentioned.
At the 17th edition of the Bangladesh Denim Expo, 36 exhibitors from seven countries, including Bangladesh, India, Pakistan, and China, participated.
Bangladesh currently has over 40 denim mills, which meet more than 50% of the denim fabric requirements for the export-oriented garment industry.
These mills are world-class, state-of-the-art facilities, many of which are LEED-certified green buildings, highlighting our commitment to environmentally responsible production.
Bangladesh's denim exports are estimated to be around $5 billion annually, with the top position in the USA and EU.
