• Monday, Jun 24, 2019
  • Last Update : 02:39 pm

5% cash incentive sought on RMG export for next 3 years

  • Published at 09:49 pm May 2nd, 2019
5% cash incentive sought on RMG export for next 3 years
Commerce Minister Tipu Munshi speaks at a conclave titled 'Sustainability of Ready Made Garments (RMG) Sector in Bangladesh' held at DCCI auditorium in the capital on Thursday Dhaka Tribune

The speakers urged for reducing cost of doing business in this sector and for image building

The country’s top business leaders on Thursday demanded a 5% cash incentive against exports of apparel goods both in traditional and non-traditional markets for the next three years to adjust the costs of production. 

Business leaders from apparel sector and Dhaka Chamber of Commerce and Industry (DCCI) came up with demands at a conclave titled “Sustainability of Ready Made Garments (RMG) Sector in Bangladesh” held at DCCI auditorium in the capital. 

DCCI organized the event to discuss the sustainability of the sector ahead of national budget. 

They said that the sustainability and competitiveness of RMG industry would be hampered due to rising production cost driven by wage hike, energy cost hike, compliance cost and declining international market price.

Commerce Minister Tipu Munshi was present as chief guest while Rubana Huq, president of BGMEA, was present as special guest. Keynote paper was presented by  DCCI President Osama Taseer.

Faisal Samad senior vice president of BGMEA, Asif Ibrahim, former president of  DCCI, Benajir Ahmed, former president of DCCI, Miran Ali, director of BGMEA, and Fazlul Haque, former president of BKMEA, spoke in the stakeholders' discussion session. 

The speakers urged for reducing cost of doing business in this sector and for image building. 

They also stressed the need for skill development and said that if gas price was hiked, it would increase the cost of production as well. 

They also sought at least 5-year incentives and support from the government. 

They also mentioned the depreciation of taka against the dollar as one of the reasons for price fall of RMG industry. But trust between buyers and producers are important remarked the speakers.  

They also said that due to increase of 208% gas price hike for power producer, electricity price would increase by 60% resulting in 9% increase in production cost. 

Some of the challenges for RMG sustainability are wage hike, energy price hike, remediation cost, currency depreciation, international market price and labour productivity.

DCCI president Osama Taseer said that RMG sector shares USD460 million of total FDI to Bangladesh. "We are the largest exporter after China constituting 6.5% of the world market of USD446 billion," he said. 

Osama Taseer also underscored the importance of skill development for improved productivity. 

A total of 1,200 factories were closed down over the last four years due to failing in compliance standard, he said.

Commerce Minister Tipu Munshi said that the RMG industry needed some incentives for a certain period in order to support the industry. 

He also said that the entrepreneurs of this sector were not getting fair price from the buyers. He urged for increasing negotiation skill to get the best price from the buyers. 

BGMEA President Rubana Huq said: "For the sustainability, we need support from the government. Moreover we are in crisis of positive image and we should build this image in the international market with the support of all specially through the media."

She also underscored the importance of forming strong strategy, right statistics and also the government should focus on how to reduce cost of doing business for RMG's sustainability.