Kazi Zahidul Hasan :
A sharp rise in overall production cost and increased competition from regional players has hit the local ready-made garment (RMG) industry hard.
Industry leaders said Bangladesh is losing ground in global market. In recent past it has led to a drop in both the demands for and price of local apparels from overseas market.
“Production cost continues to rise in the apparel factories following increase in gas, electricity and transportation cost, posing a big challenge for the industry,” Md Siddiqur Rahman, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told The New Nation.
He said production cost at the RMG units has jumped by 18 percent in the last two years, when regional competitors enjoyed favourable policy support to gain ground.
“The demand for garments in overseas markets has dropped due to the rise in production cost and a surge in competition from rival apparel manufacturing countries,” said Md Siddiqur Rahman.
The BGMEA leader said, prices of Bangladeshi apparel items dropped by 3.30 percent in the US market and 4.71 percent in the EU market last year due to surge in competition from regional rivals. “We’re not competitive at international level because countries like India, Pakistan, Vietnam and Cambodia offer garments at cheaper rates,” said Md Siddiqur Rahman adding, “Export benefit, subsidies and other fiscal package given by the governments in rival countries have made their product more competitive in the global market whereas we’re losing edge due to steady rise in the production cost.”
He also said garments factory owners have to spend huge amount to implement the fire and building safety action plans at their factories in the last two years pushing up their cost of doing business further.
“The industry is reeling under the high pressure of increased production cost making it uncompetitive in the global arena,” M Faruque Hassan, Senior Vice-President of BGMEA told The New Nation.
He said rising power and energy cost, longer lead-time, poor infrastructure and port facilities, low worker productivity and sluggish demands for garments from overseas buyers have already hit the industry hard.
“We need policy supports from the government to overcome the crisis,” he added.
Bangladesh’s export earnings from RMG products in FY17 stood at $28.15 billion posting a minimal growth of 0.20 per cent. The earning fell 7.34 per cent and way back of the government target of $30.38 billion.
“The export growth in FY17 showed the real picture of the industry. If the government does not provide necessary policy supports to the industry the apparel export growth unlikely to rebound,” M Faruque Hassan.
The BGMEA leader also urged the government to ensure uninterrupted gas and electricity supply to the apparel units to overcome the looming crisis.
