THE US buyers are shifting their apparel sourcing base from China, offering an opportunity for the countries like Bangladesh to further develop their apparel industry, especially in the manmade fibre (MMF) segment. The potentials have also been hinted by a recent US study titled ‘2020 Fashion Industry Benchmarking Study’ by the US Fashion Industry Association and the University of Delaware. MMF apparel could be a potential new growth engine for Bangladesh’s exports, as US fashion companies are eager to diversify sourcing from China, while the sourcing capacity in Vietnam is not available.
The Covid-19 and the escalating US-China trade war have exerted significant and broad impacts on US fashion companies’ sourcing practices. As the US fashion companies are sourcing relatively less from China, they are moving orders mostly to China’s competitors in Asia. The value of Bangladesh’s MMF apparel exports to the US enjoyed a 5.5 per cent growth in the five months of 2020. In contrast, the exports from China and Vietnam suffered a significant decline as value dropped by 44.5 per cent and 8.8 per cent respectively over the same period. There is no option to go for MMF production to diversify the export products and grab the growing demand for the MMF items globally.
However, the production of MMF items requires huge investment in backward linkage and there are hardly few ones who want to invest amid the absence of required infrastructure including sufficient gas supply. In 2019, Bangladesh shipped apparel items worth US$ 5.93 billion to the US market, out of which cotton items were about 77 per cent. Despite the huge potential and surge of export, low capital investment in the MMF and disruptive gas connection are the major hurdles. We think BGMEA can inspire the manufacturers to grab the opportunity, while commercial banks can invest to get huge returns. The Covid-19 will open many new gateways in the changing world and those who have enough preparation can catch the pearls. So, why not Bangladesh?
