T
he textile industry has played an important role in Bangladesh’s economy for a long time.
Currently, the textile industry in Bangladesh accounts for 45 percent of all industrial employment
and contributes 5 percent to the total national income. The industry employs nearly 4 million
people, mostly women.
A huge 78 percent of the country’s export earnings come from textiles and apparel, according
to the latest figures available. Bangladesh exports its apparel products worth nearly $5 billion
per year to the United States, European Union (EU), Canada and other countries of the world. It is
the sixth largest apparel supplier to the United States and EU countries.
Major products exported from Bangladesh include polyester filament fabrics, man-made
filament mixed fabrics, PV fabrics, viscose filament fabrics and man-made spun yarns. Major
garments exported include knitted and woven shirts and blouses, trousers, skirts, shorts, jackets,
sweaters and sportswear, among other fashion apparel.
Textile and apparel firms in Bangladesh are mostly concentrated around the capital city of
Dhaka.
A Picture Of Bangladesh’s Textile Industry
Bangladesh’s textile industry can be divided into three main categories: public sector;
handloom sector; and the organized private sector. The private sector is the fastest growing sector
in the country.
The handloom industry provides employment for a large segment of the population of
Bangladesh and supplies a large portion of the fabric required by the local market.
Mahmud E. Alam, managing director, Famano Textile Mills Ltd., said about 20 percent of
existing mills in Bangladesh are large-scale mills, roughly 30 percent are medium-scale mills, and
the remaining 50 percent are small-scale mills. Alam said the number of spinning mills in the
country is increasing day-by-day.
The textile quotas under the Multi-Fiber Arrangement of January 2005 have been moderate in
Bangladesh and the industry is divided on their impact. While industry analysts say Bangladesh’s
garment and textile manufacturers will have to face steep competition from countries such as India,
Pakistan, China and Thailand as a result of new policies, the textile companies see no impact on
their business.
Alam feels the lifting of quotas is not going to affect his business. “The future of the
textile industry here is very bright,” Alam said. “Even the lifting of quotas is not going to
affect the industry as was worried,” he said.
Mostafizur Rahman, managing director, Pawrob, also is of the view that lifting quotas is not
going to have very much of an effect, but he fears China will affect the Bangladesh textile
industry in the long run.
“The main reason behind this is the leap factor,” Rahman said. “Chinese companies have an
edge of 30 days over Bangladeshi textile companies.”
Top to bottom: National Memorial in Savar, 35 kilometers from Dhaka; Jamuna multipurpose
bridge, which connects two detached parts of Bangladesh; Shaheed Minar, which commemorates the
Language Martyrs of 1952;
and Bangladesh’s National Parliament (Sangsad Bhaban), designed by American architect Louis
Kahn
concentration of manufacturing activity in and around the capital city of Dhaka and a growing
garment manufacturing presence in the country’s export processing zones.
Bangladesh Textile Mills Association Secretary General Taufiq Hasan said that because
textiles and ready-made garments are the two largest export sectors and employers in Bangladesh,
government support will continue and there are no restrictions on repatriation of profits and
investment or tax-free imports of machinery and raw materials for export. The government also is
liberal toward work permits.
According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the
total fabric requirement in the captive market is about 3 billion yards, of which roughly 85 to 90
percent is imported from countries such as China, India, Hong Kong, Singapore, Thailand, Korea,
Indonesia and Taiwan. Fabric demand is increasing at the rate of 20 percent per year.
Although the industry is one of the largest in Bangladesh and is still expanding, it faces
serious problems, principally because the country does not produce enough of the raw materials
necessary for the industry to expand. The primary materials used in the spinning sector are raw
cotton and man-made fibers such as viscose and polyester staple fibers. Unfortunately, none of
these raw materials are produced in Bangladesh.
Most spinning mills in Bangladesh produce low-grade yarn. Available figures show that
current yarn production satisfied only 22-percent of the total yarn demand. In spite of this
drawback, as many as 116 new spinning mills, each having the capacity of 25,000 spindles, will be
established in the near future.
The weaving sector also is plagued by a lack of organization and coordination. The existing
weaving capacity in Bangladesh can meet only about 40 percent of fabric demand; the rest is
imported. However, the increasing trend of expansion in the weaving sector is clear from the fact
that 223 modern weaving plants, each with an annual capacity of 10 million meters, will be set up
in the near future.
The knitting and hosiery sectors look brighter than weaving, and about 80 percent of garment
accessories like cartons, threads, buttons, labels, poly bags, gum tapes, shirt boards and neck
boards now are being produced within Bangladesh and contribute to the the national gross domestic
product. However, the textile industry is just budding.
Bangladesh Textile Mills Corporation
When Bangladesh gained its independence from Pakistan in 1971, the new government
nationalized the textile industry. All of the country’s textile factories were then organized under
the Bangladesh Textile Mills Corp. (BTMC).
The role of BTMC within Bangladesh’s textile industry has substantially been altered since
the denationalization of a large number of public sector textile mills over the last decade and a
half. Prior to denationalization, BTMC enjoyed a near-monopoly within the yarn and fabric market in
Bangladesh.
At present, there are 21 textile companies under BTMC. They operate 24 spinning facilities
with an installed capacity of 490,892 spindles and 1,036 looms. Out of that total, 13 of the
companies — which operate 16 plants — utilize 320,228 spindles under the service charge system
producing different counts of yarn in the range of 32/1 to 80/1. Another five companies have
128,088 spindles in operation.
Among the 21 mills, Valika Woolen Mills Ltd., Nasirabad, Chittagong, is the only specialized
BTMC company, producing knitting wool, woolen suiting, men’s and women’s woolen shawls, and woolen
blankets.
The government-owned Bangladesh Export Processing Zones Authority promotes foreign and
local investment in its export processing zones, which were developed to provide potential
investors a business environment free of complicated procedures.
Jute Mills Association, and Bangladesh Knitwear Manufacturers and Exporters Association.
According to Bangladesh’s Textile Minister Shajahan Siraj, the government had initiated
various policy measures such as rationalization of tariffs and taxes on imports of capital
machinery, raw materials, dyes and chemicals, and reduction of interest on long- and short-term
loans.
Mahmudur Rahman, executive chairman of Bangladesh’s Board of Investment, said in a recently
published interview that in the next five years, the country needs an investment of US $3 billion
in the textile sector. He said the country’s textile market, during the last fiscal year (July
2004-June 2005) totaled $21.5 billion, compared to $3.2 billion 20 years ago. Rahman predicted the
market could grow to $23 billion in the next fiscal year.
The Bangladesh government offers great incentives for encouraging the use of local fabrics
in the export-oriented garment industries. To encourage textile export, companies can import
capital machinery duty-free. Cotton also may be imported duty-free. Moreover, the government
recently has implemented several policy reforms to create a more open and competitive climate for
foreign investment.
Rising garment export trends from Bangladesh, along with some benefits provided by the
government, have created concerns for Pakistan’s government. Textile tycoons in Karachi are
thinking about shifting their business to Bangladesh.
Investment In Bangladesh
As reported by Bangladesh news agencies, the Bangladesh textile sector acquired an
investment influx of Tk 622 crore (approximately US $95 million) between January and May of 2005.
Twelve textile mills — primarily spinning mills located in Dhaka — benefited from the investment,
which is said to be the largest investment in textiles in a five-month period since Bangladesh
became an independent country.
Badsha Spinning Mills recently purchased 20 Trützschler TC 03 cards.
One of the recipients of this investment, Badsha Spinning Mills Ltd., recently purchased a
blow room and 20 TC 03 cards from Germany-based Trützschler GmbH & Co. KG. The Trützschler
equipment will be used to produce sliver for Ne 30 hosiery yarns in Badsha’s ring-spinning plant.
Nepcontrol NCT, featured on all of the cards, monitors neps, seed coat fragments and trash
particles on-line. According to Trützschler, Badsha Spinning, which will export the majority of the
yarns it produces, selected Trützschler equipment because high yarn quality is important.
Editor’s Note: T.C. Malhotra is a New Delhi, India-based journalist.
January/February 2006