PRE INVESTMENT

FEASIBILITY REPORT

Prepared byANM Wahid Uddin Chowdhury

Industrial Consultant/Financial Analyst Contact No. 01819-197195

[Type the document title]

0

ON

NAAFCO DENIM LTD

(PROPOSED)

TABLE OF CONTENTS

SL NO. SUBJECT PAGE NO

01. SUMMARY OF THE PROJECT 1-06

02. MANAGEMENT ASPECT 07-08

03. TECHNICAL ASPECT 09-15

04. FINANCIAL SUMMARY 16-17

05. SOCIO ECONOMIC ASPECT 18-19

06. MARKETING ASPECT 20-66

07. FINANCIIAL ANALYSIS 1-31

Page 1

EXECUTIVE SUMMARY

1. Name of the project : NAAFCO DENIM LTD.

2. Location of the project : Plot – 607-609, Uttar Vagnahati, Sreepur, Gazipur,Bangladesh

3. Registered Office : Suvastu Tower, 12/A, 69/1 Panthapath, Dhaka 1205

4. Main Promoter : Mr. M S Huda

5. Nature of the project : 100% Export Oriented Garments Industry

6. Background of the Proposed Project:

At NAAFCO Denim Ltd, we value individuals for their diverse backgrounds, experiences,

styles, approaches and ideas. We actively promote diversity in whole value chain. This

diversity inspires the innovation that drives our business and helps improves our competitive

advantage. It helps us make decisions that serve customers in the diversed markets around

the world. Our Production capacity 15000 pcs Denim pants & Trousers per day.

Vision

Our vision is to be the world’s most vibrant & leading ONE STOP DENIM HOUSE with

TQM leader which will set the benchmark for the industry and will create optimum value for

the customer.

Mission

We commit to provide total service, quality benefits through activities which will add value

to the bond we create with our employees, customers and business associates in the

growing textile and garments market of Bangladesh”.

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07. Total Cost of the ProjectThe total fixed cost of the project stood at Tk 5655.05 Lac- mostly the cost of the plant

while the local currency will be used to finance Land building, imported, local machinery and

installation charges. The summarized position of the fund requirement appears as follows:

“Taka in Million”

Item Amount Total Cost

Sponsor’s Equity

Banks Equity

Total Cost(Tk. In 000)

01. Land(as per Present Market Value)

123.900 123.900 123.900 - 123.900

02. Building and other civil works

135.000 135.000 40.500 94.500 135.000

03. Machinery Imported

210.75 210.75 21.075 189.675 210.75

Local Machinery 30.000 30.000 3.000 27.000 30.000

04 Duty, Tax, Insurance etc.

11.250 11.250 11.250 - 11.250

05 Vehicles 10.000 10.000 5.000 5.000 10.000

06 Security Deposit 5.000 5.000 5.000 - 5.000

07 Pre-operative expenses

20.000 20.000 20.000 - 20.000

08. Contingencies 7.650 7.650 7.650 - 7.650

10 Furniture & Fixture

10.000 10.000 10.000 - 10.000

11 Internal Freight 1.000 1.000 1.000 1.000

12 Erection & Installation

1.000 1.000 1.000 1.000

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Total Cost of the project

565.55 565.55 249.375 316.175 565.55

8. Means of Finance. (Tk. In Million)

Against Total Cost Against Machinery CostAmount Percentage Amount Percentage

Bank’s Equity 316.175 52% 216.675 90%Sponsor’s Equity 249.375 48% 24.075 10%

Total: 565.55 100% 240.75 100%

09. Working Capital requirement(Tk. In Million)

1st. year 2nd. Year

3rd. year 4th. Year

Total Working Capital Requirement 470286.5

7504903.

84539655.

01574241.8

7Margin against W/C Finance 47028.66

50490.38 53965.50 57424.19

W/C for Bank Finance 423257.91

454413.45

485689.51

516817.68

…………..

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10. Financial & Economic Aspect:

(Figure in ‘million Taka)

Particulars

O P E R A T I N G Y E A R S

1 2 3 4

Assumed Capacity Utilization 70% 75% 80% 85%Sales Revenue 1,859,655 2,305,913 2,461,133 2,616,353Gross Profit 281,328 341,411 361,505 381,425Operating Profit 229,899 285,631 301,886 318,804Net Profit before Tax 110,092 168,222 186,856 206,177Net Profit after Tax 110,092 168,222 186,856 206,177Ratios:Gross Profit to Sales 15.13% 14.81% 14.69% 14.58%Operating Profit to Sales 12.36% 12.39% 12.27% 12.19%Net Profit after Tax to Sales 5.92% 7.30% 7.59% 7.88%Debt-Service Coverage Ratio (Times) 1.65 2.01 2.14 2.28Other Financial Indicators:

Break Even Sales 1103437.99 1232061.40 1218056.921103437.9

9Break Even Capacity 42% 40% 40%Internal Rate of Return (IRR)

Net Present Value (NPV)2911187.36

Pay-Back Period 2.89 Years Economic Indicators:Contrition to GDP 384086 471479 500465 532763Employment Generation 1080 Persons Cost per Job Created 523.66 Benefit-Cost Ratio 1.71

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Expected Key Ratios:O P E R A T I N G Y E A R S

1 2 3 4

DEBT ( % ) 63.07 54.06 46.44 40.01EQUITY ( % ) 36.93 45.94 53.56 59.99Current Ratio 1.23 1.55 1.87 2.19Quick Ratio 0.41 0.72 1.04 1.35

Liquidity Ratio 0.21 0.53 0.84 1.16Asset Ratio 1.59 1.85 2.15 2.50

Return on Equity Ratio 0.44 0.41 0.32 0.27Working Capital to Total

Assets(X1) 0.38 0.36 0.34 0.32Retained Earnings to Total

Assets(X2) 0.10 0.13 0.13 0.13EBIT to Total Assets(X3) 0.21 0.23 0.21 0.20

Equity to Total Liabilities(X4) 0.59 0.85 1.15 1.50 Sales to Total Assets(X5)

1.69 1.83 1.72 1.60

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MANAGEMENT ASPECTS

2.01 Type of the Organization:The name NAAFCO Denim Ltd is a private limited company under the ownership and

management of NAAFCO Denim Ltd. As per Articles of Association of the company, it will be

managed by a Board of Directors consisted of 2 sponsor shareholders. The board is fully

authorized to take all decisions in connection with Operation, Financial management and

seeking financial assistance from any financial institution.

2.02 Registrar of Joint Stock Companies:The Registration of the Company with the Registrar of Joint Stock Companies of Bangladesh has been done.

2.03 Corporate Set-up of the Company

SL.NO Name of Sponsors Status Extent of Shares

01. Mr. M S Huda M.D. 50%02. Mr. M. Saiful Huda DIRECTO

R50%

100%

Background of the Managing Director:

Mr. M S Huda is Managing Director of the Shetu-Semco Group of Companies whose primary focus since 1984 has been on Pesticides, fertilizers & seeds for the Bangladeshi market, both private & public sector, Shetu Pesticides Ltd,Naafco (Pvt) ltd& Semco between then operate an integrated supply chain based on import,formulation repacking of both raw & finished materials & then nationwide distribution, marketing & sales. These companies and their brands have an established reputation for quality products amongst the trade & consumers. He has been accorded various awards and recognition for his contribution and achievements in the agricultural sector.CNG stations and property holdings figure amongst other business units in the group.

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He is a chemistry graduate and has been an entrepreneur for 45 years in various businesses locally and internationally. He is extremely well travelled and enjoys the company of his grandchildren in his free time.

Background of the Director:

Sl. No

Name, Address and Descriptions and Signature of the Subscribers

No. of shares taken by each subscriber

01. Mohammed Shamsul Huda, Managing DirectorS/O. Late Mohammed Mohabbat Address : House #458, Road # 31 New DOHS,Mohakali, Dhaka- 1206Age : 71 Years Email : spl_naf@bdcom.comNational ID : 2650898232450TIN: 037-100-4061/sa-29(cos)Nationality: Bangladeshi Profession: BusinessExperience: 45 Years

50%

02.

Md. Saiful Huda S/O. Mr. M S HudaAddress : House #458, Road # 31 New DOHS, Mohakali, Dhaka-1206Age : 27Email : spl_naf@bdcom.comNational ID : 7TIN: 188-103-2313/sa-29/(cos)Nationality: Bangladeshi Profession: BusinessExperience: 5 Years

50%

TECHNICAL ASPECT

3.01 The Project

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The project will be a Manufacturer of Denim & Trousers pants for export market considering

the growing demand for the products in the export market the sponsors have decided to

under-take the proposed project having additional capacity of 46.80 Lac lacs Pants annually.

Location of the Project: The factory premises of the company is located at Uzilab, UttarVagnahati,Sreepur,Gazipur on its own premises.. The utilities such as

electricity, Gas line, water etc are available at project site. The most important requirement

of workers is abundantly available. There is ample scope of training up the job seeking

young boys and girls to convert them to workers (operators and helpers)

3.02 Production Capacity The annual rated capacity and product mix of the proposed project at 100% capacity

utilization based on three shifts Operation per day and 312working days per year has been

given in the following table:

(Amount Tk. In ‘000’)

Product Mix

Items Quantity Unit Price(In Taka)

Total

Denim Pant 3120000 680 2121600Trouser /short 1560000 630 982800

3104400.00

3.03 Raw materials Requirement

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Raw Materials: (Amount Tk. In ‘000’)SL. Item Quantity Quantity Unit

Price( in Tk.)

Total Amount

01 Fabrics 7020000 300 210600002 Accessories L.S. 315900

Total Imported 2421900.00

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3.04 Building and Other Civil works.To implement the proposed program of NAAFCO Denim Ltd, the sponsors of the project will

construct 203000 sft building for housing the machinery of the project which includes Office

building, factory building, godown and other utilities services. The total cost of building has

been estimated at Tk. 1350.00 lac. The details of which is given below:

SL.No.

Descriptions Types of Cons:

AreaSft.

Rate(Tk.)

Amount(Tk.in’000’)

01 Prefabricated 103000 9000002 2floors of ( 2-Storied

Building)40000 450 18000

03 2 Floors of (2 –Storied Building)

60000 450 27000

Total Building 135000.00

3.05. Machinery and Equipments

The cost of the imported and local machinery and equipments of the project has

been estimated Tk.2407.50 lac excluding duty, tax, internal freight etc. The details of

machinery and equipments is given as

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A.Machinery and Equipment’s (Imported)

SL.NO.

Item unit Value Tk. in (000)

(Depreciated Value)

010203

Total :A 210750.00

* List of Machinery enclosed in Annexure 1

B. Machinery and Equipment’s (Local)

SL.NO.

Item unit Value in Tk (000)

01 *020304.

Total: B 30000.00Total :(A+B) 240750.00

** List of Machinery enclosed in Annexure 2

3.06 Manpower Requirement

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To run the project smoothly and profitably the total man power to be required is estimated at

persons covering both administrative and factory staff. The details manpower and salary

there against is given in

A. Factory Staff: (Amount Tk 000’)SL.NO Category No. Salary/month

(average) Annually Salary(Tk.in’000,)

01 Staffs (Production) 50 20000 12000

Worker 1000 6500 78000

Total 90000.00

B.Admin Staff:

SL.NO Category No. Salary/month (average)

Annually Salary(Tk.in’000,)

01 Staff (Management & Marketing) 30 50000 18000Total (A+B) 1080 108000.00

3.07 Land and LocationThe project will be setup on an area of 12.5 Bigha project lands under Dist. Dhaka, PLOT –

607-609,Uzilab,Uttar Vagnahati,Sreepur,Gazipur.The place is very suitable for setting up of

an industry as the area has been developed as an industrial Zone. The project will enjoy all

infrastructural facilities like electricity, Gas, Road communication net work etc.

3.08 Erection and Installation

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Erection and installation of machinery will be done by experts. An amount of Tk.10.00 lac

has been estimated for this purpose.

3.09 Furniture, Fixture & vehiclesDecoration, Furniture, Fixture& Vehicles of the project has been estimated at Tk100.00 lac.

3.10. Internal Freight & Duty An amount of Tk. 122.50 lac has been estimated for both imported machinery to reach the

project site.

3.11 Utilities:

i) Electricity:To implement the proposed Program the project will require 300 KW Power at 100 %

capacity and it will get from Rural Electrification Board .The annual cost of electricity has

been estimated at Tk.100.80 lac. In addition the project will have its own generator (standby)

for uninterrupted supply of electricity.

3.12 Repair and MaintenanceThe cost of repair and maintenance for machinery has been estimated @ 0.5%, 1% & 1.5%

and onwards of it’s of machinery and equipments in 1st, 2nd, 3rd and subsequent years of

operation.

3.13 Stores & SparesThe stores & spares of machinery to be required has been estimated @ 0.5%,1% & 1.5%

and onwards of its cost of machinery and equipments in 1st, 2nd, 3rd and subsequent years

of operation.

FINANCIAL SUMMARY

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4.01 Financial Evaluation

The Profitability analysis on the proposed Project has been computed for 10 years of

operation to assess the financial viability of the project. The financial projection that has

been made includes estimate of sales, cost of goods sold, administrative and general

expenses.

4.02 Assumption underlying the financial projections

A. The capacity of the project is projected to be 70%, 75%, 80% of the rated capacity in

the 1st three years and onwards.

B. The cost of other accessories have been kept constant throughout the period on the

assumption that increase in raw materials will be offset by increase in selling price of

products.

C. The rates of depreciation / amortization of various assets of the project are

considered as normal rate that prevails in the industrial sector.

D. Insurance premium is to be charged at 0.50% of the cost of the fixed assets and raw

materials stocks.

E. Other expenses viz. power, fuel & lubricants etc. are charged as per prevailing

market price.

F. General and administrative expenses are estimated as per prevailing market price.

G. Tax-Holiday for the project has been estimated to be 5 years.

4.03 Debt Service Coverage Ratio (DSCR) The details debt service coverage ratio may be seen at Annexure- 4 x.

.

4.04 Break-Even- Analysis The break-even- analysis has been carried out on the basis of cost & sales of projected

operation. The project is expected to be break-even- at 40% of the rated capacity.

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4.05 Cash flow statement The projected earning forecast statement indicates that the project will have sufficient fund

generation at the end of the year. The project will be able to all its operational expenses,

repay its debt obligation, provides substantial returns to the sponsors and build a reasonable

reserve.

4.06 Projected Balance sheet The projected balance sheet also shows that the project will be able to maintain health

liquidity throughout the operational life.

4.07 Internal are Rate of Return The internal rate of return has been computed following the DCF technique.

4.08 Investment Period The investment period has been considered 7 years.

SOCIO-ECONOMIC ASPECTS

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501 Foreign Exchange Earning: The project envisages for production of exportable Denim Products which will earn foreign

currency through exporting the products.

5.02 Employment Generation:The project after implementation will create employment opportunity for 1080 persons and

the cost per job created will be TK 523.66 Thousand

5.03 Environmental Scanning:

Cultural & social environment: One of the major aspects of our cultural and social environments is our increasing

population. That is one of the major opportunities for market expansion. We have great

demand of packaging Products & accessories especially Denim fabrics & others so the

demand for these products production is ever increasing. Higher quality of consumers

lessens the cost of production and also increases benefit.

Economic Environment:Now our economy is more favorable for entrepreneurs. Now a day’s government provides

various opportunities for our entrepreneurs. They can get loans from banks and government

agencies. Government also provides various training facilities for unemployed people.

1. Labor cost in our country is very cheap. It lowers our production cost. Again we

generally find unskilled labor. Training needs to be provided which increases cost.

2. Cost of capital is high in our economy. Interest rate is high in our which increases

cost of capital.

. Technical environment

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Technical environment in Bangladesh is improving now-a-days. Many necessary

technologies are now available in our country. We can import many of them from Asian

countries at low cost. Now our colleges and universities provide various technical training

programs which will help to develop technically skilled employees.

Political and legal environment:Our political environment is suffering from frequent political unrest and strikes. It causes

problem in transportation sector and increases cost of product

5.04: CONCLUSION

As evaluation of the Socio-economic, Private and national benefits, which expected to

accrue from the implementation of this project and continuous execution of its operational

activities will easily highlight the rational and economic justification of this unit. The Project is

expected to generate very substantial financial returns for the promoters, all method of

project appraisal and analysis, financial, management & economic evaluation justify the

establishment and implementation of this unit. The unit will be able to pay income tax, after

expiry of tax holiday period. Such levies and taxes will help to enhance the Governments

funds, available for public sector development expenditure.

The detail feasibility reveals that the project is technically feasible, financially rewarding,

economically &commercially viable. The proposal may, therefore, be considered suitable for

bank finance.

MARKETING ASPECT

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Objective:

The objective of this market study is to examine and investigate into demand pattern,

sources and uses of Denim fabrics. The proposed project to be set-up for manufacturing of

different denim items for export market.

INTRODUCTION:

Bangladesh had a historical reputation in production of textile products including famous

Dhaka muslin. Fabrics from Bengal were found in ancient Egyptian tombs, and were traded

with the Roman and Chinese empires in the medieval age. In ancient Bengal a great deal of

expertise existed with regards to weaving of textile products as well as great reverence

towards its trade. In rural communities both men and women were apprenticed in weaving.

These skills and disciplines in sewing and weaving are passed down through generations

and are quickly transferred to production lines in modern knitwear factories.

In the early 1980s, there were small-scale independent investments in the readymade

garments sector. At that time, it was not considered viable and received very little

government attention. Within a decade, the RMG industry in Bangladesh had flourished and

by the early 1990s it had emerged as a major employer. Under the dynamic leadership of

the private sector together with policy support from the government, the export oriented

RMG industry has shown a spectacular growth during the last two and a half decades. The

textile sector initially could not keep pace with the requirement of yarn and fabrics

particularly by the woven RMG sector as the textile and clothing industry was controlled by a

fairly small community of local entrepreneurs. However, the sector grew with vengeance and

the country currently exports over US$11 billion in textiles and garments, with a projected

target of US$24 billion dollars by 2020.

Three independent associations are responsible for the textile sector: the Bangladesh Textile

Manufacturers Association (BTMA), which represents spinners, woven fabric manufacturers

and dyeing units; the Bangladesh Garment Manufacturers and Exporters Association

(BGMEA), which represents the RMG sector, primarily the cutting and sewing units; and the

Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), which represents

the knitwear fabric manufacturers, the fabric dyeing units and the knit garment cutting and

sewing units. These three associations work either in collaboration, or independently from

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each other, subject to the agenda they may be forwarding. However, it should be borne in

mind that the bulk of yarn manufactured by BTMA members is consumed by members of the

BKMEA, which at times leave the two associations at loggerhead opposing sides of an

industry issue. The three main government departments that work for apparel sector are the

Ministry of Textile and Jute, the Ministry of Finance and the Ministry of Commerce.

Knitwear firms in Bangladesh are mainly located in Narayanganj district. Besides, a few

firms are also located in Chittagong, Dhaka, and Gazipur districts. The knitwear industry in

Narayanganj emerged at the early stage of the 19th century. Initially clothes were knitted

from thread processed by wooden spindle wheels. Later handlooms were brought in from

India. This transformed the local cloth industry into a specialized sector of hosiery items. The

hosiery sector expanded and accelerated in the 1980s and 1990s into knitting industry when

the expansion of RMG industry created demand for fabrics. The industry expanded both

vertically and horizontally to meet growing demand for fabrics within a few years. Besides,

production of sweaters and socks, the major output of the knitwear industry involves two

processes; namely, knitting of fabric and making of knitwear using the fabric thus knitted. the

present case study attempts to explore the following issues by focusing on a selective

number of knitwear firms in Narayanganj. How has the knitwear industry evolved? How has

it sustained the successful performance? What are the sources of the industry’s competitive

strength? How are the structures of the constituting firms placed to productivity differentials

within the dynamic performance of the industry? How all firms growing at the same pace or

the composition is changing over time with some firms falling and some going ahead? What

are the proximate factors that are causing the differential changes? After this introduction,

Section 2 highlights some features along the path of development of the knitwear sector in

Bangladesh. Section three sheds light on the momentum of the exports mainly to the EU and

the US markets. Section four gives an idea of the production capacity and actual production

of the sector. Section five attempts a rather qualitative presentation of the internal dynamics

of small, medium and large firms based on a purposively selected sample. Section six

sketches the rise and fall of firms within the sector. Finally, section seven makes a few

concluding remarks.

Textiles have been an extremely important part of Bangladesh's economy for a very long

time for a number of reasons. The textile industry is concerned with meeting the demand for

clothing, which is one of the basic necessities of human life. It is an industry that is more

labor intensive than any other industry in Bangladesh, and thus plays an important role in

providing employment for people. Over US $ 5.0 billion has been invested in these mills and

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about 5.00 million people are currently employed. Local textile mills fulfill 100 % of the

domestic fabric and yarn requirement, 50% of the cotton woven fabric requirement of export

oriented garments sub-sector and over 95% of the yarn and fabric requirement of export

oriented knitwear sub-sector.

History of the Textile Industry in Bangladesh

Traditionally, artisans working in small groups, in what are often referred to as cottage

industries, produced most of the textile in the sub-continent. There were many highly skilled

artisans in the area, which at present is Bangladesh. In fact, from prehistoric times until the

Industrial Revolution in the eighteenth century, East Bengal was self-sufficient in textiles. Its

people produced Muslin, Jamdani, and various cotton and silk fabrics. These were all well

regarded even beyond the region as very skilled craftsmen manufactured them.

The material produced by the artisans of Bengal started facing vigorous competition from the

very beginning of eighteenth century after the growth of mechanized textile mills in the

English Midlands. This eventually affected cottage industry to a great extent and

automatically reduced the number of Bengali workers skilled enough to produce such high

quality fabrics. The fabric produced and dyed in British factories flooded the Indian markets.

In time, its importation became one of the points of contention in the growing independence

movement of the subcontinent. As separation from Great Britain was becoming a

foreseeable reality and local production again profitable.

After 1947 and the partition of East and West Pakistan from India, most of the capital and

resources of Pakistan came under the control of West Pakistanis. The textile industry thus

stagnated in East Pakistan as momentum for development shifted from the eastern part of

the country to the west. The west also grew more cotton than the east, which was used as

an incentive for developing the industry in the west instead of in the east. The majority of all

industries in the east were also owned by West Pakistani industrialists.

When Bangladesh gained its independence from Pakistan in 1971, the new government

nationalized the textile industry, as it did with many other businesses in which West

Pakistanis had been the principal owners. Although there were some Bangladeshi

industrialists, they did not form a large or politically powerful group and thus had to surrender

control of their factories to the government as well. All of the country's textile factories were

then nationalized and organized under the Bangladesh Textile Mills Corporation, or BTMC.

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The industry remained under the control of the BTMC until 1982-83. Bureaucratic obstacles

combined with other problems such as low productivity in the labor force, lack of planning,

indiscipline, lack of accountability, and poor machine maintenance and operation resulted in

the reduction of profits.

The government thus gradually denationalized the production of textiles. Factories were

privatized, beginning with the dyeing and weaving units. Since now, much of the industry has

been privatized through auctions and other means.

After 1995 a considerable number of different types of textile industries have been setup in

private sector. Now about 97% of total number of textile industries is in private sector.

The Textile Industry of Bangladesh until 1977-78 was basically domestic oriented. Textile

Industries of Bangladesh first entered into export market through Ready-made Garments in

1977-78 and since then the export oriented ready-made garment industry of the country

made a spectacular growth of fabrics & hosiery products during the last decade. Due to

dependency on imported fabrics & accessories the real foreign exchange earnings from

exports of garments from Bangladesh is only 25% of the total value in case of woven

garments while that from knit garments is upto 80%.

At present Bangladesh yarn manufacturing mills are capable of meeting of about 50% of the

total requirement of export quality knit yarn thus providing scope for maximum value addition

in knit RMG export. Local fabrics manufacturing mills are capable of meeting 80% of local

demand for yarn, about 95% of yarn & knit fabrics demand of export oriented RMG

industries and only 50% of the woven fabrics demand of export-oriented RMG industries.

While agriculture for domestic consumption is Bangladesh’s largest employment sector, the

money gained from exporting textiles is the single greatest source of economic growth in

Bangladesh. Exports of textiles, clothing, and ready-made garments accounted for 77% of

Bangladesh’s total merchandise exports in 2002.Only 5% of textile factories are owned by

foreign investors, with most of the production being controlled by families or Bangladeshi

companies. Immediately after the founding of Bangladesh, tea and jute were the most

export-oriented sectors. But with the constant threat of flooding, declining jute fiber prices

and a significant decrease in world demand, the contribution of the jute sector to the

country’s economy has deteriorated. The garment industry in Bangladesh became the main

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export sector and a major source of foreign exchange starting in 1980, and exported about

$5 billion USD in 2002.

The industry employs about 3 million workers of whom 90% are women. Two non-market

factors have played a crucial role in ensuring the garment sector’s continual success namely

(a) quotas under Multi- Fibre Arrangement1 (MFA) in the North American market and (b)

preferential market access to European markets.

Until the liberation of Bangladesh, the textile sector was primarily an import-substitution

industry. It began exporting ready-made garments (RMG) including woven, knitted, and

sweater garments in 1978, which grew spectacularly during the next two and a half decades-

from US$3.5 million in 1981 to US$10.7 billion in FY 2007. Apparel exports grew, but initially,

the RMG industry was not adequately supported by the growth up and down the domestic

supply chain (e.g., spinning, weaving, knitting, fabric processing, and the accessories

industries). Until FY 1994, Bangladesh's RMG industry was mostly dependent on imported

fabrics-the Primary Textile Sector (PTS) was not producing the necessary fabrics and yarn

Effect of the Agreement on Textiles and Clothing

From 1995-2005 the WTO Agreement on Textiles and Clothing (ATC) was in effect, wherein

more industrialized countries consented to export fewer textiles while less industrialized

countries enjoyed increased quotas for exporting their textiles. Throughout the 10 year

agreement, Bangladesh’s economy benefited from quota-free access to European markets

and desirable quotas for the American markets.

export market USA (textile) USA (clothing) EU (textile) EU (clothing)

market share in 1995 <3% 4% <3% 3%

market share in 2004 3% 2% 3% 4%

Market share in 2013 4.5% 3% 4.3% 5%

As the above table shows, the market shares for Bangladeshi textiles in the USA and both

textiles and clothing in the European Union have changed during the time period of the ATC.

It is uncertain whether these favorable export markets will remain since the expiration of the

ATC in 2005. Textile exports from Bangladesh to the United States did increase by 10% in

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2009. Currently, the textile mills provide 70% of national exports. This proportion is even

higher in Bangladesh. In Bangladesh, the number of employed workers in the textile industry

increased by 400 000 in 1990 to 2 million in 2004, and the number of enterprises – from 800

to 4000. Nine out of ten people employed in the industry – are women. In general, the state

of the textile industry depends on well-being of 10-12 million people in Bangladesh. By IMF

estimates, as a result of the abolition of quota exports of Bangladesh will be reduced by

25%.

Ready-made garments

In the 1980s, the RMG market started its journey. The hurdles of the Multi Fibre

Arrangement (MFA) quotas in 1985 and the Harkin Bill in 1994 were great challenges for the

industry, as were the phasing out of MFA quotas in 2004. Although there was concern that

the MFA phase-out would shut down the industry, the Bangladesh textile sector actually

grew tremendously after 2004 and reached an export turnover of US$10.7 billion in FY 2007.

Bangladesh's export trade is dominated by the RMG industry. The sector currently employs

2.5 million people—about 40% of total manufacturing (85% of these employees are women)

—and accounts for 76% of the country's export earnings and 10% of its GDP.

Major market

Bangladesh was the sixth largest exporter of apparel in the world after china,the EU,Hong

Kong,Turkey and India in 2006.In 2006 Bangladesh's share in the world apparel exports was

2.8%.The US was the largest single market with US$3.23 billion in exports, a 30% share in

2007. Today, the US remains the largest market for Bangladesh's woven garments taking

US$2.42 billion, a 47% share of Bangladesh's total woven exports. The European Union

remains the largest regional destination - Bangladesh exported US$5.36 billion in apparel;

50% of their total apparel exports. The EU took a 61% share of Bangladeshi knitwear with

US$3.36 billion exports. Currently Bangladesh is now second largest ready made garments

manufacturer after china, by the next five years Bangladesh will become largest ready made

garments manufacturer.

Page 24

Employment and labor

Bangladesh’s garment exports – mainly to the US and Europe – make up nearly 80% of the

country’s export income. The country has more than 4,000 factories employing between two

and three million workers. The industry currently employs 1.5 million workers, approximately

80 % of whom are women, many working in hazardous social conditions. It has been a major

source of employment for rural migrant women in a country that has increasingly limited rural

livelihood options, and where women migrants have been largely excluded from formal work

in the cities.

Woven: Woven fabric is a cloth formed by weaving. It only stretches diagonally on the bias

directions (between the warp and weft directions), unless the threads are elastic. Woven

cloth usually frays at the edges, unless measures are taken to counter this, such as the use

of pinking shears or hemming.

Woven fabrics are worked on a big loom and made of many threads woven on a warp and a

weft.

Classification of woven fabrics. Woven fabrics are classified by fiber composition and

purpose, as well as by the methods used in production, finishing, and dyeing.

Woven fabrics are produced from virtually all types of textile fibers and threads. Depending

on the sector of the textile industry producing the fabric and the principal fiber composition,

they may be classified as cotton, linen, wool, silk, or other fabric. Silk fabrics may be

produced from man-made fibers or natural silk. Woven fabrics may be manufactured from a

single type of fiber or thread or with a mixture of not more than 10 percent of another type;

from a blend of threads obtained from several types of fibers; or from an alternation of

various types of threads. Depending on their purpose, woven fabrics may be classified as

domestic or industrial. Domestic fabrics account for approximately two-thirds of the total

quantity of fabrics produced; they are subdivided into apparel fabrics—for undergarments,

dresses, suits, and kerchiefs; decorative fabrics—for upholstery and drapes; and moisture-

absorbing fabrics—for towels and napkins. The textile industry considers fabrics produced in

large quantities, such as calico and satin, as separate groups.

The majority of domestic fabrics are made from cotton. Silk and linen are second and third in

production volume. Wool fabrics may be produced from worsted yarn—a fine, smooth

(combed) yarn—for making dresses, suits, and overcoats; from thicker (condensed) yarn for

overcoats and suits; or from the coarsest, thickest condensed yarn for making overcoats and

Page 25

blankets.The terms “loom state” and “gray goods” are applied to unfinished fabrics that have

been removed from the loom. Yarn-dyed fabrics are produced from threads of various

colors; melange fabrics are obtained from yarn made from a mixture of fibers of different

colors. In addition to a smooth surface, fabrics may also have a fleecy external layer, or nap.

Pile fabrics have a nap, either looped or cut, that is formed by an additional system of

threads; in napped fabrics, the nap is formed from the filling. Felts have a face that is so

compacted as a result of fulling that the weave is concealed. Thickened threads may be

used to form ribs on the surface of fabrics; patterns in relief may also be produced

(seeJACQUARD ATTACHMENT). Multiple fabrics are produced from several superimposed

warps and are held together by common weft threads.

Before fabrics are delivered to a consumer, they are usually subjected to bleaching, dyeing

or printing and various types of final finishing processes. Uniformly dyed fabrics are dyed

with a single color; printed fabrics have a pattern printed on one side In the USSR individual

types of fabrics, differing from one another in even one characteristic, such as thickness of

the threads, number of threads per unit length or width, or weaving pattern, are designated

by an identifying code number. The USSR produces approximately 4,000 individual types of

fabrics.

Primary characteristics and properties of woven fabrics. The structure of a woven fabric

is characterized by the thickness of the threads (judged by thread density, that is, by the

weight in grams of 1 km of thread), by the type of interlacing of threads, by the density of the

weave, by the ratio of the flexure of the warp and weft threads, and by the surface structure

(smooth or napped). The properties and appearance of a woven fabric are determined by

the fabric’s structure, by the properties of the threads, and by the finishing.

In the USSR woven fabrics are certified according to three quality categories: superior, first,

and second. Fabrics that have been awarded the state seal of quality are in the superior

quality category; fabrics that have been classified as of second quality are taken out of

production. Production method, structure, and final finishing are taken into account when a

fabric is assigned to a quality category, as are such indicators as density (the weight of 1 sq

m of fabric), shrinkage, color fastness, whiteness, wearability, pilling, resistance to wrinkling,

and other mechanical properties.

Density characterizes the amount of material used in the manufacture of the fabric and,

indirectly, the fabric’s thickness. It varies from 30 gm per sq m for silk chiffon crepe to 1,000

Page 26

gm per sq m for canvas and belting. The density of the most widely used dress fabrics, such

as calico and satin, is 90–150 gm per sq m, and for wool suiting 250–400 gm per sq m. The

shrinkage of a woven fabric indicates the reduction in size, expressed in percent of the initial

value, after washing, drying, dry cleaning, and storage. Acceptable values are 1.5–5 percent

for warp shrinkage and 1.5–3.5 percent for weft shrinkage. The color fastness of a fabric is

tested for exposure to light, weathering (joint exposure to light and atmospheric conditions),

washing, and friction. Color fastness is judged visually by means of comparisons of the test

samples with standard samples. The highest rating is 8 for exposure to light and to

weathering and 5 for other exposures. The whiteness of a fabric is measured on a

photometer.

A fabric’s wearability—its ability to withstand abrasion, washing, dry cleaning, weathering

and other effects—is determined from experimental wearing of clothing made from the

fabric; it is also measured on instruments that simulate normal wear. Wear-ability is

evaluated on the basis of any reduction in strength, durability, and weight, as well as any

change in the viscosity of a solution obtained by dissolving the fabric in an alkali or acid.

Resistance to abrasion is characterized by the number of use cycles that cause destruction

of the fabric. Abrasion may cause small balls, or pills, to form on the surface of a fabric from

the rolled ends of fibers. Fabrics containing synthetic fibers are particularly prone to pilling.

The coefficient of resistance to wrinkling is determined from the recovery angle of a fabric

sample bent 180° or from the change in the dimensions of an artificially pressed fold.

In order to assess the mechanical properties of a woven fabric, the fabric’s strength and

elongation under stretching are usually measured until the breaking point is reached; fabric

fatigue and other properties are also evaluated. Breaking loads vary from 50 newtons per 50

mm for gauze to 3,500 newtons per 50 mm for canvas and belting; calico has a breaking

load of 250–400 newtons per 50 mm, and wool suiting 350–600 newtons per 50 mm.

Elongation is expressed as the difference between the fabric’s final and initial lengths, in

percent.

Evaluation of the hygienic qualities of woven fabrics includes determination of the ability to

absorb water and water vapor; capillarity; permeability to air, water, and steam; heat

conductivity; and, more rarely, ability to hold an electric chart

Page 27

Table 1: Comparative Statistics of Knit Wear & Woven Wear

  Volume in Million US$

Year Knitwear Woven Wear Total ExportVolume %

change

Share in BD Export

Volume % chang

e

Share in BD Export

RMG Bangladesh

89-90 14.84 0 0.77 609.32 29.34 31.67 624.16 1923.70

90-91 131.20 784.00 7.64 735.62 20.73 42.83 866.82 1717.55

91-92 118.57 -9.62 5.95 1064.00 44.64 53.36 1182.57 1993.90

92-93 204.55 72.51 8.58 1240.48 16.59 52.06 1445.03 2382.89

93-94 264.14 29.13 10.42 1291.64 4.12 50.97 1555.78 2533.90

94-95 393.26 48.88 11.32 1835.09 42.07 52.85 2228.35 3472.56

95-96 598.32 52.14 15.41 1948.81 6.20 50.20 2547.13 3882.42

96-97 763.30 27.57 17.28 2237.95 14.84 50.65 3001.25 4418.28

97-98 940.31 23.19 18.22 2843.33 27.05 55.09 3783.64 5161.20

98-99 1035.36 10.11 19.49 2984.81 4.98 56.18 4020.17 5312.86

99-00 1269.83 22.64 22.08 3082.56 3.27 53.59 4352.39 5752.20

00-01 1496.23 17.83 23.14 3364.20 9.14 52.02 4860.43 6467.30

01-02 1459.24 -2.48 24.38 3124.56 -7.12 52.20 4583.80 5986.09

02-03 1653.83 13.34 25.26 3258.27 4.28 49.76 4912.10 6548.44

03-04 2148.02 29.88 28.25 3538.07 8.59 46.54 5686.09 7602.99

04-05

05-6

06-07

07-08

08-09

09-10

10-11

11-12

2819.47

816.98

4553.60

5532.52

6429.00

6483.29

9076.76

9735.76

31.26

35.38

19.30

21.50

16.20

0.81

40.05

7.26

32.58

36.26

37.39

34.58

41.30

40.00

39.59

40.18

3598.20

4083.82

4567.63

5167.28

5918.51

6013.43

8837.70

9353.97

1.70

13.50

14.05

10.94

14.54

1.60

46.97

5.84

41.58

38.78

38.25

32.30

38.02

37.11

38.55

38.60

6417.67 7900.80

9211.23

10699.80

12347.51

12496.72

17914.46

19089.73

8654.52

10526.16

12177.86

14110.79

15565.19

16204.65

22924.38

24231.09

Source: Export Promotion Bureau

EU is the main export region of Bangladeshi Knitwear constituting 83% (US$ 1780.57

Page 28

million) of total knitwear export in FY 2003-2004 followed by USA (11%, i.e. US$ 236.79 million).

 This has become possible because it

can satisfy the ROO of EU as value

addition is higher (75%) in this sector.

After the adoption of the guidelines

for the application of the scheme of

generalized tariff preferences by EC

knitwear export from Bangladesh to

EU rose precipitously. The two-stage

transformation requirement of ROO in

1999 boosted market penetration in

EU further; it contributed a growth of

101.19% since 2000-2001.

Graph 2: Knitwear Export to Major Markets   

Bangladesh RMG sector has successfully passed some critical tests and is now sailing with

two masts: knit and woven. The sub-sectors are now in healthy competition among

themselves to take the role of leadership within the country.

Textiles ExportDuring the last Fiscal Year (2011-12) our total export volume was USD 24.23 billion while

the same was USD 22.92 billion in the last fiscal 2010-11. The growth achievement is near

about 5.7% whereas growth in RMG is 6.5%. Out of the total export, export from the textile

sector for the FY 2011-12 is USD 21.30 billion which is 87.9%. So contribution from textile

sector is alone nearly 88%. The composition of the textile export is given hereunder:

Page 29

Illustration-1: Textiles Export Composition

 

Page 30

RMG ExportOut of the total textile export RMG (knit & oven apparel) export was equivalent to USD 19.09

billion which is equivalent to 89.60% of total textiles export. In relation to the total export from

Bangladesh, the contribution of RGM export is equivalent to 78.78%. The RMG export trend

is given hereunder in tabular form:

Table-1: RMG & Total Export Trend for the last 10 years

Fiscal YearRMG Export inMillion USD

Growth in RMG Export

Total Export in Million USD

Growth in Total Export

2002-03  4912.09 7.16% 6548.44 9.39%2003-04 5686.09 15.76% 7602.99 16.10%2004-05  6417.67 12.87% 8654.52 13.83%2005-06 7900.8 23.11% 10526.16 21.63%2006-07 9211.23 16.59% 12177.86 15.69%2007-08 10699.8 16.16% 14110.8 15.87%2008-09 12347.77 15.40% 15565.19 10.31%2009-10 12496.72 1.21% 16204.65 4.11%2010-11 17914.46 43.35% 22924.38 41.47%2011-12 19089.73 6.56% 24231.09 5.70%

*** Raw Data has been collected from Export Promotion Bureau

 

Illustration-2: Percentage of RMG export to Total Export

Page 31

RMG export growth leads Export GrowthThe average growth rate for the last 10 FY commencing from 2002-03 FY is 15.82% where

total average export growth for the same period is 15.41%. It indicates that only RMG export

growth leads the export growth of Bangladesh as RMG export growth> Total Export Growth.

But the alarming news is that the growth in export is not steady. The growth is deviated by

almost 11% (15.41% ± 11%) which indicates volatility of the sector. The following chart will

clarify it more:

Illustration-3: Comparison of RMG export Growth to Total Export Growth

Page 32

Knit & Woven CompositionThroughout 10 years we were good in woven export but afterwards Bangladesh has become

very strong in knit garments production also. The statistics show the contribution of both knit

and woven in RMG export is similar i.e. 50:50 now. In the fiscal year 2011-12, knit sector

was stagnant- had no growth and woven sector covered the gap of the previous year with a

significant growth.

Illustration-4: Comparison of RMG export Growth to Total Export Growth

 

Page 33

Table-2: Growth in Knit & Woven Exports

Fiscal YearGrowth in Woven Export

Growth in Knit Export

2002-2003 4% 13%2003-2004 9% 30%2004-2005 2% 31%2005-2006  13% 35%2006-2007  14% 19%2007-2008 11% 21%2008-2009 15% 16%2009-2010 2% 1%2010-2011 40% 46%2011-2012 14% 0%

*** Raw Data has been collected from Export Promotion Bureau

 

Export Trend with Different CountriesExport trend with different countries shows mixed picture. Somewhere tremendous growth

has occurred and somewhere negative trend is prevailing. This is not good for highest export

earning sector. Steady growth to be maintain to ensure sustainability in the sector

Page 34

Page 35

There are several countries where we are facing negative growth ranging from -2% to -68%

which is very significant and notable but to be worked out why we are facing such negative

growth. Other alarming findings are that in some countries we have achieved significant

growth in 2010-11 FY but in 2011-12 we have touched negative growth e.g. In Turkey our

growth in 2010-11 was 69% but in current FY it reduced to -38%. Below illustration shows

that in 2010-11 we earned positive significant growth but in 2011-12 we faced significant

negative growth. It is a matter to think

Illustration-5: Countries with negative growth in 2011-12

Consistent negative growth was prevailing in USA (-2%), Canada, Slovakia, Greece,

Finland, France but differences increase in Portugal, turkey, Netherlands, and Hungary.

In some countries we earned positive growth but those are inconsistent, for an example, in

Lithuania growth in 2010-11 was 464% which reduced to 87% in 2011-12 FY. Such example

may be applied for Estonia, Poland, Korea Republic, China, Australia, Austria, India. This is

not good signal for the industry. Consistent growth is important for sustainability of the

market.

Page 36

 Illustration-6: Countries with positive growth

 

Concluding RemarksYes we are still holding the 2nd position in the global RMG export market but the growth is

not steady. It is the right time to concentrate more on the analytical actions. The actions may

include:

1. Where we have negative growth, we need to find out the reasons behind it and these

facts findings should be done by the trade bodies and government agencies for its

greater interest.

2. Where we have positive growth, we need to undertake promotional steps so that

more growth can be achieved and to make sure that current growth prevails.

3. New destinations should be looked for as we are getting threat openly from the

matured manufacturers.

Actions to be expedited higher than the pace we are applying now to protect the interest of

the nation.

Page 37

RMG export may triple to $44.66b by 2020

Bangladesh‘s ready-made garments (RMG) export may triple to 44.66 billion US dollar by

2020 if the new opportunities are properly utilized, reports UNB.

Experts said at a seminar, titled ‘Opportunities and Challenges in the Changes in Global

Sourcing Scenario’, held at Westin Hotel in the capital on Sunday. Chaired by BGMEA

president M Shafiul Islam Mohiuddin, the seminar was addressed, among others, by Foreign

Minister Dipu Moni, fellow of the Centre for Policy Dialogue (CPD) Dr Debapriya

Bhattacharya, director of Brac Business School (BBS) Prof Mamun Rashid and general

manager of Intertek Consumer Goods Karthik.N.D. The speakers expressed the optimism

that the export growth of country’ s garments even could exceed that target if the emerging

markets are fully explored in the next 7-8 years. The mentioned that garments export

fetched the country 17.91 billion dollar last year. Senior Research Fellow of Bangladesh

Institute of Development Studies (BIDS) Nazneen Ahmed and senior adviser of Promotion of

Social and Environmental Standard in the Industry (PSES) Sarwat Ahmed presented two

‘key-note’ papers at the seminar, organised by Bangladesh Garment Manufacturers and

Exporters Association (BGMEA). In her presentation, Nazneen Ahmed said, the country’s

RMG export‘s share in non-traditional markets has increased significantly over the last three

years and its growth is likely to double by 2015. The speakers laid special emphasis to

explore the new markets for the development of the RMG sector.

Page 38

Contribution of the RMG Sector in Bangladesh In the development history of Bangladesh, RMG sector contributed a lot in terms of

employment generation, involving women in the formal sector, increased substantial export

earnings etc. One significant aspect of the RMG's contribution in the development is the

human development aspect. The sector contributed a lot in the following areas:

√ Women empowerment

√ Gender equality

√ Improved health & nutrition

√ Reduced child marriage

√ Reduced infant mortality

The development in the sector also contributed a lot in the growth and development of the

backward linkage industry of the country.

Comparative Structure of Gross & Net Exports of Bangladesh (FY 2010-11)

 

Graph 5: Structure of Gross Export  Graph 6: Structure of Net Export

Though woven is the highest contributor (47%) in terms of gross export, but knit becomes

the most significant component if we consider net export with a share of 32%. This has

resulted because of the backward linkage industry that has grown over time which helped

the knitwear sector to have the higher value addition and there fore a much higher net

retention rate.

Year 1994 2000 2006

Page 39

 

  Value Addition: 50% 70% 75%

  Net Retention: 40% 55% 60%

Structure of Textile Industry of Bangladesh

The textile industry of the country comprises more than 36 sub-sectors of which the main

sub-sectors are:

a Spinning Mills

a Weaving Mills

a Weaving in Decentralized Power-loom Units

a Handloom Units

a Hosiery Units

a Knitting and Knit Dyeing-Finishing Mills

a Dyeing, Printing & Finishing Mills

SWOT Analysis on RMG: Strength:•Advantage over China, Pakistan & India

•Adequate supply of labor force of both sexes, attributed with less attitudes problem (less

absenteeism and, aptitude for learning, and loyal) and high morale

•Cheaper labor cost

•Low cost of captive power generation using gas as fuel

•GSP facility up to 2015 (renewed recently) .

Considerable Qualified/keen to learn workforce available at low labor charges.

Weakness:•Bangladesh produce mostly basic products- which are low cost items; the share of fashion

products i.e., high value added product is very low.

•Bangladesh does not produce the basic raw materials (only a negligible quantity of cotton

but no manufactured fiber) and as such has to depend totally on sensitive global market.

•Because of inadequate backward linkage, lead-time happens to be long, nearly 3 months.

•Public power supply is erratic.

Page 40

•Bank interest rate is still high enough, particularly of private sector bank, for investment of

export oriented high value project.

•HRD facility, productivity and quality support, testing and accreditation support, design

support and compliances are yet to be enhanced.

•Cost of doing business is high because of under table money

Opportunity:•Bangladesh has now a scope to go for more fashion oriented products deserving high price

in the global market.

•With the help of further increase of productivity & quality and design support, Bangladesh

can minimize cost and maximize profit and export value.

•Bangladesh, as a proven experienced RMG & Textile manufacturer, can expand share in

the existing market (USA, EU, Australia, Canada, etc.) and can also explore opportunity in

Japan & CIS countries.

•In the long run, Bangladesh has a scope to target huge populated country like China and

India- where demand as well as cost of manufacturing will be wider.

Threat:•Unless new strong market is explored in home or abroad, any non-cooperation from USA &

EU may jeopardize the whole Bangladesh RMG export business and consequently the

textile manufacturing.

•Sudden price hike of cotton and yarn in the global market may push Bangladesh to a very

awkward situation to devastate the business.

•The type of labor and political anarchies of the recent days if prevails in the future,

Bangladesh may lose the business in the way Sri Lanka has lost.

•Growing terrorism, or its false/amplified propaganda, is also a big threat.

•The poor political culture and violence is one of the most important threats.

In order to make further boom, Bangladesh has to create new capacities and modernize &

balance the existing ones. Encouragement of FDI from ethnic Bengalis in foreign countries

would be one of the best options for the needed financing in addition to the local banks'

efforts. Power supply has to be ensured.

Bangladesh needs to develop capacities to provide the industries with a sustainable supply

of resource personnel and support services in regard of research, design, testing &

standardization, accreditation, compliances, etc.

Bangladesh has to improve the port efficiency further and gear up domestic transportation.

Page 41

Labor crisis, labor safety, social rights and gender issues have to be dealt with more

efficacies. It is important that the buyers should have a preferred access to the country;

starting from reception on arrival to facilities such as hotel/rest house, tourism and recreation

should be improved.

Present Position of Readymade Garment Industry in BangladeshPresent Position of Readymade Garment Industry in Bangladesh

The glory that was in manufacturing and export of world famous Muslin and Nakshi Katha

will perhaps never come back. But it is a mater of great satisfaction that a new found

reputation has replaced some of that faded glory. It has put Bangladesh convincingly in the

industrial map of the world as we emerged in the world market as one of the major exporters

of readymade garments.

After independent of our country when traditional items of export could not yield expected

result, in late 70s the government and a section of young, educated and dynamic

entrepreneurs began to emphasize on development of non-traditional items of export. By the

year 1983, readymade garment (RMG) emerged to be a non-traditional export oriented

sector, most promising in the socioeconomic context of the country.

Within a short period of time, it has attained high importance in terms of its contribution to

GDP, foreign exchange earnings and employment and also as vehicle of social changes.

Both domestic and international environment favored the rapid growth of this industry in

Bangladesh. Thus the 100% export-oriented RMG industry experienced phenomenal growth

during the two decades.

Growth of RMG Export from Bangladesh

Page 42

In 1978 the RMG industry was started its operation in Bangladesh with nine enterprises and

has grown at a blistering pace since. The export position of RMG for last 12-years and its

growth shown at Table

Table-: Quantity of Export of RMG and Earnings from Export of RMG

Year Total Apparel Export

(In Million DZ)

Total Apparel Export Earning

(In Million US$)

Woven Knit Total Woven Knit Total

1998-19991998-1999 64.79 36.66 101.45 2984.96 1035.02 4019.98

1999-2000 66.63 45.27 111.90 3081.19 1268.22 4349.41

2000-2001 71.48 52.54 124.02 3364.32 1495.51 4859.83

2001-2002 77.05 63.39 140.44 3124.82 1458.93 4583.75

2002-2003 82.83 69.18 152.01 3258.27 1653.82 4912.09

2003-2004 90.48 91.60 182.08 3538.07 2148.02 5686.09

2004-2005 92.26 120.13 212.39 3598.20 2819.47 6417.67

2005-2006 108.82 165.02 273.84 4083.82 3816.98 7900.80

2006-2007 133.08 199.54 332.62 4657.60 4553.60 9211.20

2007-2008 147.43 241.60 389.03 5167.30 5532.50 10699.80

2008-2009 169.59 290.92 460.51 5918.50 6429.30 12347.80

2009-2010 172.80 292.70 465.50 6013.43 6483.29 12496.72

2010-2011254.00 439.54 693.54 8837.70 9076.76 17914.46

2011-2012 268.87 439.54 708.41 9353.97 9735.76 19089.73

Source: Export Promotion Bureau & BGME

Page 43

Table –Growth Rate of Export of RMG

Year Growth considering Export Quantity Growth considering Export Earnings

Woven Knit Total Woven Knit Total

1998-

1999  Base Year          

1999-

2000 2.84% 23.49% 10.30% 3.22% 22.53% 8.19%

2000-

2001 7.28% 16.06% 10.83% 9.19% 17.92% 11.74%

2001-

2002 7.79% 20.65% 13.24% -7.12% -2.45% -5.68%

2002-

2003 7.50% 9.13% 8.24% 4.27% 13.36% 7.16%

2003-

2004 9.24% 32.41% 19.78% 8.59% 29.88% 15.76%

2004-

2005 1.97% 31.15% 16.65% 1.70% 31.26% 12.87%

2005-

2006 17.95% 37.37% 28.93% 13.50% 35.38% 23.11%

2006-

2007 22.29% 20.92% 21.47% 14.05% 19.30% 16.59%

2007-

2008 10.78% 21.08% 16.96% 10.94% 21.50% 16.16%

2008-

2009 15.03% 20.41% 18.37% 14.54% 16.21% 15.40%

2009-

2010 1.89% 0.61% 1.08% 1.60% 0.84% 1.21%

Average 9.51% 21.21% 15.08% 6.77% 18.70% 11.14%

Page 44

The growth rate in last 11-years is more than 300% and annual average growth rate was

11.14% in terms of export earnings and 15.08% in terms export quantity. Growth in last year

(2009-2010) was insignificant due to world economic crisis started in 2008. This phenomenal

growth is due largely to the simple level of technology required in the industry. The

machinery is relatively inexpensive and easily available. In addition, garment producers can

operate in smaller premises than those required by most of the processes in the textile

industry. On top of this, Bangladesh has an abundant supply of cheap labor consisting

mostly of women for whom this is one of the most suitable forms of employment.

But till now RMG exports form Bangladesh is concentrated in a relatively limited range ofBut till now RMG exports form Bangladesh is concentrated in a relatively limited range of

products such as basic Shirts, T-shirt, Trousers and Shorts. To be internationally competitive,products such as basic Shirts, T-shirt, Trousers and Shorts. To be internationally competitive,

Bangladesh needs to expand its product range and should begin producing fashion-wearBangladesh needs to expand its product range and should begin producing fashion-wear

and higher value added items. Meanwhile, export order of different value added items areand higher value added items. Meanwhile, export order of different value added items are

coming but Bangladeshi exports are not being able to accept those due to lack productioncoming but Bangladeshi exports are not being able to accept those due to lack production

facilities. Considering the fact DBL Group is going to build its capacity towards higher valuefacilities. Considering the fact DBL Group is going to build its capacity towards higher value

added items like Garments of Printed Knit Fabrics and the way of this they have decided toadded items like Garments of Printed Knit Fabrics and the way of this they have decided to

set-up the proposed Textile Printing project. set-up the proposed Textile Printing project.

The Strengths of RMG Sector of BangladeshThe Strengths of RMG Sector of Bangladesh

The competitive strength of a firm or a company in the market depends on its specific

comparative advantages, which its competitors do not have. A particular uniqueness of a

supplier shapes up its strategic advantage profile. In case of Bangladesh, this uniqueness is

the unlimited availability of unusually cheap but usable workforce. It is the abundant supply

of comparatively cheap workforce that stands out as the most significant strength.

Page 45

Denim (which gets its name from the French city “from Nîmes” (de Nîmes)) is a rugged

cotton twill textile, in which the weft passes under two (twi- “double”) or more warp threads.

This twill weaving produces the familiar diagonal ribbing of the fabric, which distinguishes

denim from cotton duck. It is characteristic of any indigo denim that only the warp threads

are dyed, whereas the weft threads remain plain white. As a result of the warp-faced twill

weaving, one side of the fabric shows the blue warp threads, the other side shows the white

weft threads. This is why jeans are white from the inside and what makes their fading

characteristics so unique compared to every other fabric. Denim has been used in America

since the late 18th century. The word comes from the name of a sturdy fabric called serge,

originally made in Nîmes, France, by the André family. Originally called Serge de Nîmes, the

name was soon shortened to denim. Denim was traditionally colored blue with indigo dye to

make blue “jeans”, though “jean” then denoted a different, lighter cotton textile; the

contemporary use of jean comes from the French word for Genoa, Italy (Gênes), where the

first denim trousers were made.

Denim is mostly used to make Jeans. Beside jeans, denim has many application. This

special denim-themed issue of the cotton incorporated Lifestyle Monitor celebrates the

present and the future of denim and the blue jean. An examination of the current denim

market, trends and a look towards the future is easier than trying to pinpoint the historical

origins of what could be called the world’s most popular fabric.

Page 46

Denim Types:1. Natural Denim

2. Polycore Denim

3. Ring-spun Denim

4. Ring-Ring Denim

5. Ring Denim

6. Bull Denim

7. Dual Ring Spun

8. Black-Black Denim

9. Open-End Denim

10. Over Twisted Denim

11. Printed Denim

12. Reverse Denim

13. Pinto wash Denim

There are also some types of denim such as:

Dry denim

Selvage denim

Stretch denim

Colour denim

Uses of Denim:

Jeans

Bags & purses

Capri pants

denim skirts

Dresses

Hats

Jackets

Overalls

Shirts

Booties & shoes

Shorts

Cut offs

Daisy Dukes

Swimwear

Crafted items

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Sofa covers

Director-style chair

Lampshades

Hassocks

Dry or raw denim, as opposed to washed denim, is a denim fabric that is not washed after

being dyed during its production. Over time, denim will generally fade, which is often

considered desirable. During the process of wear, it is typical to see fading on areas that

generally receive the most stress, which includes the upper thighs (whiskers), the ankles

(stacks) and behind the knees (honey combs).

After being crafted into an article of clothing, most denim is washed to make it softer and to

reduce or eliminate shrinkage, which could cause an item to not fit after the owner washes it.

In addition to being washed, non-dry denim is sometimes artificially “distressed” to produce a

worn look.

Much of the appeal of factory distressed denim is that it looks similar to dry denim that has,

with time, faded. With dry denim, however, such fading is affected by the body of the person

who wears the jeans and the activities of his/her daily life. This creates what many

enthusiasts feel to be a more natural, unique look than distressed denim.

To facilitate the natural distressing process, some wearers of dry denim will often abstain

from washing their jeans for more than six months, though it is not a necessity for fading.

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Selvedge on a pair of jeans

Selvedge denim

Selvedge denim (alternative spelling: selvage denim) is a type of denim which forms a

clean natural edge that does not unravel. It is commonly presented in the unwashed or raw

state. Typically, the selvedge edges will be located along the out-seam of the trousers,

making it visible when cuffs are worn.

The word “selvedge” comes from the phrase “self-edge”, the natural edge of a roll of fabric.[]

As applied to denim, it means that which is made on old-style shuttle looms. These looms

weave fabric with one continuous cross thread (the weft) that is passed back and forth all the

way down the length of the bolt. As the weft loops back into the edge of the denim it creates

this “self-edge” or selvedge. Selvedge is desirable because the edge cannot fray like denim

made on a projectile loom that has separate wefts, which leave an open edge that must be

stitched.] This advantage is only realized on one edge of the fabric, however, as the fabric

has to be cut to shape and anywhere it is cut the self-edge is lost.

Shuttle looms weave a narrower piece of fabric, and thus a longer piece of fabric is required

to make a pair of jeans (approximately 3 yards). To maximize yield, traditional jean makers

use the fabric all the way to the selvedge edge. When the cuff is turned up, the two selvedge

edges (where the denim is sewn together) can be seen. The selvedge edge is usually woven

with a coloured stripe: green, white, brown, yellow, and (most commonly) red Fabric mills

used these colours to differentiate between fabrics. Contrary to popular belief, the stripe is

not sewn in finishing the product, but woven into the fabric itself.

Most selvedge jeans today are dyed with synthetic indigo, but natural indigo dye is available

in some denim labels.[ Though they are supposed to have the same chemical make-up,

there are more impurities in the natural indigo dye.[ Loop dying machines feed a rope of

cotton yarn through vats of indigo dye and then back out. The dye is allowed to oxidize

before the next dip. Multiple dips create a dark indigo blue.

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In response to increased demand for jeans in the 1950s, American denim manufacturers

replaced the old shuttle style looms with modern projectile looms. The new looms produced

fabric faster and wider (60 inches or wider). Synthetic dying techniques along with post-dye

treatments were introduced to control shrink and twist

Fades caused by prolonged periods of wear, without wash, have become somewhat of the

main lure to the raw denim. These fades are categorized by certain names:

• Whiskers – Faded streaks that surround the crotch area of the denim.

• Combs – Also known, as “honey combs” are the streaks of faded lines that are found

behind the knee.

• Stacks – Produced by having the inseam of the denim hemmed a few inches longer than

actual leg length. The extra fabric stacks on top of the shoe causing a fade to form around

the ankle to calf area of the denim.

• Train Tracks – appears on the outseams of the denm. This fade showcases the selvedge

by forming two sets of fades that resemble train tracks.

Stretch denim

Stretch denim usually incorporates an elastic component (such as elastane) into the fabric to

allow a degree of give in garments. Only a small percentage is required within the fabric

(approximately 3%) to allow a significant stretch capacity of around 15 percent.

Color denim

Denim fabric dyeing is divided into two categories; indigo dyeing and sulfur dyeing. Indigo

dyeing produces traditional blue colors or shades similar to blue colors. Sulfur dyeing (also

called color denim) is used to create specialty black colors and other colors like pink, grey,

rust, mustard, green, and also improve the qualitity

Denim industry in Bangladesh:

The 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

Page 50

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. Beximco Denim, Envoy Textiles Ltd., Royal Denim Ltd.,

Shasha Denim, Marfani Denim Mills, Partex Denim Mills Ltd., Artistics Denim Mills Ltd.,

Chittagong Denim Mills Ltd. , Ali Hossain Textile Mills Private Ltd., Argon Denims Ltd.,

Hameem Group are most denim producers in Bangladesh. Bangladesh has great future of

denim. We can export denim to EU,USA,etc more than China because of our low labour

cost. Among the new textile items, denim fabrics and sweater are gradually becoming the

flagship products for the local exporters. Industry insiders said during the last four years,

production of denim has increased from 28 million metres per year to 200 million metres in

2006. The sub-sector is nowproducing denim enough to meet the entire demand of the

export oriented readymade garments units for the same, said the Bangladesh Textile Mills

Association (BTMA). Bangladesh emerged as the number one supplier of denim clothes to

the European market, commanding 27 per cent share during the 1st half of 2006. The BTMA

claims that availability of locally produced denim fabrics and enhanced ability to offer the

same at most competitive prices have helped Bangladesh gain greater market share.

Restrictions on certain apparels of some Asian countries in the EU market have also

benefited the Bangladesh denim sector. In terms of earnings, Bangladesh, however, ranked

third in the EU market because of the exporters’ concentration in low cost dresses. During

the January-June 2006 period Bangladeshi apparels manufacturers shipped about

24 million pairs of denim jeans in men’s & boys category to Europe. In women’s & girls’

denim category, Bangladesh exporters saw the volume increased by more than 91 per cent

to about 17 million pairs during January- June 2006.

Export of Denim:The US imports of denim have been a cause for concern this year. The fall in imports has

been consistently rising and almost touching a negative growth of 14.3% from Jan to Sept

compared to similar period in 2010.

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China has shown the most significant fall in export figures and some other countries like

Bangladesh, Cambodia etc also follow but in smaller percentages. The imports have fallen

significantly in 2011 when compared to the same period in 2010. This fall is significant since

we have seen that denim sales have ditched the recessionary pattern in the past that other

apparel Products have shown. The current market reports coming from EU are not very

encouraging .Many retailers are believed to be holding their purchases or delaying them. In

fact , one of the major retailer from EU is believed to have postponed a major part of a

20million pcs order .. The situation does not look so good. But when we look at the figures of

imports of denim apparel from Jan to July 2011 as compared to the similar period in 2010,

we find a totally

different situation. The import of jeans into EU has actually increased by 5% over the same

period in 2010.

Bangladesh Export Of Denim Jeans To EU : 2005-2009

June 3rd, 2010 by Sandeep Agarwal | Filed under Denim Data & Figures.

Bangladesh is a major exporter of denim jeans to EU27. Being low priced and with special

and indefinite duty free and quota free access under ‘Everything but arms’  initiative to EU ,

Bangladesh continues to dominate the EU denim import business.  Currently, it has about

19% share of the denim jeans import market in EU27 countries.

Lets have a look at the figures of imports of denim jeans from Bangladesh for the last 10

years.

Page 52

Year Total Denim Jeans (million pcs)

Value (million Euros)

Average Price (Euro/pc CIF)

2000 16.46 87.92 5.342001 25.50 120.26 4.722002 32.69 144.69 4.432003 48.50 190.87 3.942004 63.71 247.52 3.882005 63.29 245.42 3.882006 85.07 341.78 4.022007 74.57 289.98 3.892008 81.94 317.23 3.872009 89.68 373.93 4.17

 

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Thus we can see that the exports of denim jeans have increased by almost 400%  from 2000 to 2009 . There have been some years in which the exports increased by a large % as compared to the previous year . These years have been : 2001    : Increase  54% 2002   : Increase 28% 2003   : Increase 48% 2004  : Increase 31% 2006 :  Increase 34% 2009 : Increase 10%

The prices from Bangladesh have been more or less moving in a narrow range of Euro 3.8  to 4.20 since 2003. Though in earlier years, the prices were much higher, but recent years have seen the prices move around in this range.

There is no clear trend in the prices from Bangladesh if we consider these figures. However,   would it be the similar situation if the Euro prices

were converted to dollar prices . In the table below, we have taken the average conversion factor (from Euro to USD) for each year from 2000 to

2009 and applied the factor to the average prices for that year. This gives us the average dollar prices for export of denim jeans from   Bangladesh

to Eu . With this table we will come to know whether there is really no trend for prices from Bangladesh:

Year Euro To USD

average factor

Av Price  (Euro)

Av. Price (USD)

2000 1.09 5.34 4.892001 1.12 4.72 4.212002 1.06 4.43 4.182003 0.89 3.94 4.422004 0.80 3.88 4.852005 0.80 3.88 4.852006 0.80 4.02 5.022007 0.73 3.89 5.322008 0.68 3.87 5.69

2009 0.72 4.17 5.79

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In the table and chart above, we can see that actually the prices from Bangladesh are quite different than what Euro prices show. We can see that since 2002 the average prices  in Euro terms (from 2002 to 2009) have declined by more than 5% whereas there is an  uptrend in dollar terms  and the prices have increased from $4.43 per piece in  2002  to $ 5.79 in 2009 – actually showing an increase of  about 30%

Dollar being the ruling currency worldwide, gives  a better picture of the prevailing price

situation and it clearly reflects that the prices from Bangladesh are continuously and steadily

rising over the years. This is despite the fact that the volumes have increased manifold

during this period. The Bangaldesh denim export industry is only expected to grow stronger

in the coming times . We have seen a number of denim mills also come up in Bangladesh

and this strengthens the supply chain making it easier for Bangaldesh to go deeper into

these markets.

Page 55

Imports Of Women’s/Girls Denim Jeans Into US From Bangladesh 2000-2009Year Quantity(mill

ion pcs)Value (Million USD)

Av. Price (CIF Value) per jeans

2000 1.57 10.52 6.692001 3.54 24.99 7.062002 4.95 35.09 7.102003 2.95 20.29 6.872004 4.42 28.46 6.442005 9.97 57.33 5.752006 14.62 82.16 5.622007 15.77 80.68 5.122008 18.46 100.20 5.432009(Jan-Sept)

16.28 85.92 5.28

Total 92.52 525.6 5.68

 

It is interesting to note that though there was not much difference in the export quantity of

the jeans from India and Bangladesh in 2000, Bangladesh now exports over 4 times the

quantity of women’s jeans than India. However, India has the lead in price of almost 40%–

though it has experienced a constant fall in average prices since the year 2000. But this

price difference is also due to the reason that India does not export much quantity of basic 5

pocket jeans

The figures are quite inspiring and confusing at the same moment. They do not reflect the

current economic turmoil that Europe is going through. The price increase , though seems

justified as the impact of cotton price increases of last year have continued to be felt this

year at the retail level. Many countries have increased their exports with China having

increased about 3%. However, what happens in the next few months shall be very important

and indicative for the industry . The reports coming from major exporting to EU countries

including Bangadesh , China, Pakistan etc have not been very good. Most of the apparel

exporters have indicated that they are short of orders or have requests from the buyers to

postpone the orders to next year.

Page 56

Domestic denim brands penetrate US market

Bangladeshi brands have penetrated the American and Western markets and buoyed by

this, they are targeting to capture 10 percent of America’s huge jeans market.

Two brands that have made huge impact in the above markets include ‘Envoy’ and ‘Sasha’.

Bangladesh is riding high on the factors such as cheap labour and fair prices which have

made it the leader in world market projected at US $70 billion.

Bangladesh export, which earned the country $2.07 billion, an increase of 42 percent

included items like trousers mainly jeans.

The report while revealing that Bangladeshi trouser makers had left countries such as China

and Mexico well behind, did not name India even though it is one of the biggest exporters of

this item.

Share of Bangladeshi exports to US doubled to 2.33 percent in 2005 and it further jumped to

more than 5 percent in the first quarter of 2006 while export from major players such as

Mexico and China fell during the same period.

Exporters from Bangladesh sold the denim at $78 for a dozen as against $99 and $102 of

China and Mexico. Experts have projected that if this trend goes on Bangladesh will be able

to capture 10 percent of US denim trouser market by the end of the year.

Its success story is not limited to US market alone with the exports to European Market

showing a positive outlook during the first half of 2006.

Hennes & Mauritz (H&M) Chief Executive of Bangladesh Operations, Pearl Kerlsson said

that Bangladeshi trousers and denims have a bright future ahead as they are highly

competitive.

Abdus Salam Murshey, the Ex-Vice President of Bangladesh Garment Manufacturers and

Exporters Association (BGMEA) stated that they were the most competitive supplier and that

Page 57

is the reason buyers have shifted their focus on us.

Future of Denim:For financial crisis import percentage of denim of USA has decreased in this year. But import

percentage of EU has increased and also price is increased. Day by day labour cost in china

is increased. So we have to catch international market. Our production quality is very good

and our industries are equipped with modern textile machineries and still now our labour cost

is low. So I think we have great business of denim.

COMPARATIVE STATEMENT ON EXPORT OF RMG AND TOTAL EXPORT OF BANGLADESH

YEAR EXPORT OF RMG(IN MILLION US$)

TOTAL EXPORT OF BANGLADESH (IN MILLION US$)

% OF RMG’S TO TOTAL EXPORT

1983-84 31.57 811.00 3.891984-85 116.2 934.43 12.441985-86 131.48 819.21 16.051986-87 298.67 1076.61 27.741987-88 433.92 1231.2 35.241988-89 471.09 1291.56 36.471989-90 624.16 1923.70 32.451990-91 866.82 1717.55 50.471991-92 1182.57 1993.90 59.311992-93 1445.02 2382.89 60.641993-94 1555.79 2533.90 61.401994-95 2228.35 3472.56 64.171995-96 2547.13 3882.42 65.611996-97 3001.25 4418.28 67.931997-98 3781.94 5161.20 73.281998-99 4019.98 5312.86 75.671999-00 4349.41 5752.20 75.612000-01 4859.83 6467.30 75.142001-02 4583.75 5986.09 76.572002-03 4912.09 6548.44 75.012003-04 5686.09 7602.99 74.792004-05 6417.67 8654.52 74.152005-06 7900.80 10526.16 75.062006-07 9211.23 12177.86 75.642007-08 10699.80 14110.80 75.832008-09 12347.77 15565.19 79.332009-10 12496.72 16204.65 77.122010-11 17914.46 22924.38 78.15

2011-2012 19089.73 24231.09 78.78

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Data Source Export Promotion Bureau Compiled by BGMEA

VALUE AND QUANTITY OF TOTAL APPAREL EXPORTFISCAL YEAR BASIS(VALUE IN MN. US$ QUANTITY IN MN DOZEN)

YEAR

TOTAL APPAREL EXPORT IN MN.US$

    TOTAL APPAREL EXPORT IN MN.DZ    

WOVEN  KNIT TOTAL WOVEN  KNITTOTAL1992-93 1240.48 204.54 1445.02 36.05 10.66 46.711993-94 1291.65 264.14 1555.79 34.35 10.81 45.161994-95 1835.09 393.26 2228.35 47.21 15.30 62.511995-96 1948.81 598.32 2547.13 48.82 23.18 72.001996-97 2237.95 763.30 3001.25 53.45 27.54 80.991997-98 2844.43 937.51 3781.94 65.59 32.60 98.19

1998-99 2984.96 1035.02 4019.98 64.79 36.66 101.45

1999-2000  3081.19 1268.22 4349.41 66.63 45.27 111.90

2000-2001 3364.32 1495.51 4859.83 71.48 52.54 124.02

2001-2002 3124.82 1458.93 4583.75 77.05 63.39 140.44

2002-2003 3258.27 1653.82 4912.09 82.83 69.18 152.01

2003-2004 3538.07 2148.02 5686.09 90.48 91.60 182.08

2004-2005 3598.20 2819.47 6417.67 92.26 120.1

3 212.39

2005-2006  4083.82 3816.98 7900.80 108.82 165.0

2 273.84

2006-2007  4657.63 4553.60 9211.23 133.08 199.5

4 332.62

2007-2008 5167.28 5532.52 10699.80 147.43 241.6

0 389.03

2008-2009 5918.51 6429.26 12347.77 169.59 290.9

2 460.51

2009-2010 6013.43 6483.29 12496.72 172.80 292.7

0 465.50

2010-2011 8432.40 9482.06 17914.46 247.28 441.0

3 688.31

2011-2012 9353.97 9735.76 19089.73 268.87 439.5

4 708.41

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MAIN APPAREL ITEMS EXPORTED FROM BANGLADESH(VALUE IN MN. US$)

YEAR SHIRTSTROUSERS

JACKETS

T-SHIRTSWEATER

1993-94 805.34 80.56 126.85 225.90 ….1994-95 791.20 101.23 146.83 232.24 ….1995-96 807.66 112.02 171.73 366.36 70.411996-97 759.57 230.98 309.21 391.21 196.601997-98 961.13 333.28 467.19 388.50 296.291998-99 1043.11 394.85 393.44 471.88 271.701999-2000  1021.17 484.06 439.77 563.58 325.072000-2001 1073.59 656.33 573.74 597.42 476.872001-2002 871.21 636.61 412.34 546.28 517.832002-2003 1019.87 643.66 464.51 642.62 578.372003-2004 1116.57 1334.85 364.77 1062.10 616.312004-2005 1053.34 1667.72 430.28 1349.71 893.122005-2006  1056.69 2165.25 389.52 1781.51 1044.012006-2007 943.44 2201.32 1005.06 2208.9 1248.092007-2008 915.6 2512.74 1181.52 2765.56 1474.092008-2009 1000.16 3007.29 1299.74 3065.86 1858.622009-2010 993.41 3035.35 1350.43 3145.52 1795.39

2010-2011 1566.42 4164.16 1887.50 4696.57 2488.19

Page 60

VALUE AND QUANTITY   OF TOTAL APPAREL EXPORT CALENDAR YEAR BASIS(VALUE IN MN. US$ QUANTITY IN '000 DOZEN)

YEAR

TOTAL APPAREL EXPORT IN MN.US$

   TOTAL APPAREL EXPORT IN MN DZ

   

WOVEN  KNIT TOTAL WOVEN  KNIT TOTAL1994 1544.89 341.53 1886.42 41.64 13.77 55.411995 1976.40 512.18 2488.58 49.38 19.83 69.211996 1942.37 686.27 2628.64 47.54 26.11 73.651997 2621.33 810.49 3431.82 60.56 27.99 88.551998 2871.06 976.29 3847.35 64.23 34.59 98.821999 2987.73 1169.90 4157.63 64.93 41.3 106.232000 3376.49 1448.22 4824.71 71.63 51.58 123.212001 3162.28 1432.72 4595.00 67.72 50.18 117.902002 3076.28 1573.40 4649.68 83.44 70.71 154.152003 3398.84 1850.36 5249.20 85.83 80.50 166.332004 3686.78 2532.62 6219.40 94.22 104.90 199.122005 3689.60 3210.48 6900.08 96.39 138.19 234.582006 4544.79 4388.72 8933.51 125.65 190.60 316.252007 4608.40 4741.93 9350.33 133.62 212.08 345.702008 5654.12 6222.95 11877.07161.51 272.17 433.682009 5695.42 6196.58 11892.00163.27 279.91 443.182010 7067.04 7787.76 14854.80203.48 357.76 561.242011 8504 9410.46 17914.46245.10 432.25 677.352012 9062.35 10027.38 19089.73262 465 727Data Source Export Promotion Bureau Compiled by BGMEA     Source: EPB               

Page 61

 

Bangladesh's RMG Export to World (FY2008-09, FY 2009-10 & FY2010-11).Million US$ Woven Knit Total

Major EU CountriesJuly - June July - June July -

June July - June July - June

July - June July - June

2008-09 2009-10 2010-11 2008-09 2009-10 2010-11 2008-09Austria 3.01 1.93 6.36 19.20 13.87 27.75 22.21Belgium 95.02 87.78 162.93 157.52 155.79 299.74 252.54Bulgaria 0.38 0.41 0.21 0.39 0.47 0.97 0.77Denmark 23.94 33.51 50.43 131.23 178.24 256.32 155.17Finland 6.10 5.47 11.22 15.52 15.59 28.73 21.62France 264.11 260.92 405.98 705.69 692.00 999.71 969.80Germany 801.40 717.31 1108.91 1334.40 1282.77 2022.05 2135.80Greece 8.86 8.92 9.42 29.57 20.66 20.89 38.43Italy 153.42 161.34 236.76 368.86 379.04 525.17 522.28Ireland 41.89 54.14 54.28 52.16 80.16 105.59 94.05Netherlands 393.82 388.79 374.13 513.98 528.57 591.07 907.80Portugal 6.53 4.87 6.03 24.51 23.08 32.57 31.04Romania 3.34 3.03 3.34 7.89 4.30 4.37 11.23Spain 141.66 136.98 253.49 404.23 384.55 595.92 545.89Sweden 49.18 54.98 93.91 125.74 129.89 206.86 174.92U.K. 502.34 534.29 768.90 720.58 725.74 990.98 1222.92Cyprus 0.01 0.27 0.03 0.63 0.84 1.12 0.64Czech Republic 1.84 1.24 4.31 15.66 14.59 23.98 17.50Estonia 0.00 0.10 0.91 0.13 0.24 0.62 0.13Hungary 0.00 0.31 0.29 0.00 9.98 7.01 0.00Latvia 0.07 0.04 0.14 0.16 0.30 0.34 0.23Lithuania 0.00 0.07 0.00 0.05 0.04 0.62 0.05Malta  0.04 0.00 0.00 0.66 0.12 0.32 0.70Poland 5.57 6.03 38.34 43.49 44.56 123.33 49.06Slovakia 14.80 15.56 19.01 26.22 24.29 39.59 41.02Slovenia 0.37 0.24 0.77 2.08 2.57 4.08 2.45Sub-Total (EU) 2517.70 2478.54 3610.11 4700.55 4712.21 6909.72 7218.25EU % of World 42.54 41.22 42.81 73.11 72.68 72.87 58.46Growth%   -1.56 45.65  0.25 46.63             USA 2733.98 2736.44 3506.12 959.42 891.61 1119.04 3693.40% of USA 46.19 45.51 41.58 14.92 13.75 11.80 29.91Growth%   0.09 28.13  -7.07 25.51             Canada 295.00 311.69 461.75 292.05 283.86 432.92 587.05% of Canada 4.98 5.18 5.48 4.54 4.38 4.57 4.75

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Growth%   5.66 48.15  -2.80 52.51             Non-Traditional &Emerging Markets            

Australia 13.49 25.15 49.82 35.80 60.41 143.08 49.29Brazil 11.14 11.84 32.60 28.43 33.33 62.04 39.57Chile 1.60 3.65 3.62 4.81 4.45 9.31 6.41China 4.11 10.44 26.60 5.37 8.51 26.21 9.49India 9.52 9.99 25.45 1.41 2.55 10.49 10.94Japan 52.34 120.26 153.68 21.99 53.06 93.83 74.33Korea Rep. 4.24 15.36 34.46 1.19 7.00 12.75 5.42Mexico 41.43 25.53 30.34 40.45 35.88 50.83 81.88Russia 4.87 6.67 9.53 11.29 13.72 42.33 16.16South Africa 22.92 21.36 28.09 19.59 14.90 20.35 42.51Turkey 108.43 123.76 245.79 131.11 182.52 272.52 239.54Sub-Total (Non-Trad.) 274.09 373.99 639.98 301.44 416.33 743.73 575.53% of Non-Traditional 4.63 6.22 7.59 4.69 6.42 7.84 4.66Growth%   86.42 98.11  68.75 136.84             Other Countries Except Above

97.73 112.78 214.93 175.80 179.28 276.64 273.54

% of Other Countries 1.65 1.88 2.55 2.73 2.77 2.92 2.22Growth%   15.39 90.58  1.98 54.31             GRAND TOTAL 5918.51 6013.44 8432.89 6429.26 6483.29 9482.06 12347.77Growth   1.60 40.23  0.84 46.25 

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Sub-sector Production No. of Units

Installed Capacity

ProductionCapacity

1 Textile Spinning: 385 8.7 ml. Spindle0.23 ml. Rotor

2050 ml. Kgs..

2 Textile Weaving: 721 17250 Shuttleless13500 Shuttle.

2150 ml. Metre.

3 (i) Weaving: 584(ii) Denim: 20(iii) Home Textile: 17(iv) ) Knit Fabrics: 100

.

4 Dyeing-Printing-Finishing: 233 2200 ml. Metre.

Total 1339

ConclusionDenim fabric has a long, rich history, and just like other products such as wine, automobiles

and electronics that have garnered universal aficionados, denim has morphed and changed

over the years, its status evolving from functional to fashionable staple. Denim has been

beloved in its jeans form for decades. Worldwide, nearly 90% of consumers own at least one

pair of denim jeans

The importance of the RMG industry in the economy of Bangladesh is very high so as its

backward linkage. Furthermore, the industry is expected to be the catalyst in the

industrialization of Bangladesh, and has been declared as a thrust sector by the

government. From the overall position it is observed that there is huge demand-supply gap

of Denim products in the export market. The proposed project will help to decrease the gap

by a very little quantity. The detailed feasibility study in the foregoing chapters shows that the

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project is viable in all respects. From Technical point of view the proposed program will be

viable. Also from the financial scenario, the project is highly profitable.

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