ACTION FOR ENTERPRISE: CRAFT SECTOR MARKET

DEVELOPMENT

December 2009

Objectives of the Meeting:

Present brief overview of AFE Bangladesh present Crafts-for-Export Sector program activities

Discuss potential to implement programs in the domestic and/or export craft market, with particular attention to distribution improvements between rural producers and market outlets

AFE: Present Crafts-for-Export Program Activities & Impacts

Craft Export Market Potential Declared a priority sector by GOB in 2000, once realizing the livelihoods and export potential. 120,000 producers directly and another 200,000 producers of rural and clustered areas

are indirectly involved in the Crafts–for–export Sector. Export volume of Basketry and JDPs were about 9 and 8 million USD in 2007, respectively,

with a 20% growth expected to continue in the future. With increasing prices in China and Vietnam, Bangladesh Crafts-for-export have tremendous

potential to further penetrate the international markets. With steady growth in sales to Japan, EU and USA, untapped markets remain in these regions, especially for “green-consumers” of bio-degradable products, and in the Middle East.

To keep up with growing demand, exporters estimate an additional 500-1,000 producers per company per year are needed.

In addition to the export market, the domestic market is strong. Accounting for almost 80% of total crafts production, domestic sales amounted to an estimated 142 million USD in 2007.

The Crafts-for-export Sector involves mostly women (80%), supports the long-standing tradition of craft production, and is attractive for poverty-stricken areas, particularly landless persons.

Raw materials (i.e., hogla, kaisha, palm leaves, palm fibres and bamboo) are available in Bangladesh.

Constraints & Intervention Areas Exporters do not have enough producers to meet future demand or even complete

existing orders on-time. Formal training is a new concept introduced by AFE to significantly increase numbers.

Fierce price competitions in the international marketplace require Bangladesh exporters to step-up their marketing efforts, building strong relationships through one-on-one meetings with buyers, improved promotional materials, and repeated trade fair participation, of which AFE is supporting.

Lack of design innovation proves to be a resounding issue among craft companies in Bangladesh. Efforts are needed to strengthen in-house capabilities as well as link exporters to international experts in tune with buyer preferences, an issue AFE is assisting companies with as they grow.

While raw materials are available in Bangladesh, shrinking natural areas may mean future shortages and difficulties obtaining raw materials. AFE is introducing the possibility of contract farming for raw material cultivation.

To improve efficiencies AFE is exposing producers and exporters to modern technologies.

Objectives & Strategic Partners Obj. 1: Promote improved efficiency & quality of Bangladesh craft

exports, through support of: Training of existing/new producers Machinery acquisition Obj. 2: Encourage innovativeness, through support of: New product development New raw material usage Exposure visits to exemplar countries Obj. 3: Promote new opportunities to ensure sustainability of craft

export industry, by supporting: Buyer meetings New trade fair participation Development of marketing/promotional materials Raw material cultivation Obj. 4: Support growth of sector, through New producer trainings,

Strategic Partners:

ASK Handicrafts

Conexpo

Creation Private Ltd

San Trade Limited

Producers Skill Developed in 1st year Name of companies New

Semi Skilled Skilled Total

ASK Handi Crafts 119 0 0 119San trade Ltd 100 40 10 150Creation 13 100 0 113Conexpo 40 30 0 70

Total 272 170 10 452

Producers Skill Developed in 2nd year

Name of companies New

Semi Skilled Skilled Total

ASK Handi Crafts 170 100 0 270San trade Ltd 250 0 0 250Creation 100 0 0 100Conexpo 200 0 0 200

Total 720 100 0 820

Impacts: Training

Number training conducted:12 Number of Manual Develop: 4 Number of producers skill develop:452 Number of new design add for export:70 Number of staff received ToT: 43 Reduce rejection Improved in quality Number of new job created by the company:272

Impact: Other activitiesInterventions Beneficiary / Enterprises

ASK Conexpo San Trade Creation

1 Skill Trainingi.Number of producersii.Locations*

i.119 ii.DH,BG

i.70 ii.DH, BG

i.150 ii.BG

i.113 ii.GZ, NS

2 Buyer-seller meetsi.Resulting ordersii.Sales increasediii.Additional job creation

i. 100,000 $ii. 15%iii. 120

-- i. 170,000 $ii. 40%iii. 200

i.300,000 $ii.25%iii.175

3 International expert (designer)i.Resulting ordersii.Additional job creation

-- i. 50,000 $ii. 110

-- --

4 Exposure visit (product types, process, association meeting) Mar 31 - Apr 7, 2009

5 Exposure visit (machine tech., diverse use of raw mat.) Jul 26 - Aug 2, 2009

Some of the training product

Potential Expansion of Craft Market Activities: Domestic & Export

Additional Export Potential

Potential to work with: Banglacraft Association Members Banglacraft Association regarding policy

development to submit to the Ministry Designer search with association E-commerce EKOTA Fair Trade Forum

Domestic Potential

From commercial sector Around 26 potential company existing company(including Deshi Dosh, Kanishka, Dhaka Handicrafts, Naborupa, Jahanara Cottage etc.)From NGO Sector Aarong, Corr The Jute Works, Heed Bangladesh, Kumudini welfare, Gramin Bank, MCC, TMSS, RDRS, GUP, CHCP,Jagoroni Chokra, Taranga etc.

Problems faces in distribution channel

Limited Supply of Raw Materials Lack of Producers’ Skill Development Lack of Product Standardization Lack of Handy Production Tools Use of Hazardous Chemicals Lack of Capital Machineries Lack of Product Designs Lack of Facilitation Role of the Government

Examples of MBS Providers, Bangladesh

Craft Export Companies – 4 companies in basketry & Jute Diversified Products

For 400 producers, provided: Training for new producers Training to improve quality of existing producers

Additional 10,000 suppliers are given: Raw materials advance Cash advance to some Group Leaders Transportation of products Product designs Market access (ready market for their end products)

Win for Craft Exporters: get quantity and quality of crafts needed for export

Win for producers: get inputs, designs and market access for products

Win for producers who are mothers: can work from home and thus tend to sick children as needed, stop to cook meals, etc. given the flexibility of the trade

Win-win for Craft Exporters, producers & more

Thank you