RMG
Bangladesh-Australia have huge opportunities to expand trade: BGMEA President
Bangladesh and Australia have immense potential to enhance bilateral trade by further deepening collaboration and cooperation, said Faruque Hassan, President of BGMEA.
Trade between the two countries had grown considerably over the past years and more opportunities still lie ahead that could benefit both sides if reaped together, he said.
He came up with the observations during a meeting with Tim Watts, Assistant Minister for Foreign Affairs of the Australian government, in Dhaka on May 15.
Brendan Hodgson, Director, Bangladesh, Sri Lanka and Maldives Section at Australian Department of Foreign Affairs and Trade; Megan Jones, Assistant Secretary, Indian Ocean and South Asia RegionalAustralian Department of Foreign Affairs and Trade, Australia; and Louisa Bochner, Adviser, office of the Assistant Minister for Foreign Affairs ; Jeremy Bruer, Australian High Commissioner to Bangladesh were also present at the meeting.
The meeting was also attended by Zunaid Ahmed Palak, MP, State Minister for the ICT Division, Government of Bangladesh; Mohibul Hasan Chowdhury, MP, Deputy Minister for Education, Government of Bangladesh; and Russell T. Ahmed, President of Bangladesh Association of Software and Information Services (BASIS).
They had discussions about different issues, including potential areas of expanding trade and investment between Australia and Bangladesh.
Issues relevant to Bangladesh’s RMG industry including its prospects and preparedness to continue the growth momentum were discussed during the meeting.
BGMEA President Faruque Hassan briefed the Australian Assistant Minister for Foreign Affairs about the huge progress made by Bangladesh’s RMG industry in terms of workplace safety, environmental sustainability, and workers' rights and welfare.
He said Bangladesh was interested in importing more cotton and wool from Australia to meet the growing demand of the RMG and textile industry.
The BGMEA President informed the Australian Assistant Minister for Foreign Affairs about about the BGMEA’s initiative to organize the Bangladesh Apparel Summit in Australia on 18th July 2023 and called on him to expend support in organizing the event.
He also sought cooperation from Australia in developing knowledge and skills of the students of BGMEA University of Fashion and Technology (BUFT) in textile, apparel, fashion, design and business through collaboration with leading Australian universities and fashion institutes.
He expressed thanks to the Australian government for its decision to continue duty-free market access for Bangladesh. “It would support Bangladesh in maintaining the momentum of its economic growth after the LDC graduation,” Faruque Hassan added.
BGMEA chief stresses on providing graduates with market-oriented education, skills
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan has underscored the importance of equipping students with knowledge and skills that directly align with the needs of the job market.
It is often observed that individuals who have received traditional classroom knowledge without having link to real-life workplace struggle to effectively apply their learning in practical work environments, he said.
He urged the government and educational institutes to design courses keeping a match with the present and future needs of the job market to meet the growing demand of market-oriented skilled workforce.
Faruque Hassan came up with remarks while addressing the inaugural ceremony of the 'BUFT National Career Fest 2023’ as the guest of honor on May 13.
BGMEA reiterates demand to keep source tax at 0.5pc for next 5 years
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Thursday urged the government to reduce the tax at source on export of RMG items to 0.5 percent from existing 1 percent.
The apex body of the country’s apparel industry urged to keep the source tax at 0.5 percent for the next five years.
“It will allow entrepreneurs to confidently adopt medium-term business and investment plans,” BGMEA President Faruque Hassan said at a press conference on the overall situation of the garment industry on Thursday.
At the press conference, the country’s top apparel export body called on the government to provide policy support amid the ongoing economic downturn.
“During the assessment of the RMG industry, other income such as gain on assets disposal, sub-contract income, and miscellaneous expenses should be treated as disallowable, and a corporate tax rate of 12 percent should be imposed instead of the normal rate (30 percent),” the BGMEA President said.
At the beginning of the press conference, Faruque Hassan highlighted the current scenario of apparel export.
“In the last six months, we have seen some growth in exports. However, the export has declined mainly due to the increase in the cost of production, which is clearly seen in our export statistics.”
“And in the last two months of this year, March and April, our garment exports have also gone negative in terms of price. Our exports declined by 1.04% in March, and by 15.48% in April,” he said.
According to the Export Promotion Bureau (EPB), RMG exports reached $38.57 billion during the July-April of 2022-23 fiscal year, reflecting a 9.09% increase compared to the same period in the previous fiscal year.
Regardless of the overall positive trend, a more detailed inspection of single month statistics reveals a recent decline in apparel export growth.
In April, the country's RMG exports witnesses a significant decline by 15.48%, amounting to $3.32 billion compared to April 2022.
“Yesterday, we met with the international buyers' representative of Bangladesh, namely Buyers Forum, for the first time at the BGMEA office. We asked them about the 2023 projection. But they didn't give us a very promising projection. Instead, they see the slowdown in retail sales, access inventory and supply chain crises as major problems across Europe and the United States.” BGMEA president said.
During the press conference, he called on the authorities to reduce the income tax deduction rate at source from 20 percent to 10 percent on fees paid by RMG exporters for promotion and development from the Exporter Retention Quota Fund.
The BGMEA president also highlighted the lack of diversification in products in the country’s RMG export.
“According to exports in 2021-22, about 73% of our total garment exports were made of cotton, compared to 69% in 2008-09, which means that the cotton dependence of our industry has increased in the last 10 years.”
While non-cotton accounts for about 75% of the world's total garment use, only 26% of our exported garments are made of non-cotton material, he added.
The BGMEA chief demanded a 10 percent special incentive on non-cotton garments export in FY2023-24 in an effort to encourage more export through investment in the non-cotton sector.
The BGMEA chief demanded the withdrawal of the 10 per cent tax on cash assistance saying that it’s logical to keep the cash incentives out of the tax net as it is not an income through business.
Referring to the rising demand in circular fashion and recycled products, the RMG export body urged the government to waive 7.5% and 15% VAT, respectively, on the collection of raw materials used by the recycle fiber mills established at the local level and the supply of those recycled fiber to local spinning mills.
They urged the government to provide proper classification and duty-free facilities for import of raw materials of all types of garment waste or recycle fiber producing mills, including cotton waste, keeping in mind the interest of local industry.
Bangladesh will be more attractive to global apparel buyers: BGMEA President
Bangladesh would be more attractive to international buyers as an apparel-sourcing destination in the coming days due to its ongoing efforts and initiatives to adapt to changing demand patterns in the global fashion market, said Faruque Hassan, President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
He said the readymade garment industry of Bangladesh had been continuously making efforts and investment to build up its capability through product diversification, innovation, efficiency improvement, skill development while strengthening compliance and sustainability.
“Our industry has now greater capacity to produce garments made from manmade fibers and manufacture more complex and high-value products,” he added.
Faruque Hassan made the observations while exchanging views with the members of Buyers Forum, a group of the representatives of major apparel brands, at BGMEA Complex in Uttara, Dhaka on May 10.
He urged the global apparel brands and retailers to partner with their Bangladeshi suppliers and support them in enhancing their capacity in product development and improving efficiency and sustainability.
Bangladesh has made huge strides in the area of environmental sustainability, becoming a global leader with the highest number of green garment factories in the world, said the BGMEA chief.
The meeting was attended by Ziaur Rahman, Country Manager, H&M, and also spokesperson of Buyers Forum; Shantanu Singh, Regional Head, C&A; Mohammad Rukanuzzaman, Compliance Manager, Tom Tailor; Sharif Nehal Rahman, Sustainability Manager, Stanley/Stella; Dishan Karunaratne, Country Manager, BESTSELLER ; Raky Bashey, Country Head, Newtimes; Najeeb Sayed, Country Manager, PVH; Amit Ahuja, Op. Director, Columbia; Brunhilde Descamps, Country Manager, Auchan; Peter Gerard Mckenna, Office Manager, the Warehouse Group.; Lucie Charlotte ABT, General Manager, Celio; Stephanie Wong Tung, Country Manager, Tape à l'oeil; Ghislain Christian Henno, Category Director and Office Manager, GBO; Rezwan Murshed, Country Head, Carrefour; Jessica Nursoo, Regional Director South Asia, VF Corporation; Meral Mirik, Country Manager, Jennyfer; Vivek Kunwar, Country Leader, Decathlon; Cedric Bourlet, Country Director, Groupe Beaumanoir; Gery Emonds, General Manager, Triton Textile Ltd; Steven Kruit, Country Manager, OVS; and Md. Mohammed Shahul Sally, Associate Director, Next Sourcing Services Ltd.
BGMEA First Vice President Syed Nazrul Islalm, Vice President Miran Ali, Vice President Rakibul Alam Chowdhury, Directors Asif Ashraf, Barrister Vidiya Amrit Khan, Inamul Haq Khan (Bablu), Md. Imranur Rahman, and Neela Hosna Ara were present at the meeting.
In the meeting, he updated the Buyers Forum’s members on the current situation of the RMG industry including its prospects and vision to enhance its competitiveness in the global apparel market.
He also briefed them about the initiatives taken by the industry to meet future challenges and enhance capability in line with market demands.
Faruque Hassan said the RMG industry had been making investments in productivity improvement, digitization, automation, and sustainability.
Bangladeshi garment factories operate according to international best practices, he further said.
He also highlighted the initiatives of BGMEA including the Center of Innovation, Efficiency and Occupational Health and Safety (CIEOSH) which aims to support the RMG industry of Bangladesh with knowledge, skills and technological know-how in becoming more advanced and competitive in the global market.
BGMEA was currently working on to develop recycling capacity in Bangladesh and make the country a global hub of recycling with the collaboration and partnership with global initiatives and companies specialized in recycling industry, he informed the representatives of the buyers at the meeting, Faruque Hassan said.
“Besides, Bangladesh has also made significant improvements in strengthening transport, energy, and digitization infrastructure alongside building capacity in port,” he said adding that several major infrastructure projects including the Padma Bridge, the country’s first deep-sea port at Matarbari, airport upgradation would help to meet future demand of trade and contribute to further economic growth in Bangladesh.
RMG exports reached $ 38.57bn during July-April of FY 2022-23
RMG exports reached $38.57 billion during the July-April of 2022-23 fiscal year, reflecting a 9.09% increase compared to the same period in the previous fiscal year, according to the Export Promotion Bureau (EPB).
A detailed breakdown of the various categories indicated that knitwear exports reached $20.96 billion, while woven garment exports became $17.60 billion with 8.97% and 9.24% year-over-year growth respectively. Overall, it’s a sign of a steady growth in Bangladesh's overall RMG export earnings.
Regardless of the overall positive trend, a more detailed inspection of single month statistics reveals a recent decline in apparel export growth.
In April, the country's RMG exports observed a significant decline of 15.48%, amounting to $3.32 billion compared to April 2022.
The amalgamation of these declines contributed to the overall descending trend in recent months, which stands in contrast to the otherwise positive trajectory for the mentioned period in 2022-23 fiscal year, said Mohiuddin Rubel, director of BGMEA and additional managing director of Denim Expert Limited.
“Our target was $46.80 billion, and we had to ensure a 9.83% growth. There are two months left in this financial year, so in these two months, we have to meet the target of about $8 billion,” he said.
“In April, our export target was $4.07 billion against $3.32 billion target. We exported 18.40% less than our target this month. And compared to this month last year, our exports decreased by 15.48%. This is the lowest single month export this year.”
"The reason for this is that we had fewer working days due to Eid. Exports are less in that month due to the general Eid holidays. Another trend that has been going on is our exports were down last month compared to other months,” said Rubel.
“We realised that our capacity was dwindling. In continuation of that trend, exports have declined this month as well. We have seen negative trends in the Eid holidays,” he added.
“However, it will be clear in the coming month whether this negative trend is due to the impact of the Eid holidays or because of the negative trend that we have been seeing,” Rubel said.
“Hopefully, we will be able to meet the remaining targets in the coming months,” he added.
All BGMEA factories clear wages for March before Eid: BGMEA
All 2,151 factories running under the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) have cleared their wages for the month of March 2023.
Among them, festival bonuses were paid in 2145 factories (99.72%), according to data shared by the BGMEA.
The remaining six factories were to complete bonus payments by today.
Meanwhile, 1768 factories (82.19%) paid advance salaries for the month of April.
BGMEA President Faruque Hassan has expressed gratitude to all the entrepreneurs of the garment industry for their efforts to ensure a happy Eid-ul-Fitr by making payments to workers despite having various difficulties.
The BGMEA said it brought around 450 garment factories, which might face difficulties in paying their workers, under close monitoring and assisted them in solving their problems.
Regarding Eid holidays, BGMEA said garment owners have started giving leave to their workers on the occasion of Eid in phases, which started on April 16 and continued till April 20 at the request of the government and the trade body.
Faruque Hassan thanked the governor of Bangladesh Bank and the managing directors of the scheduled banks for keeping banks open during holidays and facilitating salary-bonus payments in the RMG factories.
He also called upon the government to step up vigilance to ensure that buses, trains, and launches do not carry passengers beyond their capacity and requested the government to ensure that passengers are not transported in trucks to avoid untoward accidents during the Eid journey.
He also extended thanks and gratitude to the Minister of Road Transport and Bridges, the Commerce Ministry, the Home Minister, the Shipping Minister, the State Minister for Labour and Employment, the Department of Inspection for Factories and Establishments, the law enforcement agencies, the intelligence agencies, labour leaders, and journalists for their cooperation in ensuring that garment workers can happily celebrate Eid-ul-Fitr with their near and dear ones.
Dip in US market fails to dent apparel sector's growth momentum
Bangladesh’s apparel exports in the first nine months of the current fiscal, i.e. July 2022-March 2023, jumped by around 12 percent - an impressive clip by anybody's standards. It is even more impressive when you consider that apparel exports to the US, which has been its largest single market, actually declined 5%.
On the other hand, exports to the European Union overall, kept up with the pace of the industry. Apparel exports to the European Union during July-March of the 2022-23 fiscal also jumped by almost 12 percent (11.8% to be more precise), to $17.61 billion, compared to the $15.75 billion recorded in July-March of the 2021-22 fiscal, according to BGMEA Director Mohiuddin Rubel.
The overall growth in apparel export has been an impressive 12.2%, from $31.43 billion in the first 9 months of FY 2021-22, to $35.25 billion in the first 9 months of FY 2022-23.
Read More: Speakers emphasise safety, security in industries to avert another Rana Plaza tragedy
This highly impressive growth figure has been achieved despite the industry's exports to the US having actually declined by 5 percent - to $6.25 billion in the first 9 months of the current fiscal, from the $6.6 billion recorded last year.
Bangladesh’s apparel exports to the UK and Canada reached $3.84 billion and $1.08 billion with 14.04 percent and 17.68 percent growth respectively.
Among the major markets in the EU, apparel exports to Germany declined by 4.16% year-over-year while exports to France and Spain grew by 25.23% and 18.82% year-over-year respectively. On the other hand, exports to Poland declined by 14.86%.
Read More: BGMEA writes to US policymakers for duty-free access for US cotton-made apparel.
The most significant growth was reported in the nontraditional sector. The apparel export to nontraditional market increased by 34.74% to US$6.44 billion in July-March period of FY 2022-23 from US$ 4.78 billion in the same period.
Mohiuddin Rubel, BGMEA director, said: “BGMEA is working to facilitate the exploration of new markets, as well as working on policy reforms to facilitate and simplify business.”
“Our efforts will be continued, and it’s time for all of us in the industry to promote and highlight our strengths in new products and new markets before the global customers (existing and new ones) to explore new opportunities. That will help sustain our growth in the longer term,” he added.
Read More: Apparel exports to EU grew 35.69% in 2022.
Speakers emphasise safety, security in industries to avert another Rana Plaza tragedy
Speakers in a discussion on Sunday urged the government to enhance monitoring and vigilance in the garment and other industries so that tragedies like Rana Plaza can be avoided.
They said the the government, owner and buyers have responsibilities to ensure a secure environment for workers in the industries that will be secured by the owners’ investment in the industries.
The speaker said this in a discussion on “10 years of Rana Plaza Tragedy: Present Situation of RMG Workers and Way Forward” organised by the 5 labour organisations including Bangladesh Textile and Garment Worker League, United Federation of Garment Workers, Bangladesh Biplobi Garments Worker Federation, Bangladesh Garments and Industrial Workers Federation and National Garment Workers Federation.
Md. Mujibul Haque Chunnu, MP, Chairman of Parliamentary Committee on Labour and Employment Ministry, was the chief guest in the discussion while Winnie Estrup Petersen, Danish Ambassador in Dhaka, and Alexandra Berg Von Linde, Swedish Ambassador in Dhaka, were present as special guests.
Mujibul Haque urged all including labour leaders and owners to work together for the safety of industries and workers.
While the workers remain safe, secured and receive justified payment, the factories would grow by production, he said.
Neeran Ramjuthan, Program Manager Labour Administration and Working Conditions at ILO, said the global labour organisation will continue to support a safe environment for working and rights to the freedom of trade union.
A keynote presentation illustrated the present situation of workers affected in the tragedy of Rana Plaza.
The presentation showed that safety and security of workers have developed significantly in the garments industries after the Rana Plaza tragedy. But the activities of safety are not sustainable due to lack of labour official monitoring.
The victims of the Rana Plaza incident, a number of workers’ leaders, and officials of ILO and EU countries joined in the discussion.
BGMEA writes to US policymakers for duty-free access for US cotton-made apparel
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) called on US policymakers to negotiate with their government to allow duty-free access to Bangladesh's apparel made of US cotton to make trade easier by reducing time.
BGMEA President Faruque Hassan wrote letters to Arkansas senators Tom Cotton and John Boozman and governor Sarah Huckabee Sanders, Georgia senators Raphael Warnock and Jon Ossoff; and governor Brian P. Kemp and Kevin McCarthy, speaker of the United States House of Representatives.
In those letters, the BGMEA chief noted that the initiative will reduce the time and cost of importing cotton from the USA.
Quoting a WTO report, Faruque Hassan noted that Bangladesh is the second largest apparel exporting country in the world with a 6.37% share in global apparel trade and a significant portion of its apparel is made of cotton.
"In 2022, we exported around $32.86 billion worth of cotton garments, which is 71.89% of our total garments export," he said, adding Bangladesh's apparel export reached $45.71 billion in 2022.
According to the BGMEA president, Bangladesh is the second largest cotton-importing country in the world as 99% of the cotton needed for its export-oriented readymade garment (RMG) industry is met by imports.
He also wrote about a recent gazette notification, dated 19 February 2023, which eased the rules of mandatory fumigation tests for importing cotton from Western Hemisphere countries or regions including the United States of America.
It has withdrawn the double fumigation condition on US cotton allowing an almost zero duty (1%) import facility.
"Last year, we imported 4,080 million pounds of cotton from the world of which almost 409 million pounds were imported from the USA," he said while adding that the duty-free facility for the cotton imported for export-oriented RMG industry in Bangladesh gives a cost advantage to cotton growers and exporters.
BGMEA President Faruque Hassan further mentioned that USA's apparel import from Bangladesh reached $9.74 billion in 2022, of which 71% or $6.91 billion worth of apparel was made of cotton.
"USA's cotton apparel import from the world in 2022 was worth $47.51 billion of which the share of Bangladesh was 14.54%. It clearly shows that Bangladesh is one of the major suppliers of cotton-made apparel to the country," he added.
Duty-free access to clothing made in Bangladesh will also benefit U.S. consumers, especially the middle and lower-income groups for whom clothing and other essentials comprise a major share of expenses. As the apparel items face highest tariffs, the waiver will benefit for both U.S. consumers and its cotton growers in this difficult time. On a brighter note, we hope global economy, retail business and trade will start coming back in 2024 while the demand for cotton will further increase, the BGMEA chief said.
The requested duty-free treatment for apparel made of US cotton will add further momentum which will boost our bilateral trade and investment to certain extent.
Apparel exports to EU grew 35.69% in 2022
The European Union's (EU) apparel imports from Bangladesh rose 35.69 percent to $22.89 billion in 2022 compared to $16.87 billion in 2021, Eurostat, the statistical office of the EU, said.
The EU's apparel imports from all over the world grew 20.97 percent during this time.
With a 22.20 percent share of the EU's total readymade garment (RMG) imports, Bangladesh remained the second largest apparel import source for the supranational political and economic union, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Director Md Mohiuddin Rubel said Thursday.
EU's import from the top sourcing country China grew by 17.01 percent year-over-year to $30.14 billion in 2022, according to Eurostat.
The EU's import from its third largest apparel import source Turkey increased by 10.09 percent year-over-year to $11.98 billion.
EU countries' imports from India and Vietnam increased by 21.02 percent and 35 percent, respectively.