Cheap labour and utility cost and duty-free access to the EU are among other factors that lure foreign buyers to source locally-made terry towel products from Bangladesh, helping the industry flourish over last three decades, industry insiders said. They, however, opined that the industry which witnessed a total of Tk 55 billion (Tk 5,500 crore) investments during the period could not flourish well mainly due to absence of government policy support. Bangladesh can earn $10 to $12 billion from export of home textile and terry towel products within a couple of years if gas supply, lower bank interest rate and incentives are ensured to retain its competitiveness, they noted. More than 100 units established in last three decades produce both home textile and terry towel products. Of the total, some 71 are terry towel producing units having 6,500 looms and production capacity of 135 million kilograms, according to Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA). At least 30,000 people are employed by the sub-sector of home textile industry. The majority of the units are small and medium entities and some of them also produce home textile items and do subcontract for big ones, industry insiders said. “Bangladesh is still a lucrative destination for sourcing terry towel products mainly due to competitive labour, utility costs and duty-free access to some countries especially in the EU,” BTTLMEA Chairman Khandkar Abdul Muktadir told the FE. Bangladesh makes various types of towels like face towel, bar mop, hand towel, bath towel, dish, glass, kitchen, shop towel, kitchen gloves, dish clothes, surgical towel and draw sheet. These products are a must for household use, tourism and hospitality industries, he explained. The sub-sector of the home textile industry has an immense potentiality as buyers are looking for an alternative to China where the production cost has increased significantly mainly due to higher labour cost, he said. With the expansion of global tourism and hospitality industries, demand for such products is also increasing, he said. To grab orders shifting from China and add more value, many units are opting for mid and high-end towel products in recent years, the BTTLMEA chief said. “Towels don’t need accessories like ready-made garments. Cheap labour is an additional advantage,” an exporter said. He sees a good prospect in towel exports as Chinese buyers are exploring the sourcing potentiality here for their local market. Usually, Bangladesh produces terry towel products, which are low-end quality towels mostly worth $2.50 to $3 per kg, according to industry people. Some entrepreneurs have targeted the mid and high-end segment of the market that costs $5 to $13 per kg, they said. The sector is now facing stiff competition especially after Pakistan got the generalised system of preferences (GSP) facility in the EU, the main export destination for locally-made terry products, industry people said. Pakistan is a cotton-producing country and now enjoying the GSP facility there. “We are trying our best to beat Pakistan that is a cotton-producing country and now enjoying GSP facility from EU market,” said Shahadat Hossain, managing director of Towel Tex Ltd. Pakistan and India offer comparatively lower prices than Bangladesh that the buyers look for and put pressure on local counterparts for a lower rate, he added. He said, “We purchase yarn from local spinning mills. The cost of yarn sourcing for a Bangladeshi factory hasn’t been reduced to a rate compared to that of Pakistan or India.” Many companies have stopped operation because of lower orders, Mr Hossain said. ani Miah, proprietor of Maa Textile Mills, said his unit remained closed for last two months because of scarcity of work orders. His unit produced bath towel, bathrobe, hand, beach and kitchen towel and mostly used to do subcontract. Local makers are also in trouble due to the appreciation of taka against US dollar while euro is depreciating, said M Anisuzzaman, managing director of Global Fabrics Pvt Ltd.
