The backward linkage accessories industry is expanding rapidly in Bangladesh, pushing up the country’s ‘shadow’ export earnings significantly, industry insiders said. The rapid growth of the country’s ready-made garment industry has mainly helped in flourishing the sector, they added. Since last five years, some 100 new units are being set up every year, raising the total number of accessory makers to more than 1,400, according to BGAPMEA. “More units are being established while many are enhancing their existing capacity to meet the growing demand for accessories mainly emerged following the RMG sector’s expansion,” said Rafez Alam Chowdhury, president of Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA).
RMG sector, the lifeline of the country’s economy, is moving ahead to reach the target of $50 billion export by 2021, he said, adding that the accessories industry would play a vital role in achieving the target. “This also encourages the accessory makers to join the force as accessories worth $10 billion would be required to meet the RMG target,” he told the FE. “We have also set a target to double our export earnings, keeping pace with RMG sector,” he noted. In the last fiscal year, the sector earned $5.6 billion from ‘deemed’ exports to local apparel makers which was $4.75 billion in the fiscal year 2013-14, he said. The earnings were $2.75 billion in the fiscal year 2010-11. According to the association, Tk 300 billion have so far been invested in the sector, creating employment for more than 0.3 million workers. The annual growth of the sector is 30 per cent. The backward sector is now capable of meeting the demand for accessories by nearly 90 per cent, helping the country in reducing its dependency on import largely over the years, apparel makers said. Accessory makers also meet the demand for pharmaceuticals, leather, frozen fish and agro-based industries especially packaging products, industry insiders added. Some makers like KDS and Montrims have already entered the global market. A good portion of locally-made accessories is directly being exported to South Africa, Middle East and Eastern Europe, they said. “Now only 5-10 per cent of the accessories nominated by the buyers need to import while the rest are met by local ones,” the BGAPMEA president said. Not only that, some 20 per cent of the accessories are now directly exported to the global market, said Moazzem Hossain, managing director of Classic Carton Industries Ltd. Bangladesh initially imported accessories from the countries like China, Hong Kong, Singapore, Japan and India. Now the country is almost self-sufficient in garment accessory manufacturing as the backward linkage industry has flourished here due to growing demand, he noted. The accessories industry contributes 15 per cent of total garment exports, said Mr Hossain who supplies cartons to only local garment makers. He claimed that the value addition of the sector is more than 30 per cent each year. Some 30 to 35 types of accessories like zippers, buttons, labels, hooks, hangers, elastic bands, thread, backboards, butterfly pins, clips, collar stays, collarbones and cartons are the major garment accessories produced in Bangladesh, industry people said. The use of high-end accessories also adds value to the garment. As a result, large manufacturers and exporters try to use sophisticated accessories to pull in better prices from international buyers, they added. Accessories are as important as the fabric itself, manufacturers said. On an average, local garment makers spend 10 to 20 per cent on accessories, depending on designs and value addition besides fabrics for finished products, according to them. In RMG sector, there are a lot of fundamental elements needed to deliver a finished garment and those other than fabrics are called ‘accessories’, they added. Import of accessories declined sharply as many local companies have developed the capacity to supply, said Fazlul Hoque, former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). The local supply helps the RMG makers meet the lead time with quality products, he said, adding that it is also flexible for local apparel makers to replace the products if there is any fault. “The buyers prefer some accessories from multinational companies on the grounds of quality, although local companies have also stepped up efforts to meet quality standards,” he added. Industry insiders, however, said there are a good number of composite units having own accessory plants mainly to meet their own demand while the majority of accessory makers sell products to others. Some entrepreneurs are also planning to join the accessory business by establishing their own units. Md Nasir Uddin, a local trader of accessories, is now looking for suitable land to set up his own accessory manufacturing unit on the outskirts of Dhaka city following the growing demand. He, however, didn’t go into details about his unit. To help flourish the sector further, industry leaders have sought policy support from the government including providing cash incentives, lowering bank interest rate and resolving other bank-related issues that hamper their business.
