Knitwear makers are now integrating their existing composite units with more facilities as brands and buyers push for such facilities, industry insiders said. The composite units are one of the main strengths of the country’s knitwear sub-sector that source more than 90 per cent of fabric from the local market, they added. Traditionally, a knit factory having its own knitting, dying, sewing and finishing facilities are known as composite, according to industry people. “After the Tazreen and Rana Plaza building collapse, buyers are more conscious about the safety and compliance issues,” Fazlul Hoque, former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told the FE. The renowned brands and retailers now prefer their sourcing units to have more integrated facilities like washing, printing and embroidery on either same premise or under single- ownership mainly to ensure compliance in their whole supply chain, he said. Following the buyers’ recent requirement for washing and printing facilities on same premise or ownership, MB Knit Fashion Ltd established its own printing and embroidery sections in 2014, said Md Hatem, managing director of the company. Many more are planning to invest millions of taka to add such facilities, while some have already invested, he noted. Big brands and buyers now do not want to risk their reputation by sourcing from any unit that is not compliant, Mahmud Hasan Khan, managing director of Rising Group, said. “It helps the buyers trace and ensure all safety and other requirements if all the units are on one premise or surrounding areas or have same ownership,” he said. Terming the composite units a key strength for the growth of knitwear sector, Mr Hoque said entrepreneurs had re-invested their profit that also helped flourishing the sub-sector and also becoming self-sufficient. The government’s policy support, especially the cash incentive up to 25 per cent for local fabric sourcing, had also helped the entrepreneurs set up composite units, said MA Rahim, vice chairman of DBL group. The group has almost all the facilities ranging from spinning, knitting, dying, washing, printing, sewing, finishing and packaging. The government scaled back the support gradually, which now stands at five per cent, industry people said. There are some 463 composite units out of its listed 2,061 member factories, while Bangladesh Garment Manufacturers and Exporters Association (BGMEA) claimed that some 235 out of its more than 4000 member units are composite, according to (BKMEA). There are a good number of units that are members of both of the trade bodies. None of the associations, however, could figure out the specific number. The number of composite units ranged from 400 from 500, lobbyist groups said. Value addition by the composite units is nearly 100 per cent as they source fabric from local market, Mr Rahim said, adding the knitwear sector as a whole adds value to about 75 to 80 per cent because the basic raw material cotton is being imported. Regarding the potentials of the sector, industry people said as China is becoming more expensive, Bangladesh is the most suitable destination for the buyers. Besides cheap labour, duty-free and quota-free access to the markets of several developed and developing countries including the EU, Canada, Australia and Japan, are reasons why buyers prefer to do business with Bangladeshi companies, they added. “Despite potentials, we are still far behind compared to China, especially in developing non-cotton based products,” said Fazlul Hoque. The sector leaders rated poor infrastructure, scarcity of gas as main bottlenecks for further growth, while stressing expertise development in mid and top management that are now dominated by foreign people. Though a good number of factories produce mid and high-end products, more research is needed for innovation, design, market trend and both product and market diversification, they noted. Some of the knit makers requested the government to take pragmatic measures related to environmental pollution, saying only penalty is not sufficient. They also criticised the existing education system that failed to generate skilled workforce in line with the market demand. “We need timely forecast for infrastructure and other realistic approaches as the market is gradually becoming complicated. After a couple of years when Bangladesh becomes the middle-income country, we will not get the GSP facility as a least-developed country,” Mr Hoque added. Since fiscal year of 2007-08, knit sector was the largest foreign currency earner, which surpassed by woven items in FY 2012-13, according to official data of Export Promotion Bureau. Knitwear sector fetched $12.42 billion, while woven brought in $13.06 billion in the last fiscal year, the data showed. Bangladesh earned $8.64 billion and $9.48 billion from knitwear and woven items during the first eight months of the current fiscal year. More than 70 per cent of the total knitwear exports are destined to the EU, about 10 per cent to the US, and more than three per cent to Canada, according to BKMEA. The major products are T-shirt, polo-shirt, knitted jacket, cardigans, pullover, sweatshirt, undergarments and baby items.
