Recovering from embargo, Myanmar has begun its comeback to the textile and apparel business as the country with the most potential to emerge as a formidable player among the garment producing nations, according to a study. Myanmar has deep experience in the textile industry, but it does not cover all parts of the value chain.However, foreign direct investment tripled within the last two years emphasising the high potential, according to the Kurt Salmon Global Sourcing Reference 2005-2015.Kurt Salmon, a leading global strategy consulting firm focused on the retail industry, conducted the survey on the basis of Production Cost Indices (PCI) among six garment producing nations: Bangladesh, China, India, Morocco, Myanmar and Turkey.Bangladesh is the most attractive destination to European retailers among the six nations due to its competence in the supply of quality products at competitive prices, according to the study.The firm analysed the import data of apparel items from the six countries between 2005 and 2015. Among the six nations, China is in the second position because of higher costs of production and dearth of skilled workers.India is the third most attractive destination, Morocco fourth, Myanmar fifth and Turkey sixth.There is no back-up nation to Bangladesh for the global garment business at this moment, said Dhyana van der Pols, a sourcing consultant for a group of European garment buyers. “So, business will continue to grow in Bangladesh.”However, Bangladesh needs to shift production to value-added items from basic garment goods, she said.“Although we are passing a dull season now, the future outlook is very positive,” said Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association.However, in global comparison of Kurt Salmon, Bangladesh is the second most attractive destination after Cambodia.Globally, Cambodia is ahead of Bangladesh only because it uses more technology in production, the study said.Production costs in China are almost reaching the level of Eastern Europe and Turkey and are even exceeding costs in Southern European rim locations such as Morocco. As China no longer has transportation lead times, and as a consequence, considerable less sourcing flexibility, its competitive strength is eroding rapidly, it said. “China is no longer a low-cost production country.”Wages have tripled in China over the last decade and productivity gains were unable to level out this effect on overall production costs.On the other end of the cost continuum, Myanmar and Bangladesh are showing the lowest PCI value.Ongoing efforts to improve social and infrastructural conditions, such as the established minimum wages in Bangladesh and Myanmar, indicate further increases in sourcing costs for the future — but still on a very competitive PCI level.Bangladesh is gaining market share in sourcing for Europe and North America, the report said.But the country is still mainly focused on less complex products. Bangladesh has the potential to further strengthen its relative position if production capabilities can evolve and quality can be improved while ensuring social and environmental compliance standards, according to the report.The study said denim apparel shows a clear move away from China, which lost 7 percent in 2014, while most other markets have been able to strengthen their position.Looking at the example of denim, Turkey, Tunisia and Poland have been able to expand their position, although cost structures are significantly higher than in the traditional low-cost Asian countries.These countries offer better prices but come with limitations such as slow lead time, lower capability levels and concerns over corporate social responsibility.China is wedged in the middle between both ends of the continuum, neither being fast nor cheap.Nevertheless, the high level of capability and integration of production in China will no doubt continue to play a major role in the coming years, Kurt Salmon said.“These developments are further supported by the survey of global leaders in sourcing. Highest future growth potential is observed in Vietnam, Bangladesh, Turkey, and Myanmar in contrast to expected ongoing losses in China.”Garment exports accounted for nearly 85 percent of Bangladesh’s total products sold overseas in 2016. The country’s share in the global apparel market is about 6 percent.
