Stakeholders recommended the government to provide five percent cash incentive for the next three years for Ready-Made Garments to flourish the sector in the upcoming budget for 2019-2020 fiscal year. “Sector oriented re-skilling and new skills need to be ensured to improve the efficiency of the workforce, and investment in new technologies help the industry to upgrade functionally promoting a shift to higher production,” they also recommended. The stakeholders said these at Dhaka Chamber of Commerce and Industry (DCCI) conclave on ‘Sustainability of Ready Made Garments (RMG) Sector in Bangladesh’ at its auditorium in the capital on Thursday.Apparel exporters already enjoy upto 12 percent cash incentive, according to Bangladesh Bank. DCCI President Osama Taseer said that RMG sector contributes $460 million of total FDI to Bangladesh, the largest exporter of RMG after China cornering 6.5 percent of the world market of $446 billion. “The sustainability and competitiveness of RMG industry may be hampered due to rising production cost driven by wage hike, energy cost hike, compliance cost and declining international market price. The lowest price offering to Bangladeshi products reduces the profit margin of entrepreneurs,” he added. He also added that 1200 factories have been closed down over the last four years due to failing in compliance standard. In the EU market, Bangladeshi product price is the lowest compared to any other countries during 2013-2018. The lowest price offering to the Bangladeshi products put the sustainability of RMG sector at stake. “Since 2013, Bangladeshi apparel price decreased at 0.74 percent every year on average. Due to increase of 208 percent in gas price, electricity price may increase by 60 percent resulting in 9 percent increase of production cost. Some of the challenges for RMG sustainability are wage hike, energy price hike, remediation cost, currency depreciation, international market price and labour productivity,” Osama further mentioned. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Dr. Rubana Huq said that they need support from the government for the sustainability. “Moreover, we are in crisis of positive image and we should build image in the international market with the support of all specially through the media,” she also said. Rubana underscored the importance of forming strong strategy, right statistics and also the government should focus on how to reduce cost of doing business for RMG’s sustainability. “The Era of Collaboration has begun only to make this industry sustainable. BGMEA will work hard to establish our positive image and branding in the international market,” she added. Commerce Minister Tipu Munshi agreed that the RMG industry needs some incentives for a certain period. Noting the entrepreneurs of RMG sector are not getting right price from the buyers, he urged for increasing negotiation skill to get the best price from the buyers. The minister said our factories are now more compliant and the quality of our products are also high. The government will be with the sector as it is the biggest contributor to the economy. Munshi informed that Free Trade Agreements (FTA) with Sri Lanka, Belarus and Czech Republic are in final stage and government is thinking of signing FTA with Brazil also. Gas and energy price hike will increase cost of doing business in the industry. Faisal Samad, Senior Vice President of BGMEA, Asif Ibrahim, Former President, DCCI and Director, BGMEA, Benajir Ahmed, Former President, DCCI, Miran Ali, Director, BGMEA, Roger from H and M, Zahangir Alam, Sustainable Manager, Bestseller, Md. Rezaul Karim Bhuyian from Inditex, Qamrul Hasan from Inditex, Haider Ahmad Khan, Former Senior Vice President, DCCI, Fazlul Haque, former President, BKMEA, Mohammed Sohel, Managing Director, Banglaposhak and MS Siddiqui, Member of DCCI spoke there.
