Makers of garments accessories and packaging have made huge investments because of the availability of workers at reasonable wages, duty-free market access in major export destinations, and a preferential location at the heart of the Asia-Pacific region. These advantages have lured foreign investment to the textile and apparel industry in Bangladesh, industry insiders have said. Last year, investments worth Tk. 1,000–1,200 crore were made in this sector. More projects are now in the pipeline and around 100 new factories coming up each year to manufacture garments accessories, said Bangladesh Garments Accessories and Packaging Manufacturers’ and Exporters’ Association (BGAPMEA) president Abdul Kader Khan. Khan said since Bangladesh was the world’s second largest exporter of apparel products after China, there were huge investment opportunities in the textile and garments industry. So far, Tk. 40,000 crore has been invested since the inception of this sector, he added. Talking about exports to new markets, Khan said: “We have been exporting to new countries like Vietnam, Laos, Myanmar, Sri Lanka, South Africa and Middle East for the last two years.” “Eventually, it has helped our exports to soar,” he also said. “We have urged the government to reduce corporate tax to 10–12 per cent from 35 per cent to ensure more growth in the garments accessories sector. We have seen how the government’s decision to reduce the corporate tax rate from 15 per cent to 12 per cent in the readymade garments (RMG) sector has inspired local investors to make investment decisions,” he added. Since the demand for accessory products is growing fast both at home and abroad, around 100 new factories have started operations this year. At present, around 1,200 factories are producing accessory items in the country. Most of them are compliant factories. Talking about fully compliant accessories factories, the BGAPMEA president said: “Dekko Accessories Ltd, Babylon Group, Montrims Ltd, KDS Accessories, Mastex Accessories are some of the fully compliant factories in the accessories industry.” “We have to put more emphasis on producing high-quality accessory items. We must establish this sector separately and not as the backward integration of the RMG industry,” he also said. “However, the new investment will focus on direct export of accessory items because we can meet approximately 95 per cent of the local demand,” he added. Khan said Bangladesh produced and exporteds accessories like woven labels, leather badges, stone and metal motifs, rubber patches, gum tapes, satin and cotton ribbon hangers, price tags, buttons and zippers. Indirect contributions have always made up 15–20 per cent of the net export earnings of the RMG sector. Export earnings from the RMG sector in FY2017–18 totalled USD 30.61 billion. This includes approximately USD 7.10 billion from accessory items used in the RMG, leather, pharmaceutical and other export-oriented sectors. Currently, the export contribution of accessory items is USD 7.10 billion, among which USD 1.42 billion comes from direct exports to the Middle East, South Africa, Sri Lanka, Malaysia, Europe, Vietnam, Cambodia and Laos. Some factories are already exporting accessory items directly, Khan said. “Bangladesh yearly exports basic polo shirts, which are worth USD 6 billion. In that, our contribution stands at USD 1.2 billion,” he added.
