Bangladesh’s apparel sector is facing a huge gap between demand for and supply of yarn-dyed fabrics known as checked and striped shirting clothes as textile businesses are reluctant to establish the fabric manufacturing units for high costs and uninterrupted gas and power supply.
Exporters said they were missing export potentials in the woven sub-sector due to the weak backward linkage industry as global buyers prefer placing orders in the fabrics-producing countries.
Textile industry sources said Bangladesh’s RMG sector was mostly dependent on imported checked and striped fabrics as the local industry could meet only less than 10 percent of its total demand.
As per Bangladesh Textile Mills Association (BTMA), the local industry meets almost 100 percent of the demand for knit fabrics and 40 percent of woven fabrics. The demand for checked and striped shirting clothes is the highest among other woven garments in the world, businesses said.
‘Production of woven fabrics is lagging behind in the country due to the absence of adequate facilities as a huge amount of investment is required for setting up a woven fabric manufacturing unit,’ BTMA president Mohammad Ali Khokon said. Uninterrupted gas and power supply is also important for setting up a yarn-dyed fabric manufacturing unit, he said.
‘The government should invite foreign investments for the backward linkage of woven-subsector as a plant for checked and striped shirting fabrics requires Tk 300-400 crore which is many-fold higher than the cost for a knit fabric manufacturing unit,’ Khokon said.
He said without establishing a strong backward linkage industry, it would be difficult to achieve the export target from the woven sub-sector. ‘Time has changed. It will not be possible to remain competitive on the export market through depending on imported fabrics as buyers are thinking to place orders in the raw material producing countries to avert long lead time,’ Khokon said.
As per the BTMA president, local textile mills meet four billion meters of woven fabrics out of 10 billion meters for annual exports. The local mills meet 50-60 percent of demand for plain-woven fabrics, 50 percent for denim fabrics, and nearly 10 percent of (yarn dyed) checked and striped fabrics, he said.
‘Production units for woven fabrics are not increasing locally due to high project costs,’ Md Shahidullah Azim, vice-president of the Bangladesh Garment Manufacturers and Exporters Association BGMEA), told The Daily Observer adding that the government should extend low-cost finance for strengthening the backward linkage.
As per Export Promotion Bureau (EPB) data; Bangladesh’s export earnings from woven garments in the first half (July-December) of FY22 increased by 24.50 percent to $8.74 billion while earnings from knitwear increased by 30.91 percent to $11.16 billion.
Khokon said that export earnings from knitwear would exceed $20 billion in 2021-22 due to a strong backward linkage. Despite having potential, the Bangladesh RMG sector would lose work orders of woven garments as the sub-sector heavily depends on imported fabrics, he said.
