Bangladesh’s textile industry is importing less yarn as the industry entrepreneurs inject fresh investment of $4 billion as it prepares for greater capacity expansion by 2024.
As per Bangladesh Textile Mills Association (BTMA), new investment plans of about $1 billion have been stated. Sector people said beyond BTMA’s calculations, a further investment of about $1 billion is coming in the primary textile sector in the next year, a portion of which will be invested in the non-cotton sector. Overall, the sector will see a 3.5 million spindles capacity expansion.
Industry leaders opined that the sector leaders are consciously building manmade fiber (MMF) capacity.
Md. Saleudh Zaman Khan, Managing Director, NZ Tex Group and Director of BTMA said, “We spinners are moving towards new investments focusing on MMF. And in the next 4-5 years the country’s spinning sector is expected to grow by 50% and self-sufficiency in MMF manufacturing.”
As for the textile industry’s recent growth, Md. Saleudh Zaman Khan said, “Primary textile sector in Bangladesh has witnessed tremendous growth in the last 10 years. The sector is now capable of delivering most of the demand for knit, woven, and denim fabrics.”
“Having said that, Bangladesh’s garment backward linkage industry can supply 98% of cotton-made yarn. We have that ability and not to mention if the cotton yarn demand rises 10% annually – then we can also cater to that,” BTMA Director added.
Bangladesh’s textile industry produces most of its yarn to cater to its massive apparel industry demand – still the country needs to import quite a lot of yarn from abroad to mostly produce high-end apparel. But due to the recent investments, there is a drop in yarn import.
Although Bangladesh source yarn from diversified markets – China and India are the major yarn suppliers of the country’s textile industry.
And the recent status showed that during January-October 2022 period, Bangladesh imported $1.26 billion worth of yarn from China – which is a key yarn supplier to Bangladesh – that was $1.35 billion worth of yarn in 2021, according to market insight tool TexPro.
In volume terms, Bangladesh imported 348.438 million kg of yarn from China during the first ten months of 2022, compared to 418.562 million kg of yarn in 2021, as per the TexPro data.
TexPro data also showcased that since 2020, China’s yarn export to Bangladesh plunged to $835.451 million or 302.216 million kg. But before COVID, the shipment was $1.06 billion in 2019, $1.21 billion in 2018, and $928.314 million in 2017.
While Bangladesh’s other previous key yarn supplier i.e. India has also seen a dip in yarn export in Bangladesh.
A significant reason behind this yarn import drop is the new investment in the textile sector in Bangladesh. As the country is rearing to reap the rewards of European and the USA fashion buyers shifting sourcing from China to reduce their dependency on the country.
In 2021, Bangladesh’s primary textile sector invested a mammoth Tk57.90 billion (BTMA data) and added more than 745,400 new spindles to their existing as well as new capacity. The country’s textile millers took the benefit of the COVID-induced upset supply chain and came up with new investments to improve capacity.
Bangladesh’s top textile businesses are planning to go for capacity expansion within the next 1 to 2 years. As global buyers are increasingly looking for stable and sustainable sourcing destinations. And Bangladesh perfectly fits the bill.
MA Jabbar, Managing Director, DBL Group said to the media, “DBL has now increased its investment in the production of blended yarn to produce high-end apparel items like sportswear, outerwear, and lingerie items.”
While another top leader in Bangladesh’s primary textile sector – Envoy Textiles Ltd has invested in capacity expansion to set up a synthetic blended yarn production facility at an investment of Tk1.25 billion. The new unit will produce 12 tons of yarn per day. They are enhancing spinning capacity to produce cotton and synthetic blended ‘expanded yarn’ as a substitute for imported yarn.
According to the BTMA, more than 433 spinning mills were in operation in Bangladesh in 2020, which had a combined production capacity of 3,270 million kilograms of yarn per year.
Local spinners can supply nearly 85-90% of the required yarn and fabrics for knitwear, and 40% for woven garments.
