The readymade garment (RMG) manufacturing companies need to align their product basket with the global sourcing trends and may like to move towards more value-add products to increase profitability and competitiveness, said a recent report by PricewaterhouseCoopers (PwC) Bangladesh.
In the report titled “What’s next for the RMG sector in Bangladesh?”, PwC also said that customized strategies must be followed for each product–market combination for deeper penetration of existing markets, entry into relevant new markets and product diversification.
Moreover, industrial infrastructure and logistics need to support the efficient functioning of businesses by reducing cost of operations, making operations environment-friendly and safe, and decreasing the response time and overall business risks, the report stated, adding that quality utilities need to be sufficiently available at competitive prices.
The global textile and RMG industries have been experiencing a series of disruptions in the last five years.
The geopolitical tensions between major markets and manufacturing countries, cotton price fluctuations, global geopolitical conflicts and the Covid-19 pandemic have changed the overall trade dynamics.
Other significant developments include a sharp increase in wages and power cost in Bangladesh, the EU–Vietnam Free Trade Agreement and sustainability-related commitments made by the industry at the COP 26 summit.
To enable the survival and profitable growth of textile and RMG manufacturing businesses, transformation is required at both the company and country levels, the report said.
As the textile and RMG industry are labour-intensive industries, continuous skilling, re-skilling and up-skilling of human resources is required for adopting new technologies, developing new products, improving process efficiencies and enabling innovation, said the PwC report.
Moreover, continuous technology upgradation is necessary for improving productivity, product diversification, quality improvement and improving cost competitiveness.
The report also suggested adopting new technologies to improve competitiveness, technologies including business intelligence tools, 3D design, automation, barcodes, RFID, blockchain, laser technology, nano-bubble technology and many more.
“Faster adoption of technologies is required to reduce cost of manufacturing and business risks. This will help to improve sustainability, enable data-driven decision-making processes, ensure transparency and traceability, and enhance quality, service and responsiveness,” the report stated.
The report said that the growth of Bangladesh’s garment manufacturing industry has considerably improved the socioeconomic development of the country.
In the last decade, garment export has more than doubled to touch $42.6 billion in FY22.
Moreover, the country has now set an ambitious target of exporting RMG worth $50 billion by 2025, and touching $100 billion by 2030.
However, the industry is facing many headwinds which may impact its growth in the coming decade.
Therefore, it might be useful for the Bangladesh textile and garment manufacturing industry to maintain the mentioned recommended levers in achieving its targets.
The report also recommended that a culture of innovation needs to be introduced for creating differentiating factors around products and processes.
Moreover, the industry needs to focus on circular economy, sustainable product designing, green chemistry, net zero commitments, measurement and control of emissions and baselining the of scope emissions, living wages, and clearly defined career progression paths for the workforce.
The industry also must ensure continuous supply of good quality power at competitive prices, improved efficiency in port, road transport and custom clearance processes, with lesser human interventions.
It should ensure improved occupancy of industrial zones and strengthening of textile manufacturing capacity, especially that of finished woven fabric.
An inclusive, motivated and sufficiently skilled workforce will bring in the required changes.
Monitoring and evaluation of the implementation of governance mechanisms is also necessary, stated the report, adding that the policies need to be objectively defined, and relevant stakeholders need to be sufficiently sensitized to accommodate frequent changes.
