Pakistan’s GSP facility by the European Union and fluctuations in the value of local currency against that of major importing countries continues to take a toll on the country’s terry towel and home-textile exports, insiders have said. Lower global demand for terry towel and home-textile products coupled with absence of necessary policy support from the government is also responsible for the situation, they said.Pakistan GSP, currency woes batter towel, home textiles makers These factors have resulted in almost halving terry towel exports in the last five years, the industry people said. The local terry towel exporters fetched only $47.80 million in the 2015-16 fiscal, compared to $92.11 million in 2011-12 fiscal. Earnings from the home-textile sector almost flattened in fiscal years 2012-13 and 2013-14, while it posted a 6.38 per cent negative growth in the last fiscal year. The industry fetched $ 753.01 million in the just-concluded fiscal year against $906.07 million in 2011-12 fiscal, according to the Export Promotion Bureau (EPB) data. In a study conducted in 2014 by Bangladesh Foreign Trade Institute (BFTI) apprehended that Bangladesh would likely to face strong competitive pressure from Pakistan following the EU GSP facility and home-textile would be the main victim of the new system. The global demand for home textiles and terry towel products is slow following the financial crisis, while locally made products are facing stiff competition with those of Pakistan and India, Hossain Mehmood, chairman of Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA), told the FE. “Pakistan is a cotton-growing country and is now enjoying the new generalised system of preferences (GSP) in the EU market,” he said, adding Bangladeshi-made home textiles are lagging behind Pakistan in terms of cost-competitiveness, he said, referring to the major causes of setback. India, already in an advantageous position having its own raw materials, is now emerging as one of the main competitors of Bangladesh as its government is facilitating the local manufacturers with various incentive packages, Shahadat Hossain Sohel, managing director of Towel Tex Ltd, said. Moreover, taka is still appreciating against US dollar while currencies in rival countries depreciating along with importing ones especially in the EU and the recent political instability also cast a negative impact on the overall export growth in these sectors, industry insiders said. Monjurul Haque, general manager, marketing of Zaber and Zubair Fabrics, said raw materials like cotton price have been high since 2010 to 2012 calendar years that prompted the buyers to offer high rate of finished products. During the last one or two years, the prices of raw materials have fallen, so the rates of products, he said. Overall earnings from home-textile remained stagnant in terms of value during the last couple of years, but quantity of export did not decline, he believed. Manik Chakraborty, area manager (marketing) of Unilliance Textile Ltd, said the western consumers’ buying capacity also fell in recent times due to economic recession over there resulting in a declining demand for such products. An inadequate supply of gas and power to industrial units hampers production. The fuel crisis forces many to generate energy by alternative means, resulting in a rise in the cost of production, he said, adding no new mills have been operational in the sector due to scarcity of gas. Some factories, especially those of terry towel, were closed in recent years, Mr Sohel of Towel Tex said, expressing fear of closure of many if the government increases the gas price further. “Our cost of doing business is going up,” the BTTLMEA chairman said, adding the sector needs government’s policy support to grow further. The sector could not flourish to its expected level due to lack of the government policy support, while financial institutions like banks did not come up with funds as did for the garment sector, industry people said, adding that Bangladesh has the potential to earn $2.0 billion in next couple of years. The industry now needs capacity building to capitalise on the upcoming opportunities to take a sizeable part of the world home textile market, they added. The government can facilitate the local manufacturers by providing support like cash incentive, fixing the dollar rate for exporters, Mr Mehmood said adding it might be difficult for the government to provide cash support but it can provide assistance in terms of rebate in tax, gas and electricity bill mainly to retain the competitiveness. According to Bangladesh Textile Mills Association (BTMA), a total of 17 mills produce about 556.39 million metres of home textiles annually. Industry insiders, however, said the number of such mills is higher, although their export volume is scanty. According to BTTLMEA, there are some 71 units are involved in towel sector across the country. In terry towel segment, Bangladesh exports face, hand, bath, beach, jacquard, tea, dish, glass, kitchen and surgical towels while bath mat and robe, dish clothes, kitchen gloves, draw sheet and mommy napkin also being shipped, according to BTTLMEA. Home textiles such as bed-sheets, bedcovers, pillow covers, cushion covers, curtains, rugs, quilt, kitchen aprons, gloves, napkins and tablecloths are exported. The bulk of the shipments goes to the European Union countries, while some products also export to the USA and Canada, according to the association.
