The RMG export are increasing day by day in Bangladesh but the spinning industries still facing profitability crisis severely. In the last decades following the growth of the export oriented garments Industry Bangladesh spinning sector also made the expansion without analyzing the future market. Now, for the last 2 years the spinning sector is experiencing the real challenge to stay alive. In the recent months, export oriented garments order has gone up a little bit but the buyers are not offering good prices.
As a result, yarn prices are also low. Spinning mills therefore have to calculate loss per unit despite increase in garment orders. Almost all types of yarns except some fancy yarn orders are facing losses.
On the other hand, Bangladesh spinning mills are facing problems due to India supplying yarn at low price. Spinning mills also suffer from fiber shortages. Due to this every spinning mill is not able to utilize its full capacity. Dollar crisis is one of the reasons. Spinning mills are not able to open L/C for fiber or purchase fibre despite working capital limit. As a result, a crisis is created in the fiber and this is the scenario for almost all the spinning mills.
Diversified products or fancy yarns may be getting good prices in the case of spinning mills. Mills are facing 20 cents loss at each unit for Cotton, CVC, PC and other regular yarn. Mills are getting competitive price for slub, cyro, inject, Cotton-Modal, Cotton-tencel etc . As a result it can be said that except for fancy yarn spinning mills are facing losses for all regular yarn.
If the order quantity goes up, there will still be a hope for the spinners that they will try to mitigate losses as the RMG sectors will need support from this backward linkage industry. RMG makers will go for Bangladeshi spinners despite of having a little bit less price from India. As the quality and service of the Bangladeshi spinning mills are much more convenient for them than the same from India. If the export oriented garments industry wants to ensure smooth production and business they must have to have a very strong and healthy spinning Industry.
On the other hand, gas prices increased a lot than it was a few years ago. Salary of the workers has also increased. For gas prices government can consider a little bit for them who are producing electricity by their own using gas. On the other hand, bank support is needed to utilize the full capacity by utilizing their full working capital limit.
Also, all the spinners must have to transform their product range from regular to diversified product at the soonest possible ways. This is the high time to take the decisions whether we will shut our floors one by one or we will rise again.
