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RMG workers’ minimum wage declaration set to face delay

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RMG Bangladesh
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The third meeting of the minimum wage board for ready-made garment workers ended on Sunday without any concrete proposals from either party to declare minimum wages.

Meanwhile, the board, tasked with declaring a new wage structure within six months after assuming responsibility on 9 April, is set to expire next week.

Sources said the board is now seeking an extension of its tenure by 2/3 months so that it can declare the minimum wage this year.

Talking to journalists, Liaquat Ali Mollah, chairman of the minimum wage board, said they were hopeful that both representatives of owners and workers would propose minimum monthly wages in the next meeting, which is expected to be held in the third week of this month.

Photo: Rajib Dhar/TBS

After today’s meeting at the minimum wage board office in the capital, Liaquat Ali Mollah told journalists, “We are hopeful that by mid-November, the minimum wage for garment workers will be approved, in consultation with the representatives from all parties of the board.”

Explaining the reason for the delay in the wage proposals, he said that since the second meeting, they have visited various garment factories in the country to talk to owners and workers.

“We have discussed these issues in today’s meeting, and both sides agreed that they would present their respective proposals on the same day,” he added.

Representative of the owners Md Siddiqur Rahman, former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said they recently visited various factories and prepared a summary and will work according to that.

“We will declare the minimum wage within this year by protecting the interests of both owners and workers considering the current situation,” he said, adding that the workers have full confidence in the board.

He urged the government to monitor the situation if the house rent increases in the garment industry hubs like Savar, Gazipur, Chattogram, and Ashulia after the increase in wages.

Moreover, he called for providing low-cost consumer goods to the workers through ration cards.

Regarding the amount of the wages, GPF, basic pay, and increment, he said the board will take the decision based on the actual situation of the workers in the country.

Responding to a question on whether it is possible to increase the increment by 10%, the board chairman said they have to change the existing law to do this.

However, workers’ leaders said there is no need to change the law to do this because when a gazette is published for the new wages, it will become law.

Responding to journalists, Sirajul Islam Rony, the workers’ representative to the board, said on Sunday they have touched on the main areas and have talked about rationing measures for workers and unwarranted rent hikes.

He also said they discussed lowering the grade system to 5-grade from the existing 7-grade, a 10% increment, and other benefits.

“We assessed the demands of the various organisations and want not only an increase in wages but also the introduction of other benefits,” he added.

They will work together to introduce a reasonable wage, taking into consideration all the situations that arise.

However, a number of worker leaders were on the premises of the board office, and they said they did not know why the board was delaying the declaration of the minimum wage.

During the meeting, representatives from different workers’ organisations were demonstrating and holding placards at the premises of the board office, demanding monthly wages of Tk23,000-Tk25,000.

An alliance formed with the representation of different worker organisations handed over a proposal to the board chairman demanding a monthly wage of Tk23,000 with several benefits.

How former RMG workers reinvent themselves as fitting tailors

POST BY
RMG Bangladesh
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In Dhaka, there are dozens of former RMG workers working as fitting tailors in almost every big marketplace, working with industrial sewing machines. The number is growing quite fast

In the Nannu Market area in Mirpur 11, there are 35 such shops that provide clothes-fitting services like shortening of pants, tightening of sleeves and shirts, and so on. Photo: Noor-A-Alam

Old men working for the country’s ready-made garment (RMG) industry are extremely rare. Most of the workers are pretty young. For many reasons, workers in their 30s are either let go, or they leave the industry.

For them, going back to their village or hometown is only sometimes feasible, due to a lack of employment opportunities. The workers try to engage in various other professions, and they do anything to survive.

While this is the most common scenario, there is this case of former RMG workers increasingly working as ‘fitting tailors,’ where they get to use the skill set they acquired working in the RMG factories.

In Dhaka, there are dozens of such fitting tailors in almost every big marketplace, working with industrial sewing machines. The number is growing quite fast.

In the Nannu Market area in Mirpur 11, there are 35 such shops that provide clothes-fitting services like shortening of pants, tightening of sleeves and shirts, and so on.

Most of the workers we talked to left their jobs at RMG factories because they couldn’t bear the pressure of production and the treatment of their supervisors, and a part of them lost their jobs as their factories were shut down due to bad business.

Mohammad Babul, a tailor working in the Mecca-Madina Fitting Tailors opposite the Heed International School in Mirpur 11, started working in an RMG factory in 1999 when he was 21 years old. He worked for eight years and then went to Egypt to work in an RMG factory there. 

After working there for three years, he moved to Libya where he worked a non-RMG job for two years and then returned home. Since 2013, Babul has been working in this tailoring shop. 

We asked why he did not join RMG again.

“The workload in the RMG factory is huge. There is no freedom. Also, I cannot tolerate the treatment and behaviour of the supervisor. Here in this shop I only have to work when there is a customer,” Babul said.

There are six sewing machines in the shop, where the owner, Shahidul Islam and three other workers currently operate.

Babul has two children. His family lives with him in Mirpur.

The owner, Shahidul Islam, worked in an embroidery factory before he launched this business in mid-2013.

For the owners, launching a fitting shop increases their income significantly, although there are often loans involved. The workers, too, do not seem unhappy with their income.

When asked how the business was, Babul said, “We four are doing just fine with this work, Alhamdulillah [praise to God].”

“The income is not bad compared to an RMG factory,” he said, avoiding a direct answer to the inquiry about their monthly income.

Among the four workers in the shop, three are from the RMG sector.

Md Rokib, who hailed from Munshiganj, started working in the industry in 2003 and left in 2010.

“I did not like it there. Back then, protests and violence were commonplace in this sector. Besides, even availing sick leave was difficult. Supervisors would hurl abuses and threaten to fire us if we were absent from work,” Rokib registered his dissatisfaction about working in a garment industry.

“I worked as a helper in a public bus for two years. And then went back home and spent some time there,” he added.

Rokib, of course, had to join RMG again. 

This time, he worked for four years in a factory in Mirpur 13. He again left the industry and worked as a construction worker. Before ending up in this fitting tailor shop, he worked another job in the RMG sector for one year. The 34-year-old man has been working here for the last one year. He, too, lives in Dhaka with his family of four.

One hundred metres away in Nannu market, several fitting tailors were seen on both sides of the road. The names on the south side of the road were interesting: Cumilla Fitting Tailors, Rangpur Fitting Tailors, Dhaka Fitting Tailors… the list goes on, named after the home districts of the owners. Each shop had 3-4 sewing machines. 

Mohammad Mizanur Rahman, the owner of Dhaka Fitting Tailors, used to work in the sewing section in the RMG industry. He worked there for five years and then left the job to join a fitting tailoring shop in Mirpur. After working there for two years, Mizan started his own business where he employed four more workers.

“How long will I work in the shops owned by others? I decided to be independent and established, so I launched this shop,” said Mizan. 

Mizan lives in the same building where his shop is located along with his family.

Living with the family indicates the earning is good enough. Many blue-collar workers in Dhaka actually leave their families in their hometowns to reduce expenditure.

Asked why they only do fitting tailoring instead of full tailoring of complete dresses, Mizan said this work matches the type of skills they acquired in the garment factories.

While there are a few fitting tailors who do not have an RMG background, Mizan said most of them are from the industry. “Who else would know how to sew?” Mizan said, smiling. As we were talking, Mizan’s sewing machine was running in full swing, working on a pair of pants.

Mustafizur Rahman, who came to shorten the pants, said he was a regular customer.

“I always have to shorten ready-made pants by two inches because of my height,”  said Mustafiz, who lives in a nearby building. He said finding a fitting tailor is now easier than ever.

“There were always fitting tailors around, but the number has increased in recent years. With new buildings and the growing population of the area, new clothes stores have popped up on every road in the neighbourhood. 

Fitting tailors have grown proportionately,” Mustafiz said.

These fitting tailors are found in every neighbourhood in Dhaka, but the concentration is high in big markets. In Mirpur, they are seen in big numbers in Mirpur section 1, 10, 6, 7, and 11. There are many fitting tailors in New Market and other marketplaces as well. 

There is no association of these tailors, so the total number of such fitting tailors in the city is unknown. However, they are sure to employ a lot of former RMG workers who have not forgotten their skills.

Need more investment in dyeing ensuring synthetic fabric dyeing efficiency to boost MMF garment export

POST BY
RMG Bangladesh
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The rising production of man-made fiber (MMF) needs more dyeing units although the dyeing sector has been witnessing a dearth in investment due to shortage of gas over the last two years.

The dyeing segment cannot keep pace with the garment and spinning sectors’ growth as little investment was made in this important sector over the last two years.

Since the local garment exporters have targeted for more MMF based garment shipment, Bangladesh needs more and more dying units to gain more prices from the international retailers and brands.

The MMF based garments require finer quality of washing and dyeing as the prices are also higher than the garment made from the cotton fibre.

The dyeing units consume a lot of gas with adequate pressure and it needs continuous heat for dyeing the fabrics. Because the dyeing units need at least 25 tonnes of boilers, gas generator and electricity which all need big investment.

Since there is a shortage of gas in the country, the entrepreneurs did not put money afresh in the sector over the last two years.

So, no new unit was set up in the dyeing sector, but only few entrepreneurs expanded their capacity to cater the local customers.

Currently, more than Tk30,000 crore is invested in the dyeing sector and more than 400 modern dyeing units are in operations now in the country.

Why dyeing is needed

Dyeing is a critical process to color fabrics and yarn for finished garment items. It involves a lot of technical people and expensive chemicals.

Two kinds of dyeing processes are required mainly — solid dyeing that means coloring fabrics and yarn dyeing for making fabrics.

However, the demand for local dyeing of fabrics has been rising rapidly to the local garment manufacturers because of shortening lead time by the international clothing retailers and brands.

For instance, previously the international retailers and brands allowed 90 to 120 days lead time, but now they have been allowing 45 to 60 days lead time due to fierce competition in the global apparel supply chain.

As a result, the garment makers like to use the local fabrics, rather than the imported fabrics for making the apparel.

Because, it needs at least 30 to 45 additional days if the garment is made from imported fabrics like from China and other countries.

So, the local garment suppliers like to use more local fabrics for making the garment and to supply to their international customers.

The current situation

The production capacity in the industrial units also fell to nearly 50 percent due to shortage of gas with adequate pressure.

Major industrial hubs like Gazipur, Maona, Bhaluka, Narsingdi, Savar, Narayanganj, Narsingdi and in Dhaka have been suffering from the shortage of gas supply over the last few years.

Currently, local spinners can supply nearly 90 percent fabrics and weavers can meet more than 40 percent of the demand for fabrics from garment manufacturers, who accounted for more than 85 per cent of Bangladesh’s export earnings of $55.50 billion in the last fiscal year.

Owing to the higher inflow of orders and the truncated lead time, many dyeing industries have already been transformed into composite units, which consist of the facilities and processes involved in turning textile raw materials into fabrics.

In Bangladesh, nearly 400 large dyeing units are capable of meeting the entire demand for knit and woven fabrics.

In such cases, the dyeing is very important segment as the garment makers need different kinds of fabrics with different dyes. However, the dyeing capacity has been lowered without any fresh investment and lower production capacity.

The dyeing units are running highest 60 percent capacity because of low gas pressure. However, the industry insiders are saying that there is a lot of work orders from the clothing makers.

What the industry people said

Md Rahat Ullah Rashed, head of Technical Support at the Taiwan Persotex Corporation & Taiwan TRS Ltd said the dyeing sector did not witness a massive investment over the last two years, but the entrepreneurs expanded their capacity as there were work orders from the local garment suppliers.

He also said the gas shortage was the main cause for not heavy investment in the dyeing segment.  Rashed, however, said the machinery those the local millers use are expensive. But the dyeing units do not get adequate rate for dyeing from the customers.

The local dyers use the latest technologies for dyeing purposes, he said. Most of the machineries are imported from China, Germany, Japan, Greece, Italy and Taiwan, he said.

Bangladesh has also a handsome market for dyes chemicals as every year the local textile millers, dyeing millers and weavers import chemicals worth more than $3.0 billion to meet the growing demand of the local customers, Rashed also said.

The chemical consumption in the country’s dyeing sector has been increasing nearly 30 percent year on year.

Industry insiders said the old machinery needs to be replaced and many of the factories are getting less prices from the international clothing retailers and brands although they set up the most modern machineries in the mills.

Bangladeshi dyeing mill owners also need to set up dyes chemicals units so they need not to rely on foreign countries and companies for importing the dyes and chemicals for dyeing the textile and fabrics.

Monsoor Ahmed, Chief Executive Officer of Bangladesh Textile Mills Association (BTMA), said setting up a dyeing unit would cost Tk 200 crore to Tk 250 crore a few years ago but now it requires Tk 500 crore to Tk 600 crore.

The setting up of dyeing units is expensive as the state-of-the-art effluent treatment plant is needed for the dyeing sector, he said.

Also, BTMA President Mohammad Ali Khokon said with the inadequate supply of gas is not possible to set up a dyeing unit although there is a plenty of work orders from the fabrics millers.

Investing in such situation of gas supply, the entrepreneurs do not want to take risk and do not invest money in big amount, he said.

The supply of gas in the industrial units is needed to achieve the garment export target of $100 billion by 2030 might not be possible.

বিজিএমইএ ও গ্রিন পাওয়ারের মধ্যে সমঝোতা স্মারক সই

POST BY
RMG Bangladesh
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বাংলাদেশ পোশাক প্রস্তুতকারক ও রফতানিকারক সমিতি (বিজিএমইএ) ও গ্রিন পাওয়ার লিমিটেড একটি সমঝোতা স্মারক (এমওইউ) স্বাক্ষর করেছে। বিজিএমইএ সভাপতি ফারুক হাসান ও গ্রিন পাওয়ারের ব্যবস্থাপনা পরিচালক শেখ এহসানুল হাবীব নিজ নিজ প্রতিষ্ঠানের পক্ষে সমঝোতা স্মারক স্বাক্ষর করেন। বিজিএমইএ কমপ্লেক্সে অনুষ্ঠিত সমঝোতা স্মারক স্বাক্ষর অনুষ্ঠানে আরো উপস্থিত ছিলেন বিজিএমইএর সাবেক সহসভাপতি মো. মশিউল আজম শজল ও বিজিএমইএর স্ট্যান্ডিং কমিটি অন লেবার অ্যান্ড আইএলও অ্যাফেয়ার্সের চেয়ারম্যান আ ন ম সাইফুদ্দিন। সমঝোতা স্মারক অনুসারে, গ্রিন পাওয়ার বিজিএমইএর কারখানাগুলোকে সৌরশক্তিসহ সবুজ ও পরিচ্ছন্ন জ্বালনি শক্তি গ্রহণের বিষয়ে প্রযুক্তিগত সহায়তা করবে।

Bangladesh yet to compete to become a hub of recycled yarn

POST BY
RMG Bangladesh
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The market of recycled yarn is swelling worldwide, especially after the new environmental laws being formulated by the European Union (EU) but unfortunately, Bangladesh is still far behind the competitors in the production of such yarn due to many aspects including lack of policy support from the government. Because it is estimated that the fashion industry is one of the world’s greatest polluters responsible for about 20% of the planet’s wastewater and around 10% of the world’s greenhouse gas emissions. So the importance of yarn recycling getting a core focus in regards to sustainability among the end users and to all the stakeholders.

What is recycled yarn

The old and discarded clothing or scrap of garment that is produced by manufacturing processes, widely known as “jhoot” in Bangla are the main materials of yarn and fabric to recycle.

The Global Recycled Standard (GRS) set the criteria that a yarn can only be branded `recycled´ when spun with more than 20% recycled fibers. This specification is for tracking and verifying the recycled content of materials in a final product.

The market size of recycled yarn

The recycled yarn is projected to grow from $4,553.4 million in 2023 to $5,500 as global annual sales. According to QY, a California-based global research organization, the growth of recycled yarn can be 7 million by 2029 at a compound annual growth rate of 3.2 percent.

Another source such as Straits Research says Recycled Textile Market Size is projected to reach USD 7.56 billion by 2030, growing at a CAGR of 3.6%.

Brands are focusing on recycled yarn.

Many giant retailers like Swedish Retail H&M set strategy as a part of the new rules and have a target to have 24 percent of its apparel sourced from recycled or sustainable materials by 2025.

Japanese Fast Retailing Company plans to use 50% recycled materials by 2030.

Delara Burkhardt, one of the MEPs behind the EU’s plans said “Consumers alone cannot reform the global textile sector through their purchasing habits. If we allow the market to self-regulate, we leave the door open for a fast fashion model that exploits people and the planet’s resources”. She also added that The EU must legally oblige manufacturers and large fashion companies to operate more sustainably.

The Bangladesh situation to produce recycled yarn. 

In line with the world’s trend, there are only three local mills in Bangladesh for manufacturing recycled yarn. The mills are set up with an investment of around $30 million and they can produce nearly 40 tons of recycled yarn per day.

It is also found from different sources that approximately another 60 tons of recycled yarn are produced by some local mills that are used for domestic markets, such as mattresses and curtains.

Sources said there are four more projects under construction in Bangladesh with an investment of $40 million and are expected to come into production within the next year. The mills are expected to take the daily output of exportable recycled yarn to 100 tons.

Ayesha Shefa, Director of Sustainability & Head of Marketing, Simco Spinning and Textiles ltd (CYCLO recycled fibers) said to textile focus – 

We are now fully operating in the recycled yarns business which means we are ensuring upcycling of the fabric mill’s cut clips waste. This waste is mostly exported to different countries. SIMCO has ensured intervention and upscaled this to a level that ensures that a circular economy is achieved as the clips waste and are resourcefully valorized within Bangladesh. Our business fluency also means we were able to grow and increase the employment of locals.

Ayesha Shefa also said SIMCO’s production capacity is focused on recycled yarns only. It is now predominantly producing CYCLO Recycled Fibers. This ensures one arm of the sustainability wing – environmental improvement. Through the production of these recycled fibers and yarns, there are intangible savings on air, water, land, and CO2.

Opportunity for Bangladesh to produce recycled yarn. 

Research led by Global Fashion Agenda, with partners Reverse Resources, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and which is supported by P4G, found that in 2019, Bangladesh produced approximately 577,000 tons of waste just from ready-made garments (RMG) and fabrics mills of which almost half (250 thousand tons) was 100% pure cotton waste. It is estimated that factories in Bangladesh could sell this 100% cotton waste to the recycling market for up to 100 million USD.

Bangladesh is currently heavily reliant on the import of textile fiber. In 2019, the country imported 1.63 million tons of staple cotton fiber (with a value estimated to be 3.5 billion USD). Based on the Circular Fashion Partnership findings, if just the 100% cotton waste was recycled within Bangladesh, imports could decrease by around 15%, therefore saving half a billion USD that would have been spent on cotton imports.

Bangladesh could save as much as $500 million annually if the cotton waste is generated. This is a big opportunity for Bangladesh to recycle the pre-consumer cotton waste produced by various RMG industries. So, the opportunity has been taken by many of the millers in Bangladesh.

Challenges for Bangladesh to Produce Recycle Yarn 

Textile experts said that recycled yarn is an unavoidable fact, and that blending virgin and recycled cotton will make some quality parameters worse. So, the required technical experts are still not enough in the sector to produce quality recycled yarn. 

To cope with the risks, better communication and a common understanding are needed throughout the textile value chain.

Mohammad Ali Khokon, president of Bangladesh Textile Mills Association said to a daily newspaper that a 7.5 percent VAT on procurement and 15 percent VAT on sale of such yarn has been hindering investment in this sector. The government should formulate policy in this regard soon, he added.

In conclusion, it can be said Bangladesh has a huge opportunity to grab the global recycled yarn market by utilizing the 577,000 tons of waste annually that comes out from various ready-made garment factories. The broader sense of sustainability lies in the recycling and reuse of production waste. As Bangladesh is the second largest RMG exporter so recycled yarn market also can be dominated by the country.

Apparel export declines to the US and EU: Faruque Hassan

POST BY
RMG Bangladesh
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Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan said that garment exports from Bangladesh to the US market have decreased by one-third. He gave this information at a press conference organized on ‘Overall Status of Garment Industry’ at BGMEA Complex in Uttara on September 26 in the capital.

Figure: Apparel export declines to the US and EU. Courtesy: collected

In a written statement, BGMEA President Faruque Hassan said that overall apparel imports from the United States and the European Union have decreased at an alarming rate in the first seven months of this year. During this period, US global apparel import value decreased by 22.28 percent, while their import from Bangladesh decreased by about 20 percent.

On the other hand, in terms of quantity, global imports from the United States decreased by 28 percent. Where there is a decrease of 29 percent from Bangladesh. That is, in terms of quantity, the import of the United States from Bangladesh has decreased by one-third in these seven months.

At the same time, global imports from Europe decreased by 7.5 percent, and from Bangladesh decreased by about 12 percent. Also, in terms of volume, imports from the whole world decreased by about 13 percent, and from Bangladesh decreased by 14.50 percent.

The President of BGMEA said that our two main markets are the US and EU. These two markets account for about 80 percent of our total exports. If there is instability in this market, it will have an adverse effect on our industry. We have always focused on market expansion and new market creation to overcome this weakness.

We are working with many more unconventional markets, such as Australia, South Korea, Japan, China, India, Saudi Arabia and even Iraq. We held a day-long Bangladesh Apparel Summit in Australia. There we have highlighted the overall progress of our industry. Growth in exports to new markets is helping us in these difficult times, he added.

He said that the world economy is passing through an unprecedented period in recent years. The worst disaster of the century, the Russia-Ukraine war and the resulting inflation, which has yet to heal the wounds of the Covid pandemic, have had a profoundly negative impact on every sector of the global economy.

Developed countries have now adopted contractionary monetary policies to control the unprecedented global inflation. Consumers are now struggling to meet their daily needs like food and fuel while cutting back on clothing. As a result, retail sales of our products have decreased. As a result, the import of clothing in major markets has decreased, he said.

Regarding re-determining the minimum wages of workers in the garment sector this year, Faruque Hassan said that the board has been constituted, and the minimum wages board is now working for review. A new minimum wage is expected to be announced before the end of this year. As a result, our costs will increase further.

Exporters seek deeper trade with US despite tensions

POST BY
RMG Bangladesh
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Bangladesh’s exporters are hoping for a boost in bilateral trade, Generalised System of Preferences (GSP) for clothes made from US cotton, and more foreign direct investment (FDI), despite the diplomatic tensions between Dhaka and Washington.

Industry insiders and experts say a GSP facility for clothes made with US cotton will be a win-win for both Bangladesh and the USA. Bangladesh holds a strong position in cotton-based clothes manufacturing, but meets 98 per cent of its cotton demand through imports.

Currently, the US cotton market share in Bangladesh is only 5.5 per cent, and the country produces 95 per cent of cotton for exports.

GSP for the US cotton-made clothes can help increase its market share in Bangladesh to $3 billion over the next 5 years – 7 years, and additional exports for Bangladesh worth $400 million – $800 million every year, they added.

Industry insiders believe that the state of political ties between Bangladesh and the USA will not impact bilateral trade.

“We believe that the recent US VISA Policy will not impact Bangladesh’s business sector,” said Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan.

On the issue, Commercial Counselor to the US Embassy in Bangladesh John Fay said, “Bangladesh is improving in issues such as labour rights, labour law reforms and freedom of association for reviving the GSP, which remains lapsed since December 2020.”

The US Congress has not taken any new initiatives in this regard since then. But there is a possibility of reducing the duty on the import of garment items from Bangladesh, Fay added while addressing a seminar titled “Bangladesh-US Trade and Investment.”

The event, held at the Economic Reporters Forum (ERF) auditorium in the capital on Monday, was organised by the ERF. Forum President Mohammad Refayet Ullah Mridha presided over the programme, while Secretary Abul Kashem moderated it.

Research and Policy Integration for Development (RAPID) Chairman Mohammad Abdur Razzaque presented a key note titled “Partnering up: US-Bangladesh Trade and Economic Cooperation.”

Razzaque said, “Bangladesh should ensure fibre security in the coming days, as the country produces less than two per cent of the required nine million bales of cotton. Almost the entire demand is met through imports, and the USA is gradually becoming a good source for this fibre.

“Bangladesh’s exports to the US have expanded at a faster pace in recent times, compared to many other countries. But due to the low export basket, Bangladesh has failed to cash in on the available opportunities.”

Cambodia, a small economy, is exporting more items than Bangladesh, he pointed out.

Razzaque then said, “Clothes currently occupy 83 per cent of Bangladesh’s total exports to the USA, but we failed to capture a larger piece of the pie as China’s share in the sector declined. Vietnam is taking advantage of the situation.

“Despite the big opportunity in man-made fibre based clothing exports to the US market, Bangladesh’s market share in the sector is just 5 per cent, while Vietnam holds 21 per cent. Bangladesh can increase their exports to the USA through non-cotton clothes.”

In the keynote, Razzaque mentioned that the US annual import size is $3.3 trillion, and Bangladesh occupies just 0.2 per cent of the pie, even though the country is their single largest export destination.

Bangladesh’s earnings from the apparel sector stood at 83 per cent or $8.52 billion in FY23, and US apparel import share is just 3 per cent of their total annual import.

The US has the largest FDI stock in Bangladesh amongst partner countries, and has invested over $4 billion. Gas and petroleum sector received 70.9 per cent of such investments, while textile and clothes received just 3 per cent, according to the keynote.

At the programme, Razzaque welcomed US investors to invest more in Bangladesh in industries such as apparel produced with manmade fibre, footwear and leather, pharmaceutical, ICT, automobiles and light engineering.

The government has prepared special economic zones across the country for this very reason.

Echoing Razzaque, Policy Exchange of Bangladesh Chairman Masrur Reaz said, “The sky is the limit for attracting investments from the USA in different sectors across Bangladesh. Currently, Bangladesh is the second largest garment exporter worldwide and third largest manufacturing hub for large volume and low valued garment items worldwide.

“However, Bangladesh needs to improve the border and customs clearance process for attracting more foreign direct investments.”

Commenting on the matter, US Counselor Fay said, “There are some challenges to investing in Bangladesh, mainly in the areas of profit repatriation, intellectual property rights, data protection act and logistics services.

“There is a big potential for the USA for investments in Bangladesh’s healthcare, ICT, and education sectors.”

As Bangladesh’s major export basket is apparel, and the sector performs exceptionally well in the US market despite above 15 per cent duty on the products, BGMEA President Faruque Hassan said GSP on US cotton clothes will help increase the country’s exports to the US market.

Faruque added, “It will be a win-win situation for both countries as local millers are importing 11.5 per cent of the total nine million bales of cotton from America. Australia and the UK have already confirmed that they will continue zero tariff trade benefits even after Bangladesh graduates from LDC, but the USA is yet to announce anything.”

In his speech, Faruque mentioned that Bangladesh has achieved a lot of development in the past decade in areas of workplace safety, workers’ rights, and formation of trade unions. 

The country even amended labour rules and is in the process of amending the labour act.

He mentioned that to reduce carbon footprint, Bangladesh is setting up green RMG factories, and already 202 factories obtained LEED certification from the US Green Building Council.

“I hope the USA will consider reviving the GSP facility as we have complied with the 16 point Bangladesh Action Plan provided by the US government for GSP reinstatement. We do not want aid, we believe in trade,” Faruque pointed out.

Bangladesh Textile Mills Association (BTMA) President Mohammad Ali Khokon said, “The country currently imports 20 per cent cotton from India, 11 per cent from USA and 3 per cent from Australia.

“The Joe Biden administration should follow the fifth Ministerial Conference of the World Trade Organisation (WTO) held in Hong Kong in 2005, where the developed countries agreed to give duty-free trade benefits for 100 per cent products.”

Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Vice-President Fazlee Shamim Ehsan said, “Bangladesh has done a lot in terms of workplace safety, but the USA is not recognising our initiatives as the GSP remains suspended for Bangladesh since June 2013.”

ITMF’s 21ST GLOBAL TEXTILE INDUSTRY SURVEY (JULY 2023) BUSINESS SITUATION REMAlNS NEGATIVE­

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BGMEA demands fair prices, ethical sourcing from US brands

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As per data from Office of Textiles and Apparel (OTEXA) the USA’s import from Bangladesh dropped by 20 percent in dollar value and 29.03 percent in square meter in January-July 2023. 

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) yesterday sought fair prices and demanded ethical sourcing of garments from the US retailers and brands as the new wages for the workers are expected to be implemented from December this year.

BGMEA President Faruque Hassan made the demand in a letter to Stephen Lamar, president and chief executive officer (CEO) of American Apparel & Footwear Association (AAFA), the platform for the American retailers and brands, on September 28.

“Considering the standard and cost of living of our workers, and the inflation, we also expect fair price and ethical sourcing from our valued buyers,” Hassan said in the letter.

The BGMEA chief urged the AAFA to  pursue the US brands and retailers for rational price for the orders for Items to be produced from December 2023 and onward.

“This is important for a smoother transition to a new wage scale. May you kindly share this letter to your members, please,” Hassan said.

He said the BGMEA is working to improve the skill and efficiency level of the workers, and such initiatives should have broader collaboration.

“As we commit ourselves to continuously delivering the better, we are leaving no stone unturned to optimise the value of our spending, with an uncompromising stance on ethical and responsible business. Your continued support will be crucial,” he said.

Recently, the AAFA wrote a letter to Prime Minister Sheikh Hasina expressing concern about the labour rights situation in Bangladesh following the killing of labour leader Shahidul Islam in June this year. 

The suspects of the Shahidul Islam have been arrested, the BGMEA chief mentioned.

Hassan said the Bangladesh labour law was amended in 2013 and 2018. 

Further amendment to the labour law is in the final stage after a rigorous tripartite consultation, he said. 

As per data from Office of Textiles and Apparel (OTEXA) the USA’s import from Bangladesh dropped by 20 percent in dollar value and 29.03 percent in square meter in January-July 2023. 

“We understand the stress of managing supply chain at your end, we, the manufacturers, are also in a complete ‘nightmare situation’ to manage our capacities, supply chain, planning and forecasting. Yet, we have been quite successfully able to retain growth in our export, so far,” the letter said.

The Minimum Wage Board for the garment workers is working to review the current minimum wages. The board has already done several meetings and currently consulting with different stakeholders, said Hassan.

“They are visiting factories and discussing with workers and owners. I believe before the end of this year a new minimum wage will be declared and there will be a rational adjustment, if we look at the trend of previous reviews, as well as the aggregate inflation in past five years.”

BGMEA, Canadian delegates discuss trade, labour rights

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The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and a delegation of Canadian Labour Affairs yesterday discussed a wide range of topics, including shared interests in the potential for strengthening trade relations.

The meeting took place at the High Commission of Canada in Dhaka, where Faruque Hassan, president of BGMEA, met with Rakesk Patry, director general of International and Intergovernmental Labour Affairs, along with Pierre Bouchard, director of Bilateral and Regional Labour Affairs, the Government of Canada.

During the meeting, both sides delved into the repercussions of Bangladesh’s transition from a Least Developed Country (LDC) status on its trade and overall economy. They also explored the nation’s preparedness to sustain economic growth in the post-LDC era.

Faruque Hassan delivered a comprehensive overview of Bangladesh’s thriving ready-made garment industry, placing particular emphasis on the substantial progress made in enhancing workplace safety, safeguarding workers’ rights, and advancing environmental sustainability practices.

Additionally, he shed light on ongoing endeavours aimed at ensuring the well-being and rights of workers, with a special focus on the government’s initiatives related to labour reforms and the ongoing review of minimum wage standards.

Acknowledging Canada’s pivotal role as a significant trade and development partner, he expressed his optimism that Canada would continue to provide favourable trade access to Bangladesh.

 He underscored the vast potential for both countries to strengthen their trade and investment ties through collaborative initiatives.

Lilly Nicholls, high commissioner of Canada to Bangladesh, Debra Boyce, senior trade commissioner, Joe Goodings, head of Cooperation, Siobhan Kerr, second secretary, Political, and Kamal Uddin, senior trade commissioner at the High Commission of Canada in Bangladesh also attended the meeting.

Miran Ali, vice president of BGMEA, ANM Saifuddin, chair of BGMEA Standing Committee on Labour and ILO Affairs, and Shams Mahmud, chair of BGMEA Standing Committee on Foreign Mission Cell, were also present.

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