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Apparel zone in Chittagong prepared

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RMG Bangladesh
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The much awaited move to build an apparel zone in Chittagong equipped with all necessary facilities is most welcome. The fact that the port city is yet to have a manufacturing hub for the single most important export product – apparel, sounds quite incongruous given the advantages that could be had by the entrepreneurs in particular and the country in general. The initiative, believed to a decisive one, envisages a joint undertaking by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Chittagong City Corporation (CCC) to go for the project in the port city’s Kalurghat industrial area, to be ready for operation by 2018. The move was largely prompted by the need for relocating a good number of apparel factories from various locations in Chittagong which reportedly were suffering from various constraints threatening closure. Setting up an apparel zone in the port city deserves more than just merit. In fact, it is a necessity in view of the need for restructuring the entire readymade garment sector with required facilities given the emerging challenges as well as the $50 billion export target by 2021, set by the sector itself. More so, the facilities that the port city is potentially capable of offering far outshine those in any other part of the country, Dhaka included. As the country’s main port city, it is Chittagong which should have prevailed as the prime location for export of apparels, especially in view of the intricacies involved in the back-to-back letter of credit (LC) system. Importing raw materials against back-to-back LCs and exporting finished materials – an unusual dual procedure on which the country’s export of apparels has thrived – can be better handled if the manufacturing plants are located close-by rather than having to operate from as far as in Dhaka and its adjoining areas where most of the apparel factories are located. In this context, it may be recalled that the country’s pioneer export-oriented apparel factory, Desh Garments, kick started from Chittagong decades back. There were many who followed suit in the mid-eighties and the early nineties, but the momentum could not be sustained in the later years due mainly to the absence of well thought-out policies on the future of apparel exports. In fact, the facilities that Chittagong could have offered vis-à-vis other parts of the country were not explored. The apparel zone being planned to be set up on 10.36 acres will be able to house around forty medium-to-big factories with modern facilities. There are around 700 garment factories in Chittagong, about 40 per cent of which need relocation mainly to fulfill safety compliance. In course of time, there will be the need for more such apparel zones in Chittagong. In fact, a move is already on following the BGMEA-CCC initiative, to set up a garment village at the Mirsarai Special Economic Zone by the Bangladesh Economic Zone Authority. Though belated, these initiatives deserve to be hailed as a significant step in restructuring the country’s apparel sector to meet the needs of the time.

Muhith rejects appeal for more tax benefits: Hi-tech park at Kaliakoir

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RMG Bangladesh
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Finance minister AMA Muhith has turned down a proposal for widening tax benefit for investors and developers of the hi-tech park. His rejection came after the ministry of post, telecommunication and ICT recently requested the National Board of Revenue (NBR) to offer Value Added Tax (VAT) waiver up to 80 per cent to developers of utility services and IT/ITES (information technology and information technology-enabled services) companies of the hi-tech park. Following the request, the NBR sent a summary to the finance minister for his consent. On the basis of the summary, the finance minister declined to give his nod to further tax exemption to the hi-tech park developers as there are already some tax benefits for investors in the park. On October 8, 2015, the NBR offered 100 per cent tax exemption facility to supply of services, at production stage, for investors. It also offered 80 per cent VAT exemption for power supply services. “I think, there is no necessity of offering further tax exemption,” the finance minister commented on the summary. The ICT division, in a letter, sought 80 per cent VAT exemption on gas and water services to be made available to investors in the hi-tech park. For developers of the park, the division pleaded for 80 per cent VAT exemption to gas, water and power supply services. It also sought 100 per cent VAT exemption for suppliers in the park, except petroleum products. In the letter, the ICT division sought similar facility as the NBR offered to the Bangladesh Economic Zone Authority (BEZA). In the summary to the finance minister, the NBR said the tax authority will have to offer a fresh tax exemption to the investors of the hi-tech park for availing gas and water services. The NBR also will have to offer VAT exemption on water, power supply and suppliers of services to the developers. However, the NBR also expressed its reservation on offering 100 per cent tax exemption as sought by the ICT division. “NBR never offered more than 80 per cent VAT exemption, in principle, on gas, water and power supply to any sector earlier,” the NBR said in the summary. The ICT division sought the VAT exemption in a bid to offer power, gas and water supply to the investors of hi-tech park at cheaper price. Currently, the Kaliakoir hi-tech park is under construction. It is located at Kaliakoir upazila in Gazipur district, only 40km away from the capital. The proposed park is set to be located on a-232 acre land at a cost of over US$207 million.

BSCIC gives tanners 72 hours to move tanneries from Hazaribagh

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RMG Bangladesh
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hazaribagh tanneries

Bangladesh Small and Cottage Industries Corporation on Wednesday served legal notices on the 28 errant tanners directing them to relocate their tanneries from the city’s Hazaribagh within 72 hours. The notice said that BSCIC would force the tanners to evict them by snapping gas, power and water connections to their industries and cancel the allotment of land given to them to run tannery business in Savar industrial belt if they fail to relocate within the deadline. Industries Minister Amir Hossain Amu warned that tanneries would lose their licences if they do not shift by Wednesday from Dhaka’s Hazaribagh to Savar’s tannery estate. Talking to reporters after inaugurating a garment accessories fair in Dhaka, the minister said the government would take legal action against the tanneries, which would fail to meet the deadline. The legal notice said that the tanners had been buying time not to relocate the tanneries since BSCIC allotted 10,000 square feet land in Savar for relocation of the tanneries on April 29, 2007. BSCIC has already constructed all Infrastructures in Savar to run the tanneries, said the notice. The tanners were yet to relocate their industries in two years although BSCIC reminded them for 19 times from February 6, 2014 to December 17, 2015 to shift the tanneries. Supreme Court lawyer Md Shahidul Islam, who sent the legal notices to 28 out of 155 tanners on behalf of BSCIC, told New Age that BSCIC would send legal notices to other tanners phase by phase. The notices have been served on 20 tanners as they have taken no steps to relocate their tanneries after getting allotment of lands in Savar. The notices served on 28 tanners include Kader Leather Complex, Dhaka Tannery Ltd, Yusuf Leather Corporation Ltd, Ibrahim Leather, Chandpur Tannery, City Leather Tannery, Capital Tannery, International Tannery, Bhuiyan Tannery, Rubi Leather Complex Ptv Ltd, Hossain Brothers Tannery, Yusuf Tannery Ltd, Choudhury Leather and Company Ltd, Helena Enterprise Ltd, Aleya Tannery, Sonali Tannery, Shahi Tannery, Delta Leather Complex, Nazrul Tannery, Golden Leather Industries, HS Tannery, Roshney Complex, Komla Tannery Ptv Ltd, Dhaka Hide and Skin Ltd, Pioneer Tannery Ltd, Aziz Tanner Ltd, Mukti Tannery and Leather Industries of Bangladesh. On August 11, 2015 the High Court asked 10 errant tanners to explain in two weeks why contempt proceedings would not be brought against them for not relocating tanneries from the city’s Hazaribagh. The tanners include Arefin Shamsul Alamin, Sayedul Huq Master, Md Mahbubar Rahman Panna, Gias Uddin Pathan, Abdus Salam, MD Rezaul Karim Ansari, Abdul Wadud Miah, Abdul Wahab, Md Mofiz Mia and Akbar Hossain. The bench of justice Md Ashraful Islam and justice Zafar Ahmed issued the rule after industries secretary Mosharraf Hossain Bhuiyan told the court that the government could not relocate the tanneries in line with verdict delivered by the court in 2001 because of non-cooperation by the tanners. Bhuiyan appeared before the court responding to an earlier summon asking why contempt proceedings would not be brought against him for failure to implement the verdict. The tanneries are to relocate to Savar where the government is setting up treatment effluent plant to treat the hazardous tannery wastes. The court had asked the government to relocate around 200 tanneries which are dumping untreated wastes in the river Buriganga and causing premature death of the city’s main river.

Adidas Greater China sales touch €2billion in 2015

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RMG Bangladesh
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adidas

German sports goods and sportswear marketer Adidas Group said its Greater China subsidiary achieved its target of €2 billion in net sales in 2015, marking the company’s highest ever annual sales in this region. As per an Adidas press release, Greater China is the second-largest market for the Adidas Group globally, while in the first nine months of 2015, sales in Greater China grew 18.4 per cent year on year compared to 2014. “This record achievement is a direct result of Adidas’ ability to execute upon a decisive strategy,” Colin Currie, managing director at Adidas Group Greater China said. “I am proud of our consistent delivery of innovative products and engaging marketing campaigns and this solid financial result is a reflection of our success in Greater China,” Currie added. In Greater China, Adidas has strengthened its position across all key sports categories, expanded its retail presence to more than 8,500 stores in both higher and lower tier cities and launched new and segmented retail stores. “Today, Adidas is the leading women’s sports brand, and Originals and Neo have become the no. 1 sports style brand and the No. 1 sports casual brand in China, respectively,” the company too added. Building upon this solid foundation, Adidas’ new strategy themed ‘Creating the New’ is aimed at propelling Adidas to greater heights by becoming the ‘best sports brand’ in Greater China by 2020. “The company’s new 5-year game plan will serve as a blueprint to seize further growth opportunities,” it observed. Under this new framework, Adidas will continue to focus on five main drivers like Football, Running, Women’s, Kids and Originals, as part of a brand strategy to strengthen key categories and lead mindshare. To fuel the company’s continued brand leadership, a new framework has been built around three major strategic choices; cities, speed and open source. “The ‘Creating the New’ plan will chart the path of the company’s continued growth as Adidas seeks to meet the demands of China’s burgeoning middle class,” it noted.

Leather fashion brand Zakiz launches setups in India

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RMG Bangladesh
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Zakiz, a leading global leather fashion and accessory brand, has recently launched its operations in India. Through its online store, the brand will provide trendy high fashion leather garments for men and women across India at affordable prices. Initially, the company plans to sell leather fashion through online channels, before progressing to wholesale, high street stores, boutiques and other retailers. Zakiz targets to reach consumers between the age brackets of 18-35 years. It provides a wide variety of products like jackets, coats, trousers, skirts, dresses, and shorts. The brand represents rebel clothing, which when worn will add to the confidence of an individual’s personality. Founded in the year 2012 by Hersh Lilaramani, Zakiz has been expanding massively, and is currently present over 20 countries, mainly the US, UK, Australia and India.

Fabrics & trims show Textile Forum begins March 9

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RMG Bangladesh
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The next edition of Textile Forum runs from March 9-10, 2016 at One Marylebone and has attracted a number of new and returning suppliers who will be showcasing luxury fabrics and trimmings for spring 2017. Among the first-time exhibitors is Hand & Lock, embroiderers, whose work can be found within the collections of the top couture houses and bespoke military outfits created by Savile Row tailors. “The company will be displaying samples of its intricate handwork and also looking to secure entries for its international embroidery competition to discover next generation embroidery designers,” a press release said. “Sourcing luxury fabrics has never been easier for designers,” Textile Forum co-founder Linda Laderman said. “Our venue provides an elegant, spacious backdrop that complements our exhibitor’s collections, which is why some of the biggest names in the fashion industry have already registered to attend the event,” she added. According to Textile Forum, for spring, bridalwear is a particularly important sector and designers will be spoilt for choice with the plain, embroidered and fancy fabrics offered by exhibitors. These include Bella Tela, Portuguese company Sanmartin and Jose Maria Ruiz (JMR), all of whom have selected the March show to mark their return to the event. Michael’s Bridal Fabrics, which is seeing a demand for 3D designs and those with a vintage look said that the next trend will be in silk blend and polyester brocades in ivory and soft pastel colours. While traditionally the spring shows are more womenswear focused, Textile Forum also offers a good selection of menswear fabrics for formal, evening and casual occasion. “Designers will be able to select the finest cloths from Holland & Sherry, which is celebrating its 180th anniversary this year, A W Hainsworth and Dugdale Bros,” Textile Forum informed. There are many returning exhibitors like Laurent Garigue, Solstiss, Henry Bertrand, Bennett Silks, Makowers, Ringhart Fabrics, Tiss and Teint, G H Leathers, Bernstein & Banleys and Alan Litman. For the first time, Textile Forum will be welcoming a garment manufacturer to the show, London-based Plussamples, which specialises in men’s and women’s soft tailoring, soft separates and light-weight silk and jersey fabrics.

Vietnam blows Bangladesh in RMG export

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RMG Bangladesh
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RMG

News Report Vietnam’s RMG export to the US market almost doubled in the year 2015 superseding that of Bangladesh. According to the US data, the apparel exports of Vietnam grew 14.05 per cent during the first 11 months of 2015. During the same period Bangladesh exports grew 11.41 per cent. Vietnam exported RMG worth $9.7 billion and Bangladesh RMG export was worth $5 billion only during the period under reference. Vietnam garment industries started its journey from the beginning of 90’s whereas Bangladesh RMG sector laid its foundation during the mid-70’s. Vietnam got market access to the US during the mid-90’s and Bangladesh got the same from the very beginning of its RMG journey. Bangladesh RMG sector will face most difficult time when the US led Trans Pacific Partnership (TPP) agreement will be in operation. Under the deal Vietnam will enjoy duty-free export facilities to the US market and Bangladesh will have to pay 15 per cent duty for exporting RMG products to the US market. If the US administration restores suspended Generalized System of Preference (GSP) Bangladesh RMG sector will not be competitive with Vietnam because the GSP covers only 0.24 per cent of the total Bangladesh export to the US market. Vietnam, according to the BGMEA sources, has taken up massive expansion programme of its RMG sector. It has set a target to attract $3 billion FDI in the RMG sector during the next two years to meet the growing demand of RMG products after the TPP comes in operation. On the other hand, investment in Bangladesh RMG sector is not at all satisfactory. Some investment around $200 million per year has taken place in the Export Processing Zones, which is quite insufficient to face global market challenge. In another development the European and North American retailer groups blacklisted a large number of Bangladesh RMG factories for poor progress of working condition improvement by the RMG owners. After the collapse of Rana Plaza in 2013, the European retailers formed accord to look into the fire and building safety and North American retailer groups formed alliance to look into the workers safety issue in Bangladesh RMG sector. Both the Accord and Alliance inspected around 3500 RMG factories and found none of the factory up to the mark. They suggested some remedial measures and urged the garment owners to implement the prescriptions as early as possible. During the last one and a half years RMG owners did a lot to change the environment, but still a good number of owners could not meet the standard prescribed by the Accord and the Alliance. The Accord, according to source, has warned 120 RMG factories of losing business if they fail to meet the standard of safety within the next couple of months. The Alliance suspended business of 23 RMG factories because they could not meet the safety standard. The Alliance has also warned 12 more factories to face the similar situation, the source said.

No transfer despite taking compensation

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RMG Bangladesh
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Despite having taken money from the government, 28 tannery factories have suspended construction work to relocate their factories from the city’s Hazaribagh tannery hub to Savar Tannery Industrial City. The 28 factories – including three owned by Bangladesh Tanners’ Association (BTA) Chairman, one owned by the Vice Chairman, and some others owned by executive committee members – had failed to shift their factories by 2014, the stipulated period as per a tripartite agreement with the government. Bangladesh Small and Cottage Industries Corporation (BSCIC) sources said that as many as 155 companies have received around Tk. 50 crore from the government, which is 20 per cent of the total estimated cost of relocation of these companies. They added that the government will give total Tk. 250 crore as compensation for relocating Hazaribagh tanneries to Savar. They also said that the government will serve legal notice today after the Industries Minister’s ultimatum of 72 hours given last Sunday to tannery owners. The sources informed that factories that have suspended construction works include Kohinoor Tanneries Ltd, Helena Enterprise Ltd, International Tannery, Kader Leather Complex, Dhaka Tannery, Yousuf Leather Corporation Ltd, Ibrahim Leather, Chandpur Tannery, City Leather Tannery, Capital Tannery, Bhuiyan Tannery, Ruby Leather Complex Pvt Ltd, Hossain Brothers Tannery, Yousuf Tannery Ltd, Chowdhury Leather and Co Ltd, Aleya Tannery, Sonali Tannery, Shahi Tannery, Delta Leather Complex, Anwar Tannery, Nazrul Tannery, Golden Leather Industries, HS Tannery, Roshni Complex, Kamla Tannery Pvt Ltd, Dhaka Hyde & Skins Ltd, Pioneer Tannery Ltd, Aziz Tannery Ltd, Mukti Tannery and Leather Industries of Bangladesh Ltd. Jahangir Rahman (Milon), an EC member of BTA, who is also the proprietor of M/S. International Tannery, told The Independentyesterday, “I have already completed piling work. We will resume construction work soon.” Milon added that many BTA members have failed to relocate their factories to Savar in the stipulated period. “Like the tannery owners, the government too has failed to ready the Savar Tannery Estate. They are yet to complete the central effluent treatment plant (CETP),” said Jahangir in reply to a query. He said they are, however, yet to get the legal notice. In 2003, authorities decided to shift the tanneries as they had virtually turned the Buriganga into a pool of septic water as untreated waste from more than 200 tanneries that process raw hides into finished leather flowed freely into what is Dhaka’s lifeline. According to Environment Ministry sources, around 22,000 cubic metre of untreated, highly toxic liquid wastes from the tanneries flows into the Buriganga. However, BSCIC authorities formally sent letters to 155 tannery owners on April 23, 2007, to shift their respective factories from Hazaribagh to Savar Tannery Estate after allocation of plots. According to the legal notice, “The tannery owners should relocate their factories within 72 hours after receiving the notice. If anyone fails to comply with the notice—services of electricity, gas and water lines will be snapped from the factories.” Besides, legal action including cancellation of plots will be taken against those who violate notice. “Even the factories will be evicted as per law,” said the legal notice. However, Industries Minister Amir Hossain Amu, talking to reporters at the Bangladesh Secretariat yesterday, deviated from his Sunday ultimatum and said that action will be taken only against those who have suspended construction works to relocate tannery factories to Savar after 72 hours. The Industries Minister’s ultimatum for 72 hours to relocate tannery factories to Savar will end today at 2:00pm.

Buyers want bound in remediation in ILO-inspected RMG units

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RMG Bangladesh
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The Buyers’ Forum, a platform of the representatives of global apparel retailers, on Monday expressed concern over the remediation progress in the readymade garment factories which are beyond the purview of the inspection programmes of the European and North American buyers’ groups. In a meeting with the Bangladesh Garment Manufacturers and Exporters Association in the capital, the leaders of Buyers Forum, however, expressed satisfaction over the progress in remediation under the initiative of EU retailers Accord on Fire and Building Safety in Bangladesh and North American buyers’ group Alliance for Bangladesh Workers safety. BGMEA president Siddiqur Rahman presided over the meeting, sources said. According to the sources, the Buyers Forum urged the factory owners to speed up the remediation in the units which were inspected under the National Initiative supported by the International Labour Organisation saying that if any incident takes place in any factory it would tarnish the image of the whole sector . The meeting between the BGMEA and the Buyer Forum is a regular event which is held on the first Monday of every month. The representatives of 65 offices of global brands and buyers in Bangladesh are the members of the forum.

Survey challenges fable about women holding garment jobs

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RMG Bangladesh
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The ratio of female and male workers in the country’s apparel sector has reached 65:35 with involvement of women workers in woven sector having the highest 71 per cent, according to a recent survey. The findings of the survey, conducted by Asian Center for Development (ACD), indicates that the involvement of male workers in the garment sector continues to rise over the years as the engagement of women workers was estimated to be 80 per cent previously. “Many believe that nearly 80 per cent of the workers in the sector are female. In this survey, we found that male and female ratio of RMG workers to be 35:65,” the report said. Survey challenges myth about women holding garment jobs At the same time, the ratio is 46:54 in sweater factories, 42:58 in knitwear factories, 29: 71 in woven and 30:70 in other factories, it said. The survey conducted between August and December 2014 in some 173 BGMEA member factories-knit, woven, sweater and other categories, and some 1,204 workers were interviewed. The summary of the report is also available on the ACD’s official website. The male to female ratio of workers vary across industry types, the report said, adding based on its survey the ACD estimate that nearly 1.4 million male and 2.6 million female workers are currently working in the garment industry represented by BGMEA. “The vacuum in the field of labour statistics on the RMG sector resulted in quagmire of information asymmetry,” the report said adding accidents also expose the industry to a negative image that is further confounded by the lack of good statistics. “The average experience of workers in the industry varies between grades. The youngest ones (in grade 7) have been working for about 3 years on average, while workers in grade 1 have been working for about 12 years”, the report said. About 86 per cent of the factories are direct exporters, 8.6 per cent are engaged in both direct exports as well as sub-contracting from others while 5.5 per cent are only sub-contractors, it added. Garment workers come to factories in Dhaka and Chittagong from all over the country with the largest chunk coming from Barisal district followed by Comilla, Mymensingh, Rangpur and others. About 36 to 44 per cent of the workers said that they are sometimes consulted in the family with regard to taking decisions related to entertainment, healthcare, buying and selling of assets, choosing location of residences, education, health, and marriage of brothers and sisters, and savings and loan related decisions. Workers are investing in their future generations. Their children/siblings are in schools. Some of them are also in universities. This is also true in case of unskilled workers. Less than 0.3 per cent of the workers have income below Tk 6,000 per month, 10 per cent is between 6,000-1,200. The average family income varies from 15,500 to 20,000 taka per month between grades 7 and 1. Nearly 60 per cent of the workers earn their living from the garment industry alone. In terms of asset ownership, 86 per cent have mobile phone, 68 per cent have television, 84 per cent have electric fan, 75 per cent have own home and 28 per cent have gold ornaments, the report said. About 40 per cent of families send money back home (to extended family members) and the average monthly remittance is around Tk 3,000. Mohammed Nasir, a vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said the male-female ratio might vary 5.0 to 10 per cent in reality. “But the number of female workers has decreased in recent times,” he added. BGMEA leader Mahmud Hasan Khan said the real picture will be clear after the completion of workers’ database.

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