It is a classic rags to riches story—only that Rafiq Sheikh owes his millions to garment factory leftovers and not rags, reports bdnews24.com. The entrepreneur, who hails from Munshiganj, now based in Tongi’s Gedu Molla road first tried the route that many in Bangladesh do—by seeking work abroad. But after seven years in Libya and Malaysia, the father of a boy and a girl had hardly made enough money to pay for his travel abroad. That is when a close relative in business gave him the idea that changed his life and fortune—making caps from garment factory leftovers, ‘Jhutkapar’ in local parlance. In the last seventeen years, Rafiq has indeed hit it big with his caps. But it was never easy because no bank financed his business or when he was seeking to expand it. He had to sell off his ancestral house to finance the factory, which now employs 40 workers on 14-15 machines. He had to sell his wife’s jewellery to raise TK 16,000 to purchase his first machine employing two workers when he started “Shaon-Ripa Cap House” on advice from his nephew Abdur Rahman Pintu. Rafiq and his wife Shahnaz Begum would procure garment leftovers from factories in Savar and Tongi and turn them into attractive caps. “When I started getting good returns in the first six months, I decided to expand but no bank would finance me. So I had to sell a part of my ancestral house for Tk 120,000 to buy a piece of land to start my present factory at Gedu Road (Tongi),” Rafiq told the news agency. Rafiq said he now employs 40 workers and has 15 machines to stitch caps. “We make 500 to 600 caps everyday during the peak season and half that number during off season,” Rafiq said. His son Shaon, who studies physics in a local college, also lends a hand to his parents. Rafiq procures two tonnes of garment factory leftovers and 2,000 yards of fresh yarn to produce the caps. Earlier, he would take them to retailers in Dhaka’s Bangabazar or in other cities like Chittagong, Cox’s Bazar and Bogra. “But now the retailers come to me to buy in bulk after we have made a name. Even Indian importers turn up to take my caps,” says Rafiq. But opening Letters of Credit (LC) is a bit of problem—so Rafiq uses other businessmen to do that for him and for which he needs to pay them Tk 5 to 6 per cap. “Indian importers insist on credit. Recovering that is a problem, so I use LCs raised by other businessmen to sell my caps.” The caps are sold under different brand names—ranging from Johnson to Parachute to Net to Ayub-Baccchu and Axsar. “If the government helped, this business could be expanded and more jobs could be created for youngsters. They would not turn to crime if they had work,” says Rafiq. With rising income, Rafiq has bought four kathas of land around his factory and has a two storey house, where he lives with his family. ‘Fatima’ works in Rafiq’s factory for Tk 9,000 a month after she failed to get a job in a garment factory. ‘Mamun’ works for Tk 6,000 a month. “My family survives on my income,” said Fatima. Extortion is a huge problem for Rafiq. “Often local extortionists Suman and Kamu send their goons with weapons asking for money. That scares retailers and buyers. Complaints to police had not helped,” says Rafiq. Gedu Molla Road Police Station OC Mohammed Ali denies knowledge of extortion in the area. Rafiq is not alone with his caps. Nearly 100 units making caps have come up on the Gedu Molla road. “If the government helped, this is a line of business which has potential to grow,” says Shaon Sheikh, Rafiq’s son. Bangladesh’s economic success owes much to the indomitable spirit and hard work of men like Rafiq ,as he now sits back with a reassuring smile. “I am now a millionaire!”

Communist Party of Bangladesh (CPB) and BangladesherSamajtantrik Dal (BSD) called on Wednesday upon the readymade garment (RMG) owners to pay wages, arrears and festival bonus of the workers before July 10, reports UNB. In a joint statement, CPB president Mujahidul Islam Selim and BSD general secretary Khalequzzaman noted that the owners of the factories show various excuses for not giving arrears and bonus ahead of Eid. If any unwanted situation emerges in the country for the failure of the owners to pay the arrears and festival bonus of workers before July 10, the owners will have to take the responsibility, the statement added.

Bangladesh economy would grow by 6.7 per cent in 2015-16 financial year (FY16), according to a new report of the World Bank (WB). The forecast is close to the GDP (gross domestic product) growth target, set in the national budget for FY16. Finance Minister Abul Maal Abdul Muhith has set 7.0 percent GDP growth for the current fiscal year. The economy grew by 6.51 per cent in the immediate past 2014-15 fiscal year (FY15). The World Bank earlier revised down the growth forecast at 5.6 per cent for FY15, but the country dispelled the prediction, with attaining higher growth. The new report of Bank, however, saw higher growth prospect in the coming days against the backdrop of improved political and microeconomic situation. “As (political) tensions settle, growth should pick up in line with a recovery in exports and investment”, said the new report titled “Global Economic Prospects”, released in June.”Consumption should also remain supported by resilient remittance inflows, particularly following the resumption of migration of Bangladeshi workers to Saudi Arabia”, the report said as the country’s remittance inflow already crossed the $15 billion mark for the first time. While observing that the global economy is in transition, the report was upbeat about the Bangladesh economic prospect: “With the economy running at capacity, growth is expected to remain at close to potential over the forecast period”. About the global economy, the report said the world economy is expected to grow 2.8 per cent in 2015, slightly less than the forecast in January, before strengthening moderately to 3.2 percent in 2016-17.

The parliament on Wednesday unanimously passed the Export Promotion Bureau Bill, 2015 aimed at expansion of exports of the country. Commerce Minister Tofail Ahmed moved the bill in the House for its passage with a proposal of brining the activities of the bureau under a legal framework to consolidate and expand the export of the country. The minister said the Export Promotion Bureau (EPB) was abolished with the passage of the Fifteenth Amendment to the constitution, but activities of the organisation were continuing after promulgation of an ordinance by the President on January 21, 2013. On July 2015, the Parliamentary Standing Committee on Commerce Ministry placed the report on the bill under the Rule 211 of the Rules of Procedure of the House. Earlier, the bill was introduced in the House on June 16, 2015.

The International Finance Corporation of the World Bank group on Wednesday announced it would provide US$ 50 million financing for the local banks for making loans available for the garments factories for remediation. The IFC will provide US$ 10 million each in financing to five Bangladeshi banks which will allow them to increase lending to garment factories to improve their structural, electrical and fire safety infrastructure, said a press release issued by the corporation on the day. The IFC also signed separate cooperation agreements with North American retailers’ group Alliance and the European group Accord to assist garment factories to undertake the SEF upgrades and monitor compliance. ‘Broad, innovative partnerships are necessary to improve the safety of workers in this critical industry,’ said IFC chief executive officer Jin-Yong Cai. ‘Banks, international buyers, and manufacturers have a shared interest in this issue because it’s indispensable to making Bangladeshi garment factories more competitive and sustainable,’ he said. Prime Bank Limited has already signed up to the initiative, and four other banks are expected to follow in the coming weeks. Ellen Tauscher, the chairman of Alliance for Bangladesh Workers Safety said, ‘Alliance is focused on ensuring workers in the garment sector have a safe and secure working environment. Providing long-term loans to factory owners to undertake and implement remediation is an ongoing effort and this joint initiative will allow for a wider group of factory owners to have access to financing.’ Rob Wayss, executive director of the Accord on Fire and Building Safety in Bangladesh, said, ‘The aim of Accord is to make the RMG sector in Bangladesh safe and sustainable. Accord signatory companies have invested considerable financial and technical resources to meet this aim.  The IFC remediation financing program is an important contribution to the Accord’s ongoing efforts to ensure necessary remediation at inspected factories and meets an express request of local industry.’

The reduced rate of tax at source on export of all products including the readymade garment items will be applicable only for the current fiscal year, said the National Board of Revenue. The government on June 29 through the finance bill for the FY 2015-2016 set the tax on export proceeds at 0.60 per cent reducing from the 0.80 per cent placed in the proposed budget. The NBR on July 2 issued a statutory regulatory order saying that the reduction in the rate of tax at source on export of RMG and non-RMG items will remain in effect up to June 30, 2016. Officials of the revenue board said the government set the tenure of export tax benefit at the reduced rate for exporters as the tax would be revised in the next FY 2016-2017. Usually, the rate of any tax remains applicable only for the post-budget fiscal year unless the rate is included in the Income Tax Ordinance-1984. The rate of export tax is set under law. The effective date has been set this time so that the rate can be reviewed in the next fiscal year. The government was forced to reduce the tax under severe pressure from the exporters particularly those from the apparel sector but it considers that the tax rate should be increased further, NBR officials said. Generally, the government thinks that the exporters should pay tax on export earnings at higher rate as the sector has been enjoying tax benefit from the very beginning. The revenue board initially sought an increase in export tax to 1 per cent from 0.30 per cent and 0.60 per cent paid by the RMG exporters and the non-RMG exporters respectively in the previous fiscal year. The rates were reduced from 0.80 per cent in the FY 2013-2014. The NBR will get at least Tk 800 crore less because of the reduction in the export tax for all items.

In a change of course just six months after announcing an end to subsidies for its cotton farmers, Egypt has stopped all cotton imports in a bid to assist the production and marketing of the local crop, according to media reports. Egypt imports cotton mostly from Greece, the US, Burkina Faso and Benin. “The decision aims to protect local production of cotton and resolve its marketing problems,” the agriculture ministry said in a statement, adding that cargoes shipped before July 4 would still be accepted. “The ministry is keen on Egyptian cotton regaining its glory on all levels,” it said. The market for Egypt’s high-quality, extra-long staple cotton has been declining over the years. Egypt exported $83.8 million worth of raw cotton in 2013-14, down from $120.3 million the previous year, according to Central Bank data. Imports of raw cotton, however, grew to $117.8 million in the same year up from $51.3 million. In January, agriculture minister Adel El-Beltagy had announced that the state would not offer any form of subsidies for cotton farmers or spindles in the next season. El-Beltagy pointed out that long-staple cotton cultivation was very expensive, and added that there was no demand for it either domestically or internationally. The ministry also noted Egypt’s own textile firms had shifted their focus to creating low-quality products with cheap raw cotton imports. The chairman of the Egyptian Chamber of Textile Industries Mohammed al-Morshedy has asked farmers to grow more short and medium staple cotton to support the country’s textile industry, which he said would be hit by the lack of cheap cotton imports. Cotton acreage has fallen dramatically since the heyday of the 1960s, when Egypt produced cotton from up to 2.2 million feddans (924,000 hectares) helped by fixed state prices. The acreage his year is expected to exceed 260,000 feddans, according to a report issued by the agriculture ministry in March.

Credit rating agency India Ratings and Research (Ind-Ra) has maintained an overall stable outlook for the cotton textile sector for FY16. This is led by stable spinning margins in the cotton yarn segment, range-bound cotton prices and favourable domestic and export demand for downstream fabrics and apparels. However, the outlook for cotton yarn exporters is negative due to a slowdown in demand for yarn particularly from China, leading to softer yarn realisations and lower capacity utilization, the agency saidin a press statement. Cotton spinners’ EBITDA margins, which were hurt by inventory valuation losses on a 20 per cent decline in cotton prices in FY15, could recover in FY16 in the range of 10 per cent -13per cent. However, it would still remain lower than the FY14 levels (14 per cent -16 per cent) which benefitted due to exceptionally high Chinese demand. Ind-Ra has revised the outlook for the synthetic textile sector to negative for FY16 from ‘negative to stable’. Unfavourable cotton-polyester staple fibre spreads have hurt substitution demand for synthetic fibres and synthetic yarn. Lower export competitiveness of Indian synthetic yarn also contributes to the subdued outlook as import and central excise duty continue on man-made fibres, the statement said. Oversupply of cotton and cotton yarn over FY16 coupled with lower average crude prices could also cause the price of polyester fibres to decline. Ind-Ra expects contribution margins for polyester yarn to remain downcast in FY16. Margins for texturised yarns and fully drawn yarns are likely to be partly insulated due to higher value addition. Apparel exports could continue to show a positive growth trend in FY16, driven by the improving economic outlook of buyer countries, the agency said. India has gained out of higher wages, political instability and work place accidents in other apparel exporting nations. Although India has a small share in the global textile trade, it is well positioned to gain from weak input prices and growing demand for apparels and made-ups. The trends, if sustained in FY16, are likely to improve the financial metrics of garment manufacturers. Growth of garment manufacturers might remain largely volume led while realisations could continue to exhibit commodity and competitive pricing pressure. Companies with diversification in higher value-added products are likely to benefit from the tailwinds of input price reduction. However, commoditised products will see a pass through, and not any margin expansion. The agency has maintained a Stable Outlook on its rated textile companies as they are likely to show ratings stability on growing domestic demand, competitiveness in apparel exports and an overall improvement in credit profile (i.e. lower gearing and leverage). Trends for FY16 in the textile sector indicate more cautious inventory management, risk aversion towards holding higher raw material stocks and focus on efficiencies in cash conversion cycle.

Lectra, the world leader in integrated technology solutions dedicated to industries using soft materials—fabrics, leather, technical textiles and composite materials, has released DiaminoFashion V6R2, the latest version of its marker-making solution. The new release expands the scope of its automated marker-making capability, producing better results and bigger savings in the cutting room. Part of Lectra’s fashion and apparel offer, DiaminoFashion helps streamline the development process and keep production costs down without sacrificing product quality, forming an integral part of a lean process from product development to cutting room. With DiaminoFashion, companies can plan strategically to ensure they get the most out of every last inch of fabric—sometimes before even a single physical prototype is created, according to a Lectra press release. The latest version brings manufacturers one step closer to fully automated marker making with new added controls that make it possible to take fabric flaws and quality issues into account automatically. Amir Pradhan, managing director of Pradhan Mercantile, a manufacturer of quality ready-made apparel (India) said, “With DiaminoFashion V6R2, we can now stipulate that key pattern pieces need to be placed next to each other during automated processing, whereas before, we had to lay this type of marker by hand. Our marker-making time has been cut in half and with the additional improvements in efficiency, we have also been able to reduce our fabric waste by up to 1 per cent.” Manufacturers under pressure to meet tight deadlines can also keep up with peaks in activity by using DiaminoFashion’s automated processing feature to take advantage of off-hours. It boasts enhanced processing power that can batch process marker lists faster than before, overnight or while other tasks are being performed during the day, for a double dose of productivity. In addition, it can be launched directly from Lectra’s cutting-room optimization solution Optiplan, for a streamlined process that saves companies both time and fabric. DiaminoFashion V6R2 allows companies to accurately predict how much a given product will cost to produce ahead of time, for more informed decision making. The solution’s integrated technology also connects design, development and production teams through seamless data sharing between Lectra’s different design, development and cutting-room solutions.

Bangladesh export growth including that of the readymade garment to the United States market continued to slow.The US is a second major destination of Bangladeshi garment products after the EU market. According to the latest Export Promotion Bureau data, the country earned $5.29bn from RMG exports to the US in fiscal year 2014-15 with 2.85% up from the previous year’s  $5.14bn. But the data showed the continuous fall in growth in last two years. In FY2013-14 the RMG exports to US rose by 2.9%, sharply down from 10.31% in FY2012-13. Low demand, increased competition, political unrest and rise of production cost due to implementation of factory compliance were responsible for the slow-down, said exporters and analysts. “Buyers could not come to Bangladesh to place orders and further business negotiations because of political turmoil. It hampered the export growth to a major destination,” BGMEA vice president Shahidullah Azim told the Dhaka Tribune. “But what is the most worrisome is that new competitors are coming. The countries like Vietnam are performing well in the US market,” he added. Azim said as the Trans Pacific Partnership might give Vietnam duty-free access to the US market, the buyers were showing increased interest in that country. The exporters said orders were being shifted to new competitors like Vietnam which was to avail duty-free facility to the US market after signing the much anticipated TPP deal. He urged the government to come up with policy support to successfully face new competition in the global market and grab more market shares. Data showed the overall exports to the US rose by 3.58% to $5.78bn in FY2014-15 from $5.58bn in the previous fiscal. CPD executive director Mustafizur Raman also believed the new challenge of competition from countries like Vietnam and Cambodia caused slow-down in export growth. The TPP agreement was another reason behind this as the buyers wanted to increase their business relations with Vietnam, he added. Mustafizur said drop in demand from the consumers side also led to the fall of export growth. Exporters Association of Bangladesh (EAB) president Abdus Salam Murshedy said apart from political unrest, increased production cost due to compliance process cast an impact on export growth. He said although production cost had risen, the prices didn’t, making Bangladesh less competitive in the global market. According to data of OTEXA for the month of April, Bangladesh competitors were doing well in the US market. Myanmar, the emerging exporter of the RMG products to US market, has posted a 123% growth to more than $8m in the first four months of this year. RMG export to the US market from Vietnam also increased by 16.5% to $799m while India’s export growth grew by 9.82% to $1.4bn. Meanwhile, China, the global leader of apparel manufacturing, lost its share in the US market, which was captured by Vietnam, Bangladesh and India in recent times.