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Bangladesh RMG industry: beyond bond & BBLC – new financial paths needed (Part 2)

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RMG Bangladesh
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To navigate beyond the bond and BBLC facilities, we must recognize that the limited support from the caretaker government isn’t just about a lack of business-friendly policies or buyer support. It reflects a broader collapse in the economic ecosystem, posing challenges across various sectors. This systemic issue makes it even more crucial for us to innovate and adapt.

However, amidst these challenges, there’s a silver lining. The success of young entrepreneurs and experienced minds in our industry is truly inspiring and much needed. It’s crucial for someone with vision to provide clear guidelines to government officials on the policy support our sector needs. Over the past 20 years, we’ve never faced a shortage of orders—our challenge has always been meeting the overwhelming demand. With strong leadership, we can address these challenges and make meaningful changes that will elevate our industry to new heights.

Bangladesh RMG industry: beyond bond & BBLC – new financial paths needed (Part 2)
Figure: The Ready-Made Garment (RMG) and textile industries in Bangladesh have grown tremendously over the past few decades.

The future of our industry depends on proactive measures and strategic planning. By addressing these issues head-on, we can ensure that Bangladesh’s garment industry remains a global leader, providing livelihoods for millions and driving our economy forward. May Allah (SWT) give us the strength to overcome the obstacles ahead with unity. I can boldly say we will not face a shortage of orders in the coming days, but we need policies that excite and support our industry. Everyone, from small units to green factories, must be on the same page.

I shared my thoughts with my limited knowledge and apologize for any mistakes in my writing.

Let continue our part 2

The Ready-Made Garment (RMG) and textile industries in Bangladesh have grown tremendously over the past few decades, thanks to policies like the bonded warehouse system and back-to-back letter of credit (BBLC) facilities. These mechanisms have provided significant advantages, allowing manufacturers to import raw materials duty-free and streamline the financing of exports. However, as the industry matures and the global market evolves, it’s crucial to explore sustainable alternatives to these facilities to mitigate risks and ensure continued growth.

The backbone of Bangladesh’s garment industry

In the 1980s and 1990s, many young entrepreneurs, despite numerous obstacles, built a robust garment industry based on trust, integrity, and strategic use of financial facilities. They understood the importance of repaying bank loans and maintaining good financial standing. Today, we boast a highly educated and technologically advanced generation of entrepreneurs. Yet, the industry remains import-dependent and heavily reliant on BBLC and bonded warehouse facilities.

The government has set an ambitious target of $100 billion in exports by 2030, which seems almost impossible. Despite reaching $50 billion, we have encountered significant challenges with manpower and the banking and financial sectors. Moreover, we face immense pressure with the post-LDC (Least Developed Country) graduation in 2026. Currently, the government’s support for only one single sector is limited. We neither have the bank capacity nor the skilled manpower necessary to achieve this target.

However, it is not an impossible goal. We can achieve it, but we need to address the financial crisis management and explore various financial strategies to relieve internal reserves and financial institutions from pressure. This will enable us to run our businesses without financial obstacles, which is the key to success.

Bridging the banking and industry gap

In our current banking sector, we lack the dynamic bankers and strong linkages between banks and the industry that were prevalent in the past. From 1971 to 1990, numerous bankers and bureaucrats nurtured entrepreneurship through their guidance. My father is an example of this legacy, and many others in this sector also share similar experiences. Back then, these visionaries were deeply concerned about loan repayments, a concern that still resonates today. Many promising entrepreneurs are hesitant to expand due to the fear of loans. This is a major reason why several talented entrepreneurs fall behind in their endeavors.

We need to bridge this gap and create a supportive ecosystem where banks and industries work hand in hand. It’s essential to cultivate trust and provide the necessary guidance to foster growth and innovation in our economy. Every month, our RMG and Textile organizations (BKMEA, BGMEA, BGBA, BTMEA) and stakeholders should organize seminars with bank heads, not just MDs, to show & exchange dialogues about real garment banking. Everyone will agree that it is impossible in the garment sector to maintain 100% compliance with SOPs as per norms. It is essential now to invite them and show them our part of the issue. Otherwise, this fight will continue. Arranging dialogues and finding new ways of financial management is crucial.

The legacy of bond and BBLC facilities

The bond and BBLC facilities have been instrumental in the growth of Bangladesh’s garment sector. By allowing duty-free import of raw materials, these policies have enabled manufacturers to remain competitive in the global market. However, this dependency also poses significant risks. If these facilities were to be withdrawn or altered, the industry could face severe disruptions.

Challenges and risks

Loan burdens

Despite the advancements and investments, the industry grapples with substantial loan burdens. Many manufacturers have taken on significant debt to finance their operations and expansion. The reliance on BBLC and bond facilities means that any change in these policies could exacerbate financial stress.

A vision for a sustainable future

In light of these challenges, it is crucial to explore and implement sustainable alternatives. One potential strategy is to facilitate our customers in Bangladesh, including non-garment trading houses, foreign investors, buying houses, and trading houses, with BBLC and bonded warehouse facilities beside existing ones. This would enable them to import their required fabrics, trims, and raw materials at their own expense and utilize our manufacturing capabilities solely for CM (Cut, Make) basis. This approach reduces risk for both banks and manufacturers. Increasing CM-based work on an FOC (Free of Cost) basis is also beneficial. Currently, a manufacturer can import 50% on an FOC basis based on their performance. This should be expanded to help many new small and medium factories grow their exports.

Developing alternative financing mechanisms

Exploring new financing mechanisms can reduce the reliance on BBLC facilities. Options like factoring, supply chain financing, and partnerships with international financial institutions could provide the necessary capital without the constraints of traditional BBLC structures.

Policy reforms

The government and industry stakeholders must collaborate to develop modern policies that support sustainable growth. This includes creating incentives for local production, improving data management systems, and ensuring that financial regulations keep pace with industry needs.

Planning for the future

The garment industry in Bangladesh has a rich history of overcoming challenges and adapting to changing conditions. As we look to the future, it is essential to recognize the importance of bond and BBLC facilities while also preparing for a time when these may no longer be available. By investing in local production, exploring alternative financing mechanisms, leveraging technological advancements, and facilitating customer imports, the industry can reduce its dependency on imports and build a more sustainable foundation.

The current generation of entrepreneurs is highly educated and skilled, but to secure the industry’s future, we must also focus on policy reforms and strategic planning. This way, we can ensure that the next generation can conduct business safely and successfully, without the looming burden of debt and dependency on outdated facilities. It is not only a matter of surviving but thriving in a competitive global market.

By addressing these challenges now, we can create a resilient garment industry that continues to be a pillar of Bangladesh’s economy for generations to come. With the collective effort of industry leaders, policymakers, and stakeholders, we can pave the way for a brighter and more sustainable future, ensuring the legacy of the garment industry endures.

I have witnessed the growth of the RMG industry since childhood, experiencing its highs and lows, its successes and challenges. This unique perspective drives my belief that we must research and implement alternatives to bond and BBLC facilities to safeguard the future of our industry. RMG is no longer just an industry; it sustains the livelihood of approximately 50 million people in this country, directly and indirectly, with the potential to support many more in the future. No other sector can create such vast employment opportunities.

Therefore, we need to think critically and focus on securing not only the industry but also the future employment of the next generation. We must explore innovative solutions, implement best practices, and ensure that our policies and infrastructures are robust enough to withstand future challenges.

To be continued…

In the final part of this article, we will share valuable opinions from some of our most successful and forward-thinking RMG owners, who are ahead of their time and can provide insights into securing the future of our industry.

RMG workers block road in Ashulia demanding attendance bonus, 10% increment, and others

POST BY
RMG Bangladesh
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RMG workers from several factories blocked roads in the Ashulia area of Savar today (1 September), despite no unpaid dues, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Top BGMEA officials confirmed that the factories had already cleared workers’ salaries, with no pending payments. 

However, industry sources said that the protests, which have been ongoing for the past week, stem from various demands, including an increase in tiffin allowances, attendance bonuses, a 10% annual increment, and earned leave (EL) for all staff.

Speaking to TBS, Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) said, “Outsiders were attempting to create unrest in industrial zones, particularly in Ashulia, targeting large factories.”

“Some outsiders also threw bricks at factories, forcing several to announce a day off today,” Hatem said.

According to BGMEA, workers from factories including Hamem, Shermin, Ananta, Newage, AM Design, NASA, Unicron Sweater, Naba Knit, and Trouser Land are currently on the streets in Ashulia. Meanwhile, Pearl Garments and Gildan factories in the area have been granted leave with pay, and no workers are present.

Naba Knit and Dress & Ideas factories have shut down under Sections 13/1 and 13/3/4 of the labour law, leaving hundreds of workers standing outside the factory gates. However, some factories that had previously faced challenges in reopening are now operating.

Among the operational factories are Skyline and NASA’s second building, though one unit remains closed while counselling is ongoing. 

“Other factories are running, and no roads are currently blocked. Industrial police and BGMEA officials are present, and the army is patrolling the area,” a BGMEA official stated.

BGMEA President Khandoker Rafiqul Islam noted that the organisation has been in discussions with trade union leaders, seeking their cooperation and identifying those involved in the unrest. 

“The union leaders acknowledged that this is not the right time for demonstrations demanding benefit hikes, especially after the implementation of a new wage structure,” Rafiqul Islam said. 

“We have also spoken with the current government to ensure security for industries during this period of economic volatility,” he added.

Bangladesh garment industry short on cotton as floods worsen protest backlog

POST BY
RMG Bangladesh
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Garment factories in Bangladesh, one of the world’s biggest clothing production hubs, are struggling to complete orders on time as flooding disrupts their cotton supplies – exacerbating a backlog caused by recent political turmoil.

Bangladesh is a leading global cotton importer due to the size of its textile and garment industry, but the devastating floods mean few trucks and trains have been able to bring supplies to factories from Chattogram port over the last week, industry officials and analysts said.

The disruption, on top of the unrest and protests that led to factory closures earlier this month, have caused garment production to fall by 50%, said Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association.

“The industry is now under immense pressure to meet deadlines, and without a swift resolution, the supply chain could deteriorate even further,” Hatem said.

Bangladesh was ranked as the third-largest exporter of clothing in the world last year, after China and the European Union, according to the World Trade Organization, exporting $38.4 billion worth of clothes in 2023.

At the clothing factory she runs in the capital, Dhaka, Rubana Huq is counting the cost of lost production.

“Even for a moderate-sized company like ours, which makes 50,000 shirts a day and if the price of one single shirt is $5, there was $250,000 of production loss,” said Huq, a former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

She said some garment plants were slowing resuming production, but estimated that complete recovery “would be at least six months away”, warning that Bangladeshi manufacturers could lose 10%-15% of business to other countries.

Bangladesh’s readymade garments industry, which supplies many of the world’s best-known fashion brands, accounts for more than 80% of the country’s total export earnings.

Buyers are adopting a cautious approach and could potentially delay new orders, said Shahidullah Azim, a director of the BGMEA industry group.

“The longer this uncertainty persists, the more challenging it becomes for us to maintain the momentum we have built,” he told Reuters.

The Bangladesh Meteorological Department said flood conditions could persist if the monsoon rains continued, as water levels were receding very slowly.

Some cotton shipments could get diverted to India, Pakistan and Vietnam, commodity analysts said.

“We are already hearing and seeing some cotton for prompt delivery wanted by Pakistan and Vietnam,” said Louis Barbera, partner and analyst at VLM Commodities based in New Jersey.

New orders shifted from Bangladesh could also be accommodated in southern India, said Atul Ganatra, president of the Cotton Association of India.

Even before the floods and political unrest, the Bangladeshi garment industry was grappling with power shortages that remain a problem, said Fazlee Shamim Ehsan, vice president at the country’s knitwear manufacturers and exporters association.

“Energy shortages continue to hamper our operations,” he said.

Bangladesh misses out on $5bn annually due to policy gap on recycled textiles

POST BY
RMG Bangladesh
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Bangladesh has been missing out on a potential export business of recycled textile products worth $4-5 billion per year due to lack of comprehensive policy framework on circular textile, according to a report.

These policy frameworks would incentivize entrepreneurs to upgrade recycling of post-RMG Jhut, the study report also stated.

The study titled “Regulatory Framework to Enable Recycling of Post-Industrial Waste (Jhut) for the RMG Industry in Bangladesh” was jointly conducted by the Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and H&M under the program for Sustainability in the Textile and Leather Sector. 

Bangladesh’s textile and ready-made garment (RMG) industry, a vital contributor to its economy, is currently facing significant environmental and social challenges due to the inefficient management of post-industrial textile waste, commonly referred to as Jhut.

The report also stated that this issue presents a complex web of environmental hazards, health risks, and human rights concerns, deeply rooted in the industry’s practices and supply chain management. 

The annual production of an estimated 330,000 – 500,000 tonnes of pre-consumer textile waste, with a very limited recycling capacity, highlights a critical gap in sustainable industrial waste management and impediment to move towards a circular textile industry. 

The disposal methods currently employed result in detrimental environmental impacts, including air pollution, resource depletion, and harmful chemical leaching, posing severe threats to ecosystems and public health.

In recent years, an in-depth exploration of Bangladesh’s textile and apparel industry waste management has brought the challenge of Jhut to the forefront. 

Classified as post-industrial waste, Jhut encompasses fabric scraps, yarn, and additional residues emerging from production processes. 

Bangladesh has an existing recycling capacity for apparel-grade recycled yarns ranging between 18,000 to 24,000 tonnes annually which represents only a modest 5-7% of the expansive 330,000-500,000 tonnes of 100% cotton and cotton-elastane waste produced every year.

Moreover, less than 5% of this waste is upcycled into products such as rag rugs, rag dolls, blankets, etc and a significant portion, over 55%, is exported to recycling companies globally, while the remaining waste is downcycled.

Usually, these are downcycled into stuffing materials for cushions and mattresses, incinerated onsite for waste-to-energy purposes, and a negligible amount is landfilled. 

In Bangladesh, comprehensive data regarding Jhut waste remains incomplete.

While formal practices are tracked and documented, the extent of informal Jhut collection and management practices remains uncertain, and the pronounced disparity underscores the vast potential for enhancing Bangladesh’s textile recycling infrastructure.

The study outlined six key policy solutions for the informal textile Jhut sector in Bangladesh like to improve data availability, transparency and traceability through a national Jhut database. 

Moreover, it also suggested introducing industry guidelines for Jhut management and recycling standards and to implement changes in existing VAT and tariff rules for Jhut transactions. 

It also outlined economic incentives to formalize Jhut collection, handling and sorting and to establish a central depository system and cluster-based Jhut sorting hubs for decent work and social inclusion along with improving the investment environment for state-of-the-art recycling technologies.

There are some potential threats that could arise if factory owners set a strategy to implement Jhut recycling within their own premises which include influence or restrictions from political parties, general political pressures or influences, increased attention from various stakeholders, and sometimes factory owners beginning to reuse waste themselves.

The report also stated that in the global context, an evolving narrative around sustainability in the textile sector is shaping the operations and strategies of major brands. 

A pronounced push towards integrating circularity in value chains is evident, with entities such as H&M and GIZ at the forefront of these initiatives. 

Significantly, regulatory frameworks, particularly from bodies like the European Union, are edging towards stricter mandates and instating extended producer responsibilities. 

This global shift offers Bangladesh a multifaceted opportunity, the report added, saying that on one hand, aligning with these international sustainability goals holds promise for elevated trade and partnership prospects. 

On the other hand, the drive to formalize and institutionalize the informal Jhut sector could usher in a new era of circular economy models and formal employment opportunities in the country.

Report: BD RMG industry tops global social audits

POST BY
RMG Bangladesh
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Bangladesh’s readymade garment (RMG) industry gained the highest average number of social audits, which assess labour and human rights risks, even as audits have declined in other surveyed countries including China, Vietnam, Turkey and India, according to a report by the International Trade Center (ITC).

The report said excessive auditing can lead to “fatigue” and “inefficiencies” in supply chains.

Audit fatigue may not only divert organizations from the primary goals of audits — self-improvement, transparency, and compliance — but may also encourage them to view audits as routine tasks to be completed as quickly as possible, sometimes resorting to fraudulent practices, it added.

Social auditing in supply chains is used to identify labour and human rights risks and ensure that suppliers satisfy global, regional or company standards of ethical labour and supply-chain practices.

“The decrease in social audits is also evident in countries where the Social and Labor Convergence Program (SLCP) operates. While adoption has increased, the average number of social audits has declined in all countries except Bangladesh, which also holds the highest average number of social audits among all SLCP countries,” said the ITC report published last month.

The average number of social audits per facility in Bangladesh was 3.6 in 2021, rising to 3.7 in 2022 and then returning to 3.6 in 2023.

In China, the number was 3.1 in 2021, decreasing to 2.8 in 2023. Vietnam also experienced a similar downward trend, with an average of 3.2 audits in 2021 declining to 2.6 in 2023.

The average number of social audits in Turkey and India was 2.9 and 2.5 in 2021, respectively, and fell to 2.3 and 2.2 in 2023, according to the ITC report.

The research titled ‘Navigating the Regulatory Landscape: Audit Fatigue in the Garment and Textile Industry’ examines the SLCP as an example of how data alignment and reduced auditing can be achieved.

Of the 439 respondents who participated in this SLCP signatory survey, 83% were from China, 72% from Vietnam, 57% from Bangladesh, and 49% from Türkiye, followed by India 45%, Indonesia 33%, Pakistan 21%, Sri Lanka 11%, and Thailand and Taiwan 9% each.

The SLCP provides tools to capture accurate data about working conditions in global supply chains.

This multi-stakeholder initiative replaces the need for repetitive social audits by facilitating data sharing.

পোশাক শিল্পে সহজ শর্তে ঋণ চাইলেন ব্যবসায়ীরা, সহযোগিতার আশ্বাস অর্থ উপদেষ্টার

POST BY
RMG Bangladesh
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দেশের পোশাক শিল্পকে এগিয়ে নিতে সকল ধরনের সহযোগিতা করা হবে বলে জানিয়েছেন অর্থ উপদেষ্টা সালেহ উদ্দিন আহমেদ। দিনভর পোশাক শিল্প খাতের বিভিন্ন সংগঠনের সাথে বৈঠক শেষ এ কথা জানান তিনি। এদিকে বর্তমান প্রেক্ষাপটে সহজ শর্তে ঋণের দাবি করেন ব্যবসায়ীরা।

দেশের প্রধান রপ্তানি খাত পোশাক শিল্প। তবে জুলাই আন্দোলন ও আওয়ামী লীগ সরকারের পদত্যাগে এই শিল্পে কয়েক দিনেই ক্ষতি হয়েছিলো প্রায় কয়েক হাজার কোটি টাকা। অন্তর্বর্তী সরকার দায়িত্ব নেয়ার পর কিছুটা ঘুরে দাঁড়ানোর চেষ্টা করছিলো ব্যবসায়ীরা। তবে আকস্মিক বন্যায় ফের ক্ষতির মুখে এই শিল্পের সাথে জড়িতরা।

সংকট কাটিয়ে কিভাবে আবার ঘুরে দাঁড়ানো যায় তাই নিয়ে দিনভর অর্থ উপদেষ্টার সঙ্গে কয়েক দফায় বৈঠক করেন পোশাক খাতের শীর্ষ ব্যবসায়ীরা। এফবিসিসিআই, বিকেএমইএ, বিজেএমইএসহ এই শিল্পের সাথে জড়িত সংগঠনের নেতারা তাদের দাবি তুলে ধরেন। দ্রুত ও সহজ শর্তে এ মূহূর্তে ১ হাজার ৮০০ থেকে ১ হাজার ৯০০ কোটি টাকা ঋণ প্রয়োজন বলে জানান তারা।

বিজেএমইএ সভাপতি খন্দকার রফিকুল ইসলাম বলেন, ‘চলমান পরিস্থিতিতে আমাদের কারখানাগুলো ১৬ দিন যাবত প্রোডাক্টশন করতে পারেনি। যার ফলে আমাদের আগামী মাসে ক্রাইসিস দেখা দিতে পারে। ১ বছরের মধ্যে পে ব্যাক করার শর্তে আমরা উপদেষ্টার কাছে একটা স্ফট লোন চেয়েছি।’ 

এদিকে ব্যবসায়ীরা জানান, বর্তমান পরিস্থিতিতে দেশের বেশিরভাগ কারখানাগুলো রয়েছে নিরাপত্তাহীনতায়। তাই অনেকেই তাদের ক্রেতা হারাচ্ছেন। এছাড়াও বন্যার কারণে চট্টগ্রাম বন্দরে অনেক কার্গো আটকে আছে জানিয়ে সেগুলোর নিরাপত্তা নিশ্চিতের আহ্বান ব্যবসায়ীদের।

বিকেএমইএ সভাপতি মোহাম্মদ হাতেম বলেন, ‘আমরা আমাদের সমস্যাগুলো তুলে ধরেছি। এনবিআরের সমস্যা, এলসি সমস্যাগুলো তুলে ধরেছি। বিশেষ করে ইসলামী ৬ ব্যাংকের যে এলসির জন্য পে মার্জিন চাওয়া হচ্ছে সেগুলো উপদেষ্টার কাছে তুলে ধরা হচ্ছে এইটা অর্থ সচিবের মাধ্যমে ঠিক করা হবে।’

এফবিসিসিআই সাবেক সভাপতি এ কে আজাদ বলেন, ‘এয়ারপোর্টের থেকে একটা স্যাম্পল কালেক্ট করতে ৭ থেকে ১০ দিন সময় লাগে এইসব সমস্যা তার কাছে তুলে ধরা হয়েছে।’

বৈঠক শেষে অর্থ উপদেষ্টা সালেহউদ্দিন আহমেদ গণমাধ্যমকে জানান, ব্যবসায়ীদের দাবি দাওয়া নিয়ে গভর্নরের সাথে কথা বলে সিদ্ধান্ত জানানো হবে।

অর্থ উপদেষ্টা সালেহউদ্দিন আহমেদ বলেন, ‘তাদের সাথে আলোচনা করে অনেক সমস্যার কথা পেয়েছি। সেগুলো বেশি বড় কিছু না। আগের সরকার এইগুলো ইগনোর করেছে। এখন আমরা সমাধান করার চেষ্টা করবো।’

এদিকে সকালে বাংলাদেশে নিযুক্ত যুক্তরাজ্যের হাইকমিশনারের সাথে বৈঠক করেন অর্থ উপদেষ্টা। জানান আওয়ামী লীগ সরকারের আমলে বিদেশে পাচার হওয়া টাকা দ্রুত ফেরাতে সহযোগিতা করবে যুক্তরাজ্য সরকার।

পোশাক খাতে ১৯০০ কোটি টাকার সফট লোন চায় বিজিএমইএ

POST BY
RMG Bangladesh
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সাম্প্রতিক সময়ে রপ্তানি খাতের মন্দাভাব কাটিয়ে উঠতে অন্তর্বর্তী সরকারের কাছে ১৮০০-১৯০০ কোটি টাকা সফট লোন চেয়েছেন তৈরি পোশাক শিল্পমালিকদের সংগঠন বিজিএমইএ। 

আজ মঙ্গলবার (২৭ আগস্ট) আগারগাঁওয়ে অর্থনৈতিক সম্পর্ক বিভাগের (ইআরডি) কার্যালয়ে অন্তর্বর্তী সরকারের অর্থ উপদেষ্টা ড. সালেহউদ্দিন আহমেদের সঙ্গে সাক্ষাৎ শেষে বিজিএমইএর সভাপতি খন্দকার রফিকুল ইসলাম সাংবাদিকদের একথা জানান।

খন্দকার রফিকুল ইসলাম বলেন, ‘শুধুমাত্র তৈরি পোষাক খাতের জন্য আমরা অন্তর্বর্তী সরকারের কাছে আনুমানিক ১৮০০-১৯০০ কোটি টাকা সফট লোন চেয়েছি। গত ৪৫ দিনের মধ্যে আমাদের ১৬-১৭ দিন প্রোডাকশন বন্ধ ছিল।পাশাপাশি বন্যার কারণেও চার-পাঁচ দিন এক্সপোর্ট করা যায়নি। অনেকগুলো কারণে শুধুমাত্র এই সেক্টরের জন্য সহায়তা চেয়েছি।’

বিজিএমই সভাপতি আরো বলেন, ‘বাংলাদেশ পরিবর্তিত পরিস্থিতির কারণে আমাদের ফ্যাক্টরিগুলো প্রায় ১৬ দিন রান করতে পারেনি। এই কারণে আমরা একটি সফট লোনের জন্য মাননীয় উপদেষ্টার কাছে অনুরোধ করেছি।একটা মাসের জন্য যদি একটা সফট লোন দেওয়া যায়। এই লোন ইন্টারেস্টসহ এক বছরের মধ্যে আমরা ফেরত দিয়ে দেব। এ ছাড়া আরো ছোট ছোট কিছু ইস্যুও ছিল। তিনি আমাদের আশ্বস্ত করেছেন, আমরাও এই সরকারের সঙ্গে কাজ করে দেশকে এগিয়ে নিয়ে যেতে পারব।এটার পাশাপাশি আমাদের আরেকটি ইস্যু ছিল যে আগে আমরা ছয়টি লোনের কিস্তি ফেল করলে আমাদের ক্লাসিফাইট করত, পরে এটা পরিবর্তন করে তিনটাতে নেমে এসেছে আমরা এটাকে আবারও ৬টা করতে বলেছি। পরিস্থিতি স্বাভাবিক হলে এটা আবার তিনটা করতে পারবেন। তিনি অত্যন্ত পজিটিভ আমাদেরকে সহায়তার আশ্বাস দিয়েছেন এবং আমরাও তাকে সব ধরনের সহযোগিতার করবো বলে আশ্বস্ত করেছি। বাংলাদেশের এক্সপোর্ট অনেক দ্রুত বাড়বে। আমরা আশা করছি আমাদের অর্থনীতি ঘুরে দাঁড়াবে এবং আমাদের সবার সহযোগিতা থাকলে বিদেশি বায়ারদের আস্থা বাড়বে।আমরা বিশ্বাস করি যে অনেক বেশি বিজনেস বাংলাদেশে মুভ করবে।’

BGMEA seeks Tk1,800-1,900 crore loan from interim govt to recoup recent losses

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RMG Bangladesh
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The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has sought a Tk 1,800-1,900 crore soft loan from the interim government to recoup from the recent losses.

“We have asked the interim government for the soft loan just for the ready-made garment sector,” BGMEA President Khandaker Rafiqul Islam told reporters following a meeting with Interim Government Finance Advisor Dr Salehuddin Ahmed at Economic Relations Department (ERD) office in Agargaon today (27 August).

He also said that production was off for at least 16-17 days out of the last 45 days. Also due to the ongoing flood, exports have been halted for four-five days.

“We have asked for a loan for this sector due to many reasons. The soft loan amount we sought for is equivalent to one month’s salaries of all employees of this sector. We will pay back this loan with interest within a year,” he added.

He also said, “There were also some other minor issues. He [finance adviser] assured us that by working with this government we can take the country forward. Besides, he said their loans are now being classified if any entrepreneur fails to pay three installments in a row which was earlier six installments.

“We’re demanding to make it six installments again. the government can again revert back to three installments when the situation is normal.”

Regarding the future of the sector Khandaker Rafiqul Islam also said, “We hope that our economy will turn around and if we all cooperate, the confidence of foreign buyers will be strengthened. We believe that many more businesses will move toward Bangladesh.”

বিজিএমইএর নতুন সভাপতি খন্দকার রফিকুল ইসলাম

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RMG Bangladesh
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বাংলাদেশ পোশাক প্রস্তুতকারক ও রফতানিকারক সমিতির (বিজিএমইএ) সভাপতি এসএম মান্নান (কচি) দীর্ঘমেয়াদি চিকিৎসার কারণে সভাপতির দায়িত্ব থেকে অব্যাহতি চেয়ে পদত্যাগপত্র দিয়েছেন বিজিএমইএ বোর্ডকে। এ প্রেক্ষিতে শনিবার (২৪ আগস্ট) রাজধানীর একটি হোটেলে বিজিএমইএর পরিচালনা পরিষদের জরুরি সভা অনুষ্ঠিত হয়। বিজিএমইএ মহাসচিব মো. ফয়জুর রহমান প্রেরিত বিজ্ঞপ্তিতে এ তথ্য জানানো হয়েছে। সভায় সর্বসম্মতিক্রমে এসএম মান্নান (কচি) এর পদত্যাগপত্র গ্রহণ করে বিজিএমইএর সভাপতি করা হয় খন্দকার রফিকুল ইসলামকে, যিনি ২০২৪-২০২৬ মেয়াদে এসএম মান্নান (কচি) এর নেতৃত্বাধীন বিজিএমইএ বোর্ডে সিনিয়র সহ-সভাপতি পদে ছিলেন। সভায় সর্বসম্মতিক্রমে সহ-সভাপতি থেকে সিনিয়র সহ-সভাপতির দায়িত্ব নিলেন আব্দুল্লাহ হিল রাকিব এবং পরিচালক থেকে সহ-সভাপতির দায়িত্ব নিলেন আসিফ আশরাফ।

১ম সহ-সভাপতি সৈয়দ নজরুল ইসলাম, সিনিয়র সহ-সভাপতি আব্দুল্লাহ হিল রাকিব, সহ-সভাপতি আরশাদ জামাল (দীপু), সহ-সভাপতি (অর্থ) মো. নাসির উদ্দিন, সহ-সভাপতি মিরান আলী, সহ-সভাপতি আসিফ আশরাফ ও সহ-সভাপতি রকিবুল আলম চৌধুরী।

The rise of nearshoring in the textile industry

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RMG Bangladesh
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The global textile industry is witnessing a significant transformation, driven by the increasing trend of nearshoring. Nearshoring refers to the practice of relocating production closer to the company’s home market or the end consumer. This shift is not only reshaping supply chains but also offering several advantages, such as shorter lead times, reduced transportation costs, and improved responsiveness to market demands. As companies seek to navigate the complexities of a post-pandemic world, nearshoring has emerged as a strategic response to the challenges posed by global supply chains.

  1. The drivers behind nearshoring

Several factors have contributed to the rise of nearshoring in the textile industry:

  • Global Disruptions: The COVID-19 pandemic exposed vulnerabilities in global supply chains, causing delays, shortages, and increased costs. These disruptions highlighted the risks associated with long supply chains that rely heavily on distant production hubs, particularly in Asia.
  • Rising Costs in Traditional Hubs: The cost advantages that once made countries like China and Bangladesh attractive for textile production are diminishing. Rising labor costs, environmental regulations, and trade tensions have prompted companies to reconsider their sourcing strategies.
  • Sustainability and Ethical Concerns: Consumers and regulators are increasingly demanding more sustainable and ethically produced goods. Nearshoring allows companies to exercise greater control over their production processes, ensuring compliance with environmental and labor standards.
  • Technological Advancements: Advances in automation and digitalization have made it feasible to produce textiles closer to end markets without sacrificing cost efficiency. Technologies like 3D knitting and robotic sewing are enabling manufacturers to produce high-quality goods with minimal human intervention.
  1. Impact on the supply chain

The shift towards nearshoring is fundamentally altering the dynamics of the textile supply chain:

  • Shorter Lead Times: One of the most significant advantages of nearshoring is the reduction in lead times. By bringing production closer to the end consumer, companies can respond more quickly to market trends and demand fluctuations. This agility is particularly crucial in the fast-paced fashion industry, where trends can change rapidly. Shorter lead times also enable companies to reduce inventory levels, minimizing the risk of overproduction and waste.
  • Reduced Transportation Costs: Nearshoring can lead to substantial savings in transportation costs. Shipping goods over shorter distances is not only cheaper but also faster, further enhancing the ability to respond to market demands. Additionally, reducing reliance on long-haul shipping reduces the environmental impact, aligning with sustainability goals.
  • Improved Supply Chain Resilience: Nearshoring helps companies build more resilient supply chains. By diversifying production locations and reducing dependence on distant suppliers, companies can mitigate the risks associated with global disruptions, such as natural disasters, political instability, or pandemics. This resilience is becoming increasingly important as companies seek to safeguard their operations against future uncertainties.
  • Enhanced Collaboration and Innovation: Proximity between design teams and production facilities fosters better collaboration and innovation. Nearshoring allows for closer communication and faster feedback loops, leading to more efficient problem-solving and product development. This proximity also enables companies to experiment with smaller production runs and more frequent releases, catering to the growing demand for customization and limited-edition products.
  1. Challenges and considerations

While nearshoring offers numerous benefits, it also presents challenges that companies must navigate:

  • Cost Considerations: Nearshoring can be more expensive than traditional offshoring due to higher labor and production costs in closer markets. Companies must carefully weigh these costs against the benefits of shorter lead times and increased agility.
  • Capacity and Infrastructure: Not all nearshoring destinations have the capacity or infrastructure to handle large-scale production. Companies may need to invest in local facilities or partner with local suppliers to build the necessary capabilities.
  • Cultural and Regulatory Differences: Nearshoring often involves working in new markets with different cultural norms and regulatory environments. Companies must invest in understanding these differences and adapting their operations accordingly.

Author: Rohit Dev Sethi, Managing Director, ColossusTex

The future of nearshoring in the textile industry

The trend of nearshoring in the textile industry is likely to continue as companies seek to build more resilient, agile, and sustainable supply chains. However, the success of nearshoring will depend on the ability of companies to balance cost considerations with the need for speed, flexibility, and innovation. As technology continues to evolve, nearshoring may become even more attractive, enabling companies to produce high-quality goods closer to their customers while maintaining competitive pricing. In this dynamic landscape, nearshoring is poised to play a pivotal role in shaping the future of the textile industry.

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Ready Made Garments sector is the key source of foreign currency and GDP for Bangladesh. Approximately 4.2 million people are dependent on the RMG sector for their bread and butter.
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