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Bangladesh ranks top as knitwear source to EU

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RMG Bangladesh
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Bangladesh’s knitwear garment exports to the 27-nation economic bloc reached an impressive $9 billion in the first three quarters of 2023

File Photo: Mumit M/TBS

File Photo: Mumit M/TBS

Bangladesh has overtaken global giant China as the leading knitwear garment exporter to the European Union (EU) market for the first time, both in dollar value and volume.

This significant milestone, observed from January to September 2023, follows Bangladesh’s prior dominance in denim exports to the European markets.

Eurostat, the statistical office of the European Union, reports that Bangladesh’s knitwear garment exports to the 27-nation economic bloc reached an impressive $9 billion in the first three quarters of 2023. This narrowly edged out China, which exported $8.96 billion worth of knitwear during the same period.

In a statement issued on Monday, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan attributed Bangladesh’s success to recent investments in higher value-added items, particularly active wear.

He expressed confidence that the industry’s focus on non-cotton-based athleisure items would lead to further successes in diverse product categories in the coming years. Faruque Hassan also emphasised the industry’s commitment to responsible and sustainable manufacturing, setting a global example.

Despite this accomplishment, both Bangladesh and China experienced declines in knitwear exports, with Bangladesh witnessing a 20.94% decrease from the previous year. This dip is attributed to sluggish demand amid high inflation in the EU.

Similarly, China, the world’s largest apparel exporter, faced a 21.51% decline in the same period.

“As Bangladesh’s position in EU markets continues to strengthen over the years, 2023 sets a significant landmark for the knitwear sector in the EU market,” Faruque Hassan said.

The BGMEA president further highlighted that in 2022, the volume of the EU’s clothing imports from Bangladesh exceeded those from China. However, in terms of value, Bangladesh fell short by $7.3 billion compared to China.

The statement also underlined Bangladesh’s leadership in denim sourcing for the EU since 2014, surpassing Turkey and Pakistan.

The significance of Bangladesh as a sourcing destination is further evident in its top-ranking position for denim sourcing in the USA in 2020, surpassing Mexico.

While Bangladesh briefly secured the top spot for ‘cotton apparel’ sourcing in the USA during January-June 2023, a slight setback occurred in the subsequent months due to Vietnam’s rebound in exports.

Faruque Hassan stressed the importance of retaining and enhancing Bangladesh’s share in cotton apparel, especially in selected categories like denim and ladies’ dresses. He acknowledged the challenges faced in the global market but remained optimistic about the industry’s rebound.

EU’s sluggish demand for apparel

Eurostat data reveals a downturn in the European Union’s knitwear sector, experiencing a 17.71% decline amounting to €31.94 billion in the January-September period compared to the previous year.

Sluggish demand for apparel products in the EU led to a 17.66% year-on-year decline in apparel exports to the region, totalling €13.69 billion. China’s exports also declined by 20.17% to €17.12 billion in the same period.

Despite these challenges, apparel exporters expressed optimism about industry rebound, citing easing inflation and stabilising interest rates in the Western world as positive indicators.

Fazlee Shamim Ehsan, vice president of the Bangladesh Knitwear Manufacturers and Exporters Association, attributed Bangladesh’s leading position to China’s shift away from low-end products and Bangladesh’s successful establishment of strong backward linkages.

While acknowledging lower earnings in the recent period, BGMEA President Faruque Hassan attributed this to a global apparel demand slowdown, falling unit prices, and disruptions in production due to worker unrest in November.

However, he remains hopeful, pointing to positive signs such as cleared inventories ahead of peak festival sales and the upcoming festive season in December.

Despite a decline in apparel exports to the United States by 23.33% year-on-year to $5.78 billion, Faruque Hassan asserted that Bangladesh continues to outperform its competitors in the face of a shrinking global apparel market.

He attributed the recent slowdown to a gloomy global economic outlook, predicting a challenging year for the apparel trade in 2023.

BGMEA president for steps to bring back glory of jute

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RMG Bangladesh
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Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), emphasised the need to enhance capabilities in innovation and diversify product and fibre offerings.

He made the observation during his speech at a programme titled ‘Projecting Jute as the Fibre of the Future.’ The event, jointly organised by the Ministry of Textile and Jute and the Ministry of Foreign Affairs, took place in Dhaka on15 December, said a press release.

Addressing the program, Faruque Hassan highlighted the growing importance of consumers’ preference for sustainable materials, citing the increasing global attention on climate change, sustainability, and the circular economy. 

He stated, “BGMEA has been actively promoting fibre diversification, with a particular focus on sustainable fibres. Initiatives have already been taken to encourage the use of alternative fibres, contributing to the transformation of our industry.

The program, attended by Md. Shahriar Alam, MP, State Minister for Foreign Affairs, as the chief guest, also saw the participation of ambassadors from the EU, Saudi Arabia, Japan, China, Turkey, Pakistan, Korea, Brazil, Kosovo, Nepal, and Bhutan.

Faruque Hassan outlined the BGMEA’s commitment to promoting natural fibres, highlighting ongoing research and development to enhance jute fibre for the production of ready-made garment products. 

He mentioned Bangladesh’s rich heritage, including muslin, jamdani, nakshi kantha, natural indigo dye, and the growing utilisation of jute, bamboo, and other natural fabrics in sustainable textile production.

The BGMEA President urged stakeholders to take necessary steps in promoting natural fibres and incorporating improved technology to produce garments using local materials. 

By linking these products to the export market, Faruque Hassan opined that it would not only revive the livelihoods of local weavers but also contribute to increased employment opportunities.

Bangladesh eyes $1b in wool garments export with Australia partnership

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RMG Bangladesh
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Bangladesh aims to boost its annual high-end woollen garment exports tenfold to $1 billion in the next five years as Australia, one of the world’s largest wool producers, is considering Bangladesh as a potential alternative to China for its wool processing.

According to entrepreneurs, Bangladesh currently imports a minimal quantity of woollen fabric from China, Italy or England and produces high-value suits, shirts, pants, and knitwear sweaters for export.

However, due to the absence of domestic sources of raw materials – yarn and fabric, the country is unable to fully tap into its potential in the $17 billion market, dominated mainly by Australia and China.

Entrepreneurs say having wool processing units here will result in yarn and fabric being manufactured locally, thereby leading to competitiveness in lead time. Currently, they are falling behind in this respect, causing buyers to lack confidence in placing orders for such garments.

Sources in the commerce ministry say a delegation headed by Joe Hall, chief executive officer of Wool Producers Australia, the apex national body for the wool-producing industry in that country, visited Dhaka in October to verify the feasibility of setting up wool processing units here.

During the visit, the delegation had meetings with representatives of the Bangladesh Textile Mills Association (BTMA) and entrepreneurs’ organisations in the garment sector through the initiative of the commerce ministry.

“The Australian delegates expressed their willingness to provide all sorts of cooperation and support to explore the potential of wool processing in Bangladesh. They proposed mutual networking to expand the manufacturing of wool processing,” according to the minutes of that meeting.

Saleudh Zaman Khan, vice president of the BTMA, who attended the meeting, told The Business Standard, “Currently, Australia is the single largest wool-producing country. However, 80% of their wool is processed in China. As part of a geopolitical shift, they want to reduce their dependence on China and are considering Bangladesh as an alternative. Consequently, a significant opportunity has been created for us.”

He said, “At one time, we were only producing cotton yarn priced at $1.5 per pound, and we couldn’t imagine more. In the last 15 years, we have also ventured into linen yarn production, which now costs $9 per pound. We have come a long way since then.

“Now, we are contemplating the third stage: planning to produce woollen yarn, including premium-quality cashmere wool priced at $76 per pound. The normal quality of Merino wool will be around $13 per pound.”

Entrepreneurs suggest that this type of wool processing will not require a significant investment. It can be initiated by incorporating new machinery and technical expertise into the existing setup of spinning mills.

The number of factories in Bangladesh exporting this type of woollen garment is not very high. The list includes East West Group and Energypac Fashions Limited.

Energypac Fashions currently manufactures more than 15,000 pieces of suits annually, with a portion made of blended yarns and woollen fabrics. Each of these suits retails for around $400.

Humayun Rashid, managing director of Energypac Group, told TBS, “Currently, after receiving an order, it takes about 45 days to import raw material since opening a letter of credit. This delay in lead time puts us behind our competitors. However, if there were an opportunity to procure raw materials locally, the buyer would be in a comfort zone and have more confidence.”

He continued, “If wool yarn and fabric are produced locally, we will advance in competitiveness, and export figures will increase significantly. Presently, the annual export of wool clothing is about $100 million, a figure that could potentially increase to $1 billion in the next five years.”

Saleudh Zaman believes that with proper exploitation of the upcoming opportunity, it may not even take five years to increase the shipment to $1 billion.

According to BTMA sources, the current global wool fibre market size is over $30 billion. However, various international research sites suggest a market size of $17 billion, with predictions that it may reach close to $25 billion by 2030, driven by a compound annual growth rate (CAGR) of 5.5%.

Import duties pose biggest challenges

Entrepreneurs highlight that there is currently a substantial import tax on fibres other than cotton or cotton-made yarn or fabric, as well as on other raw materials. This tax hurdle becomes a major obstacle to the progress of this sector.

Currently, the import tax on wool fibre is around 38%. Importing with such a high tax diminishes the opportunity to enhance the competitiveness of exports. Consequently, a tax waiver for the import of this raw material, similar to that for cotton, would be beneficial for exporters.

Leaders of BTMA say they have been urging the National Board of Revenue for duty waivers on the import of such fibres, yarns, or fabrics for the past few years to boost exports, but to no avail.

This issue was also raised during a meeting with the Australian delegation on 23 October, with representatives from the commerce ministry.

In the meeting, Additional Commerce Secretary Md Abdur Rahim Khan assured that these recommendations would be presented to the ministry.  News Sources :tbsnews

Government support is required to strengthen Bangladesh’s spinning sector

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RMG Bangladesh
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Bangladesh’s textile and apparel industry is still facing order challenges from all brands and retailers due to the worldwide political and financial crisis. As a result, Bangladesh’s spinning industries are also facing order crisis demand from the export-oriented garments manufacturers. Due to the order crisis yarn price is downward. As the gas price has also gone, the selling price does not meet even the production and overhead costs. Spinning mills are still facing 40 to 50 cents loss at each unit. All the spinning mills are struggling and some are already closed due to the continuous crisis for the last 2 years. 

Figure: Bangladesh’s spinning industries are also facing order crisis demand from the export-oriented garments manufacturers. 

Despite the severe crisis, the order quantities are expected to increase in the coming months as the new season is coming up. Another challenge of the sector is that the banks are not allowing the mills to open L/Cs very frequently as there are dollar crises. In recent times cotton fibre price has gone down. If the spinning mills can buy and open L/Cs for fibre purchasing then it will be beneficial for the coming orders.

But as the banks are not allowing to open L/Cs, this opportunity of lower fibre price is going in vain. If the garment order quantities increase in the coming months, spinning mills will face raw material crisis. As a result, the whole supply chain will be hampered which can also affect the on-time garments shipment. If spinning mills could capitalize on the lower fibre price they would be able to offer yarn at a competitive price in the coming future. Otherwise, garment manufacturers will go for Indian yarn which will lead spinning mills to further lose. 

To face the recent challenges and to avoid a stock of unsold yarn spinning mills have already reduced the regular production quantity. At this moment, spinning mills are trying to reduce their production cost through different innovative approaches. Skill development for the workers as well as for the officers are must at this moment. Government policy support is also needed to minimize the loss of the spinning mills and also for a sustainable future business.

At this moment spinning mills are looking for survival not for maximizing profit. No new investments are being seen at this moment. If the spinning mills can’t run their business smoothly it will definitely affect the total export-oriented garment industry of Bangladesh as spinning mills play a vital role as a backward linkage industry.

Once again the associations and government should sit together and need to rethink how we can make the cotton spinning industry sustainable for the future. We should also make decisions for new investments by analyzing proper future market demand for the synthetic yarn industry. To achieve the ambitious 100 B export target we must have a sustainable and competitive spinning industry both for cotton and synthetic fiber. News Sources : Textiletoday

Use of advanced technology will take Bangladesh denim industry to new heights

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RMG Bangladesh
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In recent times, denim and its diverse products have become the flagship and most talked about items of textile exporters in Bangladesh. Despite recent obstacles, the country has managed to maintain its position as a top supplier of denim products to the US and EU markets; around 27% and 22% of denim market respectively. However, Bangladeshi denim manufacturers have scope to increase the quality as well as the value of the product by using advanced technology.

Due to the local backward linkage and domestic washing facility, the denim jeans of Bangladesh have reached the top level of the international market. Since it is not possible to get denim elsewhere at such attractive prices and in such a short period of time, if the economic conditions improve, buyers will bring more orders to Bangladesh. People involved in the sector and economists predict that Bangladesh will remain the preferred sourcing destination for denim products.

For the excellence of denim products and to meet the growing global demand, manufacturers need to strengthen backward linkages more in the coming days. Denim products can be versatile through more trend analysis, research and continuous development of production processes and cost saving methods, etc.

Figure: Bangladeshi denim manufacturers have scope to increase the quality as well as the value of the product by using advanced technology.

There are some challenges for denim manufacturers in our country, such as staying in traditional mindset, not investing in modern technology of denim production, less research and innovation in products, less focus on waste management and efficiency and lack of focus on product development and promotional strategies etc.

The demand for denim remains almost the same throughout the year which is not affected by seasons or trends. Top brands like H&M, C&A, JC Penney, Tesco, Zara, Lee & Fung, K-Mart, Takko, G-Star, Inditex, Bestseller (Only & Sons, Only, Jack & Jones) etc. currently source their denim from Bangladesh. However, the terms of the brands are quite complex regarding product style, wash and chemical usage.

But now country’s manufacturers understands brand preferences and fashion aesthetics and are able to produce denim products as per customer demand. However, most of our denim manufacturers produce low to medium quality jeans. While denim exporters have opportunities to take product value to new heights through quality washes and other value addition, most exporters are yet to capitalize these opportunities.

Envoy Textiles Ltd., the world’s first LEED Platinum certified denim producer, has signed an agreement with the Spanish company Xinologia SL, a pioneer in sustainable eco-friendly textile technology, to set up a state-of-the-art eco-lab. The objective of the agreement is to set a global example of sustainable and innovative management by transforming the denim industry through joint ventures.

The journey of exporting quality denim to Bangladesh started by Pacific Jeans, an industrial enterprise of Chittagong EPZ. As a denim manufacturer, Pacific Jeans Limited is using the latest technology in the denim industry. During 1984, there was no washing plant in the country then. Washing had to be done in Italy. A year later they set up a washing plant in the country with the help of an Italian buyer.

In 1998, Sasha Denim established a specialized factory for denim using the technology of the Swiss-German company Benninger. In 2008, Envoy Textiles was the first in Bangladesh to start commercial production using rope dyed technology. Genesis Denim has been working with Dutch fashion brand G-Star Raw as the sole Bangladeshi denim exporter for the past 10 years. G-Star collects about 1 million jeans worth 20 million dollars from Bangladesh every year.

According to garment industry owners, the use of new technologies reduce the production cost and buyers also ready to pay more for high-end denim. For example, G Star pays up to $35 for a pair of denim pants, while low-quality denim exporters get an average of just $6.

Hence, there is an opportunity for denim exporters to take the product value to new heights through modern technology and innovative denim production that will further accentuate the ‘Made in Bangladesh’ tag.

BGMEA and HKRITA discuss collaborative opportunities to boost Bangladesh’s garment industry capacity

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RMG Bangladesh
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Faruque Hassan, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), held a meeting with Edwin Keh, Chief Executive Officer of the Hong Kong Research Institute of Textiles and Apparel (HKRITA), in Hong Kong. 

The meeting, held on 14 December, aimed to explore potential collaborations between the two organisations to elevate the capacity of Bangladesh’s readymade garment industry.

Other attendees at the meeting were Katherine Chan, director of Business Development at HKRITA.

The primary focus of the discussions revolved around strengthening the capacity of Bangladesh’s readymade garment industry, particularly in the realm of product development, especially the manufacturing of high-end products made from manmade fiber (MMF). 

During the meeting, both sides expressed keen interest in fostering collaboration to facilitate knowledge exchange and expertise in technology adaptation, skills development, innovation, resource efficiency, and circularity within the industry.

One of the highlights of the meeting was the exploration of avenues for collaboration between industry and academia to identify areas for improvement and capacity enhancement, emphasizing the importance of providing knowledge and skills required to address future challenges.

Given Bangladesh’s significant emphasis on product development, innovation, and skills to keep pace with the evolving trends and technologies in the fashion world, BGMEA President Faruque Hassan said this collaboration would be a key step in enhancing the capacity of Bangladesh’s garment industry, propelling it to the next phase of growth and development.

He suggested partnering with BGMEA University of Fashion and Technology (BUFT) to enhance students’ knowledge and skills, focusing on areas like product and design development, as well as the latest manufacturing technologies.

Established in 2006 and hosted by the Hong Kong Polytechnic University, the Hong Kong Research Institute of Textiles and Apparel is a globally recognized institute specializing in research, development, and technology transfer within the fashion and textile industry.

Shimmy Technologies trains RMG workers to adapt to automation

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RMG Bangladesh
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Shimmy Technologies, dedicated to technology education and skill development, has stepped up to provide assistance

Officials of Shimmy Technologies with trainees. Photo: Courtesy

Shimmy Technologies, a New York-based  industrial EdTech company has trained over 6,000 workers from various readymade garment (RMG) factories and technical training centres in the country in the last seven years.

To mark this milestone, Shimmy Technologies recently organised an event at a hotel in Dhaka, according to a press release on Wednesday(13 December).

Shimmy’s Founder and Chief Executive Officer Sarah Krasley, Director of Operations Ashley Nichols, Bangladesh Business Development Lead Shahriyar Hasan, and Head of Training and Field Operations Rudro Rahman were present on the occasion. 

Sarah Krasley, said, “We have developed Upskill, our video game-based application, with structured 4-hour training sessions that help sewing machine operators gain the technical skills they need to stay relevant as automation changes the nature of production work. Since 2018, we have been providing training to workers in various RMG factories in Bangladesh.

“To date, Shimmy has successfully trained 6,000 workers, with 90% of them has expressed satisfaction with the training, stating that they have gained valuable knowledge and even shared this with their colleagues.”

She also highlighted that 78% of apparel workers trained by Shimmy felt they could confidently operate the new automated machinery.

Sarah stated, “The employees we have trained are effectively adapting to evolving technology by acquiring essential skills.”

In a response to a query from The Business Standard, Shahriyar Hasan, Bangladesh Business Development Lead at Shimmy Technologies, said these workers are working in multiple factories including Creative Collection Ltd (Hameem Group), Liz Fashion Ltd, Iris Fabrics Ltd, Crown Fashion, AKH Group etc.

He said this training depends on the number of trainees, each of the training sessions were 4-hour long. news Sources : tbsnews

Textile millers looking for loan concession, LC limit escalation

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RMG Bangladesh
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Textile millers of Bangladesh have asked for policy support from the central bank, including concessions on loan installments, extensions on repayment periods, and an increase in the Letter of Credit (LC) limit.

A letter was sent to the Bangladesh Bank on 6 December by the Bangladesh Textile Mills Association (BTMA). The letter sought a two-year extension on loan repayment periods, which the BTMA had previously extended during the pandemic.

As the textile millers are grappling with the combined challenges of the current economic downturn and the devaluation of taka, they requested an increase in their Letter of Credit (LC) limit as well as permission to exceed their single Borrower Exposure limit if it occurred after the requested extension.

Figure: Textile millers of Bangladesh have asked for policy support from the central bank, including concessions on loan installments, extensions on repayment periods, and an increase in the Letter of Credit (LC) limit.

In the letter, textile sector entrepreneurs requested a temporary reduction in loan installments, proposing to pay only 20% of term loan installments. The remaining payments should be deferred for four years as they are observing a significant contractions in production and overall business due to the current economic downturn.

Moreover, the textile sector urged the central bank to implement one of two options: either establish a consistent exchange rate for US dollars applicable to both export and remittance transactions or entirely deregulate the exchange rate and allow it to fluctuate freely on the market.

“It would not be possible for the local textile mills to sustain in such a situation if the mills do not get proper incentives and policy supports,” BTMA President Mohammad Ali Khokon said in the letter.

“While the government’s stimulus package helped us initially overcome the impact of the pandemic, our operations have been plagued by uncertainty for the past several months due to the combined challenges of the Russia-Ukraine war, the global economic crisis, the dollar crisis, and local political instability.”

The recent surges in the prices of gas, electricity, transportation, and other raw materials have significantly hampered our competitiveness and export capacity, making it increasingly difficult to compete in the global market, Khokon said.

The 150% increase in gas prices coupled with a 50% rise in workers’ wages has significantly inflated the overhead costs of textile mills, making it difficult to maintain profitability. In many cases, mills are operating at break-even, with some even incurring losses.

In January last year, the Bangladesh Bank reduced the limit of loans provided by any bank to a single person or organization to 25% of its total regulatory capital from the previous 35%.

Under the rules, no bank will be allowed to provide more than 15% funded and more than 10% non-funded loans to a person or an organization.

The banks which have defaulted loans below 3% will be able to provide large loans up to a maximum of 50% of total capital. Those with less than 5% defaulted loans will be able to provide up to 46% large loans, those with less than 10% will be able to provide 42%, and those with less than 15% defaulted loans will be able to provide 38% large loans, according to the central bank circular.

In addition, banks with less than 20% defaulted loans will be able to provide large loans worth 34% of the capital, and banks with 20% or more defaulted loans will be able to provide 30%.

Solar EPC to install 100 MW rooftop solar plant in 2024

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RMG Bangladesh
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Solar EPC Development Ltd. (SEPC) is a leading and fastest-growing solar power project developer and consultancy firm, targets to install a 100 MW Rooftop Solar Plant in Bangladesh by 2024.

Ezaz Al Qudrat A Mazid, Founder and Managing Director of Solar EPC Development Ltd. shared the target with Textile Today in the 20th Solar Bangladesh 2023 – International EXPO, held from 7-9 December Dhaka.

Solar EPC is playing a crucial role in providing the latest technologies for the textile and apparel indus

Figure 1: Ezaz Al Qudrat A Mazid, Founder and Managing Director of Solar EPC Development Ltd.

try cost-effectively. Solar EPC first started operations in Bangladesh in 2018 with floating solar project and later ventured into rooftop solar. Solar EPC thinks that the solar industry in Bangladesh now is mature. Especially in the textile industry which is a 100% export-oriented industry, they have taken solar as mandatory.

“This exhibition is very important for those who have unused rooftops and want to overcome the energy crisis by using solar systems. Through this exhibition, our industry owners can learn about new technologies, they can see many new products. Also, we can discuss our solutions with our clients (industry owners),” said Ezaz Al Qudrat A Mazid.

Solar EPC Development Ltd. provides a one-stop solution for commercial and industrial rooftop solar. It offers a complete range of services, from initial assessment to design, engineering, procurement, installation, and commissioning.

Solar EPC’s OPEX is a zero-investment model where the solar panels are installed on customers’ roofs/premises with their capital. The customer only pays for the electricity supplied to it under the long-term Power Purchase Agreement (PPA), the price is 20- 40% cheaper than the grid tariff. In this model, the customer still gets the net metering benefit.

A Mazid said, “What we can see from our experience is that there is a financing issue when doing a project anywhere. Our OPEX model is very famous in our solar industry that is we invest the operation expense and sell this power to our industry owners at a fixed tariff for a fixed period. We have started working on the OPEX model. In 2024 we will go to OPEX model investment with our target of almost 100 MW of rooftop solar.”

Figure 2: Solar EPC team at 20th Solar Bangladesh 2023 – International EXPO.

About the smooth supply chain management, Noveea Tabassum, Senior Asst. Manager (Supply Chain) of Solar EPC said, “We are working very strongly towards our target of 100 MW of rooftop solar and IPP by 2024. We do Master LC to ensure that all the products arrive at the production site at a time. It makes it easy for us to start or plan any project.”

Regarding achieving the target, Nusrat Jahan, Asst. The manager (Asset Management) said, “We are already tagged with some clients in the CNI and IPP sectors of solar EPC and have some more projects running in our pipeline.”

Ankon Chakma, Asst. Manager (EPC & Project Development) said, “We have the necessary human resources and technical solutions to implement the target of 100-watt rooftop solar by 2024.”

Martin Yip, Regional Sales Director of Powerway Renewable Energy Co. Ltd said, “We are Powerway have been in Bangladesh market for many years and right now Powerway has delivered more than 200 MW projects in Bangladesh market. We have more than 13 years of experience in this industry and for Global, we have delivered more than 20 GW of solar structure for Bangladesh. We have our partner which is solar EPC development and we work with them to support any clients and any projects they need in Bangladesh Market.”

With a good energetic team, Solar EPC is moving forward working on everything from the latest technology, latest service and remote monitoring system.

RMG manufacturers: US sanctions announcement is a political move

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RMG Bangladesh
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RMG manufacturers and labour leaders have said the recent US sanctions announcement was likely a political move and businesses do not need to worry.  

They were speaking during a seminar titled “Current Labour Issues and International Trade Scenario,” organized by the Economic Reporters Forum (ERF) – an association of the nation’s business and economic journalists – in the capital on Monday.

They also said that if the sanctions were implemented, it will be implemented for political reasons and the owners and workers have nothing to do there. So it is the government’s responsibility to deal with it through diplomatic channels.

Mohammad Hatem, executive president of the BKMEA, said that there is no opportunity for the US to impose trade sanctions on labour rights, but it can be implemented politically. 

He said such sanctions will actually affect the owners, workers and the government. So, these sanctions should be dealt with diplomatically by the government.

“We are facing bigger internal problems like banking and customs issues, interruptions in gas and electricity supply and so there is no time to think about US sanctions as we are dealing with bigger problems inside the country,” he added.

BKMEA Vice-President Fazlee Shameem Ehsan said that as per the visible implementation of law and labour rights, there is nothing to worry about as Bangladesh is among the signatories of eight of the 12 articles of the ILO on labor conditions where even the US has signed six.

“However, there may be incidents which are not visible, in this regard we have nothing to do,” he said.

He also added that Bangladesh has signed more articles than its competitors like India, Vietnam, Cambodia, noting that Bangladesh also maintains global standards in compensation and if there is any sanction now it will be due to the political reason and the government should take initiatives to solve this problem.

ANM Saifuddin, president of the ILO-related Standing Committee of the BGMEA, also spoke at the event. 

He said: “ILO declared Bangladesh RMG sector as child-labour free in 1998. We are improving everyday. Yes, still there are some issues and rooms for improvement, we are working on it.”

In his speech, Dr Mustafa Abid Khan, former member of BTTC, said that the message of the US regarding trade does not mention trade restrictions or sanctions. 

Trade penalties or fines like tariffs can be as high as 10% in this sector. And sanctions will not happen immediately.”

‘Half of the trade unions in the RMG sector are ineffective’

Labour leaders and manufacturers highlighted that half of the trade unions within the country’s ready-made garment (RMG) sector are currently ineffective, attributing this inefficiency to various factors. 

Advocating for a more accessible registration system, they urged that making an application for registration in accordance with labor laws should prompt swift action, with a faster review of the submitted documents. At present, there are approximately 1300 RMG factories with trade unions, and it was revealed that half of them are not effectively functioning.

Speaking at the event, Towhidur Rahman, a prominent labor leader and former secretary of IndustriAll Bangladesh Council (IBC), expressed concern over the unnecessary hurdles in establishing trade unions, emphasizing that such obstacles do not align with the principles of a robust labor law.

Regarding the US workers’ rights policy, he noted the emergence of a concerning development akin to a dark cloud in the western sky, emphasizing the need to address the situation promptly. He highlighted the importance of adhering to global labor standards and advocated for the implementation of EU guidelines through a national action plan to sustain business practices.

Expressing concern over the deaths of four workers during unrest in the RMG sector over wage increases, he called for thorough inquiries into the incidents. Currently, 115 labor leaders remain under arrest, and approximately 25,000 workers are facing charges in 43 cases. He urged the apex trade bodies of the RMG sector to take in consideration of these circumstances.

Addressing the challenges ahead, he pointed out that the implementation of minimum wages in various factories poses a formidable task. 

He criticized the labor ministry, branding it as a breeding ground for corruption, asserting that the ministry has failed to take meaningful actions for the welfare and well-being of workers.

Labour leaders raised question on labour act amendment procedure  

The government recently passed the labour act amendment and sent to the President for his approval, which was withheld assent to a bill amending the labour law and sent it back to parliament for reconsideration due to concerns over a new provision. 

The US and the European Union (EU) also had an objection to the bill, and said that it deprived the workers’ rights.  

Trade union leaders and apparel manufacturers blamed that the ministry of labour and employment made a final draft of the labour act amendment bypassing TCC, and sent it to the parliament. Later, the parliament passed the bill. 

In this regard, National Garment Workers Federation President and Co-founder Amirul Haque Amin said that the labour act amendment procedure was not acceptable to everyone as they found 56 issues to discuss. But the ministry sent this to the parliament without arbitration in the TCC meeting.

Fazlee Shameem Ehsan said that the law did not take into account all aspects of the owners and the workers, which made the situation chaotic.

Unions for both workers’ and owners’ welfare

The manufacturers also sought to form trade unions which will bring welfare for both the workers and owners.

Mohammad Hatem said that they are afraid of traditional trade unions and they want healthy trade union practices that support the industry. 

Fazlee Shamim Ehsan said there are two types of trade unions, trade unions function to keep industry alive and the other, who bring dollars from abroad to fill their pockets to serve outsiders’ interests.

He also suggested addressing training for the workers’ leaders to form trade unions which will serve the actual interests of the workers and industry.

ANM Saifuddin said that the owners are always in favor of the trade union if the leaders cooperate in the development of the industry.

ERF President Mohammad Refayet Ullah Mirdha presided over the seminar while general secretary Abul Kashem moderated the event. News Sources : dhakatribune

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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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