News & Event
A record-breaking year for garment sector
The year 2015 saw the garment sector log in its highest ever export earnings, facilitated in part by the regrouping brought on by the twin industrial disasters of Rana Plaza collapse and Tazreen Fashions fire.
Between January and November, garment exports raked in $26.26 billion, which is already the highest figure recorded by the sector at any given time, according to data from the Export Promotion Bureau.
In 2014, the sector logged in $24.53 billion in exports.
Exports grew phenomenally in the months of October and November this year: by 18.40 percent and 14.74 percent respectively.
Buoyed by this momentum, the garment manufacturers are now looking forward to 2016 with much optimism.
Their confidence was boosted by three main factors -- shifting of garment business from China to Bangladesh, the historically low price of cotton and the restoration of international retailers' confidence on the structural soundness of Bangladeshi garment factories.
The engineers of Accord and Alliance, two factory inspection agencies, found less than 2 percent of the factories to be risky.
It is my hope that 2016 will be better than 2015 as all the factories have already been inspected and are safer now, said Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association.
He said the factory owners are now more cautious, and many have shifted their units from Dhaka for safety reasons out of their own volition.
Besides, the factory owners have been spending millions of dollars for remediation, as per the suggestions from the inspectors of Accord and Alliance.
The BGMEA president said Bangladesh's garment export is on the rise mainly because of the China factor: the Chinese garment makers are no longer interested in apparel trade. As a result, Bangladesh is now poised to become the largest cotton importer this season.
In the year ending on July 31, 2016, Bangladesh may import a record 5.75 million bales (each bale weighs 480 pounds, or 218 kilograms) of the fibre, up 6.5 percent from a year earlier, according to the United States Department of Agriculture.
The garment makers were also heartened by the demand from new destinations this year, which accounted for about $5.5 billion of the export earnings.
Of the new export destinations, Australia, Japan, South Korea, Russia, Brazil, Chile, China, India, Turkey, Mexico and South Africa are among the most promising countries for Bangladesh.
However, not all developments this year were positive for the garment sector. The signing of the Trans Pacific Partnership agreement between 12 nations in October stands to erode the country's competitiveness in apparel trade in future. The pact is aimed at deepening economic ties between these nations, slashing tariffs and fostering trade to boost growth.
Among the 12 nations are Vietnam, Bangladesh's main competitor in global apparel trade, and the US, the country's main export destination. The deal means that Vietnam is poised to gain ground over Bangladesh, currently the second largest apparel exporter in the world.
The slide in major currencies like the euro and the US dollar in 2015 also impacted Bangladesh's earnings from garment exports. Bangladesh earned nearly $3 billion less from exports in 2015 due to a steep fall of the euro.
2016 will be better than 2015, said David Hasanat, managing director of Viyellatex Group, one of the leading garment exporters.
Going forward, the country needs to enhance the human resources for the garment sector, as it is the main source for foreign currency and employment generation, he said.
I hope many positive things will happen next year, said Hasanat, whose turnover in the garment segment is more than $250 million in a year.
Reference : The Daily Star 31.12.2015