The recent surge of orders for the apparel sector of Bangladesh has come at a time when its textile industry cannot execute them. The surge is because of global revival in the textile sector but more because buyers are shifting away from countries such as China and Vietnam.
This is the reason that Bangladesh exported 10.27 more garments last fiscal although all major textile economies posted a decline. Bangladesh’s pandemic was neck to neck with Vietnam in apparel exports but last fiscal it was far ahead of its closest rival with exports of $46.99 billion against Vietnam’s exports of $35 billion. Now Bangladesh is established as the second highest global apparel exporter after China which clocked $182 billion in exports last year.
Bangladesh’s share in the global readymade garment trade more than tripled in the past 17 years: in 2005, the country’s share was 2.5 percent but it rocketed to 7.9 percent last year. The orders are pouring in for the suppliers who consider executing them as a stiff challenge.
The diversion of orders from China has now accelerated and Bangladesh is the preferred source for most global brands. The country is not prepared to cope with a sudden surge in orders. Even a 10 percent shift from China to Bangladesh could mean an increase of orders worth 18.2 billion. It would put the manufacturing industry under strain as arranging supplies would be a problem.
While the Bangladesh garment industry keeps growing, other garment-supplying countries such as Myanmar, Ethiopia, Cambodia, China, India, Pakistan, and Cambodia have seen their global market share in the garment segment slash over the last few years.
A leading exporter from Bangladesh said a lot of US-based orders for fabrics have come to his factory from China and India over the last year and he has expanded capacity. But according to reports much more orders are expected next as international retailers and brands are running out of their stocks of unsold apparel items.
Bangladesh can supply goods against a large volume of orders, but many mills are running below capacity owing to an inadequate supply of gas and power and the dollar crisis in the banking sector. The production in many mills has declined by 50 percent
A country manager of a leading brand said although more orders are flowing to Bangladesh, the volume is still slow. He said orders are expected to see a jump if the political chaos linked to the national election does not linger.
A representative of spinning mills revealed that the installed spinning capacity is 4,500 million kilograms, but they are manufacturing 2,400 million kgs of yarn currently as their full capacity can’t be utilized because of the gas and power shortage.
In denim, Bangladesh is, however, capable of catering to any volume of orders. Local denim millers produce more than 700 million yards of fabrics per year.
Since international buyers have cut the lead time to 45 days to 60 days from 90 days and 120 days, local garment suppliers have already come under pressure. To deliver products within agreed deadlines, they are using more locally produced yarn and fabrics.
Bangladesh RMG sector awash with orders short in capacity
