03/03/2014: Garment orders on the rebound

Garment orders on the rebound

Bangladesh records 18th year-on-year increase in last 19 months

Refayet Ullah Mirdha



Work orders from international buyers are picking up with the return of political stability in Bangladesh after the January 5 national elections, exporters said yesterday.
Garment makers aim to achieve the export growth target at the end of the year, given there are no further political upheavals.

Bangladesh, the second largest garment exporter after China, shipped knitwear items worth $7 billion and $7.18 billion of woven items, registering year-on-year growth of 18.13 percent and 17.32 percent in July-January, according to data from the Export Promotion Bureau.

The country shipped more than $2.24 billion of clothing overseas in January, 7.09 percent more than a year earlier. This advance marks the eighteenth year-on-year increase in the last nineteen months, buoyed by gains in exports of both woven and knitwear, data shows.

“There is no shortage of work orders in my factory. I will be able to achieve the targeted 10-15 percent export growth in 2014, compared with the previous year,” said David Hasanat, managing director of Viyellatex Group, a leading garment exporter.

“I could have executed more orders if I had more capacity in my factory. However, we have price pressure from the international retailers, even though our cost of production increased manifold last year.”

“We have proved ourselves to be resilient as we could ship goods on time, even amid political turmoil. This is part of the reason why retailers are placing more orders with us,” Hasanat said.
With Bangladesh tentatively on track to ship an unprecedented amount of clothing abroad in 2014, the country also may import record amounts of both textiles and cotton in response. Given that the country grows little cotton of its own, the local textile and apparel sector is almost entirely dependent on imports of the fibre to spin.

Cotton consumption in Bangladesh may rise 8.75 percent to 870,000 tonnes in fiscal 2014-15 with higher demand for garments, according to a report by Economist Intelligence Unit.

“In 2013, we achieved 18 percent export growth and I am expecting 34 percent this year, as our new units have already gone into production,” said MA Jabbar, managing director of DBL Group that makes clothes for H&M and Wal-Mart.

“Even during the political crisis, I had no problems with getting work orders, but I faced difficulties in shipping the goods as transportation came to a halt during that time.”

“The situation is definitely better now. I have booked plenty of orders for the next season,” said Momin Mondol, managing director of Mondol Group that exported $225 million of garments last year. Mondol expects his company's exports would grow at least 10 percent year-on-year.
“Facing higher demand from retailers, I am expanding my production capacity.”

“Our exports will be hampered due to inspection by the Accord and Alliance as many factories will have to stop work during inspections,” said Abdus Salam Murshedy, managing director of Envoy Group.

Bangladesh will face challenges in the European market as the trade bloc has awarded trade preferences to Pakistan too for the same products, Murshedy said.
Currently, Bangladesh enjoys zero-duty benefits from the EU under the generalised system of preferences scheme. Pakistan won the GSP status from the EU for 75 of its items, effective since January.

Retailers are not interested in increasing prices although the cost of production has increased due to a 77 percent wage hike, Murshedy added. Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association, said: “We want fair prices from the retailers as our costs of production have increased.”