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course code: MKT-105 course title: Fashion Marketing Prepared for : MD. Idris ali Assistant Professor Department of business administration BUFT. Prepared by: Md. Shohag islam ID: 121-339-0-35 Batch:121(KMT-1)
BGMEA UNIVERSITY OF FASHION AND TECHNOLOGY
Date of Submission: 27-05-2013
TITLE: challenges
ACKNOWLEDGEMENT
At first I desire to express my deepest sense of gratitude of almighty Allah.
With profound regard I gratefully acknowledge my respected course teacher Mohammed Idris ali Assistant Professor Department of business administration for his generous help and day to day suggestion during preparation of the report. He is so much an inspiration and guidance to me that I am, short of words in expression my gratitude.
I like to give thanks especially to our friends and many individuals, for their enthusiastic encouragements and helps during the preparation of this report us by sharing ideas regarding this subject and for their assistance in typing and proof reading this manuscript.
Once more time to sir, I owe more than I can mentionmostly for teaching us to see the silver lining in every hard work
Executive summary:
Worldwide Clothing Production Is a$335 Billion Business 11 Million Workers/75% Women Compared to 1960s, consumers are spending 50% less but buying twice as many garments (28.7 outerwear items per person in the US.) Labor Costs: China $0.93, India $0.55-0.68, Sri Lanka $0.46, Pakistan $0.37, Indonesia $0.35, Cambodia $0.24, Bangladesh $0.21
For a $100 dress.. Retailers get $50 Manufacturers get $12-$16 Fabric costs $22 Contractor gets $9 Garment Workers get $2-$6
The challenges facing Bangladeshi garment manufacturing firms. The cost components of a shirt that is sold at the wholesale price of $6.75: $4.75 is spent purchasing fabric, $1 is spent purchasing labels and accessories specified by the retailer, and the last $1 is divided among cutting and making (includes wages), capital expenses, securing credit for future inventory, and profits. Imagine an order for 400,000 shirts is spread over a four-line (meaning four rows of sewing machines, each row with 50 workers) factory of 1,600 square meters. Those 400 workers produce 3,077 pieces per day. The wage cost works out to about 38 U.S. cents per shirt. Another 15 cents goes to sending the shirt for a fine washing spin. Rent and utilities for the factory floor works out to about 11 cents per shirt, and head-office and marketing costs for the factory are 11 cents. As for the remaining 25 cents, that will just about cover repaying a 10-year bank loan at 18% interest, which the factory owner has used for set-up costs along with a home and car. All is at a delicate equilibrium, until the owner feels compelled to give in to a firmly worded request from the retailer for an additional discount, or a demand to air-freight, at the manufacturers expense, some boxes of shirts that suffered a two-week production delay and
now wont be accepted by the retailer if they are any later than they already are. In light of these very narrow margins. It can be suggested that a substantial increase in the statutory minimum wage will prove problematic. The Bangladeshi government has actually proposed a retroactive increase in the minimum wage, which will prove extremely burdensome to garment manufacturing firms locked into supply contracts. If Bangladeshi garment manufacturing firms didnt face competition from Indonesia and other low-cost locations, theyd presumably have enough pricing power to raise prices and to finance upgrades in safety standards and much else. Just such an outcome is possible, because there arent many good alternatives to Bangladesh as a hub for garment manufacturing: Many in Bangladesh fear that if the country becomes too expensive a place to make clothes, countless sewing machines will be sent to new factories in Nigeria, Kenya or Ghana. This outcome is unlikely. African countries may have a steady supply of unskilled labor, but a higher cost of living should keep them from competing with Bangladesh. We tried to figure out what countries might inherit Bangladeshs T-shirt phase. Other than Burma, a long shot, we couldnt think of any. For now, Bangladesh might be where this centuries-long T-shirt journey ends, which means that their race to the bottom may be rooted in a misunderstanding. The countrys manufacturers can afford to take a step or two up the value chain. Not only can they pay their workers more, treat them better and house them in safe and clean factories, but there is also a significant economic incentive to do so. However, is that countries more affluent than Bangladesh, like Indonesia, can also pick up the slack, as many of these countries are unevenly developed, and so they still have scope, and an appetite, for an increase in labor-intensive manufacturing. India, which has a GDP per capita (PPP) twice as high as that of Bangladesh, has many regions that are just as poor, and which are desperate for labor-intensive manufacturing work.Labor laws t match recent progress made by Vietnam and Bangladesh: With the wages in China reaching levels at which it is likely to be forced out of these sectors, India is well positioned to become the worlds manufacturing hub. But if the costs of employment remain as they are, that opportunity is likely to be seized by a large number of smaller countries, such as Vietnam and Bangladesh. These countries allow firms to hire and fire workers under reasonable conditions and maintain a balance between the rights of both workers and employers. As a result, large firms in sectors such as apparel can be found aplenty in both countries and both have also seen significantly faster growth of the sector and done extremely well on the export front.
It should go without saying that not everyone believes that Bangladesh has done a good job of balancing the rights of workers and employers, yet it is true that employment in garment manufacturing has been a driver of poverty alleviation in Vietnam and Bangladesh alike, and that the unevenness of Indias economic development with growth concentrated in knowledge-intensive services and other sectors that are not very labor-intensive while most workers remain in a moribund agricultural sector is a profound problem. Garment manufacturing could facilitate the transition from low-productivity agriculture to higher-productivity exportoriented manufacturing, and its hard to imagine that India will keep screwing up on this front forever.An economic policy analyst who has long been critical of free trade, has an opened in Bloomberg View which makes the case that the best way forward for Bangladesh and other developing countries is a reimposition of the quotas established under the Multifibre Arrangement, which expired in 2005. His basic argument is that quotas took the pressure off of manufacturing firms in exporting countries, as they could be confident that they wouldnt be undercut by foreign rivals: Without quota-granted guaranteed market access, cost-cutting became all the more important for smaller exporting countries simply to preserve their new gains. As U.S. trade data demonstrate, most of the freed-up customers were won by the huge Asian producers that enjoyed big natural and government-created cost advantages. For example, Chinas share of U.S. apparel imports rose to 33.44 percent from 26.07 percent during the first two years of quota-free trade (2005-07) alone. Indonesian and Vietnamese sales boomed, too. Significantly, Bangladesh also excelled, and like China, Indonesia and especially Vietnam, its market share has continued to grow, reaching 5.25 percent last year, despite the sluggish U.S. economy. Unfortunately, however, much of the surge in Bangladeshi exports can be attributed to that countrys reliance on rock-bottom wages and firetrap factories, with the tragic consequences we recently witnessed. Worse, the dynamics of todays quotaless apparel trade practically guarantee that better, costlier work conditions in Bangladesh will simply drive much production and jobs elsewhere. That is what occurred in higher-cost garment exporters such as Turkey and South Africa, as well as smaller Western Hemisphere and African producers most of whose U.S. exports have fallen in absolute terms since the quotas ended in 2005. Extremely skeptical about the wisdom of this approach, which would, among other things, raise the cost of apparel in the consuming countries. No intrinsic problem with higher apparel costs, particularly if they reflect changing consumer tastes and preferences, but To nelson is explicitly counseling the re politicization of global trade in apparel, a process that can easily be gamed by, for example, domestic manufacturers seeking to raise prices. That said, Tonelsons op-ed
Acronyms
RMG GSP GDP LTA MFA WTO BTMA IBA R &D IBM BGMEA BKMEA Ready made garments
long-term arrangement Multi-fibre arrangement World Trade Organization Bangladesh Textile Mills Association Institute of Business Administration Research and Development International Business Machines Bangladesh Garments Manufacturers and Exporters association Bangladesh Knitwear Manufacturers and Exporters association Unilateral restriction, short-term arrangement
STA
Contents
1. Cover page 2. Title page 3. Acknowledgements 4. Executive summary 5. Acronyms 6. Table of contents 7. Introduction 8. Objective 0f the study 9. methodology 10. limitation 11. Overview of ready-made garments of Bangladesh 12. Reason behind the Growth of RMG in Bangladesh 13. Exporting Condition of Fashion Industry 14. Bangladeshs fashion Industry and its Challenge 15. Bangladesh Faces the Challenge of Globalization 16. Prospects of the Fashion Industry 17. Recommendation 18. Conclusion 19. References
made garment sector is suffering with a lot of problems. We should solve these negative situations by ensuring proper steps.
Methodology
This report has been prepared on the basis of experience gathered through learning annual report. For preparing this report, I have also get information from website of BGMEA, BKMEA Export Promotion Bureau and many Government and non government organization. I have presented my experience and finding by using different tables, which are presented in the analysis part. The details of the work plan are furnished below: Relevant data for this report has been collected primarily by direct investigations of different leasing companys annual report and website. The information and data for this report have been collected from secondary sources. The secondary sources of information are annual reports, websites and different manuals Data collected from secondary sources have been processed manually and qualitative approach in general and quantitative approach in some cases has been used throughout the study.
Qualitative approach has been adopted for data analysis and interpretation taking the processed data as the base. So the report relies primarily on an analytical judgment and critical reasoning.
Limitations
Since our study is based on secondary data, there is a possibility of getting fake information. If the surveyed personnel provide us with any fabricated information about their opinion of their organization, then the report findings may be erroneous. Above all, this study is weak in some points. The notable ones are as under: Conducted in a very short time so we were not able to collect more information. Made on crisis situation of Bangladesh, so it was difficult to collect more samples. Only the big and the reputed Garments Company cons ider here as sample. Lack of experience on study. Lack of proper authority to conduct the fashion industry
worth the equivalent of $12348 Million in 2010, which was about 3.00 percent of the global total value ($276 billion) of garment exports. The countrys RMG industry grew by more than 15 percent per annum on average during the last 15 years. The foreign exchange earnings and employment generation of the RMG sector have been increasing at double-digit rates from year to year. Some important issues related to the RMG industry of Bangladesh are noted in table 1 Table 1. Important issues related to the Bangladesh ready-made garment industry
Year(s) 1977-1980 1982-1985 1985 1990s 1993-1995 2003 2005 Issue Early period of growth Boom days Imposition of quota restrictions Knitwear sector developed significantly
Child labor issue and its solution Withdrawal of Canadian quota restriction Phase-out of export-quota system
Source: Compiled by the author from Quddus and Rashid (2000), Mainuddin (2000) and databases of the Bangladesh Garment Manufacturers and Exporters Association, and the Export Promotion Bureau, Bangladesh
Currently, there are more than 5,000 RMG firms in Bangladesh. More than 95 percent of those firms are locally owned with the exception of a few foreign firms located in export processing zones (Gonzales, 2002). The RMG firms are located mainly in three main cities: the capital city Dhaka, the port city Chittagong and the industrial city Narayangonj. Bangladesh RMG firms vary in size. Based on Bangladesh Garment Manufacturers and Exporters Association (BGMEA) data, Mainuddin (2000) found that in1997 more than 75 per cent of the firms employed a maximum of 400 employees each. Garment companies in Bangladesh
form formal or informal groups. The grouping helps to share manufacturing activities, to diversify risks; horizontal as well as vertical coordination can be easily found in such group activities. Ready-made garments manufactured in Bangladesh are divided mainly into two broad categories: woven and knit products. Shirts, T-shirts and trousers are the main woven products and undergarments, socks, stockings, T-shirts, sweaters and other casual and soft garments are the main knit products. Woven garment products still dominate the garment export earnings of the country. The share of knit garment products has been increasing since the early 1990s; such products currently account for more than 40 percent of the countrys total RMG export earnings (BGMEA website). Although various types of garments are manufactured in the country, only a few categories, such as shirts, T-shirts, trousers, jackets and sweaters, constitute the major production-share (BGMEA website; andante, 2001). Economies of scale for large-scale production and export-quota holdings in the corresponding categories are the principal reasons for such a narrow product concentration.
Low cost labor:As Bangladesh is an overpopulated country it is very easy for the
garment industries to hire labors at a lower rate. At present the government of our country has announced minimum wage to the garment workers but the industries can still earn a handsome amount of profit by exporting their product. Although it has increase but comparatively it is still low.
chronological steps through which the export -quota system was administered until it was finally abolished on 31 December 2004, making worldwide textile and garment trade quota-free.
Easy Communication : It
other countries and they can easily export their produced goods to the other countries.
Product Tree: Bangladesh exports about 63 items to different apparel markets. Ready-made
garments manufactured in Bangladesh are divided mainly into two broad categories: woven and knit products. Shirts, T-shirts and trousers are the main woven products and undergarments, socks, stockings, T-shirts, sweaters and other casual and soft garments are the main knit products. Woven garment products still dominate the garment export earnings of the country. The share of knit garment products has been increasing since the early 1990s; such products currently account f or more than 40 per cent of the countrys total RMG export earnings (BGMEA website).Although various types of garments are manufactured in the country, only a few categories, such as shirts, T-shirts, trousers, jackets and sweaters, constitute the major production-share (BGMEA website; and Nath, 2001). It needs to be mentioned here that Bangladesh produces a very limited categories of expensive and fashion oriented garments. Economies of scale for large-scale production and export-quota holdings in the corresponding categories are the principal reasons for such a narrow product concentration. Main apparel items exported from Bangladesh is shown in the tree diagram drawn below:
VALUE AND QUANTITY OF TOTAL APPAREL EXPORT CALENDAR YEAR BASIS (VALUE IN MN. US$ QUANTITY IN '000 DOZEN) TOTAL APPAREL EXPORT IN MN.US$ TOTAL APPAREL EXPORT IN MN DZ YEAR WOVEN KNIT TOTAL WOVEN KNIT 1994 1544.89 341.53 1886.42 41.64 13.77 1995 1976.40 512.18 2488.58 49.38 19.83 1996 1942.37 686.27 2628.64 47.54 26.11 1997 2621.33 810.49 3431.82 60.56 27.99 1998 2871.06 976.29 3847.35 64.23 34.59 1999 2987.73 1169.90 4157.63 64.93 41.3 2000 3376.49 1448.22 4824.71 71.63 51.58 2001 3162.28 1432.72 4595.00 67.72 50.18 2002 3076.28 1573.40 4649.68 83.44 70.71 2003 3398.84 1850.36 5249.20 85.83 80.50 2004 3686.78 2532.62 6219.40 94.22 104.90 2005 3689.60 3210.48 6900.08 96.39 138.19 2006 4544.79 4388.72 8933.51 125.65 190.60 2007 4608.40 4741.93 9350.33 133.62 212.08 2008 5654.12 6222.95 11877.07 161.51 272.17 2009 5695.42 6196.58 11892.00 163.27 279.91 7067.04 7787.76 14854.80 203.48 357.76 2010 9251.62 9961.36 19212.98 42.36 51.84 2011 Data Source Export Promotion Bureau & Bangladesh Bank Compiled by BGMEA
TOTAL 55.41 69.21 73.65 88.55 98.82 106.23 123.21 117.90 154.15 166.33 199.12 234.58 316.25 345.70 433.68 443.18 561.24 94.20
economy. It is the largest exporting industry in Bangladesh, which experienced phenomenal growth during the last 20 years. By taking advantage of an insulated market under the provision of Multi Fibre Agreement (MFA) of GATT, it attained a high profile in terms of foreign exchange earnings, exports, industrialization and contribution to GDP within a short span of
time. The industry plays a key role in employment generation and in the provision of income to the poor. Nearly two million workers are directly and more than ten million inhabitants are indirectly associated with the industry. Over the past twenty years, the number of manufacturing units has grown from 180 to over 3600. The sector has also played a significant role in the socioeconomic development of the country.
COMPARATIVE STATEMENT ON EXPORT OF RMG AND TOTAL EXPORT OF BANGLADESH TOTAL EXPORT OF EXPORT OF RMG BANGLADESH YEAR (IN MILLION US$) (IN MILLION US$) 1983-84 31.57 811.00 1984-85 116.2 934.43 1985-86 131.48 819.21 1986-87 298.67 1076.61 1987-88 433.92 1231.2 1988-89 471.09 1291.56 1989-90 624.16 1923.70 1990-91 866.82 1717.55 1991-92 1182.57 1993.90 1992-93 1445.02 2382.89 1993-94 1555.79 2533.90 1994-95 2228.35 3472.56 1995-96 2547.13 3882.42 1996-97 3001.25 4418.28 1997-98 3781.94 5161.20 1998-99 4019.98 5312.86 1999-00 4349.41 5752.20 2000-01 4859.83 6467.30 2001-02 4583.75 5986.09 2002-03 4912.09 6548.44 2003-04 5686.09 7602.99 2004-05 6417.67 8654.52 2005-06 7900.80 10526.16 2006-07 9211.23 12177.86 2007-08 10699.80 14110.80 2008-09 12347.77 15565.19 2009-10 12496.72 16204.65 2010-11 17914.46 22924.38 2011-12 19089.69 24287.66 Data Source Export Promotion Bureau Compiled by BGMEA
% OF RMG'S TO TOTAL EXPORT 3.89 12.44 16.05 27.74 35.24 36.47 32.45 50.47 59.31 60.64 61.40 64.17 65.61 67.93 73.28 75.67 75.61 75.14 76.57 75.01 74.79 74.15 75.06 75.64 75.83 79.33 77.12 78.15 78.60
Year
Product
Frozen Food
Export
12347.77
%
79.33
Tea
2008-09
Jute Goods
Leather
Agricultural
Products Others
Total
1508.06 15565.19
9.69 100.00
The casualties at Rana Plaza have prompted a far-reaching discussion of the economics and the ethics of the global garment manufacturing supply chain. The scramble among retailers to identify new low-cost garment manufacturing locations in the developing world, a scramble that has taken on new urgency as Bangladeshs reputation has been tarnished. Indonesia, which has a GDP per capita (PPP) two-and-a-half times as high as that of Bangladesh and a government that has improved markedly in recent years Garment factories in Bangladesh provide employment to 40 percent of industrial workers. But without the proper laws the worker are demanding their various wants and as a result conflict is began with the industry. Labor unrest is a great problem in the RMG sector. Low working salary is another r vital fact which makes the labor conflict. Workers made strike, vandalize industry
Heavy Dependence on a Few Export Market :Heavy dependence on quota markets is a major concern in the textiles and garments industry
Bangladesh's RMG Export to World (Jul-Mar, FY11-12 & FY 12-13 )
Million US$ Woven Knit Total JulJulGrowth JulJulGrowth JulJulGrowth Mar Mar % Mar Mar % Mar Mar % JulJulJulJulGrowth Growth Mar Mar Mar Mar Jul-Mar Jul-Mar % % 2011-12 2012-13 2011-12 2012-13 2011-12 2012-13
Major EU Countries
Low working salary is another vital fact which makes the labor conflict. Worker made strike, layout to capture their demand. Some time bonus and the overtime salary are the important cause of crisis. Insufficient government policy about this sector is a great problem in Garments Company.
Picture: Labor- Management conflict in Garments Industry According to our survey in five leading Company we found some problem which are given in a chart with their percentagePrimary Problems Problems high 3 medium 2 low 0 total 5
01.Raw-materials
60% 1
1 20% 0 0 3 60% 0 0 0 -
20% 5
100% 3
60% 1
20% 4
80% 3
60% 5
100%
Chart: Primary problems of Garments Industries Secondary problems Problems high 1 01.Middle man affect 20% 0 02. Sluggish business linkage 40% 60% 100% medium 3 60% 2 low 1 20% 3 total 5 100% 5
2 03. Unloading(RM) takes time 40% 2 04. Time consuming schedule 40% 1 05. Communication gap 20% 5 06. Dependency on foreign market 100% 0 07. Trade block 2 08. Credit problem 40%
150 100 50 0 1
Primary Problems
Percentage (%)
2 High
3 Medium
4 5 Problems Low
Safety Problems; Safety need for the worker is mandatory to maintain in all the organization. But without the facility of this necessary product a lot of accident is
occuincurred every year in most of the company. Some important cause of the accident are given below Routes are blocked by storage materials Machine layout is often staggered Lack of signage for escape route No provision for emergency lighting Doors, opening along escape routes, are not fire resistant. Doors are not self-closing and often do not open along the direction of escape. Adequate doors as well as adequate staircases are not provided to aid quick exit Fire exit or emergency staircase l acks proper maintenance Lack of proper exit route to reach the place of safety Parked vehicles, goods and rubbish on the outside of the building obstruct exits to the open air Fire in a Bangladesh factory is likely to spread quickly because the prin ciple of compartmentalization is practiced Lack of awareness among the workers and the owners But now the situation is much improved and we found, all the surveyed garments are fulfilling the requirement of emergency exit. It is provided in all the cases, signage is present and fire fighting equipments are up to date, a departure from the past. Even fire drill is held once in a month..
The relentless search for new locations has taken on more urgency after the deadliest industrial accident in the global garment industrys history, a multistory factory collapse in Bangladesh that left 1,127 people dead. Buying from Bangladesh, Bangladesh has been politically incorrect ever since problems started there, so a lot of major players had already been looking for alternatives
Low cost labor:As Bangladesh is an overpopulated country it is very easy for the
garment industries to hire labors at a lower rate. At present the government of our country has announced minimum wage to the garment workers but the industries can still earn a handsome amount of profit by exporting their product. Although it has increase but comparatively it is still low
Country
United States United Kingdom
Hourly Wage
$8.25-14.00 $7.58-9.11
Venezeula Costa Rica Guatemala Colombia Honduras Philippines China Peru El Salvador Jordan Malaysia Nicaragua Bahrain Thailand India Mauritius Vietnam Egypt Mexico Sri Lanka Pakistan Indonesia Cambodia Bangladesh
$2.73 $2.19 $1.21 $1.20 $1.02 $0.94-1.00 $0.93 $0.92 $0.92 $0.74 $0.73 $0.65 $0.57 $0.56 $0.55-0.68 $0.55-0.65 $0.52 $0.50-0.87 $0.50-0.53 $0.46 $0.37 $0.35 $0.24 $0.21
Figure: Trend to back-to-back linkage If Bangladesh wants to enjoy increased market access created by the global open market economy it has no alternative but to produce textile items competitively at home through the establishment of backward linkage with the RMG industry. To some extent the industry has foreseen the need and has embarked on its own capacity building. Flow of Investment It is plausible that domestic entrepreneurs alone may not be able to develop the textile industry by establishing modern mills with adequate capacity to meet the growing RMG demand. It is important to have significant flow of investment both in terms of finance and technology. Figure 3 indicates that the investment outlook in this sector is encouraging, although the uncertainties before the MFA phase-out period caused a sluggish investment scenario. In part the momentum in the post-MFA phase-out period is indicative of the efforts underway towards capacity building through backward
integration. This is evident in the pace of lending to the RMG sector and in the rising import share of RMG related machinery. However further progress would be necessary to improve and sustain competitiveness on a global scale. Policy Regime of Government Government of Bangladesh has played an active role in designing policy support to the RMG sector that includes back-to-back L/C, bonded warehouse, cash incentives, export credit guarantee scheme, tax holiday and related facilities. At present government operates a cash compensation scheme through which domestic suppliers to exportoriented RMG units receive a cash payment equivalent to 5 percent of the net FOB value of exported garments. At the same time, income tax rate for textile manufacturers were reduced to 15 percent from its earlier level for the period up to June 30, 2008. The reduced tax rates and other facilities are likely to have a positive impact on the RMG sector.
Research and Training : The country has no dedicated research institute related
to the apparel sector. RMG is highly fashion oriented and constant market research is necessary to become successful in the business. BGMEA has already established an institute which offers bachelors degree in fashion designing and BKMEA is planning on setting up a research and training institute. These and related initiatives need
encouragement possibly intermediated by donor-assisted technology and knowledge transfer. A facilitating public sector role can be very relevant here.
Our Garments Industries can improve their position in the world map by reducing the overall problems. Such as management labor conflict, proper management policy, efficiency of the manager, maintainable time schedule for the product, proper strategic plan etc. Government also have some responsibility to improve the situation by providing- proper policy to protect the garments industries, solve the license problem, quickly loading facility in the port, providing proper environment for the work, keep the industry free from all kind of political problem and the biasness. Credit must be provided when the industry fall in need.To be an upper position holder in the world Garments Sector there is no way except follow the above recommendations. We hope by maintaining proper management and policy strategies our country will take the apex position in future. Suggestions Regarding Fire Safety We need to remember that when there is a fire, the first thing one should do is to run away from it. And this is what everyone does in such a situation. But the situation become dangerous and tragic when the escape doorways and gates are found locked. Precautionary should need to be adopted are given below: Building should be constructed with fire resisting materials Adequate exits and proper escape routes should be designed Protection against fire and smoke should be ensured Electrical wiring must be properly designed, installed and main tained Escape routes should be lighted at all times, kept clear, be indicated by signs Regular fire drills should be held Doors should be protected and should open along the direction of escape Doors should not open on the steps and sufficient spac e should be provided. Smoke/Fire alarm systems must be installed adequate number of extinguishers should be provided Prior relationship with local Fire services should be established
Conclusion
First-world consumers have been the chief beneficiaries of the growth of garment manufacturing in Bangladesh and other developing countries. Americans are reaping bargains by importing more than 97 percent of what they wear.
Since 1998, womens clothing costs have fallen 7 percent, and mens have fallen 8 percent. In the U.K., costs have dropped 20 percent since 2005. The relentless search for new locations has taken on more urgency after the deadliest industrial accident in the global garment industrys history, a multistory factory collapse in Bangladesh that left 1,127 people dead. Buying from Bangladesh, Bangladesh has been politically incorrect ever since problems started there, so a lot of major players had already been looking for alternatives. When a senior executive from one of the largest American mass-market retailers called him last week with worries about suppliers in Bangladesh and plans for a trip to Vietnam and Cambodia to seek alternatives. Many Western executives are taking such trips this spring. A lethal factory fire in Bangladesh last November, 33 regional or national strikes there since January, hundreds of deaths in factional street fighting there since February, and the Rana Plaza collapse in late April have left multinational corporations scrambling for other options.Right now, the name of Bangladesh just gives a bad rep to a company the dapper chief executive of Joseph Model Associates, which designs and distributes the Annabelle New York brand of high-end apparel and also makes private-label brands for various department store chains. Western executives are checking on potential new suppliers in southern Vietnam, central Cambodia and the hinterlands of Java in Indonesia. Yet safety problems could exist anywhere. The ceiling of a small factory that makes shoes in central Cambodia collapsed on Thursday morning, killing at least two people and injuring nine, three of them severely. A Western garment buyers, is nonetheless so full these days that it is hard to book a room on short notice. Indonesian garment executives say they have seen a steady procession of arrivals in recent weeks and months, always asking the same questions about political stability, labor laws, safety compliance and wages. At first it was because of China getting too expensive, then came the Bangladesh fire tragedy, and then there have been so many steps in Bangladeshs troubles .Some buyers feel uncomfortable placing orders in Bangladesh. Many multinationals are exploring their options in case street clashes and politically motivated national strikes worsen in Bangladesh, which is the worlds second -largest garment manufacturer after China. A new faction in the countrys Islamist movement has staged more violent protests lately that have sometimes resulted in the temporary closure of factories.
Garment manufacturing makes up a fifth of the economy in Bangladesh and four-fifths of its exports, which means that one of the worlds poorest, most densely populated countries is desperately dependent on continued export orders to stave off soaring unemployment and possibly further political unrest. Some executives say that many multinationals will continue buying from Bangladesh, although some may diversify their orders to more countries. Bangladeshs export target for FY 2011-12 is $26.5 billion. The market is forecasted to be developed at an annual rate of 7 to 9 percent resulting in ten years time to an export value of approximately US D 36 to 42 billion,
References
http://www.bgmea.com.bd/ http://www.bkmea.com/ http://www.epb.gov.bd/ http://www.bbs.gov.bd/ http://www.bangla news 24.com./ http://www.btmadhaka.com/ http://www.epzbangladesh.org.bd/ http://www.bangladesh-bank.org/ http://www.bangladeshknitwear.com/ http://www.nbr-bd.org/ http://www.fbcci-bd.org/ http://www.bdgarments.wordpress.com/history/ http://www.ideas.repec.org/p/pdb/opaper/50.html http://www.en.wikipedia.org/wiki/Bangladeshi_RMG_Sector
http://www.libcom.org/tags/bangladeshi-garment-workers https://www.cia.gov/library/publications/the-world-factbook/geos/bg.html