1/16/2017 Bangladesh'sKnitwear::BKMEA

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DevelopmentandEvolutionofBangladeshKnitwearIndustry:
Dinner in honor of Latin American
LookingbyondtheHorizon Ambassadors, High Commissioner
and CDA: BKMEA eyes at export
boost.
On 07 March, 2016, starting from 7:30 PM,
Prelude:UndeniablytodayBKMEAtheApexTradeBodytorepresentsolelytheKnitwearSectorofBangladesh,standsoutintheglobal
BKMEAhostedadiplomaticprivilegedinner
panorama with distinct identity and stature. Our finelyweaved knitwear products have placed us to the world renowned buyers as an
atPanPacificSonargaon,Dhakacooperated
unparalleled sourcing destination. BKMEA adheres to innovation and creativity so that the sectorial policymaking process becomes
by Ministry of Foreign Affairs, Bangladesh.
realisticallyandstrategicallyperfectandgivesofftheresultthatexpeditesitsdevelopmentalphase. The dinner party was graced by Ms. Abida
Islam, DG, Americas, MOFA, H.E. Mr. Frank
Hans
BangladeshKnitwearindustrykeepsgreatcontributionintheBangladeshEconomythroughgeneratingEmploymentInvolvingWomeninthe Dannenberg Castellanos,
Ambassadordesignate
FormalSector,IncreasedSubstantialExportEarnings,WomenEmpowerment,ReductionofChildLabor,GenderEquality,Health&Nutrition, of Dominican
Republic to Bangladesh, H.E. Ms. Monica
andDiminishingChildMarriageetc.alongwiththegradualincreaseofknitwearexportstoacrosstheglobe.Bangladeshnowholdsnumber
Lanzetta Mutis, Ambassador of Colombia to
twopositionintheworldintermsofknitwearexportandisbandiedaboutastheNextpossiblechampioninexportingknitwearproductsas
Bangladesh, H.E. Mr. Forbes Egerton July,
Chinaisgraduallybackingoutofapparelbusiness.Thevalueadditionfromtheknitwearsectorisabout75%.ThecontributioninGDPis
Acting High Commissioner of Guyana to
about6.92%inFY201314.
Publication

In line with the global trends, our entrepreneurs are introducing stateoftheart technology in their production lines to match up to the
emerginganddynamicneeds.BKMEAsmottoistostayafloatintheinternationalcompetition&Marketswithchic,elegantqualityproducts
.Weareincontinuousefforttostrengthenthesustainablecapacitybuildingprocessandensurequalitytoaddresstheworldwidetastesand
demands.Andthustodayourmissionsaretransnationalinnature.Withovertwomillionwomenworkersemployedinsemiskilledandskilled
jobsproducingclothingsector,thedevelopmentoftheapparelexportindustryhashadfarreachingimplicationsonthesocietyandeconomy
of Bangladesh. The overall impact of the readymade garment exports is certainly one of the most significant social and economic
developmentsincontemporaryBangladesh.

StructureofBangladeshKnitwearSector:Thereadymadegarment(RMG)industryisastrategicsectorforBangladesh.InFY201314,
PhotoGallery
itprovided4.2milliondirectjobs,16percentofGDP,andmorethan75percentofforeignexchangeearnings.Overthepasttwodecades,
starting from the early 1980s, Bangladesh has built a strong reputation centered on price advantage via lowcost labor and investment
incentivesproductioncapacity,andsatisfactoryqualitylevels,especiallyinvalueandmidmarketpricepointsegments.

The exportoriented Knitwear industry is the topleading exporting sector in Bangladesh in terms of export. Its contribution in creating
employmentopportunitiesforfemaleworkerswithouthigheducationalbackgroundintheformalsectorisexceptional!Theindustryhasa
greatcontributioninpovertyreductionbyprovidingentrylevelworkerswithagreatscaleofemploymentopportunitiesandearningshigher
thanthenationalpovertyline.Suchadynamicdevelopmentoftheindustryentailsgreatdiversityinefficiency,evenincomparisonwiththe
garmentindustryofotherdevelopingcountries.TheKnitwearindustryofBangladeshhasglobalcompetitivenessintermsofproductquality&
pricethroughindustrialupgradingintermsofusageoflatestmachineriesandverticalintegrationandindustrialagglomeration.
GlobalBuyersInformation
Directory
GrowthStructure&FutureProjectionaboutKnitProduct: Thisrecentrobustgrowthispartlyachievedowingtopreferentialsupport
from the European Commissions GSP & Relaxation of Rules of Origin (ROO) and the Duty Free Quota Free (DFQF) access granted by
Canada,Australia,JapanandmembersofEuropeanFreeTradeAgreement(EFTA).Atthesametime,thegrowthisalsoaconsequenceof
favorable policies by the Government of Bangladesh, making it the most attractive sourcing hub in the world. Cashing in on this positive
impetus, BKMEA has devised plan to diversify its export destinations to buffer against the contraction and budgetcut economic situation
prevailingintheEUandbeyond.

Table:KnitwearExportGrowthofBangladesh
KnitwearExport
FiscalYear
Value(inMillionUSD) GrowthRate(In%) NEWSPaper'sCorner
CAGRGrowthRate(from0304to1314in%)
200304 2148.02 29.88
200405 2819.47 31.26
200506 3816.98 35.38
200607 4553.60 19.30
200708 5532.52 21.50
200809 6429.00 16.20 16.97
200910 6483.29 0.84
201011 9482.06 46.25

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201112 9486.39 0.05
OurPartners
201213 10475.87 10.43
giz
201314 12049.81 15.02
Source:ITCTradeMap&ExportPromotionBureau

Table:PerformanceofBangladeshKnitwearExport

Table:BangladeshKnitwearIndustry:VisionforFuture
Fact FY20142015 Vision2021 Vision2050
KnitwearExport $13.25Billion(Targted) $21.08Billion $32.62Billion
GrowthofKnit(%) 15.6 20.9 32.1
ShareinApparelExport(%) 49.75 52.3 69.4
ShareinNationalExport(%) 39.93 41.7 53.2
ShareinGDP(%) 6.9 7.2 12.12
EmploymentGeneration 1.6Million 2.8Million 4.9Million
FemaleEmpowerment(%) 45 52 67
EnhancementofWomenSavings(%) 8.8 13.69 29.2
PovertyReduction(%) 6.4 7.5 9.1
Banking&Insurance BDT176Billion BDT187Billion BDT201Billion
Shipping&LogisticsIndustry $79Million $84Million $91Million
Forward&BackwardLinkageIndustry BDT212Million BDT221Million BDT254Million
EngineeringSector $10.1Million $14.1Million $19.4Million
** Econometric forecasting methods: Autoregressive moving average with exogenous inputs (ARMAX), Forecast skill (SS) and
Regressionanalysis
MadeinBangladesh:SourceofreliabilityandTrust:MadeinBangladeshgarmentsarenotonlythemajorimportedapparelitems
byUSA,CanadaandEuropefromBangladesh,butalsotheseareactingastheImageAmbassadorofthecountryanditspeople.Ithas
helped to create a positive impression of Bangladesh. On a recent Board of Investment (BOI) statement, it is predicted that Bangladesh
expectsUS$20billionplusworthofinvestmentwithinnextfewyearsfromcountriesi.eTaiwan,India,MiddleEastandFarEastbesidesdirect
investmentfromEuropeandUSA.IthastobeacceptedherethatthesuccessstoryofBangladeshsRMGindustryanditsworkforceplaysa
pivotalroleinthisconjecture!

Theglobaleconomiccrisis,ifanything,haseventuallyboostedBangladeshsgarmentsector,asbuyersworldwidehaveswitchedtoless
expensivegarmentsthesocalledWalMarteffect.Inaddition,theongoingriseinChinesewagesandcurrencyhasmadeBangladesha
favorableinvestmentdestination.

Table:TopTenExportBundleofBangladeshiKnitwearProducts

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Source:ExportPromotionBureau,EPB,Bangladesh

Table:MajorExportBundle(Productwise)ofBangladesh

Tshirt,Tanktopand
Singlets

Poloshirt

KnittedJacket,
cardigans

Briefs,underwears
andPanties

Pulloverand
sweatshirt

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BabiesItem

FashionandPerformanceApparelDevelopment: TheworldwidedemandpatternfortheApparelproductischangingateverysingle
moment.Thedemandfortechnicalandfashionproductareincreasingdaybyday.Ontheotherhand,theglobalsmartfabricsandinteractive
textilemarketisexpectedtoreachalmost$2billionby2015.Themarketswillbedrivenbyeconomicrecoverypace,newproductofferings
andarisingdegreeofconsumerconfidence.Productinnovationwillpartlyconcernnewgenerationfibers,includinghybridmaterialsand
Nanofibers.

TomeettheworlddemandBangladeshisinnovatingtechnicaltextileproductiontechnique,usinglatesttechnology,whichensuresthebetter
qualityoftheproduct/s.Besides,Bangladeshisusingnewhightechfibers,whicharemorecomplexthantraditionalfibersfortheproduction
ofdifferentfashionproducts.

Table:FashionitemsexportofBangladesh

FashionItems

BKMEAResearchandDevelopmentwinghasbeenworkingonthedevelopmentofnewhightechfabrics,fibersandnewdesignandfashion
products.BKMEAFashionDesigningInstituteisarealadditiontothisinitiativeandisexpectedtocomeintooperationwithintheshortest
spanoftime.

PerformanceApparelDevelopment:BangladeshintheworldCupBangladeshhassuppliedaconsiderableamountofJerseysand
ShortsfordifferentTeamsoftheworldCupFootballfinalsofTheFIFAWorldCup2010&2014.Thisstatementpoignantlyoozesthefrissonof
the capacity of Bangladesh Knitwear sector and authenticates the dependability and reliability that Bangladesh has been able to create
acrosstheglobe.AgainBangladeshsupplieshugeamountofsportitemstotheworldrecognizedsportswearimportersandretailerslike
PUMA,AdidasandNIKE.

Table:SportandPerformanceproductexportofBangladesh

Sportsjerseyand
trousers

TheworldwidemarketsizeofperformancesportsweariscurrentlyestimatedatUS$6.40bn,whichisuppedby19.4%overthelastfouryears,
andisexpectedtogrowafurther18.75%,resultinginUS$7.6bnbytheendof2014.Accordingtotheforecastingtrendsofperformance
apparel, sportswear will continue to grow faster for men than for women and most of the growth will be in North America, East Asia and
Europe. With exclusive design pattern, skilled workforce, latest technology, available raw materials and huge experience, Bangladesh
knitwearsectorhascloselyeyedonthisdevelopmentandisdelvingintohelpingfactoriestobeencouragedinperformanceapparelsand
grabthehugelypotentialmarketsincoming510years.

Top Buyers around the world and their dependency on Bangladeshi Knitwear items: Bangladesh textile garments sector has
beenexpandedinvigorouswayandmaintaineditsmaturitybyholding2ndpositiongloballywith5%marketshareinReadymadeGarments
productionandexport.

BangladeshhasbeensuccessfullysupplyingapparelproductsconsistentlytothepremierinternationalfashionbrandslikeH&M,C&A,M&S,
WalMart,GAP,Levi's,s.Oliver,Tesco,Zara,Carrefour,JCPenneyandmanymore.

SupplycapacitytoproducecosteffectivebutQualityRMGproductswithover5,500factoriesemployingabout4.5millionworkers(ofatotal
workforceof80million),BangladeshisclearlyaheadofotherSoutheastAsiansuppliersinthisrespect(Indonesiahasabout2450factories,
Vietnam2000,andCambodia260factories).

International buyers/importers look for longterm apparel business ties in Bangladesh as the country has the potential to supply quality
apparelitemsthananyothercountriesoftheworld.

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Favorabletradeagreements:EUGSPrulesondutyfreeimportsofgarmentsfromBangladeshhavemadesourcingfromBangladeshmore
attractive.

ThecapacityofBangladeshknitwearindustryhasalreadybeenprovedtobethemoststrongestintheworldandtheresilienceofthesector
alsoitscratesconfidenceinthemindsoftheworldimporters,evenatthetimesofadversity.

Competitiontoabsorbtheexportshareofworldapparelmarkethasreachedfeverpitchnow.ThegradualbackpedalingofChinaonapparel
exporthascreatedavacuumintheappareltradeandthecompetitorcountriesofBangladesharestrivingtheirbesttocraftouttheirpositions
intheinternationalmarkets.Bangladeshsohasbeeninforatougherrivalryamongstitscompetitors,butexerteditsbesteffortsofartograb
the bulk sum of what China is leaving out. Though it is not easy to grapple with the situation with dispatch and efficiency, yet we think,
Bangladeshhasprobablyturnedthecorner.

Table:ContinentwiseProductDemandofBangladeshiKnitwearProduct

Africa

America

Asia

Australia

Europe

LatinAmerica

H&MdoublingsourcingvolumefromBangladesh:H&M,theSwedishretailgiantforclothingisallsettodoubleitsannualoutsourcing
volumefromBangladeshtoaround$3billionwithinthenextfiveyears.TherecentvisitofH&MCEOKarlJohanPerssonhasrevealedtheir
interesttodoubletheirsourcingfromBangladesh,whichisaround$1.5billionnow.

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C&Alookingforlongtermbusinessties: Bangladeshisbecomingmorepopularforitsstrongcompetitivenessastheothercompeting
countrieslikeChina,Vietnam,IndiaandPakistanarefacinghighercostsofproductionaccordingtomostoftheinternationalbuyers.RMG
exportofBangladeshwillremainunhurtforthenext1520yearsasthecountryhaspotentialandasChinaissufferingfromashortageof
workersandhighercostsofproduction.[Manager,GermanbasedC&ACompany].

Thecompanyhasincreaseditspurchasesto20percent.Theyhavealsoaddedthateveryyearthecompanywouldincreasesthevolumeof
theordersfromBangladeshbyatleast10percent.

SameisthecasewithmanyotherbrandslikeZara,GAP,TESCO,JCPenney,KMart,UNIQLO,Kick,NKD,Aldi,Auchan,sOliver,American
eagle,Street,andPrimarketc.SomeofthemhavealreadyestablishedtheirownofficesinBangladeshothersaresourcingthroughtrading
houses.

Table:ListoftopretailersandfashionbrandsimportingfromBangladesh
Brandname Country Brandname Country
H&M Sweden Benetton Italy
Walmart USA GU Japan
C&A Belgium Helmutlang Austria
Zara Spain OVS Italy
GAP USA ERIMA Germany
Target USA Bonmarch UK
TESCO UK Bonds Australia
LiFung Hongkong Jockey Australia
Carrefour France GStarRaw Netherlands
Levi's USA >Mango Spain
JCPenney USA JOEFRESH Canada
KMart Australia PUMA Germany
M&S UK Adidas Germany
UNIQLO Japan JBC Belgium
ESPIRIT Hongkong CharlesVgele Switzerland

Table:ListoftopretailersandfashionbrandsimportingfromBangladesh

Bangladesh: Sourcing Hub across the WorldBangladeshisthelandofverystrongtextileindustries,qualitygarmentsindustriesand

establishedbuyinghubs.Bangladeshknitwearindustryhasgainedsecondplace,leavingTurkeybehind,intheglobalmarket.Toensurethe
sustainabledevelopment,wehaveestablishedahealthybusinessenvironment&excellentstandardsforacloseandmutuallybeneficial
relationshipamongthemanufacturers,exportersandimportersintheprocess,ensuringasteadygrowthintheforeignexchangeearningsof
thecountry.

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Bangladeshs exporters are known for supplying good quality and large order sizes for the value and lower midmarket. They are now
expanding into more valueadded services. Starting from producing buttons, labels, apparel papers, threads, and all types of appliqu,
embroideries,printings,fabrics,designsworks,evenserviceslikedying,washing,ironingetc.arealsoperformedintheIndustrialareasof
Bangladesh.

CompetitivenessofBangladeshApparelSector: Theworldwidetextileandclothingbusinessaregoingthroughamajorshiftitisnow
more modernized, more dimensional and more vibrant. Also the global value chain for clothing trade integrates more rapidly than ever
before!

* Flexible functioning of the labor market is a positive factor for export competitiveness in Bangladesh.

* On average, labor markets in Bangladesh respond to productivity improvements and incentives and government
interventions are comparatively minimal.

* This favorable endowment of labor and flexibility of the labor markets provide Bangladesh a great competitive edge
on specializing in laborintensive products, especially in the manufacturing sector.

* Bangladesh being the second largest apparel exporters is expected to play a major role in the global apparel
market.

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* With three decades of experiences, supply of enthusiastic labors, huge number of entrepreneurs grown over the
years, Bangladesh has established a structural competitiveness in the apparel industry, which is likely to sustain for
the years to come as the economic structure of most developed countries has declined in last 5 decades

SincetheLTA(longtermagreementregardinginternationaltradeincottontextile)cameintoforcein1962,(Source:Discussionpaperno5,
WTO).

SpecificAdvantagesofKnitwearSectorofBangladesh:

*Knitwearisaselfsufficientsectorinallrespectscurrentlythesectorissupplying90%oftheknitfabricrequirements.

*Localyarnsuppliersprovidealargesumofyarndemandfortheindustry.

*Manygarmentshavetheirowndyeingandfinishingunits.

*Aseparatedyeingandfinishingindustryalsohasgrownupoverthetimetosupportthesector.

*Morethan200compositefactories

*BangladeshiKnitwearisalmostunbeatableinpriceadvantagesinthe.world

*Bangladeshprovidesnotonlyacheaplaborforce,whichisunbeatablebuttheyarealsopeerlessinstitchingcapability.

*Knitwearisexportedto153countriesoftheworld.

*Strongbackwardlinkagefacilities.

*Longexperienceofapparelbusinessandacreatedvaluechainacrosstheglobe.

*Morethan2000knitwearfactories.

However, Bangladeshi Knitwear Entrepreneurs are still working on development of the entrepreneurial skills, improving the existing
productivity, developing the living standard of workers and providing them a green healthy working environment. In this connection
BKMEAgetsintoitsstride&playsacatalyticroleinamalgamatingallthesefactoriesintoasimpleorderandimplementingthosefactorsinthe
memberfactories.

ComparativeAdvantagesofBangladeshKnitwearIndustry:

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Highqualitydiversifiedproducts.
Dutyfreeandquotafreeaccesstothemarketsofseveraldevelopedanddevelopingcountries,suchasEU,Canada,Australian,Japanetc.
Strongbackwardlinkageindustryintheknitsector&growingcapacityinthewovensector
Sociallyandenvironmentallycompliantfactories
Childlaborfreefactories
EnvironmentallycompliantISO,BSCIS,WRAP,OKETEXetc.certifiedfactories
Verticallyintegrated

Implementationofsocialcompliance,firesafetymechanisminthefactories.
Productivitycampaigntoensurethebestqualityproducts.
Ensuringqualityassessmentprocessfortheproductstobemade.
Linkagethefactorieswithenvironmentallyandchemicalsustainabilityprogram.
AdoptingtheGreenfactorymechanismforasustainableindustrialbuildup.
ApplicationofCPM(Cleanproductionmechanism)intothefactoryproductionstrategy.
StructuraladjustmentpoliciesofthefactoriesaccordingtothedemandofILO,ACCORD,ALLIANCE&Otherrelatedinternationalbodies.
MostfactoriesbeinginspectedbyBangladeshUniversityofTechnologyandEngineering(BUET),thusensuringstructuralsafetyfortheimportersofthe
world.

EndeavorofBKMEA:GreeningtheKnitwearIndustryTheworldwidetrendoftextileandclothingbusinessandglobalvaluechainfor
clothingtradeisnowtakingnewshapesandformsalmostdaily.Thecurrentstructureofworldeconomicandsocialtrendcravesaneraof
innovation, diversification, sustainable growth & Development. Novelty in trends and fashions, modification in designs & colors also the
comforttasteshavebeenaddingnewdimensionininternationalapparelworld.

Itisestimatedthatadoptingsustainablebusinesspracticestomanufacturegoodsinconformitywiththenaturalenvironmentwillsurelypave
thewaytothefutureofBangladeshapparelindustryinthe21stcentury.Theentrepreneursare,therefore,thinkingofecofriendlyfactoriesin
theirbusinessplanning&applicationsandBKMEAisassertingmoreemphasisontheseissuestobeexertedinappropriatemannerinthe
factories.

Topacewiththedemandoftodaysrealityinapparelsector,BKMEAhasbeeninefforttointroduceChemicalsafetymanagementspecially
ZeroDischargeofHazardousChemical(ZDHC),GloballyHarmonizeSystem(GHS),RestrictedSubstanceList(RSL)intothefactoriesand
reducecarbonemissionwithaviewtopromoteenvironmentfriendlygreenconceptsamongentrepreneurs.Wealsomotivatethemtoadopt
energyefficienttechnologiesandresourceefficientproductiontechnologies.

OurmissionistomaketheBangladeshKnitwearindustryachemicallyandenvironmentallysustainablesectorthroughthepassageoftime,
whichmustbegreen,sound,ecofriendlyatthesametime!

BKMEAs inherent transformation from an Association into an Organization: Organization is a structure of people with well
definedrolesandfunctionswhereasanassociationisagroupofpeoplewithcommoninterests.BKMEAwasformedasatradeassociationto
facilitateandpromoteknitwearbusiness.Itpreviouslyworkedtocreateacommonplatformfortheentrepreneursfromwhichtheycouldmove
fortheircommoninterest.Tocaterthedemandgeneratedfromthechangingapparelglobalvaluechain,BKMEAhasbeenmaturedintothe
levelandheightofaworldclassorganization.

BKMEAhasgivenhighestpriorityinthespecializationofresources.

BKMEAhasadoptedDivisionoflaborintheworkforcetomaterializethefutureendeavor.IthassetforthVision2021withaviewtoexporting
$21billionexportby2021.DifferentcellsunderBKMEAhavegrabbedthevisionandstartedworkingaccordingly.

Professionalbusinessbodiesarebasicallyinvolvedinthedevelopmentandmonitoringofprofessionalbusinessprograms,andtheupdating
of skills, and thus perform professional certification to indicate that a person possesses qualifications in the subject area. Sometimes
membershipofaprofessionalbusinessbodyissynonymouswithcertification,thoughnotalways.Membershipofaprofessionalbody,asa
legalrequirement,caninsomeprofessionsformtheprimaryformalbasisforgainingentrytoandsettingupbusinessventure.

BKMEAnowplaysroleinpolicymakingprocess,framingsectorsupportrules,marketexpansionprogram,researchinitiatives,productivity
campaign, making green and environmentallyfriendly industrial belt etc. These initiatives vindicate how BKMEA has matured into an
internationalorganizationfromitsprimarytagofanAssociation.

Research Based Policy Suggestion: It is often assumed that if our values do not enter into our research, it is objective and above
criticism.Objectivityisthereforedefinedasthebasicconvictionthatthereisormustbesomepermanent,ahistoricalmatrixorframeworkto
whichwecanultimatelyappealindeterminingthenatureofrationality,knowledge,truth,reality,goodnessorrightness.(Bernstein1983:8),
the old adage A Problem welldefined is a problem halfsolved holds strong even today. Proper definition of a research problem is an
importantprerequisiteforanyresearchstudy.Often,theformulationofaproblemholdsmoresignificancethanitssolution.Themannerin
whichtheproblemisdefineddecidesthedirectionfortheentireresearch.

BKMEA,thesolerepresentativeofBangladeshKnitwearsector,hasdelvedintofindingshortcomingsandpotentialsforthesector,whichin
longtermwillstrengthentheveryfiberofthesector.Researchisananalyticalprocessthatbringsoutstepbystepalogicalsolutiontoa
problem.Webelieve,asapparelbusinesshasbecomeinternationalizedandextremelycompetitive,wehavegottolookoutforpitfallsand
addressthemaccordinglytoprogram,underwhichwewillbedoingsomegroundbreakingandsuitableresearchanalysisthatwillcomein
handyforformulatingpolicyandstrategy.Wewantthatallpoliciesbemadeonrealityandfactsratherthanunderstandingandguess.

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NewMarketExpansion:Theinternationaltextileandgarmentindustryhasundergoneseveralshiftsinproductionandmarketingsincethe
1950s.Thefirstshiftoccurredinthe1950sandearly1960swhenproductionmovedfromNorthAmericaandWesternEuropetoJapan.The
secondsupplyshiftwasfromJapantotheAsiannewlyindustrializedeconomics(NIEs)HongKong,Taiwan,SouthKoreaandSingapore
andthispermittedthelattergrouptodominateglobaltextileandgarmentexportsinthe1970sand1980s.

Overthepast10to15years,therehasbeenathirdshiftasproductionwithinAsiahasmovedfromtheNIEstoChinaandSouthEastand
SouthAsianexportersasexportsfromnonAsiancountries,inparticularcontrolAmerica,theCaribbean,EasternEuropeandNorthAfrica,
haveincreasedsubstantially.Theseproductionshiftshavebeeninfluencedbyarangeoffactors,includingthedistortionsininternational
tradearisingfromMFAquotasystemandlaborcostdifferentials.

Atthebeginningof2010s,BangladeshKnitwearSectorhasbeenabletoexportknititemstomorethan145countrieswithsignificantvolume
because of efficient planning and proper implementation. But a myriad of changes in the economic, technological, social and political
equilibriums, the 2008 Financial Crisis, Europes sovereigndebt crisis, slowing down of key global economies have reshaped the world
structureofglobalmanufacturingchain.

Again,thepresentscenarioandtheemergingtrendsarestronglyindicatingthatbytheendofthefirstquarterofthiscentury,themajorshare
ofapparelmarketisexpectedtohappeninChina,India,Brazil,Russiaandothercountrieswherethegrowthofpercapitaspendonapparel
willbehigherthanthegrowthofthedevelopedeconomy.Inthemeantime,thepercapitaspendonapparelinUSAandEuropewillriseata
muchslowerrate.

Despite the prolong debt crisis in EU and USA the main two export destinations of Bangladesh, raising export to emerging markets
neutralizedtheadverseexportgrowthinthemaintwodestinations.Thesuccessresultedinmarketdiversification,whichwasnotautomatic
ratherinterventional.ThisachievementisprimarilydowntoanumbersofattemptstakenbyBKMEAduringlastthree/fouryearswithaviewto
tradeexpansionandfacilitation.

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Inordertosafeguardthesectorfromthewaveofglobalrecession,BKMEAsstrategywastosustaininthemainexportdestinationsaswellas
exploremoreemergingcountriesforfurthersustainablegrowthrate.Finallyatleastsevencountrieshadbeenidentifiedbasedoneconomic
indicatorsandnamedthemasJBMRCKS,whichareJapan,Brazil,Mexico,Russia,China,Korea(South)andSouthAfrica.

Targeting these markets, BKMEA has been attempting to strengthen bilateral trade relations through scoping mission, fair arrangement,
buyers visit, and finally branding Bangladesh. These prudent initiatives fabricate immense possibilities for Bangladesh knitwear in those
markets.Therecenttradeexperiencesvalidatetheargumentshowingasurprisingdoubledigitexportgrowthrateinthesemarketsinthelast
fiscalyear.

The new emerging markets are Australia, Japan, China, Russia, South Africa, Korea, India, Brazil, Chile, Mexico and Turkey and these
countriesheraldgreatpotentialsintermsofexportofBangladeshKnitwearproducts.Accordingtosources,riseinexporttomarketssuchas
Australia,Japan,RussiaandBrazilarehighlyencouraging.

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The Russian market appeared particularly prospective with the highest growth of Bangladesh's RMG exports at $132.82 million, a
commendableincreasebymorethan81percentinjustayear.

Infact,exportstothenewmarketshavebeenpickingupovertherecentyears,amountingtoanaggregategrowthof$2.31billionsince2008.
ThishasbeentheoutcomeofceaselessexplorationofalternativemarketsofBKMEAinthewakeofglobaldownturningeneralandtheEuro
zonecrisisinparticular.

KnitwearImportfromBangladesh(in
Country KnitImportfromWorld(in2013) %MarketShareofBD
2013)
Australia 217.99 2988.21 7.29%
Brazil 100.1 1090.44 9.18%
China 120.56 1889.49 6.38%
Japan 268.7 15347.87 1.75%
Russia 314.46 4025.64 7.81%
SouthAfrica 22.81 875.68 2.60%
Turkey 244.44 1001.04 24.42%
Source:InternationalTradeMap

NontraditionalmarketscouldbemorepromisingdestinationsfortheBangladeshiexportersanditcouldhelpthesectortoberecoveredfrom
thebadpatchinthetraditionalmarketsliketheUS,EuropeandCanada.Inthisscenario,Bangladeshgarmentindustryiswellplacedto
withstandtheincreaseincompetitioninitsexportmarkets.

Global Buyers Information Directory: Adapting to the global knit demand and thrive in a changing market nature is the ultimate
objectiveofeveryentrepreneurinanysector.BKMEAwithitsResearch&Developmentwinghaspublishedamammoth2100pagesbook
namedGlobalBuyersInformationDirectory,whererelevantbuyersinformation,tariffstructure,productvalues,economicsituationhave
beenaccommodatedtograbtheopportunitiesofmarketexpansioninupcomingdays.

TheGlobalBuyersInformationDirectoryofBKMEAataglance:

The2100pagesbookhasmorethan25,000RMGbuyers/importers
informationof160countriesoftheworld.
Thetariff,nontariffandParatariffbarriersforexportingRMGproducts
ThepricescenariosofcompetitivecountriesonRMGproducts
Theimportstructuresofthose160countriesin201314
Thetopten(10)importedRMGproductsby160countries
Airandsearoutecoststructurefortransportationofgoods
Thepotentialeconomiesoftheworldthatwouldflourishduring20152020
Listoftop50buyers/importersoftheworld

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ProductDiversification:InitiallytheproductbaseofBangladeshKnitwearwassmall.Butafter1999,thissectorhasflourishedatarapid
scale.Withthepaceofthedevelopment,theproductcategorieshavebeendiversified.NowBangladeshcansupplyanykindsofproducts
demandedbyworldclassbrandretailers.BKMEAhasundertakendifferentinitiativestodiversifytheproductbase.Ithasarrangedsingle
countrytradefairinthetargetedcountriestounderstandthetasteandpatternoftheknitproducts.Ithasalsoparticipatedinmanytradefairs
andfashionshowsacrosstheworld.BKMEAhasfacilitatedproductdiversificationactivitiestakenbythememberfactoriesandhasinstructed
thememberfactoriestobeattunedtoproductdiversificationsprocesssothattheycancopeupwiththeimmensedemandthattheywouldbe
throwntointhedaystocome.Wehavealsofamiliarizedourfactorieswithchangingpatternsindesign,artandfashionintheproducts.

InstituteofApparelResearch&Technology(iART): Duetohighlycompetitivemarketfortheapparelproductsglobally,thepriceand
qualityoftheproduct,leadtimeandcomplianceaswellasthewage,livingstandard,securityandsafeworkingenvironmentarethemain
concerns of the buyers of apparel products. Besides, our sector still requires enhanced efficiency and productivity in order to remain
competitiveintheglobalmarket.Accordingly,inordertocatertheresearchanddevelopmentneedoftheBangladeshapparelsector,BKMEA
tookthefirstinnovativeinitiativetoestablishaseparateapparelresearchinstitute,theInstituteofApparelResearch&Technology(iART)in
2008.BKMEA,throughtheInstituteofApparelResearch&Technology(iART),hasinitiateddifferenttrainingcoursestocreatefactorybased
skilled workers for the knitwear sector of Bangladesh. The institute is expected to deliver skilled workforce for the sector side by side
professional training for the industrialists, owners, top, mid and entry level officers of the factories by which the factory administrative and
industrialchainbecomemoreeffective,resultorientedandprofessional.

ResearchandDevelopment: Highfemaleparticipationrates,asarguedabove,effectivelyresultinlowerwagesandgreatercompetition
asevidencedbythesizeoftheexportmarket.Asaresult,intheknitwearsectorfemaleparticipationishigher.Currentlytheindustryemploys
aboutfourmillionworkers,ofwhom90%arewomenandtotalgarmentproductexportsaccountfor76%ofallexports(Wikipedia,2012).

BangladeshKnitwearSector:MacrocontributiontotheEconomy:BangladeshsRMGsectorcontributionintermsofGDPishighly
remarkableithasreached13percentofGDP,whichwasonlyabout3percentin1991.ThecontributionofBangladeshKnitwearsectoron
GDPis6.92%andthebackwardlinkagesectorhasanother2%contributiononGDPofBangladesh.Italsoplaysapivotalroleinpromoting
thedevelopmentofotherkeysectorsoftheeconomylikebanking,insurance,shipping&Logisticindustries,etc.

Highfemaleparticipationrates,asarguedabove,effectivelyresultinlowerwagesandgreatercompetitionasevidencedbythesizeofthe
exportmarket.Asaresult,intheknitwearsectorfemaleparticipationishigher.Currentlytheindustryemploysaboutfourmillionworkers,of
whom90%arewomenandtotalgarmentproductexportsaccountfor76%ofallexports(Wikipedia,2012).

BangladeshKnitwearSector:MacrocontributiontotheEconomy:BangladeshsRMGsectorcontributionintermsofGDPishighly
remarkableithasreached13percentofGDP,whichwasonlyabout3percentin1991.ThecontributionofBangladeshKnitwearsectoron
GDPis6.92%andthebackwardlinkagesectorhasanother2%contributiononGDPofBangladesh.Italsoplaysapivotalroleinpromoting
thedevelopmentofotherkeysectorsoftheeconomylikebanking,insurance,shipping&Logisticindustries,etc.

Productivity Improvement Campaign: Productivity Improvement Cell (PIC) is working at BKMEA member factories using the modern
productionsystemLeanManufacturingMethod,whichendowsverysignificantimpactontheproductivitylevelofthefactories.Improvement
rangeofthissystemvariesfrom20%to90%dependingonkeyperformanceindicators(KPI)e.g.cost,leadtime,laborproductivity,quality
statusandspaceutilization.Leanemphasizesoncontinuousimprovementwithproperutilizationofexistingresourcesofafactory.Alltraining
and awarenessraising sessions associated with this program are being conducted to ensure sustainable development and enhanced
competitivenessofthefactories.PICteamalsoworksonfabricoptimization,industrialandplanningengineering,factoryergonomicsetc.

EnsuringSocialComplianceStandard:WorldMarketiscommittedtoethicalandresponsibleconductinallofouroperationsandso,we
have put special attention on respect for the rights of all individuals and respect for the environment. We are dedicated to upholding the
humanrightsofallworkersinvolvedinourproductsupplychains.Weconsiderfairlaborpracticestobeanimportantpartofhumanrights.
Ourgoalistoensurethatallindividualsinvolvedinoursupplychainsexperiencesafe,fairandnondiscriminatoryworkingconditions.

Fairwagesandbenefitsareprovidingincompliancewithlawsofthecountryincludingthoserelatingtominimumwages,overtime,maximum
hours, piece rates, benefits, and other elements of compensation. Buyer/importers from different parts of the world audit our factories to
monitorandevaluatetheircompliancewithourstandardsforworkingconditionsandhumanrights,includingprohibitiononforcedlaborin
anyform.

Alongwiththeseissuesmentionedabove,BKMEAhasformeda22membercompetentcomplianceteamtomonitorcompliancestatusof
memberfactoriesonaregularbasis.Themonitoringprocesshasbeengoingonsinceearly2007usingafourgradedchecklistbasedon

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NationalLaborLaw2013andbasicrequirementsoftheimporters.

FireandStructuralSafety:BKMEAFireSafetyCellprovidestrainingcoursestoenableattendeestomeettherequirementsoffactoryfire
safety.ThetrainingcourseistailoredtothespecificrisksofFireSafetyandRiskAssessmentandbestpracticesinBangladeshgarments
industry. Its primary object is to minimize the risk of fires at workplace and to make sure all employers and employees get aware of
appropriateactionstobetakenintheeventofafire.BKMEAfiresafetycellfrequentlychecksfireandworkplacesafetyissuesoffactoriesand
conductsfiresafetytraining&drillonregularbasis.Tomakeallawareoffirerisk,BKMEAhaspublishedawarenessrisingposter,sticker,and
leafletonfiresafetyissuesanddistributedthesetothememberfactories.BKMEAisalwayscommittedtoensurestructuralsafetyinknitwear
factoriesofBangladesh.

Structural safety: In the rush to meet export demands, many knitwear factories have been set up in buildings unsuitable for industrial
purposes. Some of them struggle to cope with the heavy load of sewing machines, fabric and large numbers of workers etc. Dedicated
StructuralEngineeringteamofBKMEAdealswithstructuralaspectsofthefactoriesandprovidesthempolicysupportonhowtograpplewith
theproblems.

ChemicalandEnvironmentalSustainability:Bangladeshhasgonelongforwardinbecomingaleaderinsocialandeconomicarena,
butinregardstoenvironmentalandchemicalsustainabilityforasoundindustrialatmosphere,westillfocusonthrivingtowardscenterof
excellence.Environmentalandchemicalsustainabilityisgoingtobeacorecomponentofsustainableprocessinindustrialmanagementin
thedaystocomeinBangladesh.So,BKMEAisnowadvocatingaChemical&environmentallysustainableBangladeshKnitwearindustry.

BKMEAbelievesineducatingtheexistingfactorymanpoweraboutthesustainabilityofenvironmentandchemicalmanagement.Numerous
publicationsontheissuesofenvironmentandchemicalsustainabilityandsafetymanagementhavebeenpublishedregularlytoupdateits
member factories. No sustainable development lingers last without trainingbased education along with the practical demonstration that
assiststhefactoriestohavebetterunderstandingofenvironmentalandchemicalsafetyissues.BKMEAhasstartedprovidingconsultancy
servicestoitsmemberfactoriesonchemicalmanagementsystem,ETPandcleanerproductionmanagement(CPM).

GreenFactoryProduction:BangladeshRMGsectoriscontinuouslyupdatingitselfwiththeglobaltrend.However,ithasnotbeenmature
asanindustrytocomplywithgreenerproductionmechanism.But,asweembraceinnovationinourwaystodevelopment,wecantstayaloof
from this muchcoined issue. BKMEA has done great job in areas like product quality, workers welfare, social compliance, technological
progress,marketresearchetc.Nowitisthrivingtobecomegreenintheproductionprocess.Alreadywehaveseensomesoliddevelopments
inthisrespect.Manyentrepreneursareintheprocessofdevelopinggreenfactories.Thisishappeningbecauseweareworkingtohavea
sustainable knitwear industry. We are focusing on mainly four points: a) reducing harmful emissions, b) improving energy efficiency, c)
recycling byproduct, and d) improving waste management. As the consumers are very much comfortable with the environment friendly
products,theimmediateresultofthisimitativewouldbehugeamountofordersfrombuyers.

Apartfromthis,wealsothinktosaveourecosystemforthegreaterinterestofthemankind.Atthisjuncture,ecofriendlyfactoryorgreen
factorycanbeamainstreamsolutionbywhichwecouldreduceco2emissioninenergyproductionandenhancegreenefficiencyofproducts.

CleanproductionMechanism:CleanerProductionMechanismisoneofthemostimportantstepstowardssustainability.Atthesametime
healthandenvironmentalimpactsonplantworkersandthesurroundingcommunityarereduced.CleanerProductionMechanismfocuseson
three main issues: water and energy conservation, optimization of chemical usage and process or equipment modification. BKMEA has
realizedtheneedofgoodenvironmentalmanagementandstartedworkingonitfewyearsback.Theentrepreneursstartinvestingtoimprove
theenvironmentalperformanceofproducts,processesandservicesbyfocusingonthecausesofenvironmentalproblemsratherthanthe
symptoms.Inthisway,itisdifferenttothetraditionalpollutioncontrolapproachtoenvironmentalmanagement.Wherepollutioncontrolisan
aftertheevent,reactandtreatapproach,CleanerProductionreflectsaproactive,anticipateandpreventphilosophy.BKMEAisgoingto
takeonacrashprogramwithinshorttimeonCPM.

Dynamics of Bangladesh Knitwear Sector: SocioEconomic Development: Bangladesh Knitwear sector contributes to the
Bangladesh economy in a distinctive manner. The last 20 years witnessed unparalleled growth in this sector, which is also the largest
exporting industry in Bangladesh. It has attained top notch stance in terms of foreign exchange earnings, exports, industrialization and
contributiontoGDPwithinashortspanoftime.Theindustryplaysasignificantroleinemploymentgeneration,womenempowerment,poverty
reduction,healthandNutritionimprovementetc.LethavealookatthesocialcontributingfactorsthatarethedirectresultsofBangladesh
knitwearsector.

WomensEmpowerment:Itiswellrecognizedthatwomensparticipationinincomegenerationactivitieslendsthemabetterstatuswithin
the family and provides them with considerable freedom. A job ensures equitable access to household resources (nutrition) and larger
investment on female human capital (health and education). Expansion of womens employment has contributed positively to the
improvementofthesavingsbehaviorofthepoorpeoplesincewomentendtobebettersavers.

EmploymentintheKnitwearindustryhasprovideddirectaccesstocashincomeforthefirsttimetomanypoorwomen.Asurvey,conductedby
theInstituteofBusinessAdministration(IBA)in2012showedthatfor86percentofthefemaleworkersinthenonEPZareas,workinthe
garmentindustrywasthemaidenwageemployment.Thesurveyalsoshowedthatwomenweretakingupsuchrolespayingforhouserents
andschoolingexpensesfortheirchildrenorbrothersandsisters.Surprisinglythefemalegarmentworkerswerespendingthesameamount
as the male workers on the studies of their family members. The same survey further showed that female workers were spending their
earningsontheirmarriage,thustakingabigburdenofftheirfamilies.Theindependentearningsalsoallowthesewomentohaveagreater
shareinhouseholddecisionmaking.Evidently,wageworkattheKnitwearindustryhasempoweredwomenandimprovedtheirstatus.Most
significantchangehasbeenoccurredintheempowermentofwomen.Nowwomencanplayimportantroleinmakingdecisionsbytheirown.

PovertyReduction:RMGsectornowprovidesemploymenttoabout4millionpeople,accountsforonethirdsofmanufacturinginvestment
andisresponsibleforthreefourthsofexportearnings.Ithasbeenobservedthatoutof9.0percentagepointreductioninheadcountpoverty

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during20002005,2.5percentagepointreductioncouldbeadducedtogrowthofRMGsector.Theknitwearexportgrowthhasalsoapositive
impactonservicesector.Theservicesectorhascreatedhugejobopportunityforthepeople.Allthese,amongstothers,havepositiveimpacts
in reducing poverty and have resulted in change. The estimated poverty headcount ratio for 2014 is 24.7 (GED Estimate) percent.
Bangladeshhasalreadymetoneoftheindicatorsoftarget1ofMDGsbybringingdownthepovertygapratioagainst2015targetof8.0.

EmploymentGeneration:Theeffectivewaytoreducethepovertylevelistocreateemploymentopportunitiesfortheimpoverishedpeople.
BangladeshKnitwearIndustryhasplayedimportantrolebycreatingemploymentopportunitiesforthepooranduneducatedpeoplewhowere
previouslyengagedwiththetraditionalagriculturesector.BKMEAhassetupatraininginstituteanddevelopeddifferentshort,mediumand
longtermcoursesondifferentissuesrelatedwithknitwearproduction.Thousandsofworkersandmidlevelmanagementhavegottraining
fromBKMEA.Manyfreshgraduateshavealreadytakentrainingsfromtheinstituteandjoinedintheknitwearfactories.Theimmediateresult
ofrisingknitwearsectortranslatedintorapidurbanization.Sofartheindustrycreates1.6milliondirectjobsand0.5millionindirectjobs.

PurchasingPowerIncrement:Theexportofknitwearhasincreasedleavingahugeimpactonthepurchasingpowercapacity,particularly
forruralfemale.Thepurchasingpowerofthelowincomepeoplehasincreasedsignificantly.Theproductbasketundertheircapacityhas
beenexpandedconsiderablycomparedtothepast.NowPeoplecanaffordmoregoodsthanbefore.Thishappensbecausetheincomelevel
hasincreasedconsiderably.Thepurchasingpowerofthegarmentworkershasbeenincreasedsignificantlycomparedtothescenarioback
in1980sand1990s.

Improvement in health sector: Bangladesh has made significant progress in providing health services. Awareness about heath has
increased among People. Knitwear sector of Bangladesh provided directly about 2 million employment facilities and another 1.5 million
indirectly,whichimprovestheincomelevelaswellasthepurchasingpowerofthosepeople.Accesstomedicineandaccesstoregistered
doctorhaveincreasedsignificantly.Calorieintakeoftheworkershasincreasedconsiderably.AccordingtoBangladeshMaternalMortality
Survey(BMMS),maternalmortalityhasdeclinedfrom322in2001to194in2010,a40percentdeclineinnineyears.Childmortalityratehas
beenreducedtoasatisfactorylevel.AccordingtoBangladeshDemographicandHealthSurvey(BDHS)2011(NIPORT2013),31.7percentof
births in Bangladesh are attended by medically trained personnel, e.g., a qualified doctor, nurse, midwife, family welfare visitor (FWV), or
communityskilledbirthattendant(CSBA).BKMEAhassetupahospitalforthebettertreatmentoftheworkers.BKMEAalsostrictlymonitors
thememberfactoriessothateachfactoryprovidesmedicalservicestotheworkers.

Structural&SocialDevelopment:TheKnitwearindustryiscontributinginanumberwaystotheBangladeshnationaleconomyinpoverty
alleviation programs and has helped create an awareness of women's issues at all levels. In addition to its economic contribution, the
expansionoftheRMGindustryhascausednoticeablesocialchangesbybringingmorethan2.92millionwomenintotheworkforce.

In1980,estimatesshowaround50,000femalegarmentworkersinthissector(WorldBank,2008).AccordingtoBhattacharyaandRahman,
thenumberofpeopleemployedintheapparelsectorhadincreasedtomorethan1.5millionin199798,whichconstitutesabout70%ofthe
totalfemaleemploymentinthecountry'smanufacturingsector(BhattacharyaandRahman,1999).Currentlytheindustryemploysabout4.5
millionworkers,ofwhom90%arewomen,mostlyfromruralareas.

Table:FemaleemploymentinSouthAsiaGarmentIndustry
Country No.ofWorkers %female %oftotalExports
Bangladesh 4.1million 90 80
SriLanka 312,00 81 49
India 5.3million 38 19
Nepal 52,000 18 41
Pakistan 912,000 15 58
Highfemaleparticipationrates,asarguedabove,effectivelyresultinlowerwagesandgreatercompetitionasevidencedbythesizeofthe
exportmarket.Asaresult,intheknitwearsectorfemaleparticipationishigher.Currentlytheindustryemploysaboutfourmillionworkers,of
whom90%arewomenandtotalgarmentproductexportsaccountfor76%ofallexports(Wikipedia,2012).

BangladeshKnitwearSector:MacrocontributiontotheEconomy:BangladeshsRMGsectorcontributionintermsofGDPishighly
remarkableithasreached13percentofGDP,whichwasonlyabout3percentin1991.ThecontributionofBangladeshKnitwearsectoron
GDPis6.92%andthebackwardlinkagesectorhasanother2%contributiononGDPofBangladesh.Italsoplaysapivotalroleinpromoting
thedevelopmentofotherkeysectorsoftheeconomylikebanking,insurance,shipping&Logisticindustries,etc.

RobustEconomicGrowth:Bangladeshhaspostedarobustandresilienteconomicperformanceoverthepastdecade,accompaniedbya
sustaineddeclineinpoverty.Thisrobustgrowthwasaccompaniedbyauniformandsteadydeclineinpovertyheadcountratesbetween2000
(48.9percent)and2014(24.7percent),andacontinuousdeclineinthenumberofpoorpeoplefromnearly63millionin2000to31million
in2013,despiteagrowingpopulation.Thishasreflectedinthecountryseconomicperformance.

Table:ContributionofRMGsectoronExportgrowthrateofBangladesh
GrowthrateofNonRMG(in Exportgrowthrate(in GDPgrowthrate(in
Year GrowthrateofRMG(in%)
%) %) %)
200809 12.2 1.2 10.30 5.7
200910 0.9 3.5 4.10 6.1
201011 33.9 7.7 41.50 6.7
201112 5.2 0.9 6.00 6.2
201213 10.1 1.1 11.20 6.2
201314 9.22 2.4 11.65 6.03
Sources:ExportPromotionBureaucomputedbyiARTteam

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ThegrowthofBangladesheconomyisledbythegrowthofRMGsectorofBangladeshduringlastfiveyears.ThecontributionofRMGsector
exportonannualexportofBangladeshwasalmost80percent.

Value Addition from Knitwear industry: In Bangladesh, normally the knitwear production process starts from cotton. Then the next
processesaredoneinourcountry.Wearetoimport98%ofourrequiredcottonfromforeigncountriestheonlyimpedimenttobecomea
verticallyintegratedknitwearindustry.BangladeshknitwearindustryisplayingavitalroleinvalueadditionofGrossDomesticProduct(GDP).

Table:ValueAdditionandNetRetentionRateofBangladeshKnitwearSector
Year 1994 2000 2008 2012 2013 2014
ValueAddition 50% 70% 75% 72% 75% 75%
NetRetention 40% 55% 61% 53% 50% 48%
Thedomesticvalueadditioninthissectorisabout75%,whichismuchhigherthanwovenproducts.TheKnitwearsectorsvalueaddition
contributionintheGDPisabout10%.Intheexportfield,theknitwearindustryofBangladeshhasmanagedtomakeabignameacrossthe
world.BKMEAhastakendifferentinitiativestopromotetheexportgrowthofknitwearproducts.BKMEAisworkingtoincorporatethelatest
technology,whichinturnwillincreasethedomesticvalueaddition.

Backward linkage Development:Thecorestrengthoftheknitwearsectorisitsbackwardlinkage.Theentrepreneursofthesectorhave

notonlyincreasedtheirstitchingcapacityovertime,butalsoinvestedinthealliedindustrytoaugmenttheoverallcapacityofthetotalsector
withthesamepace.Overtheperiodoftime,knitwearsectorgraduallybecamealmostselfsufficientinfabricandyarndevelopment.This
improvementhasbecomepossiblebecauseoftheintegratedgrowthofspinningfactoriesinlineofthegrowthofcountry'sstitchingcapacity
andincreasedneedoftheyarnandfabric.Astheexporthasincreasedintheknitwearsector,thecapacityofbackwardlinkagehasalso
increasedaccordingly.Theresultislocalsupplierscanprovidenow95%ofthetotalfabricrequirementofthesector(source:BTMA).The
growthofspinningmillsisalsosteppedwiththegrowthofknitwearexports.In201011,totalnumberofYarnManufacturingMemberMillswas
383,whereasFabricManufacturerMemberMillswas743.ButNowadays,therearemorethan500YarnManufacturesMillsinBangladesh.
Asofnow,thetotalinvestmentinthebackwardlinkageinknitting,dyeingandspinningindustryismorethanUS$5.03billionor4.00billion.

In 201314, the contribution of knitwear in national export earnings is 39.81%. The Direct contribution of Knitwear sector on GDP of
Bangladeshisalmost7%,butthebackwardlinkagesectorofKnitwearsectorhasanother2%contributiononGDP.

Thishasresultedbecauseofthebackwardlinkageindustrythathasgrownovertimewhichhelpedtheknitwearsectortohavethehigher
valueadditionandthereforeamuchhighernetretentionrate.

Shipping and Logistics Industry Development: The RMG sector has contributed to the expansion of the shipping business in
Bangladesh and stimulated setting up of several container yards, expansion of port facilities to handle large container carrying trains,
increaseofcargohandlingandstoragefacilities.RMGmanufacturersalsoextensivelyuseservicesofClearing&ForwardingAgentsforthe
purposeofcustomsclearanceofinputsandfinishedgoods.
ItisestimatedthatportusagefeesearnedfromtheRMGsectoraccountformorethan40%oftheincomeoftheportauthority.RMGsector
contributedaboutUS$79millioninFY2014toearningsoftheShipping&logisticbusinessofthecountrybywayofportcharges,C&FAgents
commissions,freightcharges,forwardingchargesetc.ThepredictionaboutRMGsectorcontributiontotheShippingandlogisticindustrywill
increaseat$84millionin2021andat$91millionin2050.

DevelopmentofBankingandInsuranceSector: DevelopmentofBangladeshknitwearsectorandtherelatedactivitieshascontributed
alottotherobustgrowthofthefinancialsectorinBangladesh.InFY2002,thebankingsectorearnedabout37milliondollarsfrombusiness
relatedwiththeRMGsectorintheformofinterestandchargesandL/Ccharges.Morethanonetenthofthecommercialbanksassetportfolio
belongstotheRMGandtextilesectorinthecountry.InFY2001commercialbankslentTaka4400croretothetextilesector,whiletheamount
lenttothewovenRMGsectorwasTaka812crore.Theexportfinancingbusinessofthecommercialbanksislargelydependentonthetextile
andRMGsectors.
AfterthephaseoutMFAstheRMGsectorofBangladeshexpandeddramaticallyandreachedatpeakduringlast5years.Thenumberof
RMGfactoriesrisesdramaticallyfrom2000toabout5000.TheexportofRMGproductincreasedsharplywithanaveragegrowthrateof19%
overlast15years.InthemeantimetheL/CforexportandbacktobackL/Cforrawmaterialsimportalsorisenequivalently,whichhada
positiveimpactonimprovementofprofitmakingconditionofcommercialbank.
Besides, the expansion of readymade factories creates the demand for capital machineries also the industrial raw materials. So the
settlementforimportL/Cofindustrialmachineriesincreasedsharplywhichrisesthelendingfromthebank,whichmaximizedtheprofitof
Bank.AWorldBanksurveyrevealedthatalmostallfirms(98%)aretheclientsofthecommercialbanksforworkingcapitalandprocurement

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ofmachinesandequipment(57%).
TheRMGsectorhasalsocontributedtothegrowthofthecountrysinsurancesector.Onaverage,everyyearthepremiumpaidbytheRMG
sectortotheinsurancecompanieswasabout6milliondollars.Allfirmshavetheirmachinesandplantsinsuredand,additionally,87%of
importersofinputand45%oftheRMGexportersgettheirimports/exportsinsured.In2014,theearningofBankandInsurancecompanies
fromtheKnitwearsectorofBangladeshwasaboutBDT176Billion,whichwillriseat187billionBDTin2021also201billionBDTin2050.

CosmeticIndustryDevelopment:ThereisasignificantgrowthoffemaleemploymentintheRMGsectorofBangladeshoneofthehigher
femalelabormarketswithintheAsiaregion.ThedemandforcosmeticproductslikeColorcosmetics,thatincludeslipstick,nailpolish,eye
andcheekshadesandPersonalcareproducts,thatincludesskinandhaircareproducts,likeshampoo,conditioner,lotions,Beautysoapand
creams are increasing day by day. As the RMG sector has a great contribution in income generation of women workers, the demand for
cosmeticsitemshavegrownsignificantly.Inmonetarytermthevalueisabout28millionUSD.

Future Prediction and Strength of Bangladesh Knitwear Industry: Bangladesh is becoming more and more significant for the
apparelretailersandfashionbrandsworldwideasthecountryisconsistentlyprovidingtheC&Mserviceatthemostcompetitivepricewith
maintainingacceptablequalitystandards.Commitment,competitivepriceandhighqualityofproductsarethemaindrivingforcesbehindthe
riseinexportsofgarmentitemstothenewdestinations.
BesidesothercompetingcountriesofBangladeshlikeChina,Vietnam,IndiaandPakistanarefacinghighercostsofproductionBangladesh
isbecomingmorepopularwiththebuyersforaffordablepricesofgarmentitems.
AgaintheforecastingthroughtheAutoregressiveMovingAveragewithExogenousInputs(ARMAX)showsthatBangladeshwillbetheGiant
Knitwearexporterswithavalueof32.62billionUSD,atagrowthrateof32.1%.AlsothecontributionofKnitwearsectortotheGDPwillbe
12.12%bytheyearof2050.

Bangladesh:LeadingsourcingDestination:BangladeshisbeingconsideredasthenexthotspotforRMGasthecountrysreadymade
garmentindustryhasidentifiedsolidapparelsourcingopportunitiesthere.ThetophotspotsindicatedbyCPOsareBangladesh,Vietnam,
IndonesiaandCambodia.McKinseyforecastsexportvaluegrowthof7to9percentannuallywithinthenexttenyears,suggestingthemarket
willbedoubleby2015andnearlytripledby2020.

AsurveyresulthasalsorevealedthatEuropeanandUScompaniesthatfocusontheapparelmarketsvaluesegmentplantoexpandthe
shareoftheirsourcingfromBangladeshto25to30percentby2020,fromanaverageof20percentnow.

Bangladesh:ProspectingAlternativeofChina:Bangladeshsapparelindustryislikelytogetabigboostastheworldslargesttextile
producer.ChinaanditChineseapparelmakersandtopglobalretailershavestartedshiftingtheirorderstoBangladeshduetotherising
laborcostinthatcountry.Vancl,Chinaslargestonlineapparelretailer,shiftedsomeorderstoBangladeshitextilemakerslatelastyearinan
efforttocutthelaborcostinthecontextofChinasrapidlyrisingproductioncosts.

Besides,theEuropeanpopularretailerH&MhasalsoshiftedsomeorderstoBangladeshfromChinabecauseofthefastrisinglaborcost
there.TheBeijingBusinessToday,aChinesedaily,reportedthattheVanclwouldcontinueshiftingorderstothemanufacturersin
Bangladesh.Thisyearalso,theVanclwouldshiftaportionofitsordersforcasualpantstoBangladeshandithasbegunexperimentingwith
foreignproductionofsweatersanddownjacketsfrom2013.

Last year China raised its minimum labour cost by 23 per cent putting the local and foreign garment manufacturers under pressure and
forcingthemtofocusonthecountrieslikeVietnam,Cambodia,SriLankaandBangladesh,wherethelabourcostsarelow.Itisapieceof
goodnewsforBangladesh.

Since China is switching over to the higher segment of the market and also the hitech industry, the country will need to import garment
products.BangladeshisreadytoseizetheopportunitytoexportintoChina.

Sourcing Decision: Bangladesh Top Choice: Retailers are betting on Bangladeshs garment industry more than that of any other
country in the coming years, Wall Street Journal reported. Bangladeshs $20 billion garment business came out ahead of smaller rivals
VietnamandCambodiaintherankingofcountrieswiththehighestpotentialforfuturesourcing,accordingtoanewstudybyconsultingfirm
McKinsey&Co.BangladeshisgoingtobeNo.1,recentstudyshows.

Picture:LargeshareoftheirsourcingvalueawayfromChinatoothercountriesoverthenext5years,CompiledbyKMPGReport2013,

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McKinseysapparelCPOsurvey2013&WorldBank.
Thenewresearchshowsthatproductioncapacityandpriceappeartotrumpsafetyandlaborissueswhenitcomestochoosingwhereto
sourceclothesfrom.TheminimumwagestructureandhighnumberofgarmentfactoriesinBangladeshhavemadethecountryamagnetfor
global retailers. Though Importers have formed safety pacts aimed at improving working conditions, but this also has helped improve its
image.AsitClothingmakersfromaroundtheglobearenowplanningtoincreasetheirrelianceonBangladeshinthefuture.

Fornow,Chinaremainstheworld'slargestgarmentproducerbyfar,withmorethan$150billioninannualexports.Butitsminimumwageis
threetimesthe$68monthlybaserateofBangladesh.BangladeshistiedwithItalyfortheNo.2spotforcurrentexportsItalyishistoricallya
majorproduceroffashionandaccessories,butisdeclininginconsiderationofimportance.

BangladeshwillbeabletoexportUS$1.0billionworthofRMGtoChinawithinafewyears.TherewillbedemandofUS$650billioninthe
global clothing and apparel market by 2020, where there is a scope for Bangladesh to contribute $44.56 billion. China is an untapped
opportunityforBangladeshandatthesametimeBangladeshisalucrativedestinationforChineseconsumersaswesellat10to15percent
lowerpriceduetodutyfreeaccessfacility.

Other reasons behind the top retailers interest in Bangladesh Knitwear are availability of skilled labour, utility service at lower
price, convenience of dutyfree custom bonded warehouse, improved GSP advantages under regional cumulative, simplification of tariff
regime, meeting world standard on social compliance issues, easily accessible infrastructure like sea road, railroad, river and air
communicationetc.

Conclusion: Today's greater challenge involves rethinking business models, taking on new mission responsibilities, and evolving
management and governance approaches. BKMEA collaborates with factories and their industrial structure to transform the way they do
businessacrosstheglobe.Aslargeandcomplexsystemsofinternationalappareltradechangetimetotime,thesefactoriesmustmaintain
oversightoftheworktheydo,staywithinbudget,anddelivereffectiveandinternationalstandardproducts.Thisisparticularlyimportantwhen
integratingnewandexistingsystemsintoaseamlesswhole.ThatiswhereBKMEA,asanOrganization,isdifferentfromothersandhasbeen
inrelentlessefforttokeepallentrepreneursengagedtothemoderndevelopmentofinternationalapparelbusiness.

Bangladesh exports 35 types of garment products to about 152 countries around the world. The RMG sector is a 100% exportoriented
industry.Giventheremarkableentrepreneurialinitiativesandthededicationofitsworkforce,Bangladeshcanlookforwardtoincreasingits
shareoftheglobalRMGmarket.ThisbeckonscreatingmillionsofjobsinacountrylikeBangladeshandmillionsofcustomersworldwide.
ThereisenoughgoodwillfortheworkersandpeopleofBangladeshtoensurethat.

Theseallfacts&figuresboildowntotherealitythatinthecomingdays.BangladeshisgoingtoleadtheworldinexportingRMG.Aglorious
futureis,indeed,beckoning!Reasonably,BKMEAhasitsownmotto:Workingtodaytoshinetomorrow,whichpoignantlyreflectshowwe
(Bangladesh)intendtoreignsupremeintheinternationalmarketsinthedaysahead.

So,visionisinhandandwemustmakeithappen!

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