Introduction To RMG Business

with GLOBAL Scenario

And FORWARD & BACKWARD Linkage
 Introduction to Apparel
 Apparel:
 Clothing, especially outer garments; attire.

 or Garments:
 an article of clothing; like saying "garments of the finest silk"

 Apparel or Garments: “No difference really - technically

“Apparel" is the Industry term and “Clothing" is the
Consumer term”.
 According to the professors at the University of Georgia,
they all felt these two words could be considered
synonyms.
 Clothing-Germany, Apparel-America, Garments-UK
History of RMG Sector In
Bangladesh
 In 1977-78 only 9 exporting industries were
available in this country which deal with 10
million used every year.there were 3 big
industries available in that time.they were:
 Riaz garments
 Jewel garments
 Paris garments.
Of them, Riaz garments was the most well known and
oldest industry in that time.In urdu road of Dhaka it
started it's business with some tailoring shop first.In
that time it was known as Riaz store.In 1973,it was
named Riaz garments.In 1978,it started exporting
products abroad.it exported 1 million pieces of shirts to
the Olanda,a South Korean company.

Another garments known as Desh Garments ,also

treated as the pathfinder of textile sector in
Bangladesh.

In 1979 Desh Garments opened a joint venture

project with south korean company "Daiyuu".
 Different Types of Clothing Industry:
 Woven Industries: Material or a fabric made by weaving (Interlatching)
This types of industries produce woven garments.
Ex. Shirt, Trouser, Jacket etc.

 Cut & Sew Knitwear Industries: Knitted Garments (Inter-looping)

This types of industries produce knit items. (Cut & Sew).
Ex. T-Shirt, Polo-Shirt, Cardigan, Trouser, etc.

 Fully Fashion Knitwear:

This types of industries produce sweater items.
(Without Cut & Sew).
 Global Apparel Trade
 Business: A vast term
Export & Import
 Mainly influenced by
 Cost competitiveness, Cost, Quality and Lead Time.

 Major Apparel Importers:

 The EU countries, the USA, Japan, Australia, Canada, South Korea etc.

 Major Apparel Exporters:

 China, Turkey, Hong Kong, Bangladesh, India, Vietnam, etc.
 EU countries also export significant amount
 Processes of RMG Manufacturing
 Classification of Knitwear
 Circular Knit Items (T-Shirt, Polo shirt etc.)
 Flat Knit Items (Sweater)

Value Chain Analysis of Men’s T shirt (Size range S-XXL)

 Different Departments in a Clothing Industry
• Administration
• HRD
• Compliance
• Sales & Marketing / Merchandising
• Industrial Engineering / Work Study Department
• Accounts Department
• Store House
• Quality Department
• Sample Development section
• Production
 Textiles Production Flow Chart
(Basic)

Textile Fiber Yarn Manufacturing Yarn

Yarn Fabric Manufacturing Grey Fabric

Grey Fabric Wet Processing Finished Fabric

Finished Fabric Garments Manufacturing Garments

 Backward & Forward Linkage
 Backward linkages The relationship between a firm or
industry and the suppliers of its inputs, or raw materials. An
increase in the output of the firm or industry is transmitted
backward, yielding an increase in the demand for inputs.

 Channels through which information, material, and money

flow between a firm and its suppliers and create a network of
economic interdependence.

 Forward Linkage: Forward linkage occurs when the products

of one industry is used as the raw material of another industry.
 Forward linkage is when one industry is producing the raw
material for another industry.
 Global value chains with
Backward & Forward Linkage
Producer-driven
 In producer-driven value chains, large, usually transnational
manufacturers play the central roles in coordinating
production networks (including their backward and
forward linkages). This is typical of capital- and technology
intensive industries.

Automobiles, aircraft, computers,

semiconductors and heavy machinery
 Continued….
 Buyer-driven
 Buyer-driven value chains are those in which large retailers,
marketers and branded manufacturers play the pivotal roles in
setting up decentralized production networks in a variety of exporting
countries, typically located in developing countries.

Apparel is a good example of a

buyer driven value chain
 Producer-driven value chains are controlled at
the point of production by large manufacturers
while the main leverage in buyer-driven value
chains is exercised by marketers and
merchandisers at the design and retail stages.
In 2006, the industry employed directly more than 2.1 million
workers, about 80% of whom were female

Bangladesh garment industry has generated $28.09bn exports in

the fiscal year 2015-16 with a 10.21% growth from the previous
year, according to Export Promotion Bureau data.

Provides employment to around 5 million, about 90% of whom

were female
 Contribution on Socio-Economic
Development

 Women’s Empowerment:
 Poverty Reduction:
 Employment Generation:
 Improvement of Purchasing Power:
 Improvement in health sector:
 Forward & Backward linkage Development:
 Shipping and Logistics Industry Development:
 Development of Banking and Insurance Sector:
 Cosmetic Industry Development:

Performance Enhancement Project, iart,BKMEA

One of The major Impact of RMG
industry of Bangladesh is Female
Empowerment
Export Growth Rate
Performance Enhancement Project, iart,BKMEA
Performance Enhancement Project, iart,BKMEA
Strength Weaknes
s

Opportuni Threats
ty
 SWOT Analysis
 SWOT Analysis (Strength): Competitive price advantage due to cheap labor
and Governmental Assistance, Human Resource. Integrated Supply Chain,
Specially in Knitwear .

 SWOT Analysis (Weakness): Weak Structure, in particular Production

Efficiency, Product Development, Marketing skill, Customer Service,
Planning, Management Skill, Technical Know how and Producing mainly
basic products, Heavily depend on importing woven fabrics.
 Poor image of adapting international and Corporate social standards, Political,
Social and worker unrest.
 SWOT Analysis
 SWOT Analysis (Opportunities): Potential for higher value addition by
developing backward linkage. Reduce lead time by developing
infrastructure of transportation, faster custom clearance, strong backward
linkage, Improved image by adapting environmental and social standards,
Diversifying apparel product; switching from basic product to fashionable
product.

 SWOT Analysis (Threats): Risk of loosing competitive advantages. Poor

political and investment climate leading declined interest of importers, staff
qualification, Totally depend on others for raw materials as Bangladesh produce
neither natural fiber nor MMF.
 Importance of Garment Sector

 Foreign Currency
 Reduce huge Unemployment Problem.
 Development of others Sector (Bank, Insurance, Shipping , Infrastructure etc.).
 Empowerment of Women along with giving them Financial Support.
Almost Every Major Brands are Sourcing from
Bangladesh
 Recommended Readings
 Publications of BKMEA, BIDS (Bangladesh Institute of Development Studies), CPD
(Centre for Policy Dialogue) etc.
 For Policy: WTO (World Trade Organization)web site, UNCTAD (United Nations
Conference on Trade and Development), USITC (United States International Trade
Commission), EUROSTAT (is the statistical office of the European Union) and others
 For statistics: Trade Map (world), USITC (United States International Trade
Commission), OTEXA(USA)- Office of Textiles and Apparel, EOROSTAT (EU), UN
Database etc.

Internet is sufficient for relevant

articles
 THANK YOU

Bangladesh Knitwear Manufactures & Exporters Association (BKMEA)

Planner’s Tower, 17th Floor, 13/A Sonargaon Road
Banglamotor, Dhaka 1000, Bangladesh
Phone: +880 2 9670498, 8620377, 8622703, 9672257 Fax: +880 2 9673337

E-mail: saidur@bkmea.com (official),

Cell: 01786477767; www.bkmea.com