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Knitting Prospects in Bangladesh

History of Development of Knitwear of Bangladesh The RMG business started in Bangladesh in the 70s but it was then merely a casual effort. The first consignment of knitwear export was made in 1973 and the first consignment of woven garments was made in 1977. In 1981-82 the contribution of Woven garments in the total export was 1.10%. Afterwards it is a story of sustained success for the Bangladesh RMG sector. The knitwear sector has grown over the years in geometric progression and become the prime driving force of Bangladeshs export earnings. Within a decade the contribution of Woven to the export basket became 42.83% (1990-91) and the knitwear sectors contribution was 7.64% (1990-91). Now Knitwear has become the largest export earning sector of Bangladesh contributing 40.01% to national export earnings at the end of FY 2009-10 (July-April). Advantages of Bangladeshi Knitwear Sector Knitwear is a near self-sufficient sector in all respect; currently BKMEA members are supplying 90% of the knit fabric requirements of the sector. Local yarn suppliers provide around 75% of the total requirement of the sector. We have more than 250 composite factories; besides the composite units many garments have their own dying and finishing units. A separate dying and finishing industry also has grown up over the time to support the sector. Bangladeshi Knitwear is exported to 90 countries of the world. But the EU and the USA are the major importer. Capacity is increasing at a good rate to cope with the future demand of this sector. Bangladesh provides labor forces unparallel in stitching capability and skill at our level. Business Opportunity in Bangladesh Private investment is welcome in all areas of the economy with the exception of the four reserved sectors Arms and ammunition and other defense equipment and machinery Forest Plantation and mechanized extraction within the bounds of reserved forests Production of Nuclear Energy Security Printing and Mining

Textile Bangladesh is best placed in the region for textiles and garments industry due to cheap labor and favorable trade status with the EU. Again, Government incentives for the spinning and weaving industries in the form of cash subsidy of the fabric cost to exporters sourcing fabrics locally. There is huge yarn and fabric demand supply gap in the RMG industries which is presently met by imports. Thus the potential for backward

linkage industry is enormous Prospect for a huge textile industry capable to supply over 3 billion yards of fabrics a year to the export oriented garment industry has also been developed by the industry. Presently, about 85%-90% of this demand is met by import from countries like China, India, Hong Kong, Singapore, Thailand, Korea, Indonesia, Taiwan, etc. Fabric requirement is increasing at 20% per annum. This offers a tremendous opportunity for further investment. Cost of some key production factors in textile sector Labor costs incurred in the textile industry is the lowest compared to its competitors Thailand $ 1.00/Hour India $ 0.60/Hour Sri Lanka $ 0.45/Hour Vietnam $ 0.40/Hour Indonesia $ 0.40/Hour Pakistan $ 0.40/Hour China $ 0.35/Hour Bangladesh $ 0.25/Hour Energy cost in Bangladesh is lower compared to India and Pakistan India $ 0.095/KwH Pakistan $ 0.08/KwH Bangladesh $ 0.07/KwH
Export Processing Zone (EPZ) In order to stimulate rapid economic growth of the country, particularly through industrialization, the government has adopted an Open Door Policy to attract foreign investment to Bangladesh. Following this, EPZs have been created to provide complete infrastructural facilities including communication and utility connection where potential investors would find a congenial investment climate, free from cumbersome procedures. The Bangladesh Private Export Processing Act allows establishment in private EPZs entirely through foreign investment or through joint ventures or local initiative. Followings are the six EPZs of Bangladesh which are in operation now: Dhaka EPZ Chittagong EPZ Comilla EPZ Mongla EPZ Ishwardi EPZ Uttara EPZ (at Nilphamari)

Investment Incentives (Major) Generally 5 to 7 years No import duty for 100% export oriented industry. For other industry it is at 5% ad valorem. Tax Law Double taxation can be avoided in case of foreign investors on the basis of bilateral agreements. Exemption of income tax up to 3 years for the expatriate employees in industries specified in the relevant schedule of Income Tax ordinance. Remittance Facilities for full repatriation of invested capital, profit and divided. Exit: An investor can wind up on investment either through a decision of the AGM or EGM. Once a foreign investor completes the formalities to exit the country, he or she can repatriate the sales proceeds after securing proper authorization from the Central Bank. Ownership Foreign investor can set up ventures either wholly owned on in joint collaboration with local partner. Concessionary duty on No import duty is charged in case of capital imported capital machinery machinery and spares listed in NBRs relevant notification. Import duty at 7.5% is secured in the form of a bank guarantee or an indemnity bond to be returned after installation of the machinery. Incentives to non-resident Special incentives are provided to encourage nonBangladeshis resident Bangladeshis for investment in the country. They will enjoy facilities similar to those of foreign investors. Source - Statistical Pocket of Bangladesh, 2003, Published in January 2005 Yearly Export FY* 2010-11(July-Oct): US$ 2,888.03 million Yearly Export (FY 09-10) EU - US$ 4712.21 Million USA - US$ 891.61 Million Canada - US$ 283.86 Million Others - US$ 541.58 Million Share in National Export: 40.01% Share in RMG Export: 51.88% Yearly Growth FY 10-11 (July-October): 37.97% Tax Exemptions Duty

Contribution in National Export Increase: 43% Net Retention amount - US$ 3319.56 million Net retention rate - 60% (Highest) Value addition - 75% (Highest) Quantity Exported - 292.70 million dozens Labor Force Employed Direct - 1.20 million; about 70% of them are women. Indirect - 0.50 million Number of Member Units About - 1700 (2010) Comparative Export Performance of Bangladeshi Knit Production Major Importing Countries: (Figures in Million US $) Country Germany USA UK France Netherlands Spain Italy Canada Belgium Sweden 2006-07 1103.28 762.39 489.40 475.86 243.85 351.34 268.00 200.70 163.60 103.82 2007-08 1245.07 807.28 616.91 639.55 359.13 410.78 320.42 232.40 143.59 137.71 2008-09 1334.40 959.42 720.58 705.69 513.98 404.23 368.86 292.05 157.52 125.74 2009-10 1282.77 891.61 725.74 692.00 528.57 384.55 379.04 283.86 155.79 129.89

Source: Export Promotion Bureau,Bangladesh

Woven Prospects in Bangladesh

About Garments Industry Although Bangladesh is not developed in industry, it has been enriched in Garment industries in the recent past years. In the field of Industrialization garment industry is a promising step. It has given the opportunity of employment to millions of unemployed, specially innumerable uneducated women of the country. It is making significant contribution in the field of our export income. History of our cloth Industry: Once the cloth of Bangladesh achieved worldwide fame. Muslim and Jamdani cloth or our country was used as the luxurious garments of the royal figures in Europe and other countries. Trade Preference Schemes USA, EU, Canada, Japan, Australia, South Africa, Switzerland, Norway, New Zealand Trade Information

COMPARATIVE STATEMENT ON EXPORT OF RMG AND TOTAL EXPORT OF BANGLADESH EXPORT OF RMG (IN MILLION US$) TOTAL EXPORT % OF RMG'S OF TO BANGLADESH TOTAL (IN MILLION EXPORT US$) 31.57 811.00 3.89 7900.80 10526.16 75.06 9211.23 12177.86 75.64 10699.80 14110.80 75.83 12347.77 15565.19 79.33 12496.72 16204.65 77.12 78.97

YEAR

1983-84 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 (July3971.52 5029.05 Sep) Data Source Export Promotion Bureau Compiled by BGMEA

At present there are about 2925+ Factories in Bangladesh. Moreover the no. of factories is increasing significantly day by day.
(Data Source Export Promotion Bureau Compiled by BGMEA)

My Career Plan and reasons for choosing

I would like to build my career in knitting industry. I want to make it sweet and simple by providing some statistics below:

Export Performance of RMG over Government's Strategic Export Target for 2010-11
Product Knitwear Woven Target (in million USD) 2010-11 6392.09 5928.84 %Change of Export Performance over Strategic Export Target 32.11% 26.75%

From the chart it is clear that Moreover this is observed from the RMG sector that:

Knitting executives get more salary than other sectors like woven and textile. It is easier to get jobs in the knitting industries. At present there are about 4659+ small and big factories in our country so it is quite obvious that big fishes are coming forward to this rising sectors and investing more (BKMEA). Knitwear is exporting significantly more than woven wear. Bangladesh gets more orders than woven industries. Quick production, less operations. Knitting Workers face less difficulty than other sectors. Seniors and even our faculties also emphasizing on the knitting industries for our bright future.

To wrap up I would like to say that, each sector is fine if you are able to find the pleasure in your work. It may be woven, textile or knitting what ever you like. Thank you guys for your valuable co operations and thanks to our team members without you guys it wont be possible.