Our RMG industry needs to grow to take advantage of the US-China trade war.
China, once regarded as “the factory of the world,” has seen a steady decline in its apparel industry exports over recent years.
Although it’s still the largest apparel producing region globally -- rising labour and raw material costs and an increase in local manufacturers concentrating on the domestic market rather than exports, started a slow trickle of international customers away from the region.
This has, most recently, been further compounded by the much-publicized tit-for-tat trade war between the two nations since January 2018, which has led to an increase in apparel product tariffs from the region and created unease amongst customers.
The situation is popularly termed “trade 2.0.”
Other sourcing hubs in the Asian region are reaping the benefits of the decline in China’s fortunes, most notably Vietnam. The country is targeting an export objective of $40 billion for the year 2019 for textiles and apparel, a 10.8% increase year on year.
The largest market for Vietnamese garment production is the US and the country has seen an increase of 13.9% in apparel exports over the first nine months of 2019. This trend seems to continue as Vietnam appears set to be one of the biggest beneficiaries of the US-China trade war with US fashion companies looking to alternative sourcing areas.
The Bangladesh RMG industry has also enjoyed an increase in apparel exports over the same period but lags behind Vietnam with an increase of 9.29%. One has to ask why, given the importance of the RMG industry to Bangladesh’s economy, we are not capitalizing more on the current trade friction between the USA and China.
The Chinese apparel and textile industries were world-renowned for their diversity, able to produce nearly all garment product categories and cater for all market sectors from mass, price-sensitive brands, and retailers through to those operating in the luxury sector of the fashion industry.
To their credit, the textile and apparel manufacturers in Vietnam have taken over this mantle, establishing an industry, with some 6000 manufacturing facilities, that cater to a diverse array of apparel products appealing to US customers.
Sadly, I fear, the same cannot be said for the Bangladesh RMG industry. Historically, as all of us involved in the sector are aware, we have relied upon more basic, higher volume products to drive our business.
Since its inception in the 1980s the growth of the sector has been outstanding, but, as the industry faces the transition to trade 2.0 over the coming years, surely now is the time to instigate real change within the sector.
As mentioned earlier, using the example of Vietnam as a benchmark, we can see that the Bangladesh RMG industry falls some way short in the diversity of apparel product categories that it produces.
To tackle this the industry needs to address the skill sets of its workforce, the extent of its research and development capabilities and its investment in the appropriate technology.
Apparel categories including lingerie, swimwear, formalwear, and performance outerwear (to name a few) are not traditionally associated with Bangladesh but offer huge export business potential. It is in these, non-familiar product categories, that the RMG needs to be developing to take advantage of the US-China stand-off and to penetrate into other markets.
With the correct guidance and training, there is no reason why our workers cannot develop the appropriate skills to manufacture more diverse product categories. It may be necessary for certain RMG companies to invest in and develop different production lines for the new product categories being manufactured.
They will need to consider methods that allow increased flexibility, cater to smaller production runs and can be operated by operatives that can produce goods to the highest possible standards. The training of workers is not just a matter for factory owners and managers. The RMG sector contributes some 83% to our nation’s GDP, so it is an invaluable factor in the continuing development of the country.
I believe that the government and other concerned bodies should be supporting the industry by making the necessary investments to establish a network of training facilities so that they are fully conversant with the processes involved and can take up roles within companies and offer an immediate impact.
To support the investment in the establishment of manufacturing capabilities for new product categories we will need increased investment in the R&D sector. If the RMG industry wishes to diversify into a broader spectrum of apparel types, we need to consider the full development process and support it from concept through to finished product.
New product categories require different R&D disciplines, and these will need to be developed in line with customers’ expectations and requirements. Coupled with investment in workforce training and R&D, the industry must be prepared to invest in technology and infrastructure relevant to the new product categories. Diverse product categories require a variety of different technologies, not necessarily existing in Bangladesh at present.
With the correct investment in staff training, R&D and the appropriate technologies, there is ample opportunity for the Bangladesh RMG industry to learn from the success that Vietnam has made and shake off the image of a basic resource and offer a broader, more diverse range of apparel categories to both the US and wider international audience.
Published On : 15-12-2019
Source : Dhaka Tribune
