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RMG industry picks up steam

  • Published at 08:27 pm September 9th, 2021

Work orders returning to pre-pandemic level

The country's apparel manufacturers are seeing a steady flow of work orders showing that the ball is rolling, similar to the times before the Covid-19 outbreak hit in March last year.

Exporters hope that if the orders continue to come in, the country's apparel sector will be able to turn around by winter this year.

Industry insiders said that stores and retail outlets of the buyers have reopened in full swing after mass vaccination in the buyers’ countries, especially in the US and Europe, the two prime destinations for Bangladeshi apparel manufacturers.

Moreover, the prevailing Covid-19 situations in India and Vietnam, as well as the recent political unrest in Myanmar, have both had an impact on shifting orders to Bangladesh.

Orders also shifted from China because of increased tariffs due to the US-China trade war.

Also Read - Coronavirus: BGMEA says orders worth $3.15 billion cancelled so far

Local apparel manufacturers are optimistic about export volume recovery as they have adequate purchase orders for as late as next summer.

However, they also expressed their frustration as buyers continued to offer lower prices for products, at least 10% lower than the pre-pandemic levels.

Shahidullah Azim, vice-president at the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said that apparel exports will increase by November and December, as factories have received plenty of work orders. 

“We have plenty of purchase orders from our buyers as their stores are fully operational after mass vaccination. Exports will increase significantly in the coming months,” he added.

He also said that unofficially Bangladesh has already regained second position by overtaking Vietnam again, which will be announced officially soon.

Mohammad Hatem, vice-president of the BKMEA, said that knitwear exports experienced more than 17% growth in August.

“We expect export earnings to be 20-25% in the coming months. Demand for this specialty has grown significantly as a result of the return of normalcy in Europe and the Americas. The sector is getting more purchase orders,” he added.

He also said that they are not able to take adequate orders due to the instability of yarn prices. The price of yarn in Bangladesh is much higher than any other country, like India, Pakistan.

Manufacturers said that most of the factory is booked to 100% of its capacity till December and January.

However, the price of the products is a bit lower than the pre-pandemic period but they are hopeful that the huge purchase orders may make up for this, they said.

Azhar Khan, owner of Mithela Textiles Limited, said that the whole sector got a number of purchase orders and the maximum factory has been booked to full capacity.

But the entrepreneurs are a little worried about the lower prices, he added.

Also Read - Fair distribution of work orders crucial for garment industry to rebound

He also said that they are hopeful about the recovery of the business in the coming months. As the sector has gotten plenty of work orders, they will be able to recover soon.

Manufacturers said that some of the factories already have gotten purchase orders at the pre-pandemic level. They hope that the sector will rebound fully after one more season. They also said that it is the high time to negotiate with buyers for better prices.

Some sources from the textile sector said that they believe there has been a giant leap in the export orders.

A factory which usually sold 30 tons of yarn yearly to the local market, now sells nearly 80-85 tons of the yarn in the domestic market. They believed that the orders have increased by at least 15% in this season.

According to the recent data published by the Export Promotion Bureau (EPB), bearer of more than 82% of the export earnings, fetched an 11.56% growth year-on-year last month with exports worth $2.75 billion, up from $2.46 billion in the same month last year.

Of those, woven items recorded a growth of 4.47% which experienced a fall of 17.78% in July year-on-year exports.

However, the shipments of the apparel sector slightly dipped by 1.27% year-on-year to $5.64 billion in July and August combined in 2021, which was $5.71 billion in the same period of the last year,

Exporters said that there was a backlog due to Eid, lockdowns and port issues in July, so a number of products were unshipped.