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A new beginning

  • Published at 12:57 pm March 8th, 2018
  • Last updated at 08:06 am March 9th, 2018
A new beginning
About 80% of the apparel export of Bangladesh is concentrated on five basic products: Trousers, t-shirts, sweaters, shirts, and jackets, mostly made of cotton. Since the inception of the industry, the apparel manufacturers of Bangladesh have been manufacturing these items in large volume. Big-volume order is easy to produce nowadays, however, it becomes really difficult to make profit off of it as the price of basic apparel has not increased in global market, rather it has drastically decreased from the 10-15 year old standard. While, in the meantime, the cost of production increased in Bangladesh manifold. Moreover, at present, there are several apparel-producing countries in the world which are competing for the lowest rung in the ladder. Ethiopia and Myanmar are the latest entrants. So buyers now have a lot of options to shop around when it comes to sourcing basic garments. When there are a lot of competitors in the market, bargaining chips come down, margins become thinner, and buyers have the last laugh in the game. Now, the pertinent question is: How long could Bangladesh depend on competing in the basic apparel segment? How sustainable is it? As far as the US market is concerned, Bangladesh stands to lose its competitive advantage even on low-labour cost due to duty-free status that Ethiopia enjoys under AGOA or countries like Honduras, El Salvador, or Nicaragua enjoy under CAFTA DR. In the European Union, Bangladesh still holds the second position, thanks to the duty-free market access the country enjoys in the region under the Generalized Scheme of Preferences (GSP) as an LDC. But as Bangladesh is on the verge of graduating into a developing country, it can no longer avail the GSP facility after graduation. Even if Bangladesh can secure GSP plus, which would require complying with a number provisions including good governance, to be eligible for the trade preference, we will have to pay 7% duty on exporting apparel to the European Union -- which will indubitably affect our competitiveness. The state of our apparel industry has three phases: T-shirt phase, Race to the Top, and High End of the Spectrum. The T-shirt phase denotes the beginning of textile or apparel industry in a country starting with low wage business. But with the passage of time, the entrepreneurs cannot accommodate the price and they go for value added products where skilled manpower are needed and this phase is called Race to the Top. When it becomes more mature, then the country starts assembling business or electronic company, the phase which may be termed High End of the Spectrum. In the 19th century, America went to High End of the Spectrum from Race to the Top. Now China is in between Race to the Top and High End of the Spectrum and Bangladesh is in between the t-shirt phase and Race to the Top. Bangladesh has thepotential to move further forward attaining the transformation to High End of the Spectrum, gradually. The transformation in the country’s apparel industry is also the need of the time considering the global apparel market scenario and the economic situation of the country as stated above.
It’s high time the factories set up their research and development (R&D) cells to bring new developments and innovations design
Hurdles and challenges  To move up to the production of high-end apparel, there are indeed some challenges for Bangladesh. One challenge in manufacturing the value-added apparel products is that their lead time which is comparatively very short due to fast fashion trends. It means the life-cycle of a valued product is very limited. So while we need to establish adequate infrastructure to avoid unwanted delay impacts on our lead time, we have to also develop knowledge and efficiency to prove our capability of producing high-end products as well as deliver them on time. Quick gains could come by addressing the medium to premium segments of the brands with whom we already established basic production. Brands like H&M, Zara, Gap, Marks & Spencer, etc also have high-value items currently being supplied mostly by China, Italy, Turkey, etc. In these segments, the brands look for value adding design perspectives that increases customer experience. Does Bangladesh have the ability to add value to fashion design? The answer is: Though some garment factories of Bangladesh having visionary management at their helm have strengthened their design and development department, the industry as a whole still seriously lags behind in this area. It’s high time the factories set up their research and development cells to bring new developments and innovations design. Apart from adding value to products, it will also help them to bring diversity in product ranges and develop efficiency. It is also important to develop our presentation skills to showcase our strengths and capabilities before buyers. Textile education in Bangladesh has yet to get proper attention, though we are the second-largest RMG exporting country in the world. Without producing quality graduates with proper skills and knowledge, we cannot move up in the ladder because manufacturing of value-added apparel requires both knowledge and skills. A blouse or pair of jeans costs more or less the same to sew, but it is mainly the fabric that varies the price. Bangladesh still imports 60% of woven fabrics for manufacturing and exporting woven apparel, as the local textile industry can fulfill only 40% of the demand. Attaining cent percent sufficiency in textiles could ensure the country having the card up in its sleeve to compete in the international market of high value apparel. Finally, a country’s image is crucial in attracting the orders high-end apparel. As high-end brands hold high reputation, they always remain very conscious about associating their names with any country or organization that may put their reputation at risk. Therefore, our government should come forward along with the private sector to boost the country’s image. Only concerted and coordinated efforts engaging all stakeholders can help us regain our reputation that still stay buried in the rubble of Rana Plaza. Mostafiz Uddin is Managing Director of Denim Expert Limited, and Founder & CEO of Bangladesh Apparel Exchange (BAE). 
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