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The world's new favourite, denim à la Bangladesh

  • Published at 04:58 pm November 4th, 2017
  • Last updated at 05:35 pm November 4th, 2017
The world's new favourite, denim à la Bangladesh
Bangladesh, the second largest exporter of apparel goods, has turned into a hotspot for sourcing denim goods, beating its competitors in the European markets as well as in the United States by grabbing more shares in both. According to Eurostat, the European Commission's statistics directorate, Bangladesh exported denim products worth €603.14 million to the EU between January and June 2017, up by 5.67% compared to €570.81 million in the same period a year ago. In 2016,  Bangladesh earned €1.29 billion from the denim export to EU countries. Turkey, the second largest exporter as of June 2017, earned $551.14 million posting a 5.28% gain. Meanwhile China, the global leader in apparel products, has seen a 7.77% fall to $240.78 million, which was $261 million in the same period last year. On the other hand the US Department of Commerce's Office of Textiles and Apparel (Otexa) says between January and July this year, Bangladesh has earned $392.71 million from the US, which is 6.61% higher than the same period last year. China, the largest exporter to the US market has seen a 3.03% fall to $885.82 million, which was $913.59 million a year ago. Among Bangladesh's major exports to the US apparel market are Blue Denim Trousers WG, Blue Denim Trousers MB, Blue Denim Skirts, Blue Denim Jackets, Blue Denim Suit Type Coats MB, Playsuits and Sunsuits. Experts and manufacturers attribute this success to the sheer effort of the people in the industry. They also thank Chinese relocation, which is landing in Bangladesh. “Right now, we are getting huge orders for denim fabrics from the denim makers. This is because China is moving away from low end products,”  Sayeed Ahmad Chowdhury, general manager (operation) of Square Denim told the Dhaka Tribune. “Currently, our production capacity is 1.5 million yards a month, which will increase to three million from next month since the demand is continuously rising,” said Sayeed. To make good use of China's move away from low-end clothing, Bangladesh government should take steps to enhance the country's port capacity to deliver goods in time. It should also ensure that the utility services are provided as per the demand, said Sayeed. Exporters said that slowing export of China will open new avenues for Bangladeshi manufacturers as it is the second largest apparel exporter and has the capacity to handle bulk work orders. The cheap labour is another advantage for the country. “Bangladeshi denim industry has enormous opportunity to grow in the global market. Demand for our denim products is increasing gradually,” Abdus Salam Murshedy, the managing director of Envoy Textile, a denim fabric manufacturer, told the Dhaka Tribune. But there are challenges. Bangladesh is still dependent on import for raw materials, said Salam. The industry also has to learn to innovate, he thinks. “The more variation in the designs, the more price for our products. To remain competitive in the global market, Bangladesh has to concentrate on design development and innovation,” said Salam. According to the study by Cotton Inc, 71% of people in Europe and Latin America enjoy wearing denim, followed by 70% in the US, 58% in China and 57% in Japan. Industry sources estimate that nearly two billion units of denim jeans were sold in the world in 2016, and by 2021 the yearly sale of jeans will cross two billion units. The demand for denim products will continue to rise, said Salam, who is also a former president of Bangladesh Garment Manufacturers and Exporters Association. “From day labourer to the president of the country, everybody has at least one pair of jeans. People wear it across the world, whether in least developed countries or developed countries,” he said. Economist AB Mirza Azizul Islam told the Dhaka Tribune that provided that the industry can cope with the buyers' demand in terms of innovation and timely delivery, Bangladesh could easily be the next destination for denim product sourcing. “Meanwhile, the government should address the bottlenecks in doing business such as port congestion and ensuring utility services at affordable prices,” he said. Challenges for the denim sector In manufacturing denim fabrics, steady supply of gas and electricity is the key component, as power cuts during production can seriously hamper the quality of fabrics. On the other hand, price predictability of gas and electricity is another obstacle to new investment. “We are getting more orders for trousers but the orders for higher-end fabric is not at the expected level. This is because of shortage of manpower at managerial level, which should be addressed by entrepreneurs coming into the sector,” Anwar-ul Alam Chowdhury, managing director of Argon Denim told the Dhaka Tribune. To attract global buyers, manufacturers will have to develop different types of fabric so that they can meet 100% of the demand locally, said Anwar-ul. He stressed on improving port efficiency to ensure smoother delivery of products and to cut lead time, a big concern for the manufacturers as well as the buyers. Industry overview Although Bangladeshi denim production started with an import dependency for fabric, now it meets about 60% of the demand locally. According to Bangladesh Textile Mills Association (BTMA), there are 32 denim mills with a total annual production capacity of about 442 million metres per year. The sector employs over 20,000 people.  At least 10 new companies are expected to come into operation within the next one or two years. “We have state-of-the-art green and compliant factories, which are producing quality fabrics and are able to to meet about 50- 60% of the local demand,” said Square Denim's Sayeed Ahmad Chowdhury. In future, Bangladesh will be able to meet 100% demand of the fabric as the entrepreneurs are investing in upgradation to hi-tech machinery as well as in training the workforce to move to higher-end fabric, he added.
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