RISING OF THE BANGLADESH

TEXTILE INDUSTRY &

ITS IMPACT ON THE SOUTH

ASIAN AND GLOBAL TRADE

Faruque Hassan, Senior Vice President,

BGMEA

Mumbai, June 2017

445

175

26 22 18 15 7 6 6 0

50 100 150 200 250 300 350 400 450 500

Wo

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Ban

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USA

WORLD CLOTHING TRADE 2015 IN BILLION US DOLLAR

Y-O-Y EXPORT GROWTH% OF MAJOR CLOTHING SUPPLYING COUNTRIES, MEASURED IN US$

-60.00%

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

140.00% W

orl

d

Ch

ina

EU (

28

)

Ban

glad

esh

Ho

ng

Ko

ng

Vie

t N

am

Ind

ia

Turk

ey

Ind

on

esi

a

USA

Cam

bo

dia

Pak

ista

n

2015

2014

2013

2012

2011

2010

2009

2008

ASIA, 40.92%

ROW, 59.08%

2000

ASIA, 62.41%

ROW, 37.59%

2015 2025

?

ASIA EMERGING GLOBAL TEXTILE & CLOTHING HUB

Share of Asia and rest of the world (ROW) in global clothing exports, measured in US$

TIMELINE

1978 1985 1995 2005 2010 2013 2016 2021

RMG industry started its journey with $12,000 exports made by 900 workers

Export reached $116 million

0.12 million workers and 384 factories

Export hit $2.2 billion Eliminated Child Labor through Earn & Learn program Rise of purpose built compliant factories

Export $6.4 billion

MFA Quota phased out which was predicted to have severe consequence

Export $12.5 billion Ranked 2nd largest RMG exporting country despite global recession

Export $21.52 billion Rana Plaza & Tazreen accidents erupted the issue of workplace safety

Export $28.60 billion 10-years of MFA phase out. Export quadrupled, employment 4.4 mil. Major progress in safety & workers rights

Workplace safety, environmental sustainability, & excellence in product & market diversification envisioned

Last 10

years

compound

annual

growth

rate

(CAGR) is

12.43%

APPAREL EXPORT OF BANGLADESH VALUES IN BILLION US$, 1994-2016

1.8

9

2.4

9

2.6

3

3.4

3

3.8

5

4.1

6

4.8

2

4.6

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4.6

5

5.2

5

6.2

2

6.9

0

8.9

3

9.3

5

11

.88

1

1.8

9

14

.85

1

9.2

1

19

.79

2

3.5

0

24

.58

2

6.6

0

28

.67

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

50.00 1

99

4

19

95

1

99

6

19

97

1

99

8

19

99

2

00

0

20

01

2

00

2

20

03

2

00

4

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05

2

00

6

20

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00

8

20

09

2

01

0

20

11

2

01

2

20

13

2

01

4

20

15

2

01

6

RMG Exports to Top 15 Markets in 2016 Share, values in Million US$

21.33%

20.35%

13.67%

7.60%

7.14%

5.21%

3.84%

3.39%

3.17%

2.84%

2.73% 2.63%

2.39% 1.89% 1.83% USA

Germany

U.K.

Spain

France

Italy

Canada

Belgium

Japan

Netherlands

Denmark

Number of Clothing Factories 3200 around

Export $28

billion

Exports to around 130 countries

4.4 Million workers

Investment $10 billion around 394 spinning &

777 textile mills 99% accessories

made locally

SNAPSHOT: TEXTILE & CLOTHING INDUSTRY IN BANGLADESH

• 1459 textile mills are in operation

• capacity of yarn production 2410 million kg

• capacity of woven fabrics production is 3580 million meters

• Around 90% yarn demand for knit RMG & 35-40% yarn demand for woven RMG are met by Primary Textile Sector (PTS)

• Investment in the Primary Textile Sector is US$ 4.5 billion (approx)

• Huge potential in non-cotton items

• Opportunities for Foreign Investments in textile sector

PRIMARY TEXTILE SECTOR IN BANGLADESH

STRENGTHS

35 years experience

Price

Quality

Workforce

Safe

Green

Commitment

Market Access

Versatility

Backward

Linkage

BANGLADESH: THE SUCCESS FACTORS

Remediation completed by 77% ACCORD suppliers and

75% of ALLIANCE suppliers

Fit for Operation

:

98.96%

Inspected factories:

3746

(100%)

WORKPLACE SAFETY

All inspection reports are made publicly available at

the website of Department of Inspection for Factories

and Establishment (DIFE), Accord and Alliance.

A PLATINUM LEED CERTIFIED

WASHING FACTORY AT DHAKA

A PLATINUM LEED CERTIFIED

WOVEN FACTORY AT DHAKA

GLOBAL AWARD WINNER GREEN LANDSCAPING

APPAREL FACTORY AT DHAKA

220 more

factories in

LEED

certification

pipeline

World’s highest

rated knitwear,

woven,

washing and

Denim mills

67 LEED

certified

factories

WORLD’S TOP RATED LEED CERTIFIED INDUSTRIAL ESTABLISHMENTS ARE IN BANGLADESH

• 70% of the population is under 40 yrs old

• Large educated and motivated youth

• High literacy rate (72%) among youths aged 15-24

• Inspired young, hungry for work and growth

• 2 million youth entering in job market each year

• Labor cost advantage

• 117 million mobile phone users

• 33% internet penetration

BANGLADESH IS BLESSED WITH HUMAN RESOURCES

EU (28) GSP: Duty free access for apparel on 1-stage Rules of Origin.

Japan GSP: Duty free access for apparel on 1-stage Rules of Origin.

Canada GSP: Canada provides Zero duty access on 25% value addition requirement

Switzerland GSP: Duty free access for apparel on 1-stage Rules of Origin.

Norway GSP: Duty free access for apparel on 1-stage Rules of Origin.

Australia & New Zealand GSP: Australia & New Zealand provides Zero duty access on 25% value addition

requirement (subject to additional 25% sourcing from GSP beneficiary countries)

China Duty Free: China provides Zero duty access for 60% items under global initiative through WTO, this will be

enhanced to 97% products.

India: Zero duty access to all apparel items under SAFTA.

Chile: Duty free access for apparel.

Malaysia, Thailand & South Korea: Provide duty free access to a number of apparel items from Bangladesh.

MARKET ACCESS FOR BANGLADESH

OPPORTUNITI

ES

Product & Market

Diversification

Technology &

Efficiency Enhancem

ent

Developing

Professionals & Skills

OUR PRIORITIES

THE ASIAN AGE OF

GLOBAL TEXTILE

TRADE

REGIONAL

VALUE

CREATION

AND

GROWTH

FOCUS: THE

ASIAN

CONSUMER

MARKET

RESEARCH,

INNOVATION

&

EXCHANGE

OF

KNOWLEDGE

FROM CMT

TO BRAND

MANUFACTU

RING &

RETAILING

17

STRATEGIES FOR GLOBAL LEADERSHIP

REGIONAL VALUE CHAIN

INDIA • Second largest textile fibre producer in the

world. • Largest producer of Cotton in the world

with 5,984 million kg production in 2015-16. • Second largest producer of Manmade Fibre

and Filament in the world with 2,511 million kg production in 2015-16.

• Second largest installed spindle capacity in the world with more than 50 million spindles in 2014-15.

• World's highest installed weaving capacity with more than 4.9 million looms (including 2.4 million handlooms) in 2014-15.

• India has unique capability in the vertical supply chain starting for ginning of cotton to finished fabrics, and also in the area of fashion and designing.

BANGLADESH • Second largest exporter of apparel in the global

market. • Bangladesh’s geographical location make her a

natural trading partner. • Largest cotton importing country in the world. • India is Bangladesh’s FOURTH largest trading

partner, next to EU, US, and China with a value of US$6.14 billion.

• Bangladesh’s imports of fibre and textile from India was US$ 1.5 billion in FY2015-16.

• 30% of cotton and 62% of cotton yarn imported by Bangladesh is originated in India.

• Bangladesh’s export to India was US$ 690 million in FY2015-16, of which apparel was US$ 136.42 million.

• Bangladesh’s import from India was US$ 5.45 billion in FY2015-16.

BANGLADESH-INDIA TRADE

0

1000

2000

3000

4000

5000

6000

7000 1

99

7-9

8

19

98

-99

19

99

-00

20

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Bangladesh-India Trade Values in million US$

Export to India

Import From India

UNTAPPING THE ASIAN MARKET

• Domestic market of India and China will be a big opportunity with around 2.67 billion population.

• The size of China’s apparel retail market is around US$ 240 billion and for India it is around US$ 60 billion. These two apparel retail markets is projected to grow to US$ 795 billion by 2025.

• Bangladesh enjoys duty free market access in India under SAFTA and in China as an LDC.

• Bangladesh-China-India-Myanmar (BCIM) Economic Corridor under the Chinese mainland’s Belt and Rod Initiative has created a great potential for uncovering more bilateral opportunities.

• Besides, we have other growing markets like Japan, Korea, Singapore and countries within ASEAN region (625 million people).

• Skills development

• Workers productivity improvement training

• Multi-skills training

• Rights & responsibilities

• Occupation safety & health

• Merchandising

• Fashion designing

• Fabric designing

• Creative designing

• Fashion & color forecast capability

• Mid-management

Technical Experts -

• Planning & industrial engineering

• Lean manufacturing

• Technician & mechanics

• House-keeping

• Energy & environment expert (ESH)

• Chemical expert

RESEARCH, INNOVATION & EXCHANGE OF

KNOWLEDGE

CREATING SYNERGY: BUILDING GLOBAL

BRANDS

• Indian Fashion designers making a mark both at national and global forum exhibiting.

• India’s exports to Bangladesh (for export oriented industries) enjoy complete duty free access.

• A huge number of expats including Indian nationals are working in top positions in our textile and garment industry and adding value to our growth.

• The possibilities of forming a regional value chain through creating an integrated network of ‘raw material supply’, ‘production networks’ and ‘marketing networks at the retail level’ may lead us to jointly develop global brands.

• Our principle is – ‘Complement, not compete’.

“Collective Efforts, Inclusive Growth”

Narendra Modi, Honorable Prime Minister of India

Thank You !