The World Bank’s researchers say that the country’s future is full
of potential due to enhanced availability of accessory products such as
local yarns and packaging materials, and importers now think Bangladesh
to be a package supplier”.One of the strengths of Bangladesh’s
apparel industry is low cost, especially the local firms willingness to
keep margins low. After China and Turkey, Bangladesh is now the world’s
third largest apparel exporting country and entrepreneurs here invest
in new technology to improve productivity and to reinforce
relationships with buyers, they said… The cost of labour is one
of the key factors for Bangladesh’s success the researchers found that
the average wage per hour of garment factory workers in Bangladesh is
only 31 US cents. The per hour wage is $1.66 in China, 56 cents in
Pakistan, 51 cents in India, 44 cents in Indonesia and 36 cents in
Vietnam… They also pointed out that terminal handling and customs dealings have improved here considerably in recent times…
Apparently pointing to the growing number of spinning and denim fabric
manufacturing units, the World Bank pointed out that there has been
satisfactory growth in backward linkage textile industries here. It was
also noted that some foreign investors were setting up fabric and fibre
manufacturing units in Bangladesh… The World Bank’s researchers
pointed out that Bangladesh’s weakness was lack of good designers and
related technology. Shortage of skilled workers and mid-level
management people, workers unrest were pointed out as other drawbacks…
Power outages, inefficient infrastructure, lack of industrial expertise
and outdated social standards were also pointed out as the major
disadvantages of Bangladesh’s garment industry… In 2005
Bangladesh’s share, of both the EU and US markets, was around 3.5 per
cent, but by the end of 2009 the share increased to around 5 per cent,
said World Bank researchers ..”China has been the big winner,
although Bangladesh, India, and Vietnam have also continued to expand
their roles in the [global apparel] industry,” said the World Bank’s
study. “Leading firms [major importers] now desire to work with fewer,
larger, and more capable suppliers that are strategically located
around the world.”.. The researchers said that by the end of 2009
the economic recession that hit the apparel retail markets of all the
advanced industrial countries sent ripples throughout the supply chain
in developing economies as well…”A striking trend is that the
largest low-cost apparel producers in the developing world, such as
China, India, Bangladesh, and Vietnam, have actually managed to
increase their export shares in major global markets,” said the World
Bank. “This may reflect a substitution effect of the economic
recession, in which the lowest cost suppliers gain market share vis-vis
more expensive rivals.”.. Classifying the capability of
Bangladesh’s industry, World Bank researchers said that at least
Bangladesh’s knit apparel industry should be categorised now as OEM
[Original Equipment Manufacturing]. The industry can now do Free on
Board or package contracting business, it said .

Date:5/6/2010

Source:www.businessweek.com