The readymade garments (RMG) sector in Bangladesh is continuing its positive trend in export earnings, fuelled by value-added products, government policy support and completion of 90 per cent of the factory remediation work set by the Accord and Alliance.
Compared to 2017–18, export earnings in the RMG sector have maintained a steady growth of 15.65 per cent in July–December of FY 2018–19,
amounting to USD 17.08 billion. In 2017–18, the total earnings were USD 14.77 billion.
Talking to The Independent, Abdus Salam Murshedy, president of the Exporters’ Association of Bangladesh, said, “We have completed around 90 per cent of the requirement of factory remediation work of Accord and Alliance, which eventually helps
attract buyers of the US and Europe to buy apparel from us.”
“The Western buyers are coming to Bangladesh with a number of work orders as we have been able to gain their confidence and faith,” he added. He said people of the sector should increase their efficiency to keep up the double-digit growth.
The endeavour for factory remediation enhanced workplace safety to a great level, which eventually helps boost the brand image worldwide, he said.
“We’ve invested around USD 4 billion for ensuring workplace safety and occupational health,” he added.
According to the Export Promotion Bureau (EPB), for July–December, the first six months of FY 2018–19, knitwear exports rose by 13.92 per cent to USD 8.65 billion compared to the previous year, which was USD 7.59 billion. Woven garments exports rose by 17.48 per cent to USD 8.43 billion compared to USD 7.17 billion the previous year.
Explaining the reason behind the 15.65 per cent growth rate in the RMG sector, Bangladesh Garment Manufacturers and Exporters’ Association president Siddiqur Rahman told The Independent, “The four months from October to January will be the peak season for the shipment of apparel. So, future prospects are even higher and brighter for garment shipments.”
He added, “We now have the capacity to produce any quantity of garment items as we have expanded our operations over the years.” However, the Chattogram port needs to perform better to boost exports, said business insiders.
According to the Export Promotion Bureau (EPB), for July–December, the first six months of FY 2018–19, exports rose by 2.18 per cent to USD 3.43 billion compared to the previous year.
For July–December of FY 2018–19, the export of agricultural products like tea, vegetables and tobacco registered a growth of 66.8 per cent and fetched USD 517.64 million.
EPB officials said export of leather and leather products fell significantly, with the sector registering a negative growth rate of 14.18 per cent. “About 65,000 people used to work at the tanneries in Hazaribagh before we shifted all the factories to Savar. As a result, many people have lost their jobs and it hit the export of leather goods,” said tannery owner Shaheen Ahmed.
EPB data also shows that the growth rate of jute and jute goods exports has fallen drastically to 26.66 per cent. This sector fetched USD 421.02 million in the first half of FY 2018–19.
The tax at source in the export-oriented RMG sector was reduced to 0.25 per cent from the existing 0.6 per cent in a bid to enhance the competitive edge of the RMG sector.
The National Board of Revenue (NBR) issued a statutory regulatory order (SRO) on Thursday in this respect, which will be effective from January 1 this year.
With the latest reduction, the tax at source for exports in the RMG sector has been reduced for the second time in the current fiscal year.
Earlier, on September 5 this year, the tax at source for exports in the RMG sector was reduced to 0.6 per cent from 1.0 per cent.
According to the latest survey by Asia Inspection (AI), a Hong Kong-based global inspection and accreditation body, Bangladesh is becoming a more popular apparel sourcing destination for Western retailers because of the ongoing US-China trade war.
The US-China trade war has forced many US fashion companies to look for alternative supply sources beyond China, creating a big opportunity for Bangladeshi apparel exporters.
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Source:http://www.theindependentbd.com/post/182179