PRE INVESTMENT

FEASIBILITY REPORT

ON

Prepared by
ANM Wahid Uddin Chowdhury
Industrial Consultant/Financial Analyst
Contact No. 01819-197195

NAAFCO DENIM LTD (PROPOSED)

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0

TABLE OF
CONTENTS
NO

SL NO.

SUBJECT

PAGE

1.

SUMMARY OF THE PROJECT

1-06

2.

MANAGEMENT ASPECT
08

3.

TECHNICAL ASPECT

09-15

4.

FINANCIAL SUMMARY
17

16-

5.

SOCIO ECONOMIC ASPECT

18-19

6.

MARKETING ASPECT

20-66

7.

FINANCIIAL ANALYSIS

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07-

1-31

EXECUTIVE SUMMARY
1. Name of the project

: NAAFCO DENIM LTD.

2. Location of the project : Plot 607-609, Uttar Vagnahati, Sreepur, Gazipur,Bangladesh

3. Registered Office

: Suvastu Tower, 12/A, 69/1 Panthapath, Dhaka 1205

4. Main Promoter

: Mr. M S Huda

5. Nature of the project

: 100% Export Oriented Garments Industry

6. Background of the Proposed Project:

At NAAFCO Denim Ltd, we value individuals for their diverse backgrounds, experiences,
styles, approaches and ideas. We actively promote diversity in whole value chain. This
diversity inspires the innovation that drives our business and helps improves our competitive
advantage. It helps us make decisions that serve customers in the diversed markets around
the world. Our Production capacity 15000 pcs Denim pants & Trousers per day.
Vision
Our vision is to be the worlds most vibrant & leading ONE STOP DENIM HOUSE with
TQM leader which will set the benchmark for the industry and will create optimum value for
the customer.

Mission

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We commit to provide total service, quality benefits through activities which will add value
to the bond we create with our employees, customers and business associates in the
growing textile and garments market of Bangladesh.

07. Total Cost of the Project

The total fixed cost of the project stood at Tk 5655.05 Lac- mostly the cost of the plant
while the local currency will be used to finance Land building, imported, local machinery and
installation charges. The summarized position of the fund requirement appears as follows:
Taka in Million

Item

Amount

Total Cost

Sponsors

Banks Equity

Equity
01.

Land

Total Cost
(Tk. In 000)

123.900

123.900

123.900

123.900

02.

Market Value)
Building and other

135.000

135.000

40.500

94.500

135.000

03.

civil works
Machinery Imported

210.75

210.75

21.075

189.675

210.75

Local Machinery

30.000

30.000

3.000

27.000

30.000

04

Duty, Tax, Insurance

11.250

11.250

11.250

11.250

05

etc.
Vehicles

10.000

10.000

5.000

5.000

10.000

06

Security Deposit

5.000

5.000

5.000

5.000

07

Pre-operative

20.000

20.000

20.000

20.000

08.

expenses
Contingencies

7.650

7.650

7.650

7.650

10

Furniture & Fixture

10.000

10.000

10.000

10.000

(as per Present

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11

Internal Freight

1.000

1.000

1.000

1.000

12

Erection &

1.000

1.000

1.000

1.000

Installation
Total Cost of the

565.55

565.55

249.375

316.175

565.55

project

8. Means of Finance.
(Tk. In Million)

Against Total Cost

Banks Equity
Sponsors Equity
Total:

Against Machinery Cost

Amount

Percentage

Amount

Percentage

316.175
249.375
565.55

52%
48%
100%

216.675
24.075
240.75

90%
10%
100%

09. Working Capital requirement

(Tk. In Million)

1st. year

2nd. Year

3rd. year

4th. Year

Total Working Capital

Requirement
Margin against W/C Finance
W/C for Bank Finance

470286.57
47028.66
423257.91

..

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504903.84
50490.38
454413.45

539655.01
53965.50
485689.51

574241.87
57424.19
516817.68

10. Financial & Economic Aspect:

(Figure in million Taka)

Particulars

O P E R A T I N G

Y E A R S

70%

75%

80%

85%

1,859,655

2,305,913

2,461,133

2,616,353

Gross Profit

281,328

341,411

361,505

381,425

Operating Profit

229,899

285,631

301,886

318,804

Net Profit before Tax

110,092

168,222

186,856

206,177

Net Profit after Tax

110,092

168,222

186,856

206,177

Gross Profit to Sales

15.13%

14.81%

14.69%

14.58%

Operating Profit to Sales

12.36%

12.39%

12.27%

12.19%

Net Profit after Tax to Sales

5.92%

7.30%

7.59%

7.88%

1.65

2.01

2.14

2.28

1103437.99

1232061.40

1218056.92

1103437.99

42%

40%

40%

Assumed Capacity Utilization

Sales Revenue

Ratios:

Debt-Service Coverage Ratio (Times)

Other Financial Indicators:
Break Even Sales
Break Even Capacity
Internal Rate of Return (IRR)

2911187.36

Net Present Value (NPV)

Pay-Back Period

2.89 Years

Economic Indicators:
Contrition to GDP

384086

Employment Generation

471479

500465

532763

1080 Persons

Cost per Job Created

523.66

Benefit-Cost Ratio

1.71

Expected Key Ratios:

O P E R A T I N G

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Y E A R S

DEBT ( % )

63.07

54.06

46.44

40.01

EQUITY ( % )

36.93

45.94

53.56

59.99

Current Ratio

1.23

1.55

1.87

2.19

Quick Ratio

0.41

0.72

1.04

1.35

Liquidity Ratio

0.21

0.53

0.84

1.16

Asset Ratio

1.59

1.85

2.15

2.50

Return on Equity Ratio

0.44

0.41

0.32

0.27

Working Capital to Total Assets(X1)

Retained Earnings to Total

0.38

0.36

0.34

0.32

Assets(X2)

0.10

0.13

0.13

0.13

EBIT to Total Assets(X3)

0.21

0.23

0.21

0.20

Equity to Total Liabilities(X4)

Sales to Total Assets(X5)

0.59

0.85

1.15

1.50

1.69

1.83

1.72

1.60

MANAGEMENT ASPECTS
2.01 Type of the Organization:
The name NAAFCO Denim Ltd is a private limited company under the ownership and
management of NAAFCO Denim Ltd. As per Articles of Association of the company, it will be
managed by a Board of Directors consisted of 2 sponsor shareholders. The board is fully

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authorized to take all decisions in connection with Operation, Financial management and
seeking financial assistance from any financial institution.
2.02 Registrar of Joint Stock Companies:
The Registration of the Company with the Registrar of Joint Stock Companies of Bangladesh
has been done.
2.03 Corporate Set-up of the Company
SL.NO

Name of Sponsors

Status

Extent
of

01.

Mr. M S Huda

M.D.

02.

Mr. M. Saiful Huda

DIRECTOR

Shares
50%
50%
100%

Background of the Managing Director:

Mr. M S Huda is Managing Director of the Shetu-Semco Group of Companies whose
primary focus since 1984 has been on Pesticides, fertilizers & seeds for the Bangladeshi
market, both private & public sector, Shetu Pesticides Ltd,Naafco (Pvt) ltd& Semco between
then operate an integrated supply chain based on import,formulation repacking of both raw
& finished materials & then nationwide distribution, marketing & sales. These companies
and their brands have an established reputation for quality products amongst the trade &
consumers. He has been accorded various awards and recognition for his contribution and
achievements in the agricultural sector.CNG stations and property holdings figure amongst
other business units in the group.

He is a chemistry graduate and has been an entrepreneur for 45 years in various businesses
locally and internationally. He is extremely well travelled and enjoys the company of his
grandchildren in his free time.

Background of the Director:

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Sl.

Name,

Address

and

Descriptions

No

Signature of the Subscribers

and

No. of shares
taken by each
subscriber

01.

Mohammed Shamsul Huda, Managing

50%

Director
S/O. Late Mohammed Mohabbat
Address : House #458, Road # 31 New
DOHS,Mohakali, Dhaka- 1206
Age : 71 Years
Email : spl_naf@bdcom.com
National ID : 2650898232450
TIN: 037-100-4061/sa-29(cos)
Nationality: Bangladeshi
Profession: Business
02.

Experience: 45 Years
Md. Saiful Huda
S/O. Mr. M S Huda

50%

Address : House #458, Road # 31 New DOHS,

Mohakali, Dhaka-1206
Age : 27
Email : spl_naf@bdcom.com
National ID : 7
TIN: 188-103-2313/sa-29/(cos)
Nationality: Bangladeshi
Profession: Business
Experience: 5 Years

TECHNICAL ASPECT
3.01 The Project
The project will be a Manufacturer of Denim & Trousers pants for export market considering
the growing demand for the products in the export market the sponsors have decided to
under-take the proposed project having additional capacity of 46.80 Lac lacs Pants annually.

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Location of the Project:

The factory premises of the company is located at Uzilab, UttarVagnahati,Sreepur,Gazipur
on its own premises.. The utilities such as electricity, Gas line, water etc are available at
project site. The most important requirement of workers is abundantly available. There is
ample scope of training up the job seeking young boys and girls to convert them to workers
(operators and helpers)
3.02 Production Capacity
The annual rated capacity and product mix of the proposed project at 100% capacity
utilization based on three shifts Operation per day and 312working days per year has been
given in the following table:
(Amount Tk. In
000)

Product
Mix

Items

Denim Pant
Trouser /short

Quantity

Unit Price
(In Taka)

Total

3120000
1560000

680
630

2121600
982800

3104400.00

3.03 Raw materials Requirement

Raw Materials:

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(Amount Tk. In
000)

SL.

Item

Quantity

Quantity

Unit Price

Total Amount

( in Tk.)
01
02

Fabrics
Accessories

7020000
L.S.

300

Total Imported

2106000
315900

2421900.00

3.04 Building and Other Civil works.

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To implement the proposed program of NAAFCO Denim Ltd, the sponsors of the project will
construct 203000 sft building for housing the machinery of the project which includes Office
building, factory building, godown and other utilities services. The total cost of building has
been estimated at Tk. 1350.00 lac. The details of which is given below:

SL.No.

Descriptions

Types of

Area

01
02
03

Rate(Tk.)

Amount

Cons:
Prefabricated
2floors of ( 2-Storied

Sft.
103000
40000

450

(Tk.in000)
90000
18000

Building)
2 Floors of (2 Storied

60000

450

27000

Building)
Total Building

135000.00

3.05. Machinery and Equipments

The cost of the imported and local machinery and equipments of the project has
been estimated Tk.2407.50 lac excluding duty, tax, internal freight etc. The details of
machinery and equipments is given as

A.Machinery and Equipments (Imported)

SL.

Item

unit

NO.

Value Tk. in (000)

(Depreciated Value)

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01
02
03
Total :A

210750.00

* List of Machinery enclosed in Annexure 1

B. Machinery and Equipments (Local)

SL.
NO.
01
02
03
04.

Item

unit

Value in Tk (000)

Total: B
Total :(A+B)

30000.00

240750.00

** List of Machinery enclosed in Annexure 2

3.06 Manpower Requirement

To run the project smoothly and profitably the total man power to be required is estimated at
persons covering both administrative and factory staff. The details manpower and salary
there against is given in
A. Factory Staff:
SL.NO

Category

(Amount Tk 000)

No.

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12

Salary/month

Annually Salary

(average)

(Tk.in000,)

01

Staffs (Production)

50

20000

12000

Worker

1000

6500

78000

Total

90000.00

B.Admin Staff:
SL.NO
01

Category

No.

Staff (Management & Marketing)

Total (A+B)

30
1080

Salary/month

Annually Salary

(average)

(Tk.in000,)

50000

18000
108000.00

3.07 Land and Location

The project will be setup on an area of 12.5 Bigha project lands under Dist. Dhaka, PLOT
607-609,Uzilab,Uttar Vagnahati,Sreepur,Gazipur.The place is very suitable for setting up of
an industry as the area has been developed as an industrial Zone. The project will enjoy all
infrastructural facilities like electricity, Gas, Road communication net work etc.

3.08

Erection and Installation

Erection and installation of machinery will be done by experts. An amount of Tk.10.00 lac
has been estimated for this purpose.
3.09

Furniture, Fixture & vehicles

Decoration, Furniture, Fixture& Vehicles of the project has been estimated at Tk100.00 lac.

3.10.

Internal Freight & Duty

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An amount of Tk. 122.50 lac has been estimated for both imported machinery to reach the
project site.
3.11

Utilities:

i) Electricity:
To implement the proposed Program the project will require 300 KW Power at 100 %
capacity and it will get from Rural Electrification Board .The annual cost of electricity has
been estimated at Tk.100.80 lac. In addition the project will have its own generator (standby)
for uninterrupted supply of electricity.

3.12

Repair and Maintenance

The cost of repair and maintenance for machinery has been estimated @ 0.5%, 1% & 1.5%
and onwards of its of machinery and equipments in 1st, 2nd, 3rd and subsequent years of
operation.
3.13 Stores & Spares
The stores & spares of machinery to be required has been estimated @ 0.5%,1% & 1.5%
and onwards of its cost of machinery and equipments in 1st, 2nd, 3rd and subsequent years
of operation.

FINANCIAL SUMMARY

4.01

Financial Evaluation

The Profitability analysis on the proposed Project has been computed for 10 years of
operation to assess the financial viability of the project. The financial projection that has
been made includes estimate of sales, cost of goods sold, administrative and general
expenses.
4.02 Assumption underlying the financial projections

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A.

The capacity of the project is projected to be 70%, 75%, 80% of the rated capacity in
the 1st three years and onwards.

B.

The cost of other accessories have been kept constant throughout the period on the
assumption that increase in raw materials will be offset by increase in selling price of
products.

C.

The rates of depreciation / amortization of various assets of the project are

considered as normal rate that prevails in the industrial sector.

D.

Insurance premium is to be charged at 0.50% of the cost of the fixed assets and raw
materials stocks.

E.

Other expenses viz. power, fuel & lubricants etc. are charged as per prevailing
market price.

F.

General and administrative expenses are estimated as per prevailing market price.

G.

Tax-Holiday for the project has been estimated to be 5 years.

4.03

Debt Service Coverage Ratio (DSCR)

The details debt service coverage ratio may be seen at Annexure- 4 x.

4.04

Break-Even- Analysis

The break-even- analysis has been carried out on the basis of cost & sales of projected
operation. The project is expected to be break-even- at 40% of the rated capacity.
4.05 Cash flow statement
The projected earning forecast statement indicates that the project will have sufficient fund
generation at the end of the year. The project will be able to all its operational expenses,
repay its debt obligation, provides substantial returns to the sponsors and build a reasonable
reserve.
4.06 Projected Balance sheet

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The projected balance sheet also shows that the project will be able to maintain health
liquidity throughout the operational life.
4.07 Internal are Rate of Return
The internal rate of return has been computed following the DCF technique.
4.08

Investment Period

The investment period has been considered 7 years.

SOCIO-ECONOMIC ASPECTS

501 Foreign Exchange Earning:

The project envisages for production of exportable Denim Products which will earn foreign
currency through exporting the products.
5.02 Employment Generation:
The project after implementation will create employment opportunity for 1080 persons and
the cost per job created will be TK 523.66 Thousand

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5.03 Environmental Scanning:

Cultural & social environment:

One of the major aspects of our cultural and social environments is our increasing
population. That is one of the major opportunities for market expansion. We have great
demand of packaging Products & accessories especially Denim fabrics & others so the
demand for these products production is ever increasing. Higher quality of consumers
lessens the cost of production and also increases benefit.

Economic Environment:

Now our economy is more favorable for entrepreneurs. Now a days government provides
various opportunities for our entrepreneurs. They can get loans from banks and government
agencies. Government also provides various training facilities for unemployed people.
1. Labor cost in our country is very cheap. It lowers our production cost. Again we
generally find unskilled labor. Training needs to be provided which increases cost.
2. Cost of capital is high in our economy. Interest rate is high in our which increases
cost of capital.

Technical environment

Technical environment in Bangladesh is improving now-a-days. Many necessary

technologies are now available in our country. We can import many of them from Asian
countries at low cost. Now our colleges and universities provide various technical training
programs which will help to develop technically skilled employees.

Political and legal environment:

Our political environment is suffering from frequent political unrest and strikes. It causes
problem in transportation sector and increases cost of product

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5.04: CONCLUSION
As evaluation of the Socio-economic, Private and national benefits, which expected to
accrue from the implementation of this project and continuous execution of its operational
activities will easily highlight the rational and economic justification of this unit. The Project is
expected to generate very substantial financial returns for the promoters, all method of
project appraisal and analysis, financial, management & economic evaluation justify the
establishment and implementation of this unit. The unit will be able to pay income tax, after
expiry of tax holiday period. Such levies and taxes will help to enhance the Governments
funds, available for public sector development expenditure.

The detail feasibility reveals that the project is technically feasible, financially rewarding,
economically &commercially viable. The proposal may, therefore, be considered suitable for
bank finance.

MARKETING ASPECT
Objective:
The objective of this market study is to examine and investigate into demand pattern,
sources and uses of Denim fabrics. The proposed project to be set-up for manufacturing of
different denim items for export market.

INTRODUCTION:

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Bangladesh had a historical reputation in production of textile products including famous

Dhaka muslin. Fabrics from Bengal were found in ancient Egyptian tombs, and were traded
with the Roman and Chinese empires in the medieval age. In ancient Bengal a great deal of
expertise existed with regards to weaving of textile products as well as great reverence
towards its trade. In rural communities both men and women were apprenticed in weaving.
These skills and disciplines in sewing and weaving are passed down through generations
and are quickly transferred to production lines in modern knitwear factories.
In the early 1980s, there were small-scale independent investments in the readymade
garments sector. At that time, it was not considered viable and received very little
government attention. Within a decade, the RMG industry in Bangladesh had flourished and
by the early 1990s it had emerged as a major employer. Under the dynamic leadership of
the private sector together with policy support from the government, the export oriented
RMG industry has shown a spectacular growth during the last two and a half decades. The
textile sector initially could not keep pace with the requirement of yarn and fabrics
particularly by the woven RMG sector as the textile and clothing industry was controlled by a
fairly small community of local entrepreneurs. However, the sector grew with vengeance and
the country currently exports over US$11 billion in textiles and garments, with a projected
target of US$24 billion dollars by 2020.
Three independent associations are responsible for the textile sector: the Bangladesh Textile
Manufacturers Association (BTMA), which represents spinners, woven fabric manufacturers
and dyeing units; the Bangladesh Garment Manufacturers and Exporters Association
(BGMEA), which represents the RMG sector, primarily the cutting and sewing units; and the
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), which represents
the knitwear fabric manufacturers, the fabric dyeing units and the knit garment cutting and
sewing units. These three associations work either in collaboration, or independently from
each other, subject to the agenda they may be forwarding. However, it should be borne in
mind that the bulk of yarn manufactured by BTMA members is consumed by members of the
BKMEA, which at times leave the two associations at loggerhead opposing sides of an
industry issue. The three main government departments that work for apparel sector are the
Ministry of Textile and Jute, the Ministry of Finance and the Ministry of Commerce.
Knitwear firms in Bangladesh are mainly located in Narayanganj district. Besides, a few
firms are also located in Chittagong, Dhaka, and Gazipur districts. The knitwear industry in
Narayanganj emerged at the early stage of the 19th century. Initially clothes were knitted
from thread processed by wooden spindle wheels. Later handlooms were brought in from

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India. This transformed the local cloth industry into a specialized sector of hosiery items. The
hosiery sector expanded and accelerated in the 1980s and 1990s into knitting industry when
the expansion of RMG industry created demand for fabrics. The industry expanded both
vertically and horizontally to meet growing demand for fabrics within a few years. Besides,
production of sweaters and socks, the major output of the knitwear industry involves two
processes; namely, knitting of fabric and making of knitwear using the fabric thus knitted. the
present case study attempts to explore the following issues by focusing on a selective
number of knitwear firms in Narayanganj. How has the knitwear industry evolved? How has
it sustained the successful performance? What are the sources of the industrys competitive
strength? How are the structures of the constituting firms placed to productivity differentials
within the dynamic performance of the industry? How all firms growing at the same pace or
the composition is changing over time with some firms falling and some going ahead? What
are the proximate factors that are causing the differential changes? After this introduction,
Section 2 highlights some features along the path of development of the knitwear sector in
Bangladesh. Section three sheds light on the momentum of the exports mainly to the EU
and the US markets. Section four gives an idea of the production capacity and actual
production of the sector. Section five attempts a rather qualitative presentation of the internal
dynamics of small, medium and large firms based on a purposively selected sample. Section
six sketches the rise and fall of firms within the sector. Finally, section seven makes a few
concluding remarks.

Textiles have been an extremely important part of Bangladesh's economy for a very long
time for a number of reasons. The textile industry is concerned with meeting the demand for
clothing, which is one of the basic necessities of human life. It is an industry that is more
labor intensive than any other industry in Bangladesh, and thus plays an important role in
providing employment for people. Over US $ 5.0 billion has been invested in these mills and
about 5.00 million people are currently employed. Local textile mills fulfill 100 % of the
domestic fabric and yarn requirement, 50% of the cotton woven fabric requirement of export
oriented garments sub-sector and over 95% of the yarn and fabric requirement of export
oriented knitwear sub-sector.

History of the Textile Industry in Bangladesh

Traditionally, artisans working in small groups, in what are often referred to as cottage
industries, produced most of the textile in the sub-continent. There were many highly skilled
artisans in the area, which at present is Bangladesh. In fact, from prehistoric times until the

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Industrial Revolution in the eighteenth century, East Bengal was self-sufficient in textiles. Its
people produced Muslin, Jamdani, and various cotton and silk fabrics. These were all well
regarded even beyond the region as very skilled craftsmen manufactured them.
The material produced by the artisans of Bengal started facing vigorous competition from the
very beginning of eighteenth century after the growth of mechanized textile mills in the
English Midlands. This eventually affected cottage industry to a great extent and
automatically reduced the number of Bengali workers skilled enough to produce such high
quality fabrics. The fabric produced and dyed in British factories flooded the Indian markets.
In time, its importation became one of the points of contention in the growing independence
movement of the subcontinent. As separation from Great Britain was becoming a
foreseeable reality and local production again profitable.
After 1947 and the partition of East and West Pakistan from India, most of the capital and
resources of Pakistan came under the control of West Pakistanis. The textile industry thus
stagnated in East Pakistan as momentum for development shifted from the eastern part of
the country to the west. The west also grew more cotton than the east, which was used as
an incentive for developing the industry in the west instead of in the east. The majority of all
industries in the east were also owned by West Pakistani industrialists.
When Bangladesh gained its independence from Pakistan in 1971, the new government
nationalized the textile industry, as it did with many other businesses in which West
Pakistanis had been the principal owners. Although there were some Bangladeshi
industrialists, they did not form a large or politically powerful group and thus had to surrender
control of their factories to the government as well. All of the country's textile factories were
then nationalized and organized under the Bangladesh Textile Mills Corporation, or BTMC.
The industry remained under the control of the BTMC until 1982-83. Bureaucratic obstacles
combined with other problems such as low productivity in the labor force, lack of planning,
indiscipline, lack of accountability, and poor machine maintenance and operation resulted in
the reduction of profits.
The government thus gradually denationalized the production of textiles. Factories were
privatized, beginning with the dyeing and weaving units. Since now, much of the industry has
been privatized through auctions and other means.

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After 1995 a considerable number of different types of textile industries have been setup in
private sector. Now about 97% of total number of textile industries is in private sector.
The Textile Industry of Bangladesh until 1977-78 was basically domestic oriented. Textile
Industries of Bangladesh first entered into export market through Ready-made Garments in
1977-78 and since then the export oriented ready-made garment industry of the country
made a spectacular growth of fabrics & hosiery products during the last decade. Due to
dependency on imported fabrics & accessories the real foreign exchange earnings from
exports of garments from Bangladesh is only 25% of the total value in case of woven
garments while that from knit garments is upto 80%.
At present Bangladesh yarn manufacturing mills are capable of meeting of about 50% of the
total requirement of export quality knit yarn thus providing scope for maximum value addition
in knit RMG export. Local fabrics manufacturing mills are capable of meeting 80% of local
demand for yarn, about 95% of yarn & knit fabrics demand of export oriented RMG
industries and only 50% of the woven fabrics demand of export-oriented RMG industries.

While agriculture for domestic consumption is Bangladeshs largest employment sector, the
money gained from exporting textiles is the single greatest source of economic growth in
Bangladesh. Exports of textiles, clothing, and ready-made garments accounted for 77% of
Bangladeshs total merchandise exports in 2002.Only 5% of textile factories are owned by
foreign investors, with most of the production being controlled by families or Bangladeshi
companies. Immediately after the founding of Bangladesh, tea and jute were the most
export-oriented sectors. But with the constant threat of flooding, declining jute fiber prices
and a significant decrease in world demand, the contribution of the jute sector to the
countrys economy has deteriorated. The garment industry in Bangladesh became the main
export sector and a major source of foreign exchange starting in 1980, and exported about
$5 billion USD in 2002.
The industry employs about 3 million workers of whom 90% are women. Two non-market
factors have played a crucial role in ensuring the garment sectors continual success namely
(a) quotas under Multi- Fibre Arrangement1 (MFA) in the North American market and (b)
preferential market access to European markets.
Until the liberation of Bangladesh, the textile sector was primarily an import-substitution
industry. It began exporting ready-made garments (RMG) including woven, knitted, and

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22

sweater garments in 1978, which grew spectacularly during the next two and a half decadesfrom US$3.5 million in 1981 to US$10.7 billion in FY 2007. Apparel exports grew, but initially,
the RMG industry was not adequately supported by the growth up and down the domestic
supply chain (e.g., spinning, weaving, knitting, fabric processing, and the accessories
industries). Until FY 1994, Bangladesh's RMG industry was mostly dependent on imported
fabrics-the Primary Textile Sector (PTS) was not producing the necessary fabrics and yarn

Effect of the Agreement on Textiles and Clothing

From 1995-2005 the WTO Agreement on Textiles and Clothing (ATC) was in effect, wherein
more industrialized countries consented to export fewer textiles while less industrialized
countries enjoyed increased quotas for exporting their textiles. Throughout the 10 year
agreement, Bangladeshs economy benefited from quota-free access to European markets
and desirable quotas for the American markets.

export market

USA

USA

EU

EU

(textile)

(clothing)

(textile)

(clothing)

market share in 1995 <3%

4%

<3%

3%

market share in 2004 3%

2%

3%

4%

Market share in 2013 4.5%

3%

4.3%

5%

As the above table shows, the market shares for Bangladeshi textiles in the USA and both
textiles and clothing in the European Union have changed during the time period of the ATC.
It is uncertain whether these favorable export markets will remain since the expiration of the
ATC in 2005. Textile exports from Bangladesh to the United States did increase by 10% in
2009. Currently, the textile mills provide 70% of national exports. This proportion is even
higher in Bangladesh. In Bangladesh, the number of employed workers in the textile industry
increased by 400 000 in 1990 to 2 million in 2004, and the number of enterprises from 800
to 4000. Nine out of ten people employed in the industry are women. In general, the state
of the textile industry depends on well-being of 10-12 million people in Bangladesh. By IMF
estimates, as a result of the abolition of quota exports of Bangladesh will be reduced by
25%.

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23

Ready-made garments
In the 1980s, the RMG market started its journey. The hurdles of the Multi Fibre
Arrangement (MFA) quotas in 1985 and the Harkin Bill in 1994 were great challenges for the
industry, as were the phasing out of MFA quotas in 2004. Although there was concern that
the MFA phase-out would shut down the industry, the Bangladesh textile sector actually grew
tremendously after 2004 and reached an export turnover of US$10.7 billion in FY 2007.
Bangladesh's export trade is dominated by the RMG industry. The sector currently employs
2.5 million peopleabout 40% of total manufacturing (85% of these employees are women)
and accounts for 76% of the country's export earnings and 10% of its GDP.

Major market
Bangladesh was the sixth largest exporter of apparel in the world after china,the EU,Hong
Kong,Turkey and India in 2006.In 2006 Bangladesh's share in the world apparel exports was
2.8%.The US was the largest single market with US$3.23 billion in exports, a 30% share in
2007. Today, the US remains the largest market for Bangladesh's woven garments taking
US$2.42 billion, a 47% share of Bangladesh's total woven exports. The European Union
remains the largest regional destination - Bangladesh exported US$5.36 billion in apparel;
50% of their total apparel exports. The EU took a 61% share of Bangladeshi knitwear with
US$3.36 billion exports. Currently Bangladesh is now second largest ready made garments
manufacturer after china, by the next five years Bangladesh will become largest ready made
garments manufacturer.

Employment and labor

Bangladeshs garment exports mainly to the US and Europe make up nearly 80% of the
countrys export income. The country has more than 4,000 factories employing between two
and three million workers. The industry currently employs 1.5 million workers, approximately
80 % of whom are women, many working in hazardous social conditions. It has been a major
source of employment for rural migrant women in a country that has increasingly limited rural
livelihood options, and where women migrants have been largely excluded from formal work
in the cities.

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24

Woven: Woven fabric is a cloth formed by weaving. It only stretches diagonally on the bias
directions (between the warp and weft directions), unless the threads are elastic. Woven
cloth usually frays at the edges, unless measures are taken to counter this, such as the use
of pinking shears or hemming.
Woven fabrics are worked on a big loom and made of many threads woven on a warp and a
weft.
Classification of woven fabrics. Woven fabrics are classified by fiber composition and
purpose, as well as by the methods used in production, finishing, and dyeing.
Woven fabrics are produced from virtually all types of textile fibers and threads. Depending
on the sector of the textile industry producing the fabric and the principal fiber composition,
they may be classified as cotton, linen, wool, silk, or other fabric. Silk fabrics may be
produced from man-made fibers or natural silk. Woven fabrics may be manufactured from a
single type of fiber or thread or with a mixture of not more than 10 percent of another type;
from a blend of threads obtained from several types of fibers; or from an alternation of
various types of threads. Depending on their purpose, woven fabrics may be classified as
domestic or industrial. Domestic fabrics account for approximately two-thirds of the total
quantity of fabrics produced; they are subdivided into apparel fabricsfor undergarments,
dresses, suits, and kerchiefs; decorative fabricsfor upholstery and drapes; and moistureabsorbing fabricsfor towels and napkins. The textile industry considers fabrics produced in
large quantities, such as calico and satin, as separate groups.
The majority of domestic fabrics are made from cotton. Silk and linen are second and third in
production volume. Wool fabrics may be produced from worsted yarna fine, smooth
(combed) yarnfor making dresses, suits, and overcoats; from thicker (condensed) yarn for
overcoats and suits; or from the coarsest, thickest condensed yarn for making overcoats and
blankets.The terms loom state and gray goods are applied to unfinished fabrics that
have been removed from the loom. Yarn-dyed fabrics are produced from threads of various
colors; melange fabrics are obtained from yarn made from a mixture of fibers of different
colors. In addition to a smooth surface, fabrics may also have a fleecy external layer, or nap.
Pile fabrics have a nap, either looped or cut, that is formed by an additional system of
threads; in napped fabrics, the nap is formed from the filling. Felts have a face that is so
compacted as a result of fulling that the weave is concealed. Thickened threads may be
used to form ribs on the surface of fabrics; patterns in relief may also be produced
(seeJACQUARD ATTACHMENT). Multiple fabrics are produced from several superimposed
warps and are held together by common weft threads.

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25

Before fabrics are delivered to a consumer, they are usually subjected to bleaching, dyeing
or printing and various types of final finishing processes. Uniformly dyed fabrics are dyed
with a single color; printed fabrics have a pattern printed on one side In the USSR individual
types of fabrics, differing from one another in even one characteristic, such as thickness of
the threads, number of threads per unit length or width, or weaving pattern, are designated
by an identifying code number. The USSR produces approximately 4,000 individual types of
fabrics.

Primary characteristics and properties of woven fabrics. The structure of a woven fabric
is characterized by the thickness of the threads (judged by thread density, that is, by the
weight in grams of 1 km of thread), by the type of interlacing of threads, by the density of the
weave, by the ratio of the flexure of the warp and weft threads, and by the surface structure
(smooth or napped). The properties and appearance of a woven fabric are determined by
the fabrics structure, by the properties of the threads, and by the finishing.
In the USSR woven fabrics are certified according to three quality categories: superior, first,
and second. Fabrics that have been awarded the state seal of quality are in the superior
quality category; fabrics that have been classified as of second quality are taken out of
production. Production method, structure, and final finishing are taken into account when a
fabric is assigned to a quality category, as are such indicators as density (the weight of 1 sq
m of fabric), shrinkage, color fastness, whiteness, wearability, pilling, resistance to wrinkling,
and other mechanical properties.
Density characterizes the amount of material used in the manufacture of the fabric and,
indirectly, the fabrics thickness. It varies from 30 gm per sq m for silk chiffon crepe to 1,000
gm per sq m for canvas and belting. The density of the most widely used dress fabrics, such
as calico and satin, is 90150 gm per sq m, and for wool suiting 250400 gm per sq m. The
shrinkage of a woven fabric indicates the reduction in size, expressed in percent of the initial
value, after washing, drying, dry cleaning, and storage. Acceptable values are 1.55 percent
for warp shrinkage and 1.53.5 percent for weft shrinkage. The color fastness of a fabric is
tested for exposure to light, weathering (joint exposure to light and atmospheric conditions),
washing, and friction. Color fastness is judged visually by means of comparisons of the test
samples with standard samples. The highest rating is 8 for exposure to light and to
weathering and 5 for other exposures. The whiteness of a fabric is measured on a
photometer.

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26

A fabrics wearabilityits ability to withstand abrasion, washing, dry cleaning, weathering

and other effectsis determined from experimental wearing of clothing made from the
fabric; it is also measured on instruments that simulate normal wear. Wear-ability is
evaluated on the basis of any reduction in strength, durability, and weight, as well as any
change in the viscosity of a solution obtained by dissolving the fabric in an alkali or acid.
Resistance to abrasion is characterized by the number of use cycles that cause destruction
of the fabric. Abrasion may cause small balls, or pills, to form on the surface of a fabric from
the rolled ends of fibers. Fabrics containing synthetic fibers are particularly prone to pilling.
The coefficient of resistance to wrinkling is determined from the recovery angle of a fabric
sample bent 180 or from the change in the dimensions of an artificially pressed fold.
In order to assess the mechanical properties of a woven fabric, the fabrics strength and
elongation under stretching are usually measured until the breaking point is reached; fabric
fatigue and other properties are also evaluated. Breaking loads vary from 50 newtons per 50
mm for gauze to 3,500 newtons per 50 mm for canvas and belting; calico has a breaking
load of 250400 newtons per 50 mm, and wool suiting 350600 newtons per 50 mm.
Elongation is expressed as the difference between the fabrics final and initial lengths, in
percent.
Evaluation of the hygienic qualities of woven fabrics includes determination of the ability to
absorb water and water vapor; capillarity; permeability to air, water, and steam; heat
conductivity; and, more rarely, ability to hold an electric chart

Table 1: Comparative Statistics of Knit Wear & Woven Wear

Volume in Million US$
Year

Knitwear
Volume

Woven Wear

%
Share
change in BD
Export

Total Export

Volume

%
Share
change in BD
Export

RMG

Bangladesh

89-90

14.84

0.77

609.32

29.34

31.67

624.16

1923.70

90-91

131.20

784.00

7.64

735.62

20.73

42.83

866.82

1717.55

91-92

118.57

-9.62

5.95

1064.00

44.64

53.36

1182.57

1993.90

92-93

204.55

72.51

8.58

1240.48

16.59

52.06

1445.03

2382.89

93-94

264.14

29.13

10.42

1291.64

4.12

50.97

1555.78

2533.90

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27

94-95

393.26

48.88

11.32

1835.09

42.07

52.85

2228.35

3472.56

95-96

598.32

52.14

15.41

1948.81

6.20

50.20

2547.13

3882.42

96-97

763.30

27.57

17.28

2237.95

14.84

50.65

3001.25

4418.28

97-98

940.31

23.19

18.22

2843.33

27.05

55.09

3783.64

5161.20

98-99

1035.36

10.11

19.49

2984.81

4.98

56.18

4020.17

5312.86

99-00

1269.83

22.64

22.08

3082.56

3.27

53.59

4352.39

5752.20

00-01

1496.23

17.83

23.14

3364.20

9.14

52.02

4860.43

6467.30

01-02

1459.24

-2.48

24.38

3124.56

-7.12

52.20

4583.80

5986.09

02-03

1653.83

13.34

25.26

3258.27

4.28

49.76

4912.10

6548.44

03-04

2148.02

29.88

28.25

3538.07

8.59

46.54

5686.09

7602.99

04-05

2819.47

31.26

32.58

3598.20

1.70

41.58

6417.67
7900.80

8654.52

816.98

35.38

36.26

4083.82

13.50

38.78

05-6

10526.16
9211.23

06-07

4553.60

19.30

37.39

4567.63

14.05

38.25

07-08

5532.52

21.50

34.58

5167.28

10.94

32.30

08-09

6429.00

16.20

41.30

5918.51

14.54

38.02

09-10

6483.29

0.81

40.00

6013.43

1.60

37.11

10-11

9076.76

40.05

39.59

8837.70

46.97

38.55

9353.97

5.84

12177.86
10699.80
14110.79
12347.51

11-12

9735.76

7.26

40.18

38.60

15565.19
12496.72
17914.46

16204.65
22924.38

19089.73
24231.09

Source: Export Promotion Bureau

EU is the main export region of Bangladeshi Knitwear constituting 83% (US$ 1780.57
million) of total knitwear export in FY 2003-2004 followed by USA (11%, i.e. US$ 236.79
million).
This has become possible because it
can satisfy the ROO of EU as value
addition is higher (75%) in this sector.
After the adoption of the guidelines for
the application of the scheme of
generalized tariff preferences by EC
knitwear export from Bangladesh to
EU rose precipitously. The two-stage
transformation requirement of ROO in
1999 boosted market penetration in

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28

EU further; it contributed a growth of

101.19% since 2000-2001.
Graph 2: Knitwear Export to Major Markets
Bangladesh RMG sector has successfully passed some critical tests and is now sailing with
two masts: knit and woven. The sub-sectors are now in healthy competition among
themselves to take the role of leadership within the country.

Textiles Export
During the last Fiscal Year (2011-12) our total export volume was USD 24.23 billion while the
same was USD 22.92 billion in the last fiscal 2010-11. The growth achievement is near
about 5.7% whereas growth in RMG is 6.5%. Out of the total export, export from the textile
sector for the FY 2011-12 is USD 21.30 billion which is 87.9%. So contribution from textile
sector is alone nearly 88%. The composition of the textile export is given hereunder:

Illustration-1: Textiles Export Composition

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29

Page
30

RMG Export
Out of the total textile export RMG (knit & oven apparel) export was equivalent to USD 19.09
billion which is equivalent to 89.60% of total textiles export. In relation to the total export from
Bangladesh, the contribution of RGM export is equivalent to 78.78%. The RMG export trend
is given hereunder in tabular form:
Table-1: RMG & Total Export Trend for the last 10 years

Fiscal Year

RMG
Export
Million USD

inGrowth
in
RMG Export

Total
Export
Million USD

in

2002-03

4912.09

7.16%

6548.44

9.39%

2003-04

5686.09

15.76%

7602.99

16.10%

2004-05

6417.67

12.87%

8654.52

13.83%

2005-06

7900.8

23.11%

10526.16

21.63%

2006-07

9211.23

16.59%

12177.86

15.69%

2007-08

10699.8

16.16%

14110.8

15.87%

2008-09

12347.77

15.40%

15565.19

10.31%

2009-10

12496.72

1.21%

16204.65

4.11%

2010-11

17914.46

43.35%

22924.38

41.47%

2011-12

19089.73

6.56%

24231.09

5.70%

*** Raw Data has been collected from Export Promotion Bureau

Illustration-2: Percentage of RMG export to Total Export

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31

Growth
in
Total Export

RMG export growth leads Export Growth

The average growth rate for the last 10 FY commencing from 2002-03 FY is 15.82% where
total average export growth for the same period is 15.41%. It indicates that only RMG export
growth leads the export growth of Bangladesh as RMG export growth> Total Export Growth.
But the alarming news is that the growth in export is not steady. The growth is deviated by
almost 11% (15.41% 11%) which indicates volatility of the sector. The following chart will
clarify it more:

Illustration-3: Comparison of RMG export Growth to Total Export Growth

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32

Knit & Woven Composition

Throughout 10 years we were good in woven export but afterwards Bangladesh has become
very strong in knit garments production also. The statistics show the contribution of both knit
and woven in RMG export is similar i.e. 50:50 now. In the fiscal year 2011-12, knit sector
was stagnant- had no growth and woven sector covered the gap of the previous year with a
significant growth.

Illustration-4: Comparison of RMG export Growth to Total Export Growth

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33

Table-2: Growth in Knit & Woven Exports

Fiscal Year
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

Growth
Woven Export
4%
9%
2%
13%
14%
11%
15%
2%
40%
14%

in

Growth
Knit Export
13%
30%
31%
35%
19%
21%
16%
1%
46%
0%

in

*** Raw Data has been collected from Export Promotion Bureau

Export Trend with Different Countries

Export trend with different countries shows mixed picture. Somewhere tremendous growth
has occurred and somewhere negative trend is prevailing. This is not good for highest export
earning sector. Steady growth to be maintain to ensure sustainability in the sector

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34

Page
35

There are several countries where we are facing negative growth ranging from -2% to -68%
which is very significant and notable but to be worked out why we are facing such negative
growth. Other alarming findings are that in some countries we have achieved significant
growth in 2010-11 FY but in 2011-12 we have touched negative growth e.g. In Turkey our
growth in 2010-11 was 69% but in current FY it reduced to -38%. Below illustration shows
that in 2010-11 we earned positive significant growth but in 2011-12 we faced significant
negative growth. It is a matter to think

Illustration-5: Countries with negative growth in 2011-12

Consistent negative growth was prevailing in USA (-2%), Canada, Slovakia, Greece,
Finland, France but differences increase in Portugal, turkey, Netherlands, and Hungary.
In some countries we earned positive growth but those are inconsistent, for an example, in
Lithuania growth in 2010-11 was 464% which reduced to 87% in 2011-12 FY. Such example
may be applied for Estonia, Poland, Korea Republic, China, Australia, Austria, India. This is
not good signal for the industry. Consistent growth is important for sustainability of the
market.

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36

Illustration-6: Countries with positive growth

Concluding Remarks
Yes we are still holding the 2nd position in the global RMG export market but the growth is
not steady. It is the right time to concentrate more on the analytical actions. The actions may
include:
1. Where we have negative growth, we need to find out the reasons behind it and these
facts findings should be done by the trade bodies and government agencies for its
greater interest.
2. Where we have positive growth, we need to undertake promotional steps so that
more growth can be achieved and to make sure that current growth prevails.
3. New destinations should be looked for as we are getting threat openly from the
matured manufacturers.
Actions to be expedited higher than the pace we are applying now to protect the interest of
the nation.

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37

RMG export may triple to $44.66b by 2020

Bangladeshs ready-made garments (RMG) export may triple to 44.66 billion US dollar by
2020 if the new opportunities are properly utilized, reports UNB.
Experts said at a seminar, titled Opportunities and Challenges in the Changes in Global
Sourcing Scenario, held at Westin Hotel in the capital on Sunday. Chaired by BGMEA
president M Shafiul Islam Mohiuddin, the seminar was addressed, among others, by Foreign
Minister Dipu Moni, fellow of the Centre for Policy Dialogue (CPD) Dr Debapriya
Bhattacharya, director of Brac Business School (BBS) Prof Mamun Rashid and general
manager of Intertek Consumer Goods Karthik.N.D. The speakers expressed the optimism
that the export growth of country s garments even could exceed that target if the emerging
markets are fully explored in the next 7-8 years. The mentioned that garments export
fetched the country 17.91 billion dollar last year. Senior Research Fellow of Bangladesh
Institute of Development Studies (BIDS) Nazneen Ahmed and senior adviser of Promotion of
Social and Environmental Standard in the Industry (PSES) Sarwat Ahmed presented two
key-note papers at the seminar, organised by Bangladesh Garment Manufacturers and
Exporters Association (BGMEA). In her presentation, Nazneen Ahmed said, the countrys
RMG exports share in non-traditional markets has increased significantly over the last three
years and its growth is likely to double by 2015. The speakers laid special emphasis to
explore the new markets for the development of the RMG sector

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38

Contribution of the RMG Sector in Bangladesh

In the development history of Bangladesh, RMG sector contributed a lot in terms of
employment generation, involving women in the formal sector, increased substantial export
earnings etc. One significant aspect of the RMG's contribution in the development is the
human development aspect. The sector contributed a lot in the following areas:

Women empowerment

Gender equality

Improved health & nutrition

Reduced child marriage

Reduced infant mortality

The development in the sector also contributed a lot in the growth and development of the
backward linkage industry of the country.

Comparative Structure of Gross & Net Exports of Bangladesh (FY 2010-11)

Graph 5: Structure of Gross Export

Graph 6: Structure of Net Export

Though woven is the highest contributor (47%) in terms of gross export, but knit becomes
the most significant component if we consider net export with a share of 32%. This has
resulted because of the backward linkage industry that has grown over time which helped
the knitwear sector to have the higher value addition and there fore a much higher net
retention rate.

Year

1994

2000

Page
39

2006

Value Addition:

50%

70%

75%

Net Retention:

40%

55%

60%

Structure of Textile Industry of Bangladesh

The textile industry of the country comprises more than 36 sub-sectors of which the main
sub-sectors are:
a

Spinning Mills

Weaving Mills

Weaving in Decentralized Power-loom Units

Handloom Units

Hosiery Units

Knitting and Knit Dyeing-Finishing Mills

Dyeing, Printing & Finishing Mills

SWOT Analysis on RMG:

Strength:
Advantage over China, Pakistan & India
Adequate supply of labor force of both sexes, attributed with less attitudes problem (less
absenteeism and, aptitude for learning, and loyal) and high morale
Cheaper labor cost
Low cost of captive power generation using gas as fuel
GSP facility up to 2015 (renewed recently) .

Considerable Qualified/keen to learn workforce available at low labor charges.

Weakness:
Bangladesh produce mostly basic products- which are low cost items; the share of fashion
products i.e., high value added product is very low.
Bangladesh does not produce the basic raw materials (only a negligible quantity of cotton
but no manufactured fiber) and as such has to depend totally on sensitive global market.
Because of inadequate backward linkage, lead-time happens to be long, nearly 3 months.
Public power supply is erratic.

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40

Bank interest rate is still high enough, particularly of private sector bank, for investment of
export oriented high value project.
HRD facility, productivity and quality support, testing and accreditation support, design
support and compliances are yet to be enhanced.
Cost of doing business is high because of under table money
Opportunity:
Bangladesh has now a scope to go for more fashion oriented products deserving high price
in the global market.
With the help of further increase of productivity & quality and design support, Bangladesh
can minimize cost and maximize profit and export value.
Bangladesh, as a proven experienced RMG & Textile manufacturer, can expand share in
the existing market (USA, EU, Australia, Canada, etc.) and can also explore opportunity in
Japan & CIS countries.
In the long run, Bangladesh has a scope to target huge populated country like China and
India- where demand as well as cost of manufacturing will be wider.
Threat:
Unless new strong market is explored in home or abroad, any non-cooperation from USA &
EU may jeopardize the whole Bangladesh RMG export business and consequently the
textile manufacturing.
Sudden price hike of cotton and yarn in the global market may push Bangladesh to a very
awkward situation to devastate the business.
The type of labor and political anarchies of the recent days if prevails in the future,
Bangladesh may lose the business in the way Sri Lanka has lost.
Growing terrorism, or its false/amplified propaganda, is also a big threat.
The poor political culture and violence is one of the most important threats.

In order to make further boom, Bangladesh has to create new capacities and modernize &
balance the existing ones. Encouragement of FDI from ethnic Bengalis in foreign countries
would be one of the best options for the needed financing in addition to the local banks'
efforts. Power supply has to be ensured.
Bangladesh needs to develop capacities to provide the industries with a sustainable supply
of resource personnel and support services in regard of research, design, testing &
standardization, accreditation, compliances, etc.
Bangladesh has to improve the port efficiency further and gear up domestic transportation.

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41

Labor crisis, labor safety, social rights and gender issues have to be dealt with more
efficacies. It is important that the buyers should have a preferred access to the country;
starting from reception on arrival to facilities such as hotel/rest house, tourism and recreation
should be improved.

Present Position of Readymade Garment Industry in Bangladesh

The glory that was in manufacturing and export of world famous Muslin and Nakshi Katha
will perhaps never come back. But it is a mater of great satisfaction that a new found
reputation has replaced some of that faded glory. It has put Bangladesh convincingly in the
industrial map of the world as we emerged in the world market as one of the major exporters
of readymade garments.
After independent of our country when traditional items of export could not yield expected
result, in late 70s the government and a section of young, educated and dynamic
entrepreneurs began to emphasize on development of non-traditional items of export. By the
year 1983, readymade garment (RMG) emerged to be a non-traditional export oriented
sector, most promising in the socioeconomic context of the country.
Within a short period of time, it has attained high importance in terms of its contribution to
GDP, foreign exchange earnings and employment and also as vehicle of social changes.
Both domestic and international environment favored the rapid growth of this industry in
Bangladesh. Thus the 100% export-oriented RMG industry experienced phenomenal growth
during the two decades.

Growth of RMG Export from Bangladesh

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42

In 1978 the RMG industry was started its operation in Bangladesh with nine enterprises and
has grown at a blistering pace since. The export position of RMG for last 12-years and its
growth shown at Table
Table-: Quantity of Export of RMG and Earnings from Export of RMG
Year

Total Apparel Export

Total Apparel Export Earning

Woven
64.79
66.63
71.48
77.05
82.83
90.48
92.26
108.82
133.08
147.43
169.59
172.80

(In Million DZ)

Knit
36.66
45.27
52.54
63.39
69.18
91.60
120.13
165.02
199.54
241.60
290.92
292.70

Total
101.45
111.90
124.02
140.44
152.01
182.08
212.39
273.84
332.62
389.03
460.51
465.50

Woven
2984.96
3081.19
3364.32
3124.82
3258.27
3538.07
3598.20
4083.82
4657.60
5167.30
5918.50
6013.43

254.00

439.54

693.54

8837.70

9076.76

17914.46

2011-2012
268.87
439.54
708.41
Source: Export Promotion Bureau & BGME

9353.97

9735.76

19089.73

1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011

(In Million US$)

Knit
Total
1035.02
4019.98
1268.22
4349.41
1495.51
4859.83
1458.93
4583.75
1653.82
4912.09
2148.02
5686.09
2819.47
6417.67
3816.98
7900.80
4553.60
9211.20
5532.50
10699.80
6429.30
12347.80
6483.29
12496.72

Table Growth Rate of Export of RMG

Year

Growth considering Export Quantity

Woven
Knit
Total

Page
43

Growth considering Export Earnings

Woven
Knit
Total

19981999
1999-

Base Year

2000
2000-

2.84%

23.49%

10.30%

3.22%

22.53%

8.19%

2001
2001-

7.28%

16.06%

10.83%

9.19%

17.92%

11.74%

2002
2002-

7.79%

20.65%

13.24%

-7.12%

-2.45%

-5.68%

2003
2003-

7.50%

9.13%

8.24%

4.27%

13.36%

7.16%

2004
2004-

9.24%

32.41%

19.78%

8.59%

29.88%

15.76%

2005
2005-

1.97%

31.15%

16.65%

1.70%

31.26%

12.87%

2006
2006-

17.95%

37.37%

28.93%

13.50%

35.38%

23.11%

2007
2007-

22.29%

20.92%

21.47%

14.05%

19.30%

16.59%

2008
2008-

10.78%

21.08%

16.96%

10.94%

21.50%

16.16%

2009
2009-

15.03%

20.41%

18.37%

14.54%

16.21%

15.40%

2010
Average

1.89%
9.51%

0.61%
21.21%

1.08%
15.08%

1.60%
6.77%

0.84%
18.70%

1.21%
11.14%

The growth rate in last 11-years is more than 300% and annual average growth rate was
11.14% in terms of export earnings and 15.08% in terms export quantity. Growth in last year
(2009-2010) was insignificant due to world economic crisis started in 2008. This phenomenal
growth is due largely to the simple level of technology required in the industry. The
machinery is relatively inexpensive and easily available. In addition, garment producers can
operate in smaller premises than those required by most of the processes in the textile
industry. On top of this, Bangladesh has an abundant supply of cheap labor consisting
mostly of women for whom this is one of the most suitable forms of employment.

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44

But till now RMG exports form Bangladesh is concentrated in a relatively limited range of
products such as basic Shirts, T-shirt, Trousers and Shorts. To be internationally competitive,
Bangladesh needs to expand its product range and should begin producing fashion-wear
and higher value added items. Meanwhile, export order of different value added items are
coming but Bangladeshi exports are not being able to accept those due to lack production
facilities. Considering the fact DBL Group is going to build its capacity towards higher value
added items like Garments of Printed Knit Fabrics and the way of this they have decided to
set-up the proposed Textile Printing project.

The Strengths of RMG Sector of Bangladesh

The competitive strength of a firm or a company in the market depends on its specific
comparative advantages, which its competitors do not have. A particular uniqueness of a
supplier shapes up its strategic advantage profile. In case of Bangladesh, this uniqueness is
the unlimited availability of unusually cheap but usable workforce. It is the abundant supply
of comparatively cheap workforce that stands out as the most significant strength.

Denim (which gets its name from the French city from Nmes (de Nmes)) is a rugged
cotton twill textile, in which the weft passes under two (twi- double) or more warp threads.
This twill weaving produces the familiar diagonal ribbing of the fabric, which distinguishes
denim from cotton duck. It is characteristic of any indigo denim that only the warp threads
are dyed, whereas the weft threads remain plain white. As a result of the warp-faced twill
weaving, one side of the fabric shows the blue warp threads, the other side shows the white
weft threads. This is why jeans are white from the inside and what makes their fading
characteristics so unique compared to every other fabric. Denim has been used in America
since the late 18th century. The word comes from the name of a sturdy fabric called serge,

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45

originally made in Nmes, France, by the Andr family. Originally called Serge de Nmes, the
name was soon shortened to denim. Denim was traditionally colored blue with indigo dye to
make blue jeans, though jean then denoted a different, lighter cotton textile; the
contemporary use of jean comes from the French word for Genoa, Italy (Gnes), where the
first denim trousers were made.

Denim is mostly used to make Jeans. Beside jeans, denim has many application. This
special denim-themed issue of the cotton incorporated Lifestyle Monitor celebrates the
present and the future of denim and the blue jean. An examination of the current denim
market, trends and a look towards the future is easier than trying to pinpoint the historical
origins of what could be called the worlds most popular fabric.

Denim Types:
1. Natural Denim
2. Polycore Denim
3. Ring-spun Denim
4. Ring-Ring Denim
5. Ring Denim
6. Bull Denim
7. Dual Ring Spun
8. Black-Black Denim
9. Open-End Denim

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46

10. Over Twisted Denim

11. Printed Denim
12. Reverse Denim
13. Pinto wash Denim

There are also some types of denim such as:

Dry denim
Selvage denim
Stretch denim
Colour denim
Uses of Denim:
a Jeans
a Bags & purses
a Capri pants
a denim skirts
a Dresses
a Hats
a Jackets
a Overalls
a Shirts
a Booties & shoes
a Shorts
a Cut offs
a Daisy Dukes
a Swimwear
a Crafted items
a Sofa covers
a Director-style chair
a Lampshades
a Hassocks

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47

Dry or raw denim, as opposed to washed denim, is a denim fabric that is not washed after
being dyed during its production. Over time, denim will generally fade, which is often
considered desirable. During the process of wear, it is typical to see fading on areas that
generally receive the most stress, which includes the upper thighs (whiskers), the ankles
(stacks) and behind the knees (honey combs).
After being crafted into an article of clothing, most denim is washed to make it softer and to
reduce or eliminate shrinkage, which could cause an item to not fit after the owner washes it.
In addition to being washed, non-dry denim is sometimes artificially distressed to produce
a worn look.
Much of the appeal of factory distressed denim is that it looks similar to dry denim that has,
with time, faded. With dry denim, however, such fading is affected by the body of the person
who wears the jeans and the activities of his/her daily life. This creates what many
enthusiasts feel to be a more natural, unique look than distressed denim.
To facilitate the natural distressing process, some wearers of dry denim will often abstain
from washing their jeans for more than six months, though it is not a necessity for fading.

Selvedge on a pair of jeans

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48

Selvedge denim
Selvedge denim (alternative spelling: selvage denim) is a type of denim which forms a
clean natural edge that does not unravel. It is commonly presented in the unwashed or raw
state. Typically, the selvedge edges will be located along the out-seam of the trousers,
making it visible when cuffs are worn.
The word selvedge comes from the phrase self-edge, the natural edge of a roll of fabric.[]
As applied to denim, it means that which is made on old-style shuttle looms. These looms
weave fabric with one continuous cross thread (the weft) that is passed back and forth all the
way down the length of the bolt. As the weft loops back into the edge of the denim it creates
this self-edge or selvedge. Selvedge is desirable because the edge cannot fray like denim
made on a projectile loom that has separate wefts, which leave an open edge that must be
stitched.] This advantage is only realized on one edge of the fabric, however, as the fabric
has to be cut to shape and anywhere it is cut the self-edge is lost.
Shuttle looms weave a narrower piece of fabric, and thus a longer piece of fabric is required
to make a pair of jeans (approximately 3 yards). To maximize yield, traditional jean makers
use the fabric all the way to the selvedge edge. When the cuff is turned up, the two selvedge
edges (where the denim is sewn together) can be seen. The selvedge edge is usually woven
with a coloured stripe: green, white, brown, yellow, and (most commonly) red Fabric mills
used these colours to differentiate between fabrics. Contrary to popular belief, the stripe is
not sewn in finishing the product, but woven into the fabric itself.
Most selvedge jeans today are dyed with synthetic indigo, but natural indigo dye is available
in some denim labels.[ Though they are supposed to have the same chemical make-up,
there are more impurities in the natural indigo dye.[ Loop dying machines feed a rope of
cotton yarn through vats of indigo dye and then back out. The dye is allowed to oxidize
before the next dip. Multiple dips create a dark indigo blue.
In response to increased demand for jeans in the 1950s, American denim manufacturers
replaced the old shuttle style looms with modern projectile looms. The new looms produced
fabric faster and wider (60 inches or wider). Synthetic dying techniques along with post-dye
treatments were introduced to control shrink and twist

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49

Fades caused by prolonged periods of wear, without wash, have become somewhat of the
main lure to the raw denim. These fades are categorized by certain names:
Whiskers Faded streaks that surround the crotch area of the denim.
Combs Also known, as honey combs are the streaks of faded lines that are found
behind the knee.
Stacks Produced by having the inseam of the denim hemmed a few inches longer than
actual leg length. The extra fabric stacks on top of the shoe causing a fade to form around
the ankle to calf area of the denim.
Train Tracks appears on the outseams of the denm. This fade showcases the selvedge
by forming two sets of fades that resemble train tracks.

Stretch denim
Stretch denim usually incorporates an elastic component (such as elastane) into the fabric to
allow a degree of give in garments. Only a small percentage is required within the fabric
(approximately 3%) to allow a significant stretch capacity of around 15 percent.

Color denim
Denim fabric dyeing is divided into two categories; indigo dyeing and sulfur dyeing. Indigo
dyeing produces traditional blue colors or shades similar to blue colors. Sulfur dyeing (also
called color denim) is used to create specialty black colors and other colors like pink, grey,
rust, mustard, green, and also improve the qualitity

Denim industry in Bangladesh:

The textile industry has played an important role in Bangladeshs economy for a long time.
Currently, the textile industry in Bangladesh accounts for 45 percent of all industrial
employment and contributes 5 percent to the total national income. The industry employs
nearly 4 million people, mostly women. A huge 78 percent of the countrys export earnings
come from textiles and apparel, according to the latest figures available. Bangladesh exports
its apparel products worth nearly $5 billion per year to the United States, European Union
(EU), Canada and other countries of the world. It is the sixth largest apparel supplier to the
United States and EU countries. Beximco Denim, Envoy Textiles Ltd., Royal Denim Ltd.,

Page
50

Shasha Denim, Marfani Denim Mills, Partex Denim Mills Ltd., Artistics Denim Mills Ltd.,
Chittagong Denim Mills Ltd. , Ali Hossain Textile Mills Private Ltd., Argon Denims Ltd.,
Hameem Group are most denim producers in Bangladesh. Bangladesh has great future of
denim. We can export denim to EU,USA,etc more than China because of our low labour
cost. Among the new textile items, denim fabrics and sweater are gradually becoming the
flagship products for the local exporters. Industry insiders said during the last four years,
production of denim has increased from 28 million metres per year to 200 million metres in
2006. The sub-sector is nowproducing denim enough to meet the entire demand of the
export oriented readymade garments units for the same, said the Bangladesh Textile Mills
Association (BTMA). Bangladesh emerged as the number one supplier of denim clothes to
the European market, commanding 27 per cent share during the 1st half of 2006. The BTMA
claims that availability of locally produced denim fabrics and enhanced ability to offer the
same at most competitive prices have helped Bangladesh gain greater market share.
Restrictions on certain apparels of some Asian countries in the EU market have also
benefited the Bangladesh denim sector. In terms of earnings, Bangladesh, however, ranked
third in the EU market because of the exporters concentration in low cost dresses. During
the January-June 2006 period Bangladeshi apparels manufacturers shipped about
24 million pairs of denim jeans in mens & boys category to Europe. In womens & girls
denim category, Bangladesh exporters saw the volume increased by more than 91 per cent
to about 17 million pairs during January- June 2006.
Export of Denim:
The US imports of denim have been a cause for concern this year. The fall in imports has
been consistently rising and almost touching a negative growth of 14.3% from Jan to Sept
compared to similar period in 2010.

China has shown the most significant fall in export figures and some other countries like
Bangladesh, Cambodia etc also follow but in smaller percentages. The imports have fallen
significantly in 2011 when compared to the same period in 2010. This fall is significant since
we have seen that denim sales have ditched the recessionary pattern in the past that other
apparel Products have shown. The current market reports coming from EU are not very
encouraging .Many retailers are believed to be holding their purchases or delaying them. In

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51

fact , one of the major retailer from EU is believed to have postponed a major part of a
20million pcs order .. The situation does not look so good. But when we look at the figures of
imports of denim apparel from Jan to July 2011 as compared to the similar period in 2010,
we find a totally
different situation. The import of jeans into EU has actually increased by 5% over the same
period in 2010.

Bangladesh Export Of Denim Jeans To EU : 2005-2009

June 3rd, 2010 by Sandeep Agarwal | Filed under Denim Data & Figures.

Bangladesh is a major exporter of denim jeans to EU27. Being low priced and with special
and indefinite duty free and quota free access under Everything but arms initiative to
EU , Bangladesh continues to dominate the EU denim import business. Currently, it has
about 19% share of the denim jeans import market in EU27 countries.
Lets have a look at the figures of imports of denim jeans from Bangladesh for the last 10
years.

Year

Total Denim Value

Jeans
(million

Average
Price

Page
52

(million pcs) Euros)

(Euro/pc
CIF)

2000

16.46

87.92

5.34

2001

25.50

120.26

4.72

2002

32.69

144.69

4.43

2003

48.50

190.87

3.94

2004

63.71

247.52

3.88

2005

63.29

245.42

3.88

2006

85.07

341.78

4.02

2007

74.57

289.98

3.89

2008

81.94

317.23

3.87

2009

89.68

373.93

4.17

Thus we can see that the exports of denim jeans have increased by almost 400% from 2000 to
2009 . There have been some years in which the exports increased by a large % as compared to the
previous
year
.
These
years
have
been
:
2001
:
Increase
54%

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53

2002
2003
2004
2006
2009 : Increase 10%

:
:
:
:

Increase
Increase
Increase
Increase

28%
48%
31%
34%

The prices from Bangladesh have been more or less moving in a narrow range of Euro 3.8
to 4.20 since 2003. Though in earlier years, the prices were much higher, but recent years
have seen the prices move around in this range. There is no clear trend in the prices from
Bangladesh if we consider these figures. However, would it be the similar situation if the
Euro prices were converted to dollar prices . In the table below, we have taken the average
conversion factor (from Euro to USD) for each year from 2000 to 2009 and applied the factor
to the average prices for that year. This gives us the average dollar prices for export of
denim jeans from Bangladesh to Eu . With this table we will come to know whether there is
really no trend for prices from Bangladesh:
Year

Euro To USD Av Price

(Euro)
average
factor

Av. Price
(USD)

2000

1.09

5.34

4.89

2001

1.12

4.72

4.21

2002

1.06

4.43

4.18

2003

0.89

3.94

4.42

2004

0.80

3.88

4.85

2005

0.80

3.88

4.85

2006

0.80

4.02

5.02

2007

0.73

3.89

5.32

2008

0.68

3.87

5.69

2009

0.72

4.17

5.79

Page
54

In the table and chart above, we can see that actually the prices from Bangladesh are quite different
than what Euro prices show. We can see that since 2002 the average prices in Euro terms (from
2002 to 2009) have declined by more than 5% whereas there is an uptrend in dollar terms and the
prices have increased from $4.43 per piece in 2002 to $ 5.79 in 2009 actually showing an increase
of about 30%

Dollar being the ruling currency worldwide, gives a better picture of the prevailing price
situation and it clearly reflects that the prices from Bangladesh are continuously and steadily
rising over the years. This is despite the fact that the volumes have increased manifold
during this period. The Bangaldesh denim export industry is only expected to grow stronger
in the coming times . We have seen a number of denim mills also come up in Bangladesh
and this strengthens the supply chain making it easier for Bangaldesh to go deeper into
these markets.

Page
55

Imports Of Womens/Girls Denim Jeans Into US From Bangladesh 2000-2009

Year

Quantity(mill Value
ion pcs)
(Million
USD)

Av. Price (CIF

Value) per jeans

2000

1.57

10.52

6.69

2001

3.54

24.99

7.06

2002

4.95

35.09

7.10

2003

2.95

20.29

6.87

2004

4.42

28.46

6.44

2005

9.97

57.33

5.75

2006

14.62

82.16

5.62

2007

15.77

80.68

5.12

2008

18.46

100.20

5.43

2009(JanSept)

16.28

85.92

5.28

Total

92.52

525.6

5.68

It is interesting to note that though there was not much difference in the export quantity of
the jeans from India and Bangladesh in 2000, Bangladesh now exports over 4 times the
quantity of womens jeans than India. However, India has the lead in price of almost 40%
though it has experienced a constant fall in average prices since the year 2000. But this
price difference is also due to the reason that India does not export much quantity of basic 5
pocket jeans

The figures are quite inspiring and confusing at the same moment. They do not reflect the
current economic turmoil that Europe is going through. The price increase , though seems
justified as the impact of cotton price increases of last year have continued to be felt this
year at the retail level. Many countries have increased their exports with China having
increased about 3%. However, what happens in the next few months shall be very important
and indicative for the industry . The reports coming from major exporting to EU countries
including Bangadesh , China, Pakistan etc have not been very good. Most of the apparel
exporters have indicated that they are short of orders or have requests from the buyers to
postpone the orders to next year.

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56

Domestic denim brands penetrate US market

Bangladeshi brands have penetrated the American and Western markets and buoyed by
this, they are targeting to capture 10 percent of Americas huge jeans market.
Two brands that have made huge impact in the above markets include Envoy and Sasha.
Bangladesh is riding high on the factors such as cheap labour and fair prices which have
made it the leader in world market projected at US $70 billion.
Bangladesh export, which earned the country $2.07 billion, an increase of 42 percent
included items like trousers mainly jeans.
The report while revealing that Bangladeshi trouser makers had left countries such as China
and Mexico well behind, did not name India even though it is one of the biggest exporters of
this item.
Share of Bangladeshi exports to US doubled to 2.33 percent in 2005 and it further jumped to
more than 5 percent in the first quarter of 2006 while export from major players such as
Mexico and China fell during the same period.
Exporters from Bangladesh sold the denim at $78 for a dozen as against $99 and $102 of
China and Mexico. Experts have projected that if this trend goes on Bangladesh will be able
to capture 10 percent of US denim trouser market by the end of the year.
Its success story is not limited to US market alone with the exports to European Market
showing a positive outlook during the first half of 2006.
Hennes & Mauritz (H&M) Chief Executive of Bangladesh Operations, Pearl Kerlsson said
that Bangladeshi trousers and denims have a bright future ahead as they are highly
competitive.
Abdus Salam Murshey, the Ex-Vice President of Bangladesh Garment Manufacturers and
Exporters Association (BGMEA) stated that they were the most competitive supplier and that
is the reason buyers have shifted their focus on us.

Page
57

Future of Denim:
For financial crisis import percentage of denim of USA has decreased in this year. But import
percentage of EU has increased and also price is increased. Day by day labour cost in china
is increased. So we have to catch international market. Our production quality is very good
and our industries are equipped with modern textile machineries and still now our labour cost
is low. So I think we have great business of denim.

COMPARATIVE STATEMENT ON EXPORT OF RMG AND TOTAL EXPORT OF

BANGLADESH
YEAR
1983-84
1984-85
1985-86
1986-87
1987-88
1988-89
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-2012

EXPORT OF RMG
(IN MILLION US$)
31.57
116.2
131.48
298.67
433.92
471.09
624.16
866.82
1182.57
1445.02
1555.79
2228.35
2547.13
3001.25
3781.94
4019.98
4349.41
4859.83
4583.75
4912.09
5686.09
6417.67
7900.80
9211.23
10699.80
12347.77
12496.72
17914.46
19089.73

TOTAL EXPORT
% OF RMGS TO
OF BANGLADESH
TOTAL EXPORT
(IN MILLION US$)
811.00
3.89
934.43
12.44
819.21
16.05
1076.61
27.74
1231.2
35.24
1291.56
36.47
1923.70
32.45
1717.55
50.47
1993.90
59.31
2382.89
60.64
2533.90
61.40
3472.56
64.17
3882.42
65.61
4418.28
67.93
5161.20
73.28
5312.86
75.67
5752.20
75.61
6467.30
75.14
5986.09
76.57
6548.44
75.01
7602.99
74.79
8654.52
74.15
10526.16
75.06
12177.86
75.64
14110.80
75.83
15565.19
79.33
16204.65
77.12
22924.38
78.15
24231.09
78.78

Page
58

Data Source Export Promotion Bureau Compiled by BGMEA

VALUE AND QUANTITY OF TOTAL APPAREL EXPORT

FISCAL YEAR BASIS
(VALUE IN MN. US$ QUANTITY IN MN DOZEN)

YEAR

1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

TOTAL
APPAREL
EXPORT IN
MN.US$
WOVEN
1240.48
1291.65
1835.09
1948.81
2237.95
2844.43
2984.96
3081.19
3364.32
3124.82
3258.27
3538.07
3598.20
4083.82
4657.63
5167.28
5918.51
6013.43
8432.40
9353.97

TOTAL APPAREL
EXPORT IN MN.DZ
KNIT
204.54
264.14
393.26
598.32
763.30
937.51
1035.02
1268.22
1495.51
1458.93
1653.82
2148.02
2819.47
3816.98
4553.60
5532.52
6429.26
6483.29
9482.06
9735.76

Page
59

TOTAL
1445.02
1555.79
2228.35
2547.13
3001.25
3781.94
4019.98
4349.41
4859.83
4583.75
4912.09
5686.09
6417.67
7900.80
9211.23
10699.80
12347.77
12496.72
17914.46
19089.73

WOVEN
36.05
34.35
47.21
48.82
53.45
65.59
64.79
66.63
71.48
77.05
82.83
90.48
92.26
108.82
133.08
147.43
169.59
172.80
247.28
268.87

KNIT
10.66
10.81
15.30
23.18
27.54
32.60
36.66
45.27
52.54
63.39
69.18
91.60
120.13
165.02
199.54
241.60
290.92
292.70
441.03
439.54

TOTAL
46.71
45.16
62.51
72.00
80.99
98.19
101.45
111.90
124.02
140.44
152.01
182.08
212.39
273.84
332.62
389.03
460.51
465.50
688.31
708.41

MAIN APPAREL ITEMS EXPORTED FROM BANGLADESH

(VALUE IN MN. US$)

YEAR
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010

SHIRTS
805.34
791.20
807.66
759.57
961.13
1043.11
1021.17
1073.59
871.21
1019.87
1116.57
1053.34
1056.69
943.44
915.6
1000.16
993.41

TROUSERSJACKETS T-SHIRT
80.56
126.85
225.90
101.23
146.83
232.24
112.02
171.73
366.36
230.98
309.21
391.21
333.28
467.19
388.50
394.85
393.44
471.88
484.06
439.77
563.58
656.33
573.74
597.42
636.61
412.34
546.28
643.66
464.51
642.62
1334.85
364.77
1062.10
1667.72
430.28
1349.71
2165.25
389.52
1781.51
2201.32
1005.06 2208.9
2512.74
1181.52 2765.56
3007.29
1299.74 3065.86
3035.35
1350.43 3145.52

SWEATER
.
.
70.41
196.60
296.29
271.70
325.07
476.87
517.83
578.37
616.31
893.12
1044.01
1248.09
1474.09
1858.62
1795.39

2010-2011

1566.42

4164.16

2488.19

1887.50

VALUE AND QUANTITY OF TOTAL APPAREL EXPORT

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60

4696.57

CALENDAR YEAR BASIS

(VALUE IN MN. US$ QUANTITY IN '000 DOZEN)
TOTAL
TOTAL
APPAREL
APPAREL
EXPORT IN
EXPORT IN
YEAR
MN.US$
MN DZ
WOVEN
KNIT
TOTAL WOVEN
KNIT
1994
1544.89
341.53
1886.42 41.64
13.77
1995
1976.40
512.18
2488.58 49.38
19.83
1996
1942.37
686.27
2628.64 47.54
26.11
1997
2621.33
810.49
3431.82 60.56
27.99
1998
2871.06
976.29
3847.35 64.23
34.59
1999
2987.73
1169.90
4157.63 64.93
41.3
2000
3376.49
1448.22 4824.71 71.63
51.58
2001
3162.28
1432.72 4595.00 67.72
50.18
2002
3076.28
1573.40 4649.68 83.44
70.71
2003
3398.84
1850.36 5249.20 85.83
80.50
2004
3686.78
2532.62 6219.40 94.22
104.90
2005
3689.60
3210.48 6900.08 96.39
138.19
2006
4544.79
4388.72 8933.51 125.65
190.60
2007
4608.40
4741.93 9350.33 133.62
212.08
2008
5654.12
6222.95 11877.07 161.51
272.17
2009
5695.42
6196.58 11892.00 163.27
279.91
2010
7067.04
7787.76 14854.80203.48
357.76
2011
8504
9410.46 17914.46245.10
432.25
2012
9062.35
10027.38 19089.73262
465
Data Source Export Promotion Bureau Compiled by BGMEA
Source: EPB

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61

TOTAL
55.41
69.21
73.65
88.55
98.82
106.23
123.21
117.90
154.15
166.33
199.12
234.58
316.25
345.70
433.68
443.18
561.24
677.35
727

Bangladesh's RMG Export to World (FY2008-09, FY 2009-10 & FY2010-11).

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62

Million US$
Major EU Countries

Woven
July June
2008-09

Knit

Total

July - June

July June

July - June

July June

July June

July - June

2009-10

2010-11

2008-09

2009-10

2010-11

2008-09

Austria
Belgium
Bulgaria
Denmark
Finland
France
Germany
Greece
Italy
Ireland
Netherlands
Portugal
Romania
Spain
Sweden
U.K.
Cyprus
Czech Republic
Estonia
Hungary
Latvia
Lithuania
Malta
Poland
Slovakia
Slovenia
Sub-Total (EU)
EU % of World
Growth%

3.01
95.02
0.38
23.94
6.10
264.11
801.40
8.86
153.42
41.89
393.82
6.53
3.34
141.66
49.18
502.34
0.01
1.84
0.00
0.00
0.07
0.00
0.04
5.57
14.80
0.37
2517.70
42.54

1.93
87.78
0.41
33.51
5.47
260.92
717.31
8.92
161.34
54.14
388.79
4.87
3.03
136.98
54.98
534.29
0.27
1.24
0.10
0.31
0.04
0.07
0.00
6.03
15.56
0.24
2478.54
41.22
-1.56

6.36
162.93
0.21
50.43
11.22
405.98
1108.91
9.42
236.76
54.28
374.13
6.03
3.34
253.49
93.91
768.90
0.03
4.31
0.91
0.29
0.14
0.00
0.00
38.34
19.01
0.77
3610.11
42.81
45.65

19.20
157.52
0.39
131.23
15.52
705.69
1334.40
29.57
368.86
52.16
513.98
24.51
7.89
404.23
125.74
720.58
0.63
15.66
0.13
0.00
0.16
0.05
0.66
43.49
26.22
2.08
4700.55
73.11

13.87
155.79
0.47
178.24
15.59
692.00
1282.77
20.66
379.04
80.16
528.57
23.08
4.30
384.55
129.89
725.74
0.84
14.59
0.24
9.98
0.30
0.04
0.12
44.56
24.29
2.57
4712.21
72.68
0.25

27.75
299.74
0.97
256.32
28.73
999.71
2022.05
20.89
525.17
105.59
591.07
32.57
4.37
595.92
206.86
990.98
1.12
23.98
0.62
7.01
0.34
0.62
0.32
123.33
39.59
4.08
6909.72
72.87
46.63

22.21
252.54
0.77
155.17
21.62
969.80
2135.80
38.43
522.28
94.05
907.80
31.04
11.23
545.89
174.92
1222.92
0.64
17.50
0.13
0.00
0.23
0.05
0.70
49.06
41.02
2.45
7218.25
58.46

USA
% of USA
Growth%

2733.98
46.19

2736.44
45.51
0.09

3506.12
41.58
28.13

959.42
14.92

891.61
13.75
-7.07

1119.04
11.80
25.51

3693.40
29.91

295.00
4.98

311.69
5.18
5.66

461.75
5.48
48.15

292.05
4.54

283.86
4.38
-2.80

432.92
4.57
52.51

587.05
4.75

13.49
11.14
1.60
4.11
9.52
52.34
4.24
41.43

25.15
11.84
3.65
10.44
9.99
120.26
15.36
25.53

49.82
32.60
3.62
26.60
25.45
153.68
34.46
30.34

35.80
28.43
4.81
5.37
1.41
21.99
1.19
40.45

60.41
33.33
4.45
8.51
2.55
53.06
7.00
35.88

143.08
62.04
9.31
26.21
10.49
93.83
12.75
50.83

49.29
39.57
6.41
9.49
10.94
74.33
5.42
81.88

Canada
% of Canada
Growth%
Non-Traditional &
Emerging Markets
Australia
Brazil
Chile
China
India
Japan
Korea Rep.
Mexico

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63

Russia
South Africa
Turkey
Sub-Total (Non-Trad.)
% of Non-Traditional
Growth%
Other Countries
Except
Above
% of Other Countries
Growth%
GRAND TOTAL
Growth

4.87
22.92
108.43
274.09
4.63

6.67
21.36
123.76
373.99
6.22
86.42

9.53
28.09
245.79
639.98
7.59
98.11

11.29
19.59
131.11
301.44
4.69

13.72
14.90
182.52
416.33
6.42
68.75

42.33
20.35
272.52
743.73
7.84
136.84

16.16
42.51
239.54
575.53
4.66

97.73

112.78

214.93

175.80

179.28

276.64

273.54

1.65

1.88
15.39

2.55
90.58

2.73

2.77
1.98

2.92
54.31

2.22

5918.51

6013.44
1.60

8432.89
40.23

6429.26

6483.29
0.84

Sub-sector Production

No. of
Units

Page
64

Installed
Capacity

9482.06 12347.77
46.25

Production
Capacity

Textile Spinning:

Textile Weaving:

385

721

8.7 ml.
Spindle
0.23 ml.
Rotor
17250
Shuttleless
13500
Shuttle.

(i)
Weaving: 584
(ii)
Denim: 20
(iii)
Home Textile: 17
(iv)
) Knit Fabrics: 100
Dyeing-Printing-Finishing:

2050 ml.
Kgs..
2150 ml.
Metre.

233 2200
ml. Metre.

Total 1339

Conclusion
Denim fabric has a long, rich history, and just like other products such as wine, automobiles
and electronics that have garnered universal aficionados, denim has morphed and changed
over the years, its status evolving from functional to fashionable staple. Denim has been
beloved in its jeans form for decades. Worldwide, nearly 90% of consumers own at least one
pair of denim jeans
The importance of the RMG industry in the economy of Bangladesh is very high so as its
backward linkage. Furthermore, the industry is expected to be the catalyst in the
industrialization of Bangladesh, and has been declared as a thrust sector by the
government. From the overall position it is observed that there is huge demand-supply gap
of Denim products in the export market. The proposed project will help to decrease the gap
by a very little quantity. The detailed feasibility study in the foregoing chapters shows that the
project is viable in all respects. From Technical point of view the proposed program will be
viable. Also from the financial scenario, the project is highly profitable.

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