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Bangladesh moving up the value chain

There was a time when Bangladesh’s apparel export was more or less concentrated on a handful of items (as per reports, around 73 per cent of its total exports revolved around five basic items including T-shirts, trousers, sweaters and formal shirts).

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Increasing overhead and operating costs, compounded further by wafer-thin profit margins in basic items, which continue to dwindle by the day as buyers squeeze the price points, forced the garment exporters to explore new product categories.

And also since the manufacturers grew in size and revenue, the companies imbibed more technology and better worker management and with that the focus has also shifted from producing mere basics products to more innovations for value add.

Today, Bangladesh garment makers have moved beyond the basics with value, making many new and exciting engineered product categories, amongst which intimatewear, MPPE, uniform and workwear are going to be the next growth drivers.

Uniforms and Workwear on roll!

The global workwear and uniform market was valued at US $ 75.63 billion in 2020 and is expected to reach US $ 109.47 billion by the end of 2027, growing at a CAGR of 4.3 per cent (during 2021-2027) even if as per another report, the global uniform manufacturing industry for the military, navy, fire brigade and police is worth around US $ 370 billion.

Bangladesh’s export though negligible, yet compared to the overall size of the market —defence dresses fetch between US $ 400 million and US $ 500 million annually, according to industry people —is set to rise as more and more take to uniform and workwear manufacturing to increase market share and garner better price points.

“Currently, I am making uniforms for the Belgian Army and the police of Kosovo,” claims Managing Director of Team Group, Abdullah Hil Rakib.

Uniforms accounted for nearly 2 per cent of Team Group’s total apparel export last year.

The volumes are low yet, felt the MD of the group, who said Team Group can entertain more orders as it has the capacity to do so.

Then there is Satexco, an early bird in uniform making in Bangladesh, which is said to be serving the British Army for long.

Speaking to Apparel Resources (AR) earlier, Managing Director of the company Iqbal Hossain claimed Satexco has been regularly supplying army jackets, rucksack, webbing, ammunition pouch, water containers, bayonet holders, pistol holsters and heavy tents.

“We also supply uniforms and other defence-related products to some European countries including France, The Netherlands, Belgium and Denmark. Sometimes we supply uniforms to UK’s Royal Air Force as well,” claimed Iqbal, adding, “We make the uniform as per the design and style supplied by the authorities concerned. The higher-ups of the armies of the concerned countries regularly visit the manufacturing unit and inspect production processes to ensure quality conformation. The uniforms and other products are exported after being tested by a third country.”

Mirage Textiles is another name in this direction, which even though not into making uniforms for the defence forces except for the police, has been catering to the uniform/workwear requirements of its clients from across the globe for quite some time now.

“Unlike fashion, the uniform business is very stable. Our clients are mostly the airlines, restaurants, police and electronics companies,” shares the Chairman of Mirage Textiles Pvt. Ltd., Lalindra Yahatugoda, in an interview with AR.

Snowtex Group (an outerwear exporter), which although does not produce uniforms for defence forces, manufactures workwear and outerwear for fire-fighters, farmers, engineers and other professionals and boasts of four manufacturing units namely Snowtex Outerwear Limited, Snowtex Sportswear Limited, Snowtex Apparels Limited and Cut and Sew Limited.

MPPE: The growth driver

The COVID-19 pandemic, an unmatched health disaster in recent human history, also offered an opportunity for Bangladesh to exploit. As the world continued to grapple with the ramifications of the pandemic, the demand for MPPE rose to an all-time high.

The second biggest apparel exporter globally, Bangladesh did not miss this opportunity.

Since the early days of the pandemic, when production of regular items took a backseat, garment makers took to PPE making, claims  Monirul Alam Shuvo from BGMEA, according to whom at least 30 factories took PPE manufacturing initially only to witness the numbers increase by the day.

“Just few days ago, we got an export order to make 20 million surgical gowns. All our factories are now booked for the entire year,” claims Fakir Apparels’ Director Mashiur Rahman Shommo, who turned five of his factories into PPE plants as the Western clients came calling in face of the initial onslaught of the pandemic.

One of the biggest names to take on PPE-making actively was also the renowned Bangladesh business conglomerate Beximco.

“It’s remarkable to see that within this short span of two months, Bangladesh was able to foray into this very regulated market with such a sensitive healthcare product,” felt Commerce Minister Tipu Munshi, who has subsequently assured all possible assistance from the Government by way of enabling policies and regulations to support healthy growth of MPPE sub-sector while also offering duty exemption on taxes for raw material imports.

Meanwhile, Deloitte has identified 12 MPPE products that bear high potential for development, which are namely isolation gowns, coverall suits, masks (including surgical kn95 and n95), shoe cover and head cover, gloves, protective spectacle, face shields, hand sanitisers, bed linen, towel, melt-blown fabric and nursing pad even as CEO of BUILD — Business Initiate Leading Development or BUILD is the first-ever national public-private dialogue platform to promote private-sector development through policy reforms —Ferdaus Ara Begum noted Bangladesh is already making progress in the MPPE sector, especially in 12 products, including eight WHO-listed ones while adding the country’s garment sector was the first to focus on the MPPE segment.

As per a recent study, Bangladesh not only holds the capacity of producing 12 MPP products (as mentioned by Deloitte) for domestic and global markets, but more than 50 firms in the country have already obtained clearance from the Directorate General of Drug Administration (DGDA), for making surgical masks, sanitisers and coveralls/PPE gowns as well.

This only goes to show Bangladesh’s competence is not only restricted to basic items but critical products as well, including lingerie and intimate apparels.

Lingerie in mix of things

A promising product category as it is, manufacturing destinations are vying to make the most of the opportunities that are on offer in lingerie — in 2019, Statista valued the global lingerie retail market at US $ 32.07 billion, while Kenneth Research expects the global lingerie market to reach an astounding US $ 62 billion by 2024 — and Bangladesh is, slowly but surely, lapping up the opportunities on offer, as it moves up the ladder rather strongly, so it seems.

According to industry insiders, Bangladesh’s annual lingerie export stands somewhere around US $ 700 million, which not so long ago was merely half of it.

“If we can get hold of a portion of the global lingerie market, our exports will go up significantly,” feels BGMEA Vice-President Shahidullah Azim even as industry people underline lingerie fetching better bargains vis-a-vis run of the mill products, was proving to be a better bet for those who want to move beyond shirts, T-shirts and denims to something more exciting in terms of profitability quotient.

Amongst the established names in lingerie manufacturing are Apex Group, SQ Group, Hop Lun BD, Blue Planet Knitwears, Chorka Textiles, KDS Group, Zaber & Zubair, Mondol Group, Four H Group, Mahdeen Group, etc., even if many new and overseas players are also getting into the lingerie space lately.

Take, for example, Kaixi Fashion Bangladesh Co. Ltd., the Chinese textile company which has recently announced an investment of US $ 6 million for a new unit at Dhaka Export Processing Zone to produce around 24 million pieces of ladies’ intimatewear annually.

Established in 1995, Kaixi Fashion owns three subsidiaries (Shenzhen Kaixi Fashion Co., Ltd., Shantou Kaixi Lingerie Industrial Co. Ltd. and Myanmar Kaixi Lingerie Industrial Co., Ltd.) and produces, distributes and sells products ranging from traditional knitting lingerie bra, panties, to ‘invisible’ bra pads and straps majorly to UK, France, Spain, Germany, Australia and Chile.

Meanwhile, home-grown player CTL or Chorkha Textile Limited has invested around US $ 70 million to enhance capacities since its inception in 2013 even if in fiscal 2020-21, CTL exported lingerie worth US $ 90 million while Ananta Apparels, another big name in lingerie in Bangladesh, has pumped in a massive Taka 250 crore to come up with a sophisticated lingerie unit in the port city of Chittagong last year.

Given the eagerness amongst the apparel makers to diversify their product basket by taking up new and exciting items, industry insiders feel Bangladesh is now all set for the next step towards attaining the much-needed manufacturing maturity.

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