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20 November, 2018 03:33:08 AM
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Garments accessories and packaging ready to boost export earnings

Sharif Ahmed, Dhaka
Garments accessories and packaging ready to boost export earnings

Makers of Bangladeshi garments accessories and packagers have invested enormously to push up export earnings and meet the demand of the apparel sector.

Abdul Kader Khan, president of the Bangladesh Garments Accessories and Packaging Manufacturers' and Exporters' Association (BGAPMEA), told The Independent that around Tk. 1,500 crore has been invested by the manufacturers of garments accessories and packagers this year. Even more projects are in the pipeline, he said.     

Since the demand for accessory products is growing at a faster rate at both home and abroad, about 100 new factories have started their operations this year.

Currently, around 1,700 factories are producing accessory items in the country mostly in compliant factories.            

When asked, Abdul Kader Khan said: “We have to emphasise more on producing high-quality accessory items to establish this sector as an individual industry ratther than a backward integration of the readymade garments (RMG) industry.”          

“However, the newly made investment directly focuses on export accessory items because we have the capacity to meet approximately 95 per cent of the local demand,” he added.

When asked about the items, Abdur Kader Khan said Bangladesh has produced and exported accessories like woven labels, leather badges, stone and metal motifs, rubber patches, gum tapes, satin and cotton ribbon hangers, price tags, and buttons and zippers.

The indirect contribution has always been 15–20 per cent of the net export earning of the RMG sector. Export earnings for RMG in 2017–18 FY totalled USD 30.61 billion, of which approximately USD 7.10 billion came from accessory items used in the RMG, leather, pharmaceutical and other export-oriented sectors.

Presently, the export contribution of accessory items stands at USD 7.10 billion. Of this, USD 1.42 billion comes from direct exports to countries like those in the Middle-East, South Africa, Sri Lanka, Malaysia, Europe, Vietnam, Cambodia, and Laos.

Citing an example, Abdul Kader Khan said: "Suppose, a T-shirt is sold for USD 20. In that case, the contribution of accessory items is USD 3–4. So, accessory items can be another major export earner for the country. Some factories are exporting accessory items directly to foreign destinations."

China is the biggest player in manufacturing garment accessory items in the world. Bangladesh holds the second largest position in this regard.        

Khan said the sector could grow big with the right kind of policy support. “There is a USD 24-billion market for garment accessories just in Asia. China now accounts for the lion’s share of it. Our products are as good as theirs, and we have the potential to grab that market,” he asserted.

“We have demanded cash incentives on exports several times as this has been contributing almost fully to export-oriented sectors,” he said.

"Banks are charging double-digit interest rates on loans from businesses. This is eventually increasing the cost of doing business," he added.     

Talking to The Independent, Dr Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue (CPD), said the garments accessory making and packaging industry should not be treated as a backward linkage industry. "It should be recognised and categorised as an independent entity," he added.

“Accessory items are also meeting the demand of the country’s agro-business and plastic sectors,” he said.

Bangladeshi accessory items are exported abroad. They support the backward linkages of the country’s other businesses, he observed.

Mentioning one of the challenges, Moazzem said small entrepreneurs in this sector should participate more to build up their brand images as buyers always prefer to purchase items that possess quality and display brand loyalty.

In the RMG sector, the accessory makers and packagers supply 34 types of products, disclosed industry

insiders.

They said that with proper policy support and financial incentives, both indirect and direct export earnings in the sector can be increased by up to three times over the next couple of years.

EA

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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