Apparel makers seek investment to develop woven backward linkage

A big investment coupled with policy support is needed to develop a strong backward linkage of woven and manmade fabrics within the next two years, thus coming out of dependence on imports for such fabrics, said apparel leaders on Monday.

Apparel manufacturers now import around 65% of such fabrics to meet their needs, they noted at a plenary session titled "Readymade garments and textiles waving the way" at the two-day investment summit in Dhaka.

Bangladesh Investment Development Authority hosted the summit and The Business Standard was a media partner.

"We need investment in manmade fabrics. If we get policy and utility support from the government, it will help to reduce import dependency and cut lead time too," said Mohammad Ali Khokon, president of Bangladesh Textile Mills Association. 

"After the next two years, we do not have to import any fabrics from abroad," he added. 

While presenting a keynote, Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said Bangladesh is a greenfield for investments in textiles and high value-added items.

He urged investors to make investments in potential sectors. 

"We need foreign direct investment in potential sectors, especially for diversification towards high-end products and technological up-gradation," the BGMEA president said. 

Besides, Bangladesh offers a profitable location for investors both as a market and a production or sourcing base, he added. 

Faruque Hassan, said, "We are mainly exporting mainly five apparel items, which have occupied over 82% of RMG export earnings." 

Apparel exporters produce 74% of cotton-based products and 80% of exports items are concentrated within the $15 per kg price range, he added.

Anwar-Ul-Alam Chowdhury Parvez, president of Bangladesh Chamber of Industries, said, "We meet 60% demand of the lower segment world market and we have an opportunity to go for high-value products."

Foreign investors should come to Bangladesh as not considering export potential only, its local market also has demand for high-value products, he added. 

"Bangladeshi garment makers are trusted for their commitments to pricing and maintaining lead time. And, global buyers consider us as partners," he pointed out.

Mohammad Hatem, executive president of Bangladesh Knitwear Manufacturers and Exporters Association, said the apparel industry has been receiving a significant number of orders from buyers, but it faces a shortage of skilled workers. 

The government should set up vocational training centres across the country to develop skilled workers, he also said.

Shwapna Bhowmick, Bangladesh country manager for Marks and Spencer, said, "Bangladesh is one of our largest sourcing countries. Our sourcing of lingerie from Bangladesh has reached more than 100 million over the last five years." 

 She also said they earlier depended on Korea, Taiwan, China and Indonesia for sourcing fabrics and laces. 

Shovon Islam, managing director at Sparrow Group, said, "We have to invest in people and synthetic fabrics." 

Bangladesh is still lagging behind in lead time owing to a lack of manmade and sportswear fabrics and laces, he added.

Obstacles to taking export earnings from leather sector to $5 billion by 2024

Investors put down three major obstacles, such as delay in customs clearance, not up to the mark logistic support and a lack of policy support, to reaching the target of $5 billion export earnings from the leather and leather goods by 2024.

Presenting a keynote at a technical session of the investment summit, Syed Nasim Manzur, managing director at Apex Footwear Limited, said the leather sector is now performing well and its exports almost clocked the $1.3 billion mark. "We will be able to reach the $5 billion export target if the existing issues are addressed." 

Lead time also needs to be reduced to 40-45 days from the existing 90-92 days, he also said.

Despite having annual production of nearly 300 million square feet of leather, Bangladesh is way behind Vietnam when it comes to exports, he also said.

Vietnam, with a lower amount of leather production, exports $21 billion worth of leather and leather goods annually, he noted. 

"Good news is that from every level, the government is now working seriously on boosting earrings from the leather sector and providing a lot of support to it," Syed Nasim said.  

Stating that the leather sector is the second largest export earner, Amir Hossain Amu, chairman at the Parliamentary Standing Committee on Ministry of Industries, said in the government's eighth Five Year plan, a top priority has been given to diversification of leather footwear production and its export base. 

The Leather and Leather Goods Development Policy 2019 has incorporated 17 types of incentives to boost the sector's export earnings to $5 billion by 2024. In the FY22 national budget, customs duty on some raw materials of footwear has been reduced to 15% to decrease manufacturing cost.

Lien Chan Chun Yao, managing director at Blue Ocean Footwear Limited, said good manufacturing practices need to be maintained in all aspects of production. All tanneries have to be compliant. And, it takes a lot of time for customs clearance, which must be expedited. Otherwise, no new investment will come to Bangladesh. 

Ziaur Rahman, managing director at Bay Footwear Limited, said, "We have to reduce lead time to stay competitive in the global market."

Deborah Taylor, managing director at Sustainable Leather Foundation, said work on Savar tannery estate that began in 2012 has not finished yet. The central effluent treatment plant there has to be made functional. 

Besides, the government needs to formulate a policy conducive to new investments, she added.

Saiful Islam, president at Leather Goods and Footwear Manufacturers & Exporters Association of Bangladesh, moderated the event, while Dr Mike Redwood, spokesperson at Leather Naturally, also spoke on the occasion. 

Stress on investment in agri machinery to grab $1.35 billion market

If anyone thinks of investment in different stages of agriculture at this moment, they can choose areas, such as farm mechanisation, fertiliser, seed, agro-processing, post-harvest management, poultry, fisheries, dairy, product quality control and certification and research, experts said. 

Investment in those areas will actually help increase agricultural production rapidly, they also said at a seminar titled "Agribusiness Potential of Bangladesh" of the International Investment Summit 2021.

Presenting a keynote, FH Ansarey, managing director and chief executive officer of ACI Agrolink, said the current $1.35 billion market of farm machinery and spare parts will surpass the $2 billion mark in the next five years.

So, there is now a scope of investments in machinery, spare parts and their services in this phase of agriculture mechanisation, he also said.

The annual post-harvest loss of paddy, maize and wheat is 9%-10%, while the loss of vegetables is 20%-40%. 

Reducing post-harvest losses of crops and vegetables requires investments in harvesting and storage system development, he noted. 

With proper investment, it is possible to reduce the post-harvest losses and cut import dependency by up to 50%. 

There are also big investment opportunities in the agro-processing sector with an aim to manufacture quality and safe products. Because an 8% market growth annually indicates its bright future.

Anwar Faruk, former agriculture secretary, said, "If we focus on processing meat given the global demand, we can increase our exports."

Rana Karadsheh-Haddad, regional industry director at Asia and East Asia and Pacific, IFC, said now is the time to give utmost importance to two things - food waste and safe food. There is no alternative to reducing post-harvest losses for minimising food waste.

Agriculture Minister Md Abdur Razzaque said agriculture modernisation is now the highest priority of the government. At the same time, food safety is also a big issue. 

For this, we have to give importance to mechanisation and quality processed food," he added.

Ahsan Khan Chowdhury, chairman and chief executive officer of Pran RFL, moderated the session.