The Cotton knitwear sector in Bangladesh shows an almost complete value chain. Spinning, yarn dyeing, knitting, confection of knits and garment finishing is done in the country. Some of the factories are even fully vertically integrated; from spinning to finished garments.
Competitive wage rate together with easily trainable workforce, entrepreneurial skill, expanding supply side capacity, and government’s supporting policy helped to translate the comparative advantages into competitive advantages.
The core strength of the knitwear sector is its backward linkage. The entrepreneurs of the sector not only increased their stitching capability overtime but also invested in the allied industry to augment the overall capacity of the total sector with the same pace. Over the period of time knitwear sector gradually became almost self sufficient in fabric and yarn. This improvement has become possible because of the integrated growth of spinning factories in line of the growth of country’s stitching capacity and increased need of the yarn and fabric.
As the export increased in the knitwear sector, the capacity of the backward linkage also gradually increased accordingly. The result is local suppliers can provide 95% of the total fabric requirement of the sector. The growth of spinning sector also stepped with the growth of knitwear exports.
Though woven is the higher contributor in terms of gross export, but knit becomes the most significant component if we consider net export. 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 therefore a much higher net retention.
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