Value Chain: Woven

 

Value Chain: Woven

 

The situation of woven garments is completely different. There are only a few weaving mills in Bangladesh offering a sufficient quality standard for exports and consequently the majority of fabrics that are used for woven garments exports has to be imported. This means higher purchasing costs, stronger dependence on an external supplier and also pricing disadvantages due to higher import duties on the EU market as these fabrics are not complying with the so called ‘rules of origin’.

 

There is a concentration of manufacturing activity in and around the capital city of Dhaka and port city Chittagong and a growing garment manufacturing presence in the country’s export processing zones.


According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the total fabric requirement in the captive market is about 3 billion yards, of which roughly 85 to 90 percent is imported from countries such as China, India, Hong Kong, Singapore, Thailand, Korea, Indonesia and Taiwan. Fabric demand is increasing at the rate of 20 percent per year.

Although the industry is one of the largest in Bangladesh and is still expanding, it faces serious problems, principally because the country does not produce enough of the raw materials necessary for the industry to expand. The primary materials used in the spinning sector are raw cotton and man-made fibres such as viscose and polyester staple fibres. Unfortunately, none of these raw materials are produced in Bangladesh.

Most spinning mills in Bangladesh produce low-grade yarn. Current yarn production satisfied only 22-percent of the total yarn demand. In spite of this drawback, as many as 116 new spinning mills, each having the capacity of 25,000 spindles, will be established in the near future.

The weaving sector also is plagued by a lack of organization and coordination. The existing weaving capacity in Bangladesh can meet only about 15 percent of fabric demand; the rest is imported. However, the increasing trend of expansion in the weaving sector is clear from the fact that 223 modern weaving plants, each with an annual capacity of 10 million meters, will be set up in the near future.