Bangladesh’s RMG sector is gradually losing its share in the European Union market due to factors like political unrest and lack of compliance, which gives boost to its global competitors.
According to Eurostat data, the country’s apparel export registered slow growth in July-October period last year compared to its competitors.
In 10 months of last year the country earned 11.7% RMG export growth in the EU market while Vietnam posted 22.88% growth, Cambodia 25.41% and Pakistan 28.26%.
Apart from political unrest and compliance issue, the productivity of Bangladesh garment industry is lower than that of other leading players on the global market, said Reaz Bin Mahmood, vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
He said despite the rise in production cost, the product price has not increased, which also makes the sector less competitive and lose market share.
BGMEA vice president Shahidullah Azim said many EU buyers shifted their orders from Bangladesh to other competing countries as political instability continued and factories were closed after compliance inspection.
“Such situation also affect the production capacity of the industry,” he added referring to Accord and Alliance inspection initiative after Rana Plaza catastrophe and subsequent closure of many factories.
Abdus Salam Murshedy, president of Bangladesh Exporters Association (EAB), told Dhaka Tribune that they had introduced production engineering and automation to reduce production cost and enhance productivity to tackle the situation.
He said Rana Plaza building collapse, Tazreen Fashion fire and political unrest acted as catalyst to the slow export growth to the EU market.
Murshedy sought policy support from the government to reduce production cost and continuation of supports provided by the authorities.
He urged the government to fix a special dollar rate for the export-oriented sectors as appreciation or devaluation of the greenback affect their business.
According to Export Promotion Bureau (EPB) data, in July-December of 2014 Bangladesh earned $7.30bn posting a 3.5% growth compared to $7bn during the same period in 2013.
Source: Dhaka Tribune