RMG

It has been four decades since Bangladesh-made apparels made their way into the global market. Today the "Made in Bangladesh" tag is a name of trust in the global fashion market. Apparels made in Bangladesh are the first choice of leading global brands, whose worldwide network makes those available in the shelves of dress shops in cities across the continents.

"Made in Bangladesh" labels now have become a familiar label in almost all places, as the apparel sourcing formula by fashion giants accelerate dependency on manufacturing strength, capacity and efficiency.     

Bangladesh has grown into an apparel powerhouse second only to China, with factories producing clothing for the likes of Tommy Hilfiger, Gap, Calvin Klein, H&M, Giorgio Armani, Ralph Lauren and Hugo Boss. Many global retailers have opened sourcing operations in Dhaka. 

Why do global fashion giants opt for sourcing apparels from Bangladesh? The answer lies in competitive rates, manufacturers' accountability, concrete confidence, Bangladesh apparel's adaptation of modern technologies and the industry's relentless endeavours for meeting environment and workplace safety standards.  

Apparel now fetches the country more than $42 billion in annual export to more than 150 countries for more than 1000 retailers. Garments are vital to the Bangladesh economy, accounting for 82% of manufactured exports and over 4.2 million employment.

Bangladesh is now home to the highest number of green garment factories in the world. 

At present, 177 apparel factories that are certified as LEED (Leadership in Energy and Environmental Design) by the US Green Building Council are located in the country. Of them, 58 are LEED Platinum-rated, 105 are LEED Gold-rated, ten Silver-rated and four only certified.  

Moreover, 550 more apparel factories are on their way to get the LEED certifications.

As the South Asian nation is poised to graduate from the least developed country to a middle income one in 2026, the country's apparel strength continues to play a crucial role. 

However, the country's apparel endeavour began just roughly around 44 years ago in 1978 with the export of only 10,000 pieces of shirts to a French buyer worth 13 million French Francs by Dhaka-based Reaz Garments. The owner of the factory Reazuddin used to make the clothes for both local and foreign consumers.

But in terms of exports by a fully export oriented apparel-maker, Desh Garments Limited led the way by shipping 1.2 lakh pieces of boy's shirts to a German company called MNR in January 1980.

In 1979, Desh sent 133 workers and mid-level managers to the world-renowned Daewoo's garment manufacturing plant in Busan, South Korea to receive training in modern machinery.      

The team returned home after six months of training. Desh Garments set up a new plant with those 133 people. And it marked the beginning of a new journey to turn Bangladesh into an economically self-sufficient nation through apparel exports. 

Driving factors

There are a number of factors that helped Bangladesh become the global apparel giant defying all odds. Those include labour availability, price competitiveness, quick returns for entrepreneurs, duty-free market advantage, technology adaptation, policy support by the government and a shift in apparel-making from China to the South Asian region.      

There are more than 30 private and public universities producing textile graduates in the country every year, further adding to the skilled manpower for the segment. Moreover, favourable government policies, bank facilities and strong backward linkage industries have hugely contributed to the spectacular growth of the sector over the last four decades.

Besides, Bangladesh's Least Developed Country (LDC) status helps perform better in competition abroad as the clothes are entitled with duty-free market access or reduced tariff facilities to many developed and developing nations.

The country now enjoys market privileges to around 52 countries, including countries in the European Union bloc, Australia, Switzerland, Japan, Turkey, Russia, Norway, New Zealand, China, South Korea, Thailand, Malaysia, and India.

From the very beginning of the local ready-made garment industry in the 80s, there has been a fashion industry shift from China to South Asian countries.

Another key factor responsible for the apparel boom in Bangladesh is the good return the sector offers to investors who start getting dividends on their investment in three to five years' time. Besides, being the second biggest apparel exporter globally, there are huge growth opportunities that the sector offers.

Bangladeshi manufacturers and exporters have built excellent vertical capacities, which only China could offer before, which help global brands to ensure more transparency and coordination in their supply chains.

To cater to its worldwide clientele, the apparel industry has now implemented the most advanced garment production and management methods. As a result, Bangladesh's RMG industry has a very high rate of quality achievement and technical compliance. 

Absorbing shocks to grow stronger

The country's apparel journey was not a smooth ride, rather local and global shocks challenged the rise although the way. Issues like rules of origin, most favoured nation status and global financial crisis recession in the external front and deadly factory accidents--- all put roadblocks on the way since '90s.

And the industry, with its resilience and coping strategies, braved all the odds and kept growing on the back of trust and support of global brands, retailers and fashion-lovers across the globe.      

Apparel-makers in 2020 faced an unprecedented supply and demand shocks stemming from the Covid-19 pandemic. As the pandemic started waning in late-2021, a war and pinching inflation surfaced next year, hitting a fresh blow at a time when the sector has achieved a record $52 billion export and set an ambitious target of reaching annual exports worth $100 billion in 2030.

But industry people still hold their morale and stamina high, and have not lost the hope for good days ahead.       

"Whenever a situation emerges, it tends to seem so huge that we wouldn't survive anymore. But we survived those and emerged more resilient every time," said Miran Ali, vice-president of the apex body of woven apparel makers- Bangladesh Garment Manufacturers and Exporters Association (BGMEA).   

A path to becoming resilient and sustainable

A recent survey report by Hong Kong-based supply chain compliance solutions provider QIMA ranked Bangladesh's apparel industry second in "Ethical Manufacturing" with a score of 7.7 – only behind Taiwan. 

The ethical auditing report covered a wide range of compliance and ethical manufacturing issues such as hygiene, health and safety, waste management, child and young labour and standard labour practices.

"In recent years, we have undergone a massive transformation in workplace safety, environmental, sustainability and compliance issues," says Faruque Hassan, president of the BGMEA. 

"Our vision for the next decade is to pursue new areas of opportunity, growth, and excellence. Modernisation, innovation, diversification and technological upgrade are vital, as we also prioritise the health, education and well-being of our workers," he added.

According to the BGMEA, environmental social governance has emerged as one of the major areas of concern in the global business landscape. Given the context, the association has outlined a strategic sustainability vision to map out the priorities and subsequent actions.

The BGMEA's first point of the strategic vision notes reducing the greenhouse gas emissions by 30% by 2030.

The plans – in line with the Sustainable Development Goals – also call for elevating circularity by enhancing the "Sustainable Material Mix" by 50%, reducing 50% usage of groundwater consumption, ensuring 100% safe and non-hazardous chemicals and 30% reduction in energy consumption by 2030.

The sustainability vision also includes at least 20% of the industry's energy consumption from renewable sources by 2030 and reduction of deforestation.

Apparel makers have already seen significant success in reducing water consumption.   

The traditional method requires a minimum of 55 litres of water to wash a pair of jeans. Now a number of garment factories can halve the water use and reduce the wash cycle.

In some cases, Bangladesh jeans exporters are using zero water washing facilities to produce more environmentally friendly products.

"Ananta Apparels has reduced water consumption in its washing process ", said its Managing Director Sharif Zahir.

Ananta's wash cycle used to be 15-20 minutes, which meant more water consumption. Now it has come down to a minute.

"This helped in cutting the use of hazardous chemicals in the washing and the finishing process," Sharif said.

Envoy Textiles Limited has reduced water usage by over 80% in the dyeing and finishing process.

"We can save about 59.28% of water during the dyeing process, and about 20% in the finishing process," Envoy textile founder Kutubuddin Ahmed said.

"In the normal process we need 35 litres of water per yard of denim fabric for dyeing. However, in the sustainable process, the water requirement has come down to 15 litres," said Kutubuddin, a former president of BGMEA.

Steep, but achievable

After the pandemic induced sluggish sales for around one and a half years, apparel exports registered a near 50% year-on-year growth in the first 27 days of June, shrugging off the 40-year high record inflation in the United States and European countries prompted by the Russia-Ukraine war.

Achieving the $100 billion target in 2030 may seem steep at first sight, but is not impossible, according to sector people and trade analysts. They believe a fast and consistent growth owing to the favourable government policies and global attention will facilitate this feat. 

"China's global market share is set to fall further, paving the way for Bangladesh to seize the tremendous opportunity," said Dr Mohammad Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID) Bangladesh and Research Director at the Policy Research Institute of Bangladesh (PRI).

He said the growing geopolitical uncertainty will bring many Western suppliers to Bangladesh as they move to diversify their sourcing away from China. "Bangladesh is now an inevitable sourcing choice." 

He called for mastery and increasing market share of man-made fibre-based apparel to reach the $100 billion export target. 

Apparel entrepreneurs say while the LDC graduation could mean loss of trade preference in the near future, the industry is likely to transform by adopting more capital, more automation of production process and improvement in productivity.

"The industry's future growth will critically depend on its ability to ensure Environmental Social Governance (ESG). This is one area where Bangladesh must make improvements in a sustained manner," said Dr Razzaque. 

What needs to be kept in mind during the journey forward is to ensure better living standards for garment workers, for which the industry and the government must work hand-in-hand.

A technology advancement plan can also help, which also focuses on the skill development of the workers through regular training programmes. 

These will enable the garment manufacturers to sustain their growth, make more profits and pay workers a better wage for a decent life.