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Export growth to slow down in 2023: BGMEA president

Staff Correspondent
17 Sep 2023 22:17:37 | Update: 17 Sep 2023 22:54:22
Export growth to slow down in 2023: BGMEA president
BGMEA officials including its President Faruque Hassan and Bangladesh German Chamber of Commerce and Industry (BGCCI) officials at a seminar on German Supply Chain organised by BGCCI in Dhaka on September 14 – Courtesy Photo

The export growth of the country’s Readymade garments (RMG) sector is expected to slow down this year due to various factors including the Russia-Ukraine war, rising production costs, and sluggish economic growth in some importing countries, said Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan on Sunday.

BGMEA chief came up with the remarks at a seminar titled "German Supply Chain Due Diligence Act" organized by the Bangladesh German Chamber of Commerce and Industry (BGCCI) on September 14 where he discussed the challenges Bangladesh facing in the RMG sector and export growth in the global market.

He noted that in the past two fiscal years, Bangladesh's RMG industry achieved substantial growth, outperforming some of its competitors like Vietnam, Cambodia, and Pakistan. In the outgoing fiscal year FY23, Bangladesh's exports grew by 6.67 per cent year-on-year, reaching $55.55 billion, driven primarily by the exceptional performance of the apparel sector.

Hassan also expressed concern about the increasing lending rates by commercial banks, which has led to higher production costs for Bangladeshi RMG manufacturers.

Addressing the global shift towards human rights and environmental due diligence, he emphasised the importance of responsible business practices. He also urged stakeholders, particularly buyers, to share the burden with supply chain partners, ensuring that cost escalation does not adversely impact the industry, especially small and medium-sized enterprises (SMEs).

Hassan also stressed the need for greater collaboration between manufacturing associations, buyers, development partners, and governments to create a fair and level playing field for all.

Regarding sustainability, the BGMEA president mentioned BGMEA's Sustainability Vision 2030, focusing on environmental, social, and governance (ESG) factors. This vision aims to reduce carbon emissions by 30 per cent, use 50 per cent sustainable raw materials, reduce energy usage by 50 per cent, achieve 100 per cent usage of Zero Discharge of Hazardous Chemicals (ZDHC), reduce deforestation by 30 per cent, ensure inclusive and decent work, promote gender equality, and uphold good governance.

Hassan highlighted BGMEA's commitment to due diligence, with the establishment of the "Responsible Business Hub" to support manufacturers in complying with new regulations and reporting requirements related to human rights and environmental due diligence.

He also emphasised the resilience and commitment of Bangladesh's RMG industry to sustainability, making it a role model on the global stage. He highlighted the industry's strong foundation in workplace safety and workers' well-being, even during challenging times such as the Covid-19 pandemic and ongoing geopolitical tensions.

The seminar also featured a keynote presentation on the "German Supply Chain Due Diligence Act" by Dr Michael Klode, project manager at GIZ.

Bangladesh-German Chamber of Commerce and Industry (BGCCI) President M Maksud addressed the importance of the German Supply Chain Due Diligence Act and the positive outlook for Bangladesh's economy. He noted Bangladesh's fastest-growing economy in the Asia-Pacific region and its aspiration to graduate from the Least Developed Country (LDC) status by 2026.

Maksud also highlighted opportunities for infrastructure development and trade between Bangladesh and Germany, emphasising Bangladesh's readiness to attract new investments and participate in the global supply chain.