In a highly volatile world market economic slowdown, geo-political crisis, global trade policy shifts, climate action and ESG priorities, disruptive technologies and supply chain or inventory management may continue to be the major issues in the coming year, according to Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Director Mohiuddin Rubel.
"For us, the strategy for the next decade should be investment in backward linkages, technology, complex skills development, and continuing the sustainability momentum," said Rubel, also additional managing director of Denim Expert Ltd.
He said initiatives towards green transformation must be accelerated and supported, according to a press release.
"Going global is our next agenda, where the virtual marketplace can serve as a strategic avenue, particularly for the SMEs," Rubel wrote in an article titled "Beyond Challenges: Comprehensive Recap of Bangladesh Readymade Garment Industry in 2023."
"As we are ready to set foot in 2024, poised to embark on a new chapter; we can confidently say that 2023 was a pivotal year for us. Despite wresting with twofold challenges, domestic and international, we have successfully overcome them and emerged stronger," he said.
Rubel said, "Going forward, not only in 2024 but also in the next decade, we have to continue the momentum of our achievements"
Achieving excellence in products, fibre, market diversification and value addition are the key opportunities for this sector.
"We need to develop our capacity in backward and forward linkage industries. At the same time, we need to focus on innovation, technological up-gradation, design and skill development, and overall business capabilities," Rubel said.
However, the RMG industry leader said the uncertainty persists as the advanced economies are struggling with inflation and recession as well as the crisis of the pandemic is still haunting our economy.
Geopolitical issues like Russia-Ukraine, and the Israel-Hamas conflict have created an additional layer of adversity.
The escalation of inflation has hit the pinnacle of record with 8.8 per cent in 2022 which was 4.7 per cent in 2021.
The impact of this inflation continued into 2023 with 6.8 per cent, affecting consumer demand for apparel in the United States and Europe. In the first 9 months of 2023, the overall import of the European countries declined by 12.08 per cent, which has been recorded as 22.71 per cent for the United States in January-October 2023.
Consequently, Bangladesh faced a 15.87 per cent decrease in EU imports and a 24.75 per cent decrease in the US market.
"This pressure exerted a significant impact in the pricing dynamics of major clothing items, resulting in a notable 7 to 9 per cent decrease in our average unit prices," he said.
Nevertheless, the picture is not entirely bleak.
The ready-made garment industry of Bangladesh has started producing value-added garments, a strategic move that allowed us to maintain our average unit prices.
In parallel, amid the adversities, a number of accomplishments have been added to our success list.
Significant strides in circular fashion have been established, and the number of LEED-certified green garment factories by USGBC reached 206 including 76 platinum-rated ones.
Despite the economic headwinds, as per the “World Trade Statistical Review” by WTO in 2022, Bangladesh has regained its ranking as the 2nd largest apparel exporter in the world with a 7.87 per cent share of the global market.
Bangladesh has already become the top denim-sourcing country for the US and EU. Now we are in close competition with the largest apparel exporter in China in the EU market, Rubel said.
The RMG sector continues to thrive, reaching USD 47 billion in the last fiscal year 2022-23.
This is a new landmark in our history of RMG manufacturing, as we have exceeded the 40 billion dollar mark in 40 years of journey.
Apart from the major markets EU and the US, our export share in non-traditional markets has also doubled from 6.87 per cent in FY2008-09 to 17.82 per cent in FY2022-23.
On the domestic front, there has been substantial infrastructure development, including the completion of the Padma Bridge and Railway Bridge, Metro Rail, Dhaka Elevated Expressway, Chattogram Elevated Expressway, Bangabandhu Tunnel (Karnaphuli), Dhaka-Cox's Bazar Train, Payra Sea Port, Terminal-3 at Hazrat Shahjalal International Airport, Matarbari Thermal Power Plant, and Rampal Coal Power Plant, he mentioned.
"Challenges persisted throughout the year, as we encountered increased electricity and gas prices, a decrease in foreign currency reserve, and issues related to minimum wage review," Rubel mentioned.
The global attention on US disclosures and European labour regulation has created additional pressure.
"However, we want to emphasise that even in the face of such challenges, we are taking all-out steps to make the industry sustainable and to take better care of our workers and community," he said.
"Looming LDC graduation poses another layer of challenge in our itinerary towards future growth, and we are committed to taking astute measures," he added.
