Home ›› 23 Jan 2022 ›› Front
Apparel makers recorded more than 20 per cent rise in export orders in 2021 when compared year-on-year, indicated by the surging number of Utilisation Declaration permissions issued by the Bangladesh Garment Manufacturers and Exporters Association.
Industry insiders attributed this growth to the continued inflow of work orders from global buyers, who have grown more confident in Bangladeshi readymade garment manufacturers’ capacity and commitment to deliver shipments on time even amid the Covid-19 crisis.
Data from the BGMEA reveals that the number of UD permissions issued by the trade body rose from 24,714 in 2020 to 29,849 in 2021. A relevant entity grants UD permission to an exporter to allow import of raw materials for executing work orders placed by an importer.
So, the number of UD permissions given by an association clearly defines the trend of work order inflow for this sector.
Following the Covid-19 pandemic’s outbreak in March 2020, the number of UD permissions had dropped drastically to 520 in April from 2,090 in the previous month. However, this figure rose to 2,805 in April 2021.
Bangladesh’s capacity to execute bulk work orders and timely delivery of finished goods helped retain the global buyers, insiders told The Business Post. Moreover, the then ease in Covid-19 situation in the European Union and United States, and their governments’ support to reduce unemployment helped increase demand for RMG goods.
As Bangladesh is the second largest exporter of apparel goods, global retailers and brands landed here with increased work order volume.
Addressing the matter, BGMEA Vice-President Shahidullah Azim said, “Bangladesh has the capacity to take bulk work orders and deliver in time. Even amid the ongoing Covid-19 pandemic, exporters ensured timely shipments of goods.
“As a result, global buyers have kept their confidence in us and placed a large volume of work orders.”
The industry leader continued, “After economies reopened, brands and buyers are placing more orders to cater to the rising demand boosted by the rising employment rates in the US and EU.
“A good quantity of work orders shifted from Vietnam and India to Bangladesh as Covid-19 hit their productions in the last couple of months. Bangladesh also took advantage of shifting work orders from China triggered by trade conflict with the US.”
On the issue, Merchandising Manager at Tex Care Riad Hossain said, “Factories do not have enough space to take fresh work orders. But the buyers are willing to place them. Factories that have the capacity are expanding their production line to take more orders.
“Despite a rise in prices, buyers and retailers are willing to place more work orders as the Covid-19 pandemic lingers on, but they have to do business.”
What about next season?
Snowtex’ Managing Director SM Khaled said, “With already booked work orders, we are looking for factories to subcontract some of our workload, but those are not available or do not have the capacity to work for us. It means, everyone is flooded with apparel orders.
“My factories are fully booked by the retailers and brands till September.”
He added, “Ethiopia and Myanmar are in trouble due to the ongoing political crisis. China is facing sanctions on its few provinces by the US government in addition to the trade conflict. Vietnam is fighting the Covid-19 pandemic.
“Bangladesh is in a comparatively better position as we were able to run factories amid the pandemic, and it still continues. So, in the coming season, we are hoping for a further boost in work order placement by global retailers and brands.”
Policy support a must for further growth
Terming the growth encouraging, economists and industry insiders called for policy support to ensure smoother operations in ports both land and sea to ship finished goods and import raw materials.
“Credit goes to our resilient entrepreneurs and workers who ensured timely shipment through their hard work amid the pandemic,” BGMEA president Faruque Hassan told The Business Post.
“Government policy support for operating factories and providing safety guidelines has helped us a lot in overcoming the crisis. It yielded dividends for the exporters,” said Hassan, adding, “To continue this growth and reach export targets, the government has to extend existing policy support.”
Research Director at the Centre for Policy Dialogue Khondaker Golam Moazzem said, “Bangladesh’s export growth and the trend present work orders are very encouraging. Amid the ongoing pandemic, Bangladesh has received new brands and buyers.
“Now, the main task is to retain them by giving them confidence that we have the capacity to provide quality products at a reasonable price. We have to attract foreign direct investments, mostly in the special economic zones, to sustain this growth.”
Former lead economist at World Bank Dhaka office Zahid Hussain said, “To execute export orders, exporters need to import while they have to ship finished goods.
“So, the government has to ensure smoother delivery of imported goods and send finished goods without any hassles to ensure shipment within the lead time. Manufacturers have to keep their commitment to ensure timely delivery and maintain health safety guidelines.
Export performance in 2021
Bangladesh’s export earnings posted a robust growth by 30.36% to $35.81 billion in 2021, the highest ever, which was $27.47 billion in 2020.
Of the total export earnings from clothing products, $19.60 billion came from knitwear – which is 37.72% higher compared to $14.22 billion in the same period previous year. Woven products earned $16.21 billion, up by 22.45%, which was $13.24 billion in 2020.
Besides, Bangladesh recorded its highest-ever export earnings of $44.21 billion in the just-concluded year, which was $35.5 billion in 2020.
