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Lead time key barrier to apparel export boost

Arifur Rahaman Tuhin
17 Nov 2022 00:00:00 | Update: 17 Nov 2022 00:25:57
Lead time key barrier to apparel export boost

Bangladesh’s apparel industry has shown a lot of improvement – especially in matters such as the infrastructure, green initiatives, workplace environment and compliance, but the country must reduce its lead time to boost exports further, stakeholders say.

The country is currently spending 25-35 days more compared to its closest competitors China and Vietnam, and the issue is making it difficult for Bangladesh’s apparel exporters to attract reputed buyers.

A number of industry insiders and other key stakeholders claimed that the country’s comparatively long lead time is a result of backward linkage shortage and harassment from National Board of Revenue (NBR) officials.

EPIC Group General Manager Marius Macovei said, “I had worked in China before Bangladesh. In China, goods transportation from one province to another usually took only a couple of hours, but it takes at least one and half days in Bangladesh.

“Besides, Bangladesh spends a large amount of time importing backward linkage materials, which is also one of the main barriers. However, the country’s progress in green initiatives will certainly benefit its apparel country.”

LEED (Leadership in Energy and Environmental Design) is the most widely used green building rating system in the world.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) sources say the country has 178 LEED factories certified by the US Green Building Council (USGBC), and 500 more are waiting for certification.

Besides, Bangladesh has nine factories among the USGBC’s top ten scorers.

Speaking to The Business Post, BGMEA President Faruque Hassan said, “We are planning to convert almost all factories into green or sustainable ventures as per the western buyers’ carbon reduction initiative.

“Our government is also working to develop the necessary infrastructure, and many investors have begun to invest in the manmade fibre sector. We believe that our lead time issue will be resolved after a few years.”

He then said, “We are facing many problems from Customs Bond Comissionarate. We have already informed Prime Minister Sheikh Hasina about this issue.

I hope this crisis will be resolved as soon as possible.”

“Besides, we are getting many recommendations from our stakeholders in the ongoing Made in Bangladesh Week 2022. We will start to solve the issue after the mega event.”

As part of the Made in Bangladesh Week, the BGMEA is organising several events in partnership with the Bangladesh Apparel Exchange, Dhaka Apparel Expo, Dhaka Apparel Summit, Bangladesh Denim Expo, Green Factory Visit, International Apparel Federation (IAF) convention, Fashion Show.

In a session of Dhaka Apparel Summit on Tuesday, BGMEA Director Faisal Samad said, “We, as apparel makers, dreamt of a $50 billion export only 10 years ago, and today this is a reality.

“We could not have achieved such a feat without the right policy support, infrastructure logistics, and continued improvements. However, with every positive comes new challenges, and to rise above it, we need continued support with the correct framework in place to reach BGMEA’s latest target of $100 billion.”

Logistics a thrust sector

In the Industrial Policy announced on September 25 this year by the industries ministry, logistics has been included for the first time as one of the export diversification segments, and it has also been considered a “thrust sector.”

Twenty-one logistics sub-sectors have been included in this policy. It is clearly evident that the government is willing to give more importance to logistics development in the coming years, industry leaders say.

In the summit, several apparel manufactures and stakeholders claimed that in Bangladesh, permission from 33 licensing agencies are required for export, and about 15 licences are required for a formal business to start, which are taking more time and money.

This is why the country is falling behind in the ease of doing business index, they claimed, adding that some officials from the Customs Bond Comissionarate and many banks are harassing the apparel makers in matters of raw material imports and goods exports.

Replying to a question, an apparel exporter on condition of anonymity said, “The HS code is one of the main issues. We urged the NBR several times to include many items in the HS Code, but they have not done it as yet. They are regularly harassing exporters for bribes.

“The NBR did not return advance tax money after evaluating our final tax assessment. We have to spend 3-4 days extra in customs due to the harassment.”

Another exporter, who also participated in the apparel expo, claimed, “The banking sector officials are harassing us as well. The behaviour of many bankers is not professional.”

“If the government manages to break the glass ceiling, Bangladesh will easily meet the $100 billion apparel export target in 2030,” BGMEA Director Faisal Samad told The Business Post.

500 more are waiting for certification.

Besides, Bangladesh has nine factories among the USGBC’s top ten scorers.

Speaking to The Business Post, BGMEA President Faruque Hassan said, “We are planning to convert almost all factories into green or sustainable ventures as per the western buyers’ carbon reduction initiative.

“Our government is also working to develop the necessary infrastructure, and many investors have begun to invest in the manmade fibre sector. We believe that our lead time issue will be resolved after a few years.”

He then said, “We are facing many problems from Customs Bond Comissionarate. We have already informed Prime Minister Sheikh Hasina about this issue.

I hope this crisis will be resolved as soon as possible.”

“Besides, we are getting many recommendations from our stakeholders in the ongoing Made in Bangladesh Week 2022. We will start to solve the issue after the mega event.”

As part of the Made in Bangladesh Week, the BGMEA is organising several events in partnership with the Bangladesh Apparel Exchange, Dhaka Apparel Expo, Dhaka Apparel Summit, Bangladesh Denim Expo, Green Factory Visit, International Apparel Federation (IAF) convention, Fashion Show.

In a session of Dhaka Apparel Summit on Tuesday, BGMEA Director Faisal Samad said, “We, as apparel makers, dreamt of a $50 billion export only 10 years ago, and today this is a reality.

“We could not have achieved such a feat without the right policy support, infrastructure logistics, and continued improvements. However, with every positive comes new challenges, and to rise above it, we need continued support with the correct framework in place to reach BGMEA’s latest target of $100 billion.”

Logistics a thrust sector

In the Industrial Policy announced on September 25 this year by the industries ministry, logistics has been included for the first time as one of the export diversification segments, and it has also been considered a “thrust sector.”

Twenty-one logistics sub-sectors have been included in this policy. It is clearly evident that the government is willing to give more importance to logistics development in the coming years, industry leaders say.

In the summit, several apparel manufactures and stakeholders claimed that in Bangladesh, permission from 33 licensing agencies are required for export, and about 15 licences are required for a formal business to start, which are taking more time and money.

This is why the country is falling behind in the ease of doing business index, they claimed, adding that some officials from the Customs Bond Comissionarate and many banks are harassing the apparel makers in matters of raw material imports and goods exports.

Replying to a question, an apparel exporter on condition of anonymity said, “The HS code is one of the main issues. We urged the NBR several times to include many items in the HS Code, but they have not done it as yet. They are regularly harassing exporters for bribes.

“The NBR did not return advance tax money after evaluating our final tax assessment. We have to spend 3-4 days extra in customs due to the harassment.”

Another exporter, who also participated in the apparel expo, claimed, “The banking sector officials are harassing us as well. The behaviour of many bankers is not professional.”

“If the government manages to break the glass ceiling, Bangladesh will easily meet the $100 billion apparel export target in 2030,” BGMEA Director Faisal Samad told The Business Post.