Global RMG machinery suppliers eye Bangladesh as their next big market

Textile and RMG machinery suppliers from around the world are eyeing Bangladesh as their next big market with immense trade potential as the country’s readymade garment (RMG) sector continues to grow.

Bangladesh’s RMG and textile sector grew exponentially in recent years thanks to the massive order shifting from China, the top apparel exporter in the world, due their trade conflicts with the western countries.

The boom has attracted a growing number of leading machinery suppliers from around the world, including Germany, Italy, Indonesia, China, Taiwan and Hong Kong.

Talking to The Business Post at South Asia’s biggest textile and garment machinery expo The Dhaka International Textile and Garment (DTG) 2023, they said they said Bangladesh is soon going to be their next major machinery supplier country.

According to the suppliers, Bangladesh is ripe to be a RMG machinery supply destination, especially high technology machines as the country is receiving a good amount of local and foreign investment in the sector.

The four-day long expo, launched on Wednesday at the International Convention City, Bashundhara (ICC,B) in Dhaka is being jointly organised by Bangladesh Textile Mills Association (BTMA) and Chan Chao International, Taiwan’s leading professional exhibition company.

Judy Wang, executive director (overseas) of Chan Chao International, said some 1200 companies from 35 countries

Global RMG machinery are participating in the four-day long event.

Suppliers of advanced technology-based machinery with high efficiency have participated in the exhibition as the nature of the productivity in the industries changed over the last few years, she said.

Big potential

According to the suppliers, Bangladesh, the second largest RMG exporter in the world, is still importing nearly $12 billion of fabrics annually, and is lagging behind in the manmade fibre sector. However, they expect that soon Bangladesh will be able to reduce imports of fabrics and increase manmade fibre-based exports.

They also said so far, the country imported more than $4 billion of textile and garment machinery, and had nearly 20 per cent year-on-year sales growth.

Thomas Streicher, area sales and product manager of Trutzschler, a German machinery company, said his company mainly supplies spinning machines and so far, they supplied 600 machines to his customers in Bangladesh.

“Bangladesh is one of the markets with the most potential for machinery supply as international retailers and brands are coming here with a lot of work orders. Also, Bangladesh has the advantage of a competitive labour force and good knowhow.”

Streicher added that his company is very much optimistic that the Bangladesh market will grow a lot in future.

Echoing a similar optimism, Shima Seiki (Hong Kong) Ltd chief executive officer Ikuto Umeda told The Business Post, “Of course, Bangladesh is the number one destination for my company as the sales are increasing with high demand from the customers.”

According to Umeda, Shima Seiki supplied 20,000 units of machineries to 200 local customers over the last seven years.

According to official data, Bangladesh’s export earnings from RMG stood at $42.61 billion in FY22 with a 35.46 per cent growth, compared to the previous fiscal year. During the first six months (July-December) of the current financial year, export earnings from RMG was nearly $23 billion with 15.56 per cent growth year on year. The growing RMG business here is also earning profits for global machinery suppliers.

“Last two years my business grew 40 per cent year-on-year in Bangladesh despite the impacts of the Covid-19 as a lot of businessmen looked for machinery online due to not being able to travel abroad,” Gianpiero Valsecchi, sales area manager of Santoni, an Italian textile machinery producer with also operation in China, told The Business Post.

However, he said, “Currently, the demand for clothing items is a bit low because of the Russia Ukraine war, but it will also be corrected soon.”

Focus on manmade fibre

Meanwhile, Akai Lin, overseas director of Taiwan-based Chan Chao International Co, said Chan Chao first organised the expo in Dhaka in 2004, when Bangladesh was the fourth largest apparel supplier worldwide. Now, the country is the second largest garment exporter which indicates the strength of its RMG sector.

The demand for the machinery of the manmade fibre is growing in Bangladesh as local entrepreneurs are putting a lot of investment in the industry to grab more market share, he said.

“Bangladesh is a key market for us. Our VSF (viscose-staple fibre) business will continue to expand into the international markets by partnering with others in the textile value chain,” said Tapan Sannigrahi, vice president, Marketing and Downstream Development of Asia Pacific Rayon, an Indonesian manmade fibre producer.

Also speaking on the occasion, Salman F Rahman, prime minister’s private industries and investment adviser, called on local entrepreneurs to invest more in manmade fibre.

He said manmade fibre segment accounts for 70 per cent share in the global fibre consumption while in Bangladesh, 90 per cent of the garment products are made from cotton and cotton mixed fibre. “Bangladesh has a good opportunity to invest in manmade fibre.”

However, he also said that the rising price of energy is affecting the investment in the textile and garment sector in Bangladesh.

Md Jashim Uddin, president of the Federation of Bangladesh Chambers of Commerce and Industry, said Bangladesh has set a target to export $300.0 billion worth of merchandise by 2041. Innovative and sustainable garment items will help achieve the target.”