Special policy incentives sought to attract investment in MMF

Experts at a workshop on Tuesday called for special policy incentives to attract more investment in man-made fibre-based textiles and apparel industries.   

Increased use of MMF would enable Bangladesh’s readymade garments sector to diversify its products and to move up the value chain as the sector prepares for the post-LDC graduation scenario, they said. 

Such observations came at a workshop on ‘Man-Made Fiber for Moving up the Value Chain of RMG in the Context of LDC Graduation’ jointly organised by the Support to Sustainable Graduation Project (SSGP) of the Economic Relations Division (ERD) and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) at the National Economic Council (NEC) conference room in the capital. 

Bangladesh’s ready-made apparel has made a strong footprint in the global market and emerged as the second largest exporter in the world after China.

However, the country would lose all the LDC-specific ISMs, including preferential Rules of Origin (RoO) and Duty-Free and Quota-Free (DFQF) market access soon after the graduation from the LDC category in 2026 – except the Everything but Arms scheme of the EU GSP, which will end in 2029.

Since Bangladesh could make maximum utilisation of the DFQF facilities, the loss of such facilities after graduation may create some challenges for our exports, particularly the RMG as the sector alone contributes around 83 per cent of our total exports.

Meanwhile, data from the International Textile Manufacturers Federation reveal that 78 per cent of clothes in the world are made of man-made fibre, and 22 per cent are made of cotton.

BGMEA sources say the country exported MMF-based clothes worth around $8 billion last year, and nearly 100 per cent of the demand for this type of yarn is met through imports.

Meanwhile, the rapid shift in the global apparel market from cotton to non-cotton-based Man-Made Fibre may thwart the potential growth of the Bangladesh RMG sector as currently, the overwhelming portion of our RMG exports are still cotton-based. In this context, expanding the production base of non-cotton yarn and fabric, and manufacturing garment items with it has enormous potential for Bangladesh to grab a larger share in the global apparel market. It will also give an extra edge in qualifying for the stringent RoO after graduation.

Speaking on the occasion, Planning Minister MA Mannan said that switching to manmade fibre would help the country to bring about increased diversification within the RMG sector. He also observed that such a transformation would strengthen the backward linkage of the local RMG industry.

ERD Secretary Sharifa Khan said that Bangladesh would have to grab the potential of MMF while maintaining the current growth in cotton to increase our global market share. 

The president of BGMEA Faruque Hassan called for enhancing the competitiveness of the RMG sector to prepare it for the post-LDC graduation scenario. He also emphasised simplification of relevant business processes and improvement in logistics. 

Commerce Ministry Additional Secretary Noor Md Mahbubul Haq emphasised on technological upgradation of the textiles sector.

Chairman of Research and Policy Integration for Development (RAPID)  Dr MA Razzaque delivered the keynote presentation of the event while BGMEA Director Asif Ashraf delivered a presentation on ‘Challenges in Production and Use of MMF in RMG and Expectations of the Private Sector’.

Bangladesh Bank Executive Director Kazi Rafiqul Hassan, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Executive President Mohammad Hatem and Bangladesh Textile Mills Association (BTMA) Director Syed Nurul Islam also spoke at the event.