After a period of sluggish demand, Bangladesh's denim industry is experiencing a rebound. Raw material suppliers and goods manufacturers are reporting a surge in export orders as Western brands, having cleared out their inventory, are now placing significant new orders.
In a bid to ensure long-term export stability, denim manufacturers are shifting their focus to non-traditional markets, aiming to reduce their dependence on the traditional Western markets, traditionally defined as the US, UK, EU, and Canada.
However, due to the ongoing global economic headwinds, they have said that the pricing is not up to mark as the worldwide clothing market is still unstable.
On the other hand, the global denim supply chain and other garment sectors are experiencing a rebound from the disruptions caused by the COVID-19 pandemic and the Russia-Ukraine war. This is evident in the growing interest received from key market players. Denim manufacturers and millers in Bangladesh are receiving a positive response, with some companies even expanding their business or setting up new offices in the country.
The chemical traders are also enjoying a boom in business here as the local dyers and washers are buying much chemicals from them.
Market stakeholders shared their perspectives on the inaugural day (Monday) of the 16th edition of the Bangladesh Denim Expo at the International Convention City in Dhaka. The two-day event featured 60 local and international exhibitors, with the Bangladesh Apparel Exchange (BAE) serving as the organiser. Notably, 27 of the exhibitors hailed from China.
Although nearly 100 exhibitors participated and hundreds of visitors came to the expo, the participants claimed that Bangladesh's only international-standard exhibition had lost its glory.
Wishing anonymity, a BAE official told The Business Post, "Only four to five local companies participated in this fair. Their [local company] disappointed regarding the number of foreign exhibitors, especially from China. But in order to ensure international standards, foreign exhibitors are most important."
Also, a local factory owner who used to attend the expo regularly said, "The hospitality from the expo's organisers is not up to mark this time. So, we decided not to participate in this season."
Order flow up
Experience Group's Chief Executive Office Michael Maqsood said that they had suffered from order shortages after the Russia-Ukraine war as their crucial export destination, the European Union (EU), faced severe inflation.
However, his company has been able to secure orders recently, especially from January.
While explaining that brands want good-quality products at low costs, he said, "Now we are seeing a good number of orders from the EU, US, and non-traditional markets. But prices are not up to the mark.
"Now we do not have any alternative except investing on research and development. Market diversification is another tool to get sustainable order flow as well. The government should continue its support in polices, even after the LDC graduation, to keep the order flow."
Officins39, a chemical supplier, faced a severe order shortage in the last two years. However, the Italy-based company has recently witnessed a good number of orders.
"Now, the trend of opening Letters of Credit (LCs) is up by nearly 15 per cent year-on-year," said the company's Country Director Md Nasir Ullah.
Monowar Shikder, director of Sales and Marketing of Soko Chemicals, said his Italian company has been selling washing chemicals in Bangladesh for the last 17 years in the denim sector.
He said the chemicals used for washing denim fabrics have been growing here as the industry develops.
Denim prospects are good here, he said, adding that his business grew 20 per cent over the last few years and may grow even more in 2024.
Work orders are coming in large numbers, said Shikder, who supplied washing chemicals to about 100 denim factories in Bangladesh.
The denim business has been growing in Bangladesh for three reasons: low price, better quality, and high production capacity. The local millers are adopting new washing and dyeing technologies to reduce the water used in the washing process of denim fabrics.
The traders remarked that many denim millers use seven to eight litres of water to wash a kilogram of fabric. Earlier, they had to use nearly 350 litres.
