Apparel orders staging a strong comeback
The flow of work orders to the garment industry is rebounding strongly on the back of the reopening of stores of retailers and brands in Europe and the US, the two main export destinations for the apparel manufacturers in Bangladesh.
Local suppliers estimate that their exports in the next summer might go up by 20 to 30 per cent. The production for the season runs from September to March.
"Usually, the work orders for the summer season are higher in volume than that for the winter season due to the nature of the garment items produced in Bangladesh," said Bakhtiar Uddin Ahmed, chief operating officer of Narayanganj-based Fakir Apparels.
Bangladesh is strong in the manufacturing of knitwear and woven clothes, which are mainly worn during the days of summer and mild winters.
The value of monthly exports from Fakir Apparels varied between $10 million and $11 million over the past one year. But Ahmed expects it will go up to $13 million to $14 million from September.
His factory mainly exports comfortable knitwear items worn at home, the demand for which is greater than that of woven items because people are spending more time indoors owing to the coronavirus pandemic.
Moreover, work orders are shifting to Bangladesh from Myanmar and China because of the competitive prices offered by the local items.
Many western buyers are also relocating work orders from China to Bangladesh and Vietnam as the production cost has gone up in the world's second-largest economy.
Narayanganj-based Kappa Fashion Wear Ltd has received nearly 25 per cent higher work orders from its buyers for the next season.
The company mainly ships T-shirts and polo shirts. The pandemic has forced it to cut production by half.
Before the pre-pandemic, it used to export garment items worth Tk 100 crore per month. The receipts stand at Tk 75 crore per month now.
"But business is making a revival now," said Ahmed Fazlur Rahman, chairman of Kappa Fashion Wear.
Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association, said confidence in Bangladesh had been restored as local manufacturers had been able to supply items to international retailers and brands even during the pandemic.
"We are getting an increased volume of orders with the restoration of normalcy in the global apparel supply chain."
The issuance of the utilisation declaration (UD), which is required in the processing of bonded warehouse facility, from the BGMEA rose by 30 per cent for the next season compared to last season.
Mohammad Hatem, first vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association, said the issuance of the UD went up by at least 20 per cent for the next season.
"The inflow of work orders is so high that we are even turning down some of our buyers if they don't offer higher prices. This is unusual in Bangladesh."
The increasing work orders are pushing up the demand for yarn.
Viyellatex Group, a major garment exporter and yarn producer, sold around 30 tonnes of yarn daily a year ago.
"Now it stands around 90 tonnes, which indicates that there has been a major jump in international orders," said KM Rezaul Hasanat, chairman and chief executive officer of the group.
Similarly, A Matin Chowdhury, managing director of Malek Spinning Mills, one of the leading spinners and a garment exporter, said his knitwear work orders for the next year had increased by more than 15 per cent.
He exported garment items worth $208 million last financial year and targets to lift it to $240 million at the end of the current fiscal year.
Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association, said the demand for knitwear products increased by 22 per cent worldwide for the change in consumer behaviour for the longer stays at homes.
As a result, the demand for cotton-made yarn had gone up. There was an increased flow of orders from local garment makers, he said.
"This indicates that international retailers and brands are placing an increased volume of work orders in Bangladesh."
Earnings from garment shipment improved in recent months.
The industry, which accounts for about 85 per cent of the national exports, fetched $5.64 billion in July and August, data from the state-run Export Promotion Bureau showed.