Apparel makers demand easing conditions for using duty-free fabrics
Local apparel manufacturers have urged the bond authorities to increase the amount of waste permitted while producing garments from items imported duty free under bonded warehouse benefit.
The garment makers' placed the demand as they are shifting productions from basic garments to high-end value-added items.
Currently, manufacturers are allowed to waste 7 to 9 per cent of the required materials while making export-oriented garment items. It is 7 per cent during the dyeing process and 9 per cent in case of processed knitted fabrics.
However, the percentage of waste in making export-oriented garment items has risen as most local manufacturers are entering the high-end market.
A portion of fabrics is wasted for various reasons during manufacturing. For instance, incidents of wasting fabrics and yarn take place when these materials are cut or processed. Scraps are also produced while sewing fabrics.
The process of making fancy or high-value added garment items generate more waste compared to the production of basic apparel products.
Garment manufacturers and exporters in a meeting with the Customs Bond Commissionerate (CBC), Dhaka yesterday demanded an increase in the percentage of waste permitted in making export-oriented garment items to 25 or 30 per cent. CBC Dhaka is a field office under the National Board of Revenue (NBR).
This is because, in many cases, garment manufacturers and exporters cannot maintain the commerce ministry's fixed 7 per cent and 9 per cent waste allowances in making fancy and high-end garment items, they said.
As a result, the bond office and customs offices sometimes cause delays in releasing goods from ports because of a mismatch in the amount of fabrics imported and its consumption for making finished apparel goods for export under bond licences.
At the meeting, garment exporters showed that a prominent local manufacturer's waste was calculated at 40.24 per cent between 2015 and 2018.
This manufacturer's export price was $5 per unit during this time as it was making fancy and value-added products.
Of the 40.24 per cent, visible waste was 8.43 per cent, invisible waste 9.72 per cent, cutting waste 15.38 per cent, cut panel waste 5.66 per cent and rejected garment waste was 4.95 per cent, according to a document submitted to the bond office by garment exporters.
Between 80 per cent and 90 per cent are cut maintaining right processes. Still, 10 to 20 per cent of the fabrics are wasted, the documents showed.
Since the beginning of the local garment sector's journey four decades ago, Bangladesh has been mainly known for producing basic and semi value-added garment items.
In recent years, however, local manufacturers started producing diversified garment items like fancy, semi value-added and high value-added garment items, to become more competitive in the international market since the price of basic garment items is declining worldwide, as new suppliers like Myanmar and Ethiopia also produce cheap basic garments.
The price of "Made in Bangladesh" garment items for export declined by 1.79 per cent over the last five years but the cost of production rose 30 per cent, according to industry insiders.
"Exporters like local fabric and yarn suppliers should be treated equally in the process of Utilisation of Declaration and ease of audit period like garment exporters," they said at the meeting.
Representatives from the Bangladesh Garment Manufacturers and Exporters Association, Bangladesh Knitwear Manufacturers and Exporters Association and Bangladesh Textile Mills Association participated in the meeting with the bond commissioner.
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