The sustainability and competitiveness of readymade garment industry may be hampered due to rising production cost driven by wage and energy cost hikes, compliance costs and declining international market prices, a business leader said yesterday.
The lowest price offering to Bangladeshi products reduces the profit margin of entrepreneurs, said Osama Taseer, president of the Dhaka Chamber of Commerce and Industry (DCCI).
He was addressing a DCCI conclave on sustainability of the RMG sector in Bangladesh at its office in Dhaka.
Taseer recommended a 5 percent cash incentive for the next three years on the export of all RMG to both traditional and non-traditional markets, according to a DCCI statement.
Reducing dependence on gas, local coal resource can be extracted and utilised for growing energy and power needs to keep the RMG sector sustainable, he said.
Some 1,200 factories have been closed down over the last four years for failing in compliance standards.
Since 2013, Bangladeshi apparel prices decreased 0.74 percent every year on an average. Due to a 208 percent gas price hike for power producers, electricity prices may increase by 60 percent, resulting in a 9 percent increase of production cost. Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association, said government support is needed for sustainability.
“Moreover we are in an image crisis and we should brighten the image in the international market with the support of all, especially through the media,” she said.
Huq also underscored the importance of forming strong strategies while the government should focus on ways to reduce the cost of doing business for RMG sector’s sustainability.
Commerce Minister Tipu Munshi said the entrepreneurs of this sector were not getting the right prices from buyers.