Capital machinery imports by the primary textile sector increased about 54 percent year-on-year in fiscal 2014-15 on the back of higher demand for raw materials from garment exporters.
Last fiscal year, $445.7 million worth of capital machinery was imported by the sector, according to data from Bangladesh Textile Mills Association. A BTMA certification is required for importing machinery for the textile sector.
Machinery imports accelerated, as entrepreneurs set up 26 textile mills in spinning, weaving, dyeing and finishing last fiscal year, said Monsoor Ahmed, secretary to the BTMA.
Moreover, the owners of many factories have expanded their production capacity as the demand for yarn and fabrics from garment makers is on the rise, he added.
At present, the textile mills meet 90 percent of the requirement for knitwear and 40 percent for woven fabric by garment factories, and in doing so they are helping the country save a substantial amount of foreign currency.
And thanks to sourcing raw materials from the local market, the garment makers can now ship the finished goods within 32-45 days.
If the fabrics are imported from China instead, another 30-40 days are required, according to Abdullah Al Mahmud Mahin, managing director of Hamid Fabrics. “We can supply the fabrics in two weeks due to our faster production capacity.”
Mahin has invested Tk 135 crore to expand his yarn dyeing and weaving operations in Narsingdi. “I have a lot of work orders from buyers -- this is why I have expanded my capacity.”
Like him, many factory owners have installed new machineries within their existing power and gas generation capacities to replace their older ones for higher production in a shorter time.
Had the government given new gas connections to the factories, the investment in the primary textile sector would have been much higher for increased demand from garment makers, Ahmed said.
The garment makers have set a target to export $50 billion worth of apparel products by the end of 2021.