Local RMG carves niche in China market
China, the world's largest apparel supplier, has become a major export destination for Bangladesh as Chinese manufacturers are showing reluctance to produce basic RMG items, exporters said.
They said the Chinese manufacturers have recently shifted from basic readymade garment (RMG) items to high-end apparels.
A significant number of garment factories that made basic RMG products earlier faced closure in China recently. Bangladesh and other competing countries are now exporting RMG products to China, local manufacturers said.
According to Export Promotion Bureau (EPB) statistics, Bangladesh exported knitwear products to China worth $3.071 million in fiscal 2007-08 against $7.65 lakh in the previous fiscal year, posting a staggering 400 percent growth.
In fiscal 2007-08 the country exported woven garments to China worth $6.691 million against $6.323 million in fiscal 2006-07, the EPB data said.
The total export to China from Bangladesh amounted to $106.946 million against the import of around $3.0 billion in fiscal 2007-08.
China is a prospective market for Bangladeshi RMG as many Chinese manufacturers are not making basic garments, said S Kutub Khan Chowdhury, deputy general manager of Grameen Knitwear Ltd, which started apparel export to China in 2007.
"Grameen Knitwear started exporting sportswear to Chinese 'Coolmax Fresh Fabrics' in 2007 and until now we have a good number of export orders from China," Chowdhury said.
"If we go for market sourcing, I think we will realise how big the Chinese market is for Bangladesh," he added.
In 2007, Bangladesh exported cotton T-shirts, singlets and other vests worth $7.92 lakh against $5.78 lakh in 2006. China imported such kind of apparel items worth $976.890 million in 2007 and $926.330 million in 2006 from the rest of the world.
"The figure clearly indicates that China itself imports apparel items of a significant amount," said Fazlul Hoque, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
"Bangladesh can grab a chunk of such import of China. We need just an aggressive marketing drive," Hoque said.
Currently Bangladesh enjoys duty concession on exports of 757 products to Chinese market under Asia Pacific Trade Agreement.
Of the 757 products, 22 knitwear items and almost the same amount of woven items are included in the concession category. As a result, the export of knitwear and woven products is maintaining a steady rise in China, market operators said.
According to a study by Euromonitor (July 2007), China's middle class (with household incomes of $8,300 to $68,800 per year) grew 22 percent in the last two years to reach 80 million and is expected to increase nearly tenfold by 2020.
"As the disposable income of Chinese consumers grows, increased competition within the apparel market offers new opportunities for retailers, both domestic and international," Euromonitor said.
As a part of marketing drive in China, EPB is going to submit a priority list of some Bangladeshi products to commerce ministry next week proposing the Chinese government for giving duty-free market access for those, said Khalilur Rahman, director general of the EPB.
"We will try to make the priority list small so that we can utilise it if China agrees. But, the major Bangladeshi products like woven and knitwear products, leather goods, jute and jute goods and light engineering products would be prioritised on the list," Rahman said.
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