The African Growth and Opportunity Act (AGOA) has opened up a new opportunity for Bangladesh’s readymade garment sector.
Under AGOA African less developed countries enjoy zero duty benefits for exporting their products to the US market and this facility will be available for the next ten years.
Capitalising on this opportunity, the DBL Group, one of the largest apparel groups in Bangladesh, has decided to invest 100 million dollars to set up an integrated textile and garment factory in Ethiopia. It is expected to go into production in February next year. A total of 3500 workers including 150 executives will be employed in the Ethiopian factory. All of them would be recruited from Bangladesh.
Bangladesh though a LDC country does not enjoy zero duty benefits in the US market as the US suspended the generalized system of preferences for Bangladesh in June 2013 after the Rana Plaza tragedy.
The DBL Group, which produces items from yarn to garments, employs 22,600 workers in different factories in Bangladesh. The group is expecting shipment of apparel worth 340 million dollars by the end of the current fiscal, which was about 320 million dollars last fiscal.
The cost of doing business in Bangladesh is much higher compared to that in other developing countries. This induces Bangladeshi investors to look for alternative places for investment.