Despite global tensions, Bangladesh's apparel exporters are upbeat mood as new orders are fuelling expansion of old factories and opening new ones. Since 2021, Bangladesh has set up around 200 new garment factories, say experts. And old factories are expanding capacities and subcontracting orders

More factories seek BGMEA membership

However, exporters fear, the current Russia-Ukraine war may cause a delay in payments and shipments. To offset delays, around 110 garment factories joined the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) in the last two years. Around 72 factories also joined Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) during this period.

Industrial Police (IP) stats show, around 55 new garment factories were set up in Gazipur industrial belt in the last two months. Most of these IP-listed factories are small-sized and subcontract orders that employ around25-50 workers. Masud Alam, Managing Director, MN Seven Fashions says, they opened a small-sized factory in Gazipur last year to make knits. The plan is to bag some of the orders that have recently shifted to Bangladesh due to US-China trade war.

Safety and compliance makes Bangladesh a preferred manufacturer. With work orders beyond capacity, a few manufacturers are engaging subcontractors to meet supply deadlines. Some are also expanding their machine capacities.

Shahidullah Azim, Vice President, BGMEA says, a few factories have been set up in recent months as global buyers are placing plenty of work orders. Orders diverted from China are also increasing with buyers adopting China-plus strategy. Compliance on safety and environmental standards too make Bangladesh a lucrative destination for apparel production, adds Azim. Exports surge to $31.45 million From July-January 2021-22 Bangladesh received work orders worth $23.98 billion for readymade garments both knit and woven. Exports grew 30.30per cent year-on-year during this period. Since September 2021, Bangladesh’s apparel exports earnings surged above four-billion in February. Growth is attributed to the strong rebound of apparel shipments from pandemic-spawned recession. Bangladesh’s apparel exports surged to $31.45 billion in FY2020-21 as the industry continued to expand production and restore supply chains

Remain connected with buyers and lein banks

The ongoing Russia-Ukraine conflict is a concern for RMG sector as Russia is an emerging market for Bangladesh apparel exports. Meanwhile, Russia faces wide ranging sanctions from countries with ‘banks’ access to SWIFT international payments systems blocked, he adds. In 2020-21, Bangladesh exported garments worth $593 million to Russia. BGMEA has advised exporters to inform the buyers they are currently working with alongiwth overdue payments and details of the concerned banks.

BGMEA has also advised exporters to remain connected with buyers and lein banks and take the required decisions only after discussing with them.