Textile Industry Scenario of Bangladesh-2

About Bangladesh

Bangladesh is a poor, agricultural society with 130 million inhabitants on 144 000 sq. km. With app. 900 people per sq. km, the country is the most densely populated country in the world. The majority of the people are Bengali (98%), some 250 000 are Bihari and around one million are different tribal people. 88 % of the population are Muslim, 11 % Hindu, and 1 % have other religions. The People’s Republic of Bangladesh is headed by President Professor Dr. Iajuddin Ahmed. The present government is run by the BNP whose Prime Minister is Begum Khaleda Zia. The Awami League is the largest opposition party. The average age of living is 58 years for men and 59 years for women. 49 % of the adult men are illiterate as compared to 71 % of the adult women. Bangla is the local language. Educated people also speak English. The unit of currency is the Taka.

The country is mostly flat farmland divided by numerous rivers, the main ones being the delta of Ganges and Bramaputra, called the Padma and the Jamuna in Bangla. For Bangladesh, annual flooding is a way of life. Much of the flooding is regarded by farmers as beneficial, replenishing the worn soils with nutrients. The principal crops are rice, jute, tobacco, tea, sugarcane and vegetables. About 10% of the country is still forested. There are two hilly areas, one in the northeast and one in the southeast. Most of the tribal people live in these areas.

Preserving the environment is not as much a priority as human survival in Bangladesh. About half the population is living below the poverty line and most of them are extremely poor. In spite of the relatively high economical growth in the 90ies the reduction in poverty has only been 1 % per year. The gap between the poor and the wealthy sections of the population is increasing. The most important industries are jute manufactures, ready-made garments, cotton textiles, seafood processing, and pharmaceuticals.[1] The most important trade partners are EU, USA, Hong Kong, Japan, India, China and Singapore. The seaports of Chittagong and Mongla are instrumental for exports as are the airports in Dhaka, Chittagong and Sylhet.

Norway has been providing development assistance for Bangladesh since the country seceded from Pakistan in 1971. Since 1975, Bangladesh has been one of the main recipients of Norwegian development assistance and is now one of seven main partner countries. Norway focuses its efforts on education, economic development, improved governance and human rights. Despite sustained domestic and international efforts to improve economic and demographic prospects, Bangladesh remains a poor, overpopulated, and ill-governed nation. It is one of the so-called “least developed” countries. Major impediments to growth include frequent cyclone and floods, inefficient state-owned enterprises, inadequate port facilities, a rapidly growing labour force that cannot be absorbed by agriculture, delays in exploiting energy resources (natural gas), insufficient power supplies, and slow implementation of economic reforms. Economic reform is stalled in many instances by political infighting and corruption at all levels of government.


The Textile and Clothing Industry

International trade involving textiles and clothing represent a classic example of “managed trade”. During the 1974-94 period, international trade in textiles and clothing were negotiated bilaterally and governed by the rules of the Multifibre Agreement (MFA). On January 1, 1995, the Agreement on Textiles and Clothing (ATC) replaced the MFA and became part of the World Trade Organization (WTO) agreements. The ATC provides for the complete integration of textiles and clothing into the WTO regime over a 10-year period ending on January 1, 2005. Quotas will be eliminated at the same time.


World trade in textiles normally divides the products into three separate categories:
-Textile fiber
- Natural fibers
- Cellulosic fibres
- Synthetic or non-cellulosic fibres

International trade in textiles and clothing has changed substantially the last twenty-five years. Developed countries are increasingly relying on developing countries for exporting clothing.

Textile production is relatively capital intensive while apparel production is relatively labor intensive. Bangladesh, being a labor-abundant country, started the process if industrialization by concentrating on labor-intensive products such as clothing. Textiles and clothing account for about 85 % of total export earnings of Bangladesh, the clothing industry alone employing 180 000 managers and 1.5 million workers, of whom 1,2 million are women. The country has become a significant exporter of clothing within a short period of time. The important question is whether Bangladesh will be able to maintain or improve its competitive position in clothing after the 10-year transition period of the world trade agreement, which comes to an end in 2005. In a liberalized trade regime, competition among textiles and clothing exporting countries is likely to become intense.

Implementation of the comprehensive world trade agreement involves:
Abolition of quotas under the multifiber arrangement (MFA)
Reduction of tariffs on textiles and clothing of 21 % for industrial countries and 14 % for developing countries
Reduction of agricultural output subsidies by 20 % and export subsidies by 36 %

The impact of the world trade agreement is predicted to be growth of output of textiles to be negative in developed countries such as Australia, New Zealand, the European Union, North America, and also in Latin America. Output of textiles, in contrast, will grow substantially in Asian, China, the NIEs, and South Asia and modestly in Japan. For a developing country such as Bangladesh, low relative labor costs may not be sufficient for improving the competitive position of the clothing industry. Greater competition from China and India, which both have a well-integrated textiles and clothing industry and even lower labor costs than Bangladesh, can be expected.

Productivity in apparel and other sub-sectors of Bangladesh are substantially lower than that in other developing countries, including India, Pakistan and Sri Lanka. It also appears that this productivity gap has widened. Professor S. Islam suggests in his book “The Textile and Clothing Industry of Bangladesh in a Changing World Economy” that the demand for South Asian clothing is quite sensitive to price changes. This is consistent with the fact that South Asian countries typically export standardized low-value-added apparel products. Low labor productivity in Bangladesh may be responsible for the relatively high unit labor costs compared to the major competitors. In countries were the share of wages is quite high, the apparel industries are concentrating on high-value-added products.

The clothing industry often produces in the way of production sharing. The garments are for instance cut in one country and assembled in another. This trend may well be changing. Fully vertically integrated manufacturing seems to be a growing trend, meaning that the production of thread and yarn, fabrics, cutting and sewing the apparel is done in one place. This can be seen in Mexico i.e., due to the need of increasing the competitiveness relative to Asian competitors who all want a part of the large US market.

The European Union (EU) is the leading market for apparel, with a share of world apparel imports of 42 % in 1997. The EU imposes no quotas on textiles and clothing from least developed countries including Bangladesh. Textiles and clothing from the least developed countries also enter the EU duty free. Bangladesh relies heavily on the European Union and the United States for exporting clothing. Japan is the third largest market for textiles and clothing after the European Union and the United States. In recent years Japanese textile companies have increased investments in Asian countries such as China and Vietnam. The market share for Bangladesh in Japan’s apparel imports was only .6 % in 1997.

During the last decade or so, Bangladesh has substantially liberalized its trade regime, moving away from costly protectionist policy toward a more export-friendly trade regime. The current industrial policy has identified the textile and clothing sector as one of the “thrust” sectors in the country.

The experiences of textiles and clothing producing countries seem to suggest that a labor-abundant country, which is in an early stage of industrial development, is likely to specialize in only one component, as for instance clothing. As the country moves into higher stages of development, it acquires the capacity to develop other components such as yearns, fabrics, synthetic fibers, chemicals, textile machinery.

Recent years have seen concerns being raised about the viability of the textile sector in Bangladesh, due to the heavy dependence on imported outputs. Export-oriented sectors such as clothing have little linkages with domestic-market-oriented sectors as for instance the handloom industry. It had been argued that Bangladesh may loose its competitive position relative to other South Asian and East Asian countries in a liberalized trade environment because the textile and clothing sector of Bangladesh lacks “backwards linkages” (UNCTAD 1998).

Sadequel Islam concludes in his book “The Textile and Clothing Industry of Bangladesh in a Changing World Economy” that positive development is only possible if

“Trade and industrial policy instruments must be coherent and consistent with the stage of industrial development,

Shifts from assembly-type operations to exports of high value added products require development of a well-integrated textiles and clothing industry, and

The “system loss” due to corruption and government failures in implementation of policy instruments needs to be reduced, in order for government policy to become credible.”

The future for Bangladeshi textile production lies in high-value-added production. High-value-added production requires a host of highly qualified, internationally oriented designers.

Jute
Jute is the major textile fiber growing in Bangladesh. During the British colonial time, jute was taking over where earlier very fine cotton had grown, used for the famous Dacca muslin. Nowadays, the production of cotton and silk is much smaller than the demand and most often these fibers have to be imported. India is the world’s largest producer of jute and also its leading consumer of jute. Bangladesh is the only other major producer of jute. Bangladeshi jute is supposed to hold a high quality. Jute has, however, a low price image in the local market

In Bangladesh, 70 % of the population is working in the agricultural sector. 25 % of the population is directly affected by jute production and many more on the industry. Jute provides a necessary break between rice crops and helps to enrich the soil. It also provides a vital cash flow for people who live at the very margins of subsistence.[2]

The jute industry is a so-called “sunset” industry. Synthetic substitutes play a great role in the downfall of the jute industry, as many of the earlier jute products, i.e. packaging and carpets, now have been substituted by synthetics.
The entire jute industry in Bangladesh is loosing money, my sources said. The government-owned mills are losing the most. Investment is available with great reluctance. Pubali Jute Mills Ltd. has reduced its losses the past year thanks to a product being developed in the wake of the jute project, - a gardening product using jute “wraps” to shield the roots of plants during transport. Jute is now also used in paper production.

Chand´s report states that there are positive signs in export markets for-
a) Food grade sacks that do not use machine oil during processing
b) Natural fiber geotextiles
c) Garden products
d) All jute carpets

This sack like weave still provides the backbone of the jute industry, being used for shopping bags and packaging, webbing, substrates, barrier fabrics, tarpaulin, reinforcement, belts, canvas, carpet backing cloth and Hessian. This quality is also suitable for geotextiles.

Finer weave

The finer weave is today the minimum threshold for consumer products, being used for soft luggage, industrial fabrics and as substrates.

The Jute Research Council in Bangladesh has produced a blended 60 % cotton/40 % jute yarn that has successfully been used in a variety of handloom fabrics from the craft business Prabartana.


The Dutch design company LA Colors worked as consultants in the project’s first years. The project participants grant much of the honor for their success to the Dutch designers. The fact that the project was not planned in detail, allowing for development and changes during the project period, are also mentioned as a positive experience. Thirdly, the length of the project period is seen as positive. Getting started in a serious manner took a long time, says one of the textile mills.

The interior decoration market is a much smaller and specialist fashion driven market than the textile market. The markets that can be targeted by the fabric itself are ten times bigger than those than can be targeted for the treated fabric.
Chand´s report states that the ideal growth pattern for the jute industry is to supply large buyers with industrial products. The need for diversification of the jute production in order to obtain greater volume will have to be one of the conditions for potential product development projects.


Managing Director Kamran T. Rahman expresses a special interest in product development of non-woven textiles.

Textile Crafts

Bangladesh has an established place in the history of textile trade. In the capitals of the world the region was known for the high quality of its products, its unique designs and techniques of production. Especially the exquisitely fine cloth from Bengal, known as Dacca Muslin, was very highly prized. This cloth was so delicate that it could only be woven at dawn whilst the dew still hung on the threads, and the surest test of quality was that a full sari length (6 yards) could be pulled through a woman’s ring.

Today textiles make out 60-70 % of the total crafts production in Bangladesh. The NCCB claims that crafts still employs the second largest segment of the population, after agriculture. It is therefore critical to the NCCB to undertake programmers, which will not only promote the fine traditional skills of the country, but also stem the flow of urban migration of millions of artisans in search of a livelihood. Some say that crafts could have been the breadbasket of Bangladesh. Others claim that crafts is another domestic commodity that developing countries can use to help balance their export / import books, just like coffee, jute or sugar, but that it unfortunately is not credited with the same level of investment.

In the Bangladeshi society craft work and industrialization seem to be co-existing quite happily. The divide between hand made and machine manufactured known from the times of the Industrial Revolution in the western world, does not appear to be taking place in Bangladesh, certainly not at a pace one might expect. Therefore it can be just as feasible, in terms of cost, to order a hand made chair to your specifications, as it is to purchase a machine made one. Jackie Corlett writes that a possible reason for this is caste. Before the Muslim Moghuls conquered Bengal in the 13th Century, the indigenous religion had been predominantly Buddhism and Hinduism. Much of the Hindu culture remains, particularly in special celebrations and the strictures of the caste system. Many of the traditional, as opposed to the trained, craft workers are from Hindu families who have practiced the same craft for generations. Most craftwork tends to be a low caste activity, clay for example is of the earth and therefore not given a high status, similarly leather workers have a low status because they deal with shoes and the feet. Craftwork is generally seen as a low status activity, albeit admired in its final results

There is quite a number of “crafts shops”[3] in Dhaka selling clothes, accessories, home furnishings, and to some extent, basketry, ceramics, candles, cards etc. A Norwegian, having lived in Bangladesh for six years, complained that there had been little innovation regarding the assortment in the shops during her stay. The crafts shops are selling mostly traditional Bangladeshi clothes and crafts, but many are also making new collections and new products, like the youth collections of Aarong and Prabartana mentioned in this report. One shop, The Salvation Army´s Sally Ann, differed from the other crafts shops, selling a home furnishings production line with a “western look”. The shop “Essentials”, selling the “Misty Waters” jute/cotton/silk fabric collection, was run by some young Bangladeshis and had a “westernized” interior design profile.

Skills
On the one hand the skills in textile crafts, i.e. the embroidery skills demonstrated in finished products, are quite impressive, on the other hand are many of the craftspeople initially unskilled, taking a lot of training to produce the necessary quality. The labor is cheap, but, accordingly, largely unskilled. Some of the crafts businesses try, however, to find workers with at least basic skills in reading and numbers. One particular aspect of working with unskilled labor is that it is often difficult to make people do something that they are not used to. Many are illiterates used to doing routine work.

There are many and varied textile skills in Bangladesh. We have concentrated on getting to know the techniques selected by the NCCB for the exhibition planned for October 2003. The other techniques mentioned we tried to explain.

Dyeing

As synthetic dyes have to be imported, it is worth noting that at least one company, Aranya, is working with natural dyes.

Weaving

Naturally there are a lot of impressive woven fabrics, mostly saris, especially impressive considering the technology used. The thin, transparent Jamdani saris with their distinct decorative patterns seem to hold an especially high status in the Bengali society. Being the work of two people in one month, the price for a Jamdani sari lies well above the ordinary level of textiles. Also the brocaded borders of many saris are elaborate and exclusive. Most of the hand-woven fabrics, however, are woven in simple, plain weave, like i.e. the lungi, a sort of skirt worn by the men.

Printing and tie-die

It seems to me that block print is still the major printing technique, using handheld blocks. I have also seen some examples of wax printing and freehand batik, with wax covering part of the fabric stopping the dyestuff from entering into the fabric. Tie-die is also available, sometimes combined with wax print in the same product.

Embroidery

There are many examples of time consuming embroidered decorations on clothes and home furnishings. The Kantha embroidery technique, a simple stitch, is used for all kinds of products, from tea cosies to cushion covers. Originally Kantha embroidery was made in the homes, sewing layers of worn out clothing together to a quilt with a characteristic rippled surface. The women would compose their own Nakshi Kanthas. This embroidery technique has a long past in which it developed as a way of recording stories and events using needle and thread in a spontaneous style. Now, Kantha embroidery products are made on a commercial level, being designed by professionals. The stitching technique and the designs do not hold the same quality as in the old Nakshi Kanthas. However, a number of embroidery techniques are being used, including application and mirror work.

Sewing

Sewing is the common denominator of all the textile crafts products, except for the saris. Also in this field, the lack of basic skills can be problematic. I was told that the tailors were good at making traditional regional clothing, but that sewing westernised clothes were more difficult, as few were able to take correct measurements and shape patterns accordingly.
Products

Textile crafts products in Bangladesh are versatile and can be divided into three main categories:

Fashion
This includes all kinds of clothing, but, because of the tropical and subtropical climate, what we would think of as summer clothes. The traditional saris and shalwar-kameezes for the women and the long shirts for the men, are being supplemented by international style clothes as shirts, jackets and kimonos as well as “fusion” clothes, often preferred by younger people.

As far as I can see, the Bangladeshi are doing well at supplying clothes to the local market and possibly have a market in the entire subcontinent where saris and/or shalwar-kameezes are worn in all countries. The clothes that are made for a western or international market, however, are not the kind of high-value-added items directed at niche markets that will be needed for exports. The need for western or international design input is quite obvious, probably more in the cut of the clothes than in the weaving or decoration.

Fashion accessories
Scarves are an important part of women’s clothing in Bangladesh, always being used with the trousers and long blouse of the Shalwar-Kameez. Large “scarves”, called throws, are used to cover up in the so-called “winter”. Handbags are also a large product category.

Home furnishings
All kinds of bedspreads, table cloths, curtains and cushion covers are seen in the crafts shops, as well as almost any kind of imaginable textile product for the home.

In order to appeal to a western or international market, there is a need of product development, especially regarding materials, colors and sewing.
The Production Process
The production process in the crafts sector in Bangladesh is different than the one known in western machine or hand production. There are many elements, each maybe involving new people and separate financing. The dyer is not the weaver, the weaver may not be the one preparing the warp, the printer is yet another person etc. The complexity of the production process is a challenge, both as far as planning production, getting the desired quality in the end product, and getting the desired quality on time. Most crafts businesses and NGOes try to establish work centers to avoid working at home. Homework increases the risk of soiling fabrics, making them unfit for sale.



This is one example of the elements in a production process:

Buying yarn
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Dying yarn (quality control)
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Supplying yarn to the weaver
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Instructing the weaver
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Weaving the fabric (quality control)
ß
Treating the fabric
ß
Decorating the fabric with block print/tie die/wax print/embroidery (quality control)
ß
Sewing the finished product (quality control)

Export

The total crafts export is estimated to 34-35 million taka per year (Banglacraft). Some craft businesses work 100% for the export market. Most likely the majority would like to have a 70/30 percentage with exports making out 30%. This is certainly the case for Aranya, whose director Ruby Ghuznavi, claims that 1-2 export orders per year would suffice. She then calculates with 3 months delivery time.

Other countries in the region, like India and Thailand, have achieved great success in promoting their textiles worldwide. They have done so by developing institutions for design and technical support, matched by well-documented publications and promotional exhibitions within their countries and abroad. The Export Promotion Bureau is supposed to be promoting Bangladeshi products to the world markets

The Export Promotion Bureau

The Export Promotion Bureaus is a governmental institution, giving priority to a number of activities, some mentioned here:
Simplifying export procedures, and helping the private sector achieve efficiency. The Govt. desires more and more involvement of the private sector while the govt. will continue to play its facilitating role
Enhancing technological strength and productivity and facilitating reduce cost and attain internationally accepted standard of quality of exportable products and thereby consolidate their competitiveness
Participation in the international trade fairs, specialized fairs, single country exhibitions abroad and also sending out trade missions, with a view to consolidating our position in the existing market and creating new markets;
Organizing regularly international trade fairs and product-specific fairs with the country making appropriate development and expansion of infrastructure conducive to export.
Making arrangements for necessary technical and practical training for development of skilled manpower in the export sector
Ensuring maximum utilization of financial and other assistance extended by the World Trade Organization to the Least Developed Countries.
Extending technical and marketing assistance for development of new products and for finding appropriate marketing strategies.

The Export Promotion Bureau is being widely criticized for making exporting more difficult that actually helping the textile and craft businesses. The EPB do take the businesses to tradeshows, though, and even if the there is very little exposure space for each participant, the participation is subsidized and can be made useful.

Trade shows or agents?

The participants in the NORAD jute project have taken part in the Heimtextil fair in Frankfurt several years, and will continue doing so. The jute products are niche products needing to be exposed in exhibition halls with other high quality products, not in a “3. World”-context. The jute project participants have succeeded in getting a good exposition position at Heimtextil.

Aranya has also taken part in international trade fairs with good results, but Ms Ghuznavi finds the cost of participating very high and would rather have an agent connecting Aranya to the buyers. So does Prabartana. Esheeta, on the other hand, does not want an agent because Ms Dewan does not want anyone to become “sole agent”. Even so, it is obvious that agents would bridge the gap between Bangladeshi producers and the international market, providing the “missing link” in the producers´ way to new and unknown markets.

In the report on the Norad jute project, Mr. Chand suggests that the buyers should rather be attracted to the sellers through the internet, editorial publicity and “a few well placed advertisements”, than spend a lot of money on participating in trade shows.

The Handloom Industry

Most of, or maybe all, the fabric used by the crafts businesses and the NGOes involved in crafts production are hand-woven. The handloom industry has long been the premier source of employment in Bangladesh outside of agriculture. At least up to the mid-1970´s, from time immemorial, the handloom industry has been the predominant source of clothing for the majority of the people. Even today it is said that the handloom industry supplies 77 % of the textiles for the local market. Nearly one million people are directly employed in production activity, and also a large number of people are indirectly employed in yarn and cloth trade linked with handlooms. The position of the handloom industry in Bangladesh is unique, because a much larger share of the total production is still being provided by informal handlooms than by the organized mill and power-loom industries.
Materials
Bangladesh has remained a net importer of yarn at least since 1947. Almost all yarns are imported, warp silk from China, cotton from China and India. Some local silk and cotton can be used for weft. Jute, which is locally grown and an important agricultural crop, has a lot of potential, especially the softer material developed in the Norad project as well as blends. The Jute Research Institute has made an interesting 40 %jute/60 % cotton yarn. Jute/silk experiments – silk warp and jute weft - have also been conducted, showing that a softer jute yarn is needed.

One textile designer claims that “Interesting yearns are made only for exports.” Thin yarns for the handloom industry are machine spun. Hand spun cotton is used in the fabric called “khaki”, a thicker cotton quality. Linen also has to be imported and is too expensive to be used in any quantity. Synthetic dyes are imported. Natural dyes, except madder, which has to be imported, are grown locally. Some international designers using the Pantone color system face problems, because they do not take the availability of dyes and the working process of the dyers into consideration.