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P&p of gmt industry

  1. 1. 1Introduction: Garments Industry of Bangladesh is economically most important and one of the mostemerging sector of the country. This is an assignment on “Problem and Prospects of Garment Industry in Bangladesh”.For writing sequentially this topics is divided into three stages. First stage includes outlook or front page presentation. Second stage is divided into followings: Contents, Introduction, Historical Backgroundof Garments Industry in Bangladesh, Present Status of Garments Industry in Bangladesh,Prospects of Garments Industry in Bangladesh, Problems of Garments Industry inBangladesh, Recommendations and Conclusion. Third stage includes References. With the help of specific and related data all the points are described in the body partof the assignment. Related pictures and graphical presentations are also included with thepoints. Many points are described deeply with the help of related data, graph and references. Finally, almost all the references are mentioned in the last stage of the assignment.References are taken from related books, research papers and publications, projectpapers, websites and related writings of different authors and organizations.
  2. 2. 2Historical Background of Garment Industry in Bangladesh: Large-scale production of readymade garments (RMG) in organized factories is arelatively new phenomenon in Bangladesh. Until early sixties, individual tailors madegarments as per specifications provided by individual customers who supplied the fabrics.The domestic market for readymade garment, excepting children wears and mens knitunderwear was virtually non-existent in Bangladesh until the sixties. Since the late 1970s, the RMG industry started developing in Bangladesh primarily asan export-oriented industry although; the domestic market for RMG has been increasingfast due to increase in personal disposable income and change in life style. The sectorrapidly attained high importance in terms of employment, foreign exchange earnings andits contribution to GDP. In 1999, the industry employed directly more than 1.4 millionworkers, about 80% of whom were female. The hundred percent export-oriented RMG industry experienced phenomenal growthduring the last 15 or so years. In 1978, there were only 9 export-oriented garmentmanufacturing units, which generated export earnings of hardly one million dollar. Someof these units were very small and produced garments for both domestic and exportmarkets. Four such small and old units were Reaz Garments, Paris Garments, JewelGarments and Baishakhi Garments. Reaz Garments, the pioneer, was established in 1960as a small tailoring outfit, named Reaz Store in Dhaka. It served only domestic marketsfor about 15 years. In 1973 it changed its name to M/s Reaz Garments Ltd. and expandedits operations into export market by selling 10,000 pieces of mens shirts worth FrenchFranc 13 million to a Paris-based firm in 1978. It was the first direct exporter of garmentsfrom Bangladesh. Desh Garments Ltd, the first non-equity joint-venture in the garmentindustry was established in 1979. Desh had technical and marketing collaboration withDaewoo Corporation of South Korea. It was also the first hundred percent export-oriented company. It had about 120 operators including 3 women trained in South Korea,and with these trained workers it started its production in early 1980. Another SouthKorean Firm, Youngones Corporation formed the first equity joint-venture garmentfactory with a Bangladeshi firm, Trexim Ltd. in 1980. Bangladeshi partners contributed51% of the equity of thee new firm, named Youngones Bangladesh. It exported its firstconsignment of padded and non-padded jackets to Sweden in December 1980. Within a short period, Bangladeshi entrepreneurs got familiar with the world apparelmarkets and marketing. They acquired the expertise of mobilizing resources to export-Foreign buyers found Bangladesh an increasingly attractive sourcing place. To takeadvantage of this cheap source, foreign buyers extended, in many cases, suppliers creditunder special arrangements. In some cases, local banks provided part of the equitycapital. The problem of working capital was greatly solved with the introduction of back-to-back letter of credit, which also facilitated import of quality fabric, the basic raw Thegovernment assigned high priority to the development of RMG industry. Over the last fifteen years or so the garments industries have emerged as the largestsource of earning foreign currency. About half of the foreign currency from the ready-made garments is earned from European Union and the U.S.A. Besides, Canada, Japan,Australia, New Zealand; Russia etc. also are other garments importing countries. Atpresent about 20 countries of the world are importers of our garments. Its market is beingexpanded in the Middle East, Russia, Japan, Australia and many other countries.
  3. 3. 3 Table 1: World’s Leading Textile and Clothing ExportersLeading % Share in world export Leading % Share in world exportExporters of Exporters ofClothing 1980 1990 2000 2006 Textile 1980 1990 2000 2006China 4.0 8.9 18.2 30.6 EU (25) 49.4 48.7 35.6 32.6EU (25) 42.0 37.7 26.9 26.8 China 4.6 6.9 10.2 22.3Hong Kong, Hong Kong, 12.3 14.2 12.2 9.1 3.2 7.9 8.5 6.4China ChinaTurkey 0.3 3.1 3.3 3.8 US 6.8 4.8 6.9 5.8India 1.7 2.3 3.1 3.3 Korea, 4.0 5.8 8.0 4.6Bangladesh Taipei, 0.0 0.6 2.1 2.8 3.2 5.9 7.5 4.5 ChineseMexico 0.0 0.5 4.4 2.0 India 2.4 2.1 3.8 4.3Indonesia 0.2 1.5 2.4 1.8 Turkey 0.6 1.4 2.3 3.5US 3.1 2.4 4.4 1.6 Pakistan 1.6 2.6 2.9 3.4Viet Nam ... ... 0.9 1.7 Japan 9.3 5.6 4.4 3.2Source : WTO Trade StatisticsThe regional flow of the T&C export shows that China is the leading world exporterwhose clothing export share has immensely increased from 4.0% in 1980 to 30.6% in2006. The other major exporters are EU (union of 25 countries), Hong Kong, Turkey,India, and Bangladesh. It is evident from the Table 1 that the share of EU in the worldexport of clothing has significantly declined from 42.0% in 1980 to 26.3% in 2006.Whilethe shares of some developing countries such as China, Turkey, Bangladesh, India,Mexico, and Indonesia among others, have increased (Table 1). For instance, share ofIndia’s clothing export has increased from 1.7% in 1980 to 3.3% in 2006.
  4. 4. 4Contribution of the RMG Industry: RMG business started in the late 70s as a negligible non-traditional sector with anarrow export base and by the year 1983 it emerged as a promising export earning sector;presently it contributes around 75 percent of the total export earnings. Over the past oneand half decade, RMG export earnings have increased by more than 8 times with anexceptional growth rate of 16.5 percent per annum. In FY06, earnings reached about 8billion USD, which was only less than a billion USD in FY91. Excepting FY02, theindustry registered significant positive growth throughout this period.1Figure 1: Trend of RMG Export Volume, Export Growth and Contribution to GDP.Table-2: Employment in RMG Factories in Fiscal Years1996/97-2005/06:
  5. 5. 5 The export of world RMG has grown through quantitative restrictions of Multi FiberArrangement (MFA) from 1974 to 1994. These restrictions were phased out during 1994- 2004 in four phases. Now, with the opening of market, since January 1, 2005, the RMGindustry has been fully integrated into the World Trade Organization (WTO).Present Status of Garments Industry in Bangladesh (PositivePerspectives): The contribution of readymade garment (RMG) to the national export increases withthe rebound of orders from international buyers following a recovery in the globaleconomy, according to trade data of the Export Promotion Bureau. The share of RMG products reached 77.17 percent in the July-November period from77.15 percent in July-October of the current fiscal year. During the July-November period, the country exported woven garments worth $2.13billion and knitwear items of $2.59 billion totaling $4.72 billion. The share of woven garments in the total exports of the country was 34.84 percent andthat of knitwear (including sweater) was 42.34 percent, the data said. During the five-month period, the total national export was worth $6.10 billion. In fiscal 2008-09 the RMG contribution was 79.33 percent, while woven segmentadded 38.02 percent and knitwear items 41.30 percent. Bangladesh exported woven garments worth $5.92 billion and knitwear worth $6.43billion in 2008-09, registering growths of 14.54 percent and 16.48 percent respectivelycompared to the previous year.Table-3: National Income Aggregates: Items 2008-2009* 2007-2008 Changes over previous year
  6. 6. 6 absolute Percentage GDP at current prices (in million 6149432 5458224 691208 12.66% Taka) GNI at current prices(in million 6832305 5942119 890186 14.98% Taka) NNI at current prices(in million 6358229 5518610 839619 15.21% Taka) GDP at constant prices ( base 3406524 3217260 189264 5.88% 1995-96 ), (in million Taka) GNI at constant prices ( base 3784806 3502483 282323 8.06% 1995-96 ), (in million Taka) Per Capita GDP at current prices, 42638 38330 4308 11.24% (in Taka) Per Capita GDP at constant prices (base 1995-96), 23620 22593 1027 4.55% (in Taka) Per Capita GNI at current prices 47373 41728 5645 13.53% (in Taka) Per Capita GNI at constant prices (base 1995-96), 26242 24596 1646 6.69% (in Taka)Source: BBS (Bangladesh Bureau of Statistics) *:= Provisional, R: =Repeated. Most Asian LICs are expected to record positive growth in 2009 and should see afurther strengthening of activity in 2010 as global conditions continue to improve.IMF forecasts suggest Asia will grow by 5.75 per cent in 2010–far higher than the 1.25per cent predicted for the G-7 economies but well short of the 6.67 per cent averagerecorded for the region over the past decade.“A strong rebound in exports is unlikely, given that some of the Asian LICs’ exportproducts including agricultural goods and garments have low responsiveness to globaldemand changes.” At present there are about 3500 garment industries in the country and 75 percent ofthem are in Dhaka. The rest are in Chittagong and Khulna. These Industries haveemployed fifty lacks of people and 85 percent of them are illiterate rural women. About76 percent of our export earning comes from this sector.The prime reason why garment industries have come out to be the champion in the fieldof export is obviously the cheap labor. Labor is not as cheap anywhere in the world as itis in Bangladesh.
  7. 7. 7 Bangladesh exports its RMG products mainly to the United States of America and theEuropean Union. These two destinations account for more than a 90 percent share of thecountry’s total earnings from garment exports. The country has achieved some productdiversification in both the United States and the European Union. Recently, the country has achieved some level of product upgrading in the EuropeanUnion, but not to a significant extent in the United States. Bangladesh is less competitivecompared with China or India in the United States and it is somewhat competitive in theEuropean Union.Table-4: Category-wise exports of different products in 2008 & 2009:Present Status of Garments Industry in Bangladesh (NegativePerspectives): In a recent survey, it is realized that a large portion of population are working in theRMG sector. A worker (male or female) earns at best (1000-1600) taka per month asbasic. But it is a matter of close observation that a significant percentage of workers are
  8. 8. 8marrying within RMG. So, both husband and wife are working in garments and earningat best 3500 taka as basic. Now the question, is 3500 taka enough to lead life in a costly city like Dhaka? Theanswer is no. Then what is happening around us. Can you even imagine? Since freedomis the birth right of a man, mother’s milk, fathers affection and love are the birth right of achild. Mother and father are working in garments all the day round and earn money notenough to live together. So, they are bound keep their child in the village with theirmother, mother in law or sister in law. The child must not be growing like any other childwho lives with their father and mother. As a result, this child is becoming irrigative. Itsmental growth is downward. He or she is not getting a good environment of education.He is always dejected. The child is growing up in an unwelcome world. In the long run,this child will not honor the parents since relationship is not as such. What will happenafter 50 years if the children are not grown properly? From the law of business, we have seen that if the owner is unable to provide goodworking environment for the worker, it is the violation of law. Side by side the workersmust get a good compensation package from the owner. This compensation package mustinclude salary, medical service, home allowances, transportation, trainings and education => On the other side, UD consumption improved in January 2010 by 4.0-5.0 percentcompared to the same month last year, according to Bangladesh Garment Manufacturersand Exporters Association (BGMEA) data.“But the concerns for Bangladesh are the sudden price hike of cotton by 25 percent oninternational market and yarn price rise on the local market by 30 percent as the Free onBoard (FoB) value remained static,” said BGMEA President Abdus Salam Murshedy. If acommodity is quoted on a FoB basis it means the cost of the goods and their loading onto a ship are included but not the insurance or freight charges. He said the exporters’ costincreased as they have to send the goods by air to maintain the lead-time. Recently theexporters are continuously failing to maintain the lead-time due to failure in on-timeproduction caused by low gas pressure in the plants, he said in an interview recently.Prospects of Garment Industry in Bangladesh: • Financial Prospect: Over the last fifteen years or so the garments industries have emerged as the largestsource of earning foreign currency.
  9. 9. 9Industry Sector: 2.5 In the industry sector, which contributed 29.7 percent of GDP, growth rate sloweddown from 6.8 percent of FY08 to 5.9 percent in FY09. Within this sub-sector knitwear,rice milling, dairy products, leather products, footwear, embroidery, wooden furniture,paper and paper products, nonmetallic mineral products etc. showed substantial growth inthe first six months of FY09.
  10. 10. 10 Despite global economic rescission, woven garments and knitwear, the countrys keyexport industry, showed substantial growth in FY09. Exports of woven garments andknitwear achieved 14.5 and 16.2 percent growth respectively during FY09. [To illustrate these topics more specifically we can use the references of previous tableno.: 3 & 4 of page no.: 05 & 06.] According to Export Promotion Bureau (EPB), Bangladesh, during the FY-2008-2009, contribution of the major export items were Ready made garment (Knit-41.31%,Woven-38.02%). In the July-November period of the current fiscal year, Bangladesh exported wovengarments worth $2.13 billion and knitwear items of $2.59 billion, with the share ofgarments in national exports increasing. The share of RMG products reached 77.17 percent in the July-November period from77.15 percent in July-October of the current fiscal year. The share of woven garments in the total exports of the country was 34.84 percent andthat of knitwear (including sweater) was 42.34 percent. • Employment Prospect: After the emergence of Bangladesh radical change has come to our garment sector.Garment industries started working from the 10s of the late century. At present there areabout 3500 garment industries in the country and 80 percent of them are in Dhaka. Therest are in Chittagong and Khulna. These Industries have employed fifty lacks of peopleand 90 percent of them are illiterate rural women. About 80 percent of our export earningcomes from this sector.Formal paid employment at end of March 2009 totalled 20,326, declined by 1,768 fromthe comparable 2008 period. The drop was largely dominated by the decline of 1,324 inthe secondary industry followed by the declines of 544 and 12 in tertiary and primarysectors whilst the public administration industry had increased by 111 respectively.Table-5: Employment in RMG Factories in Fiscal Years1996/97-2005/06:
  11. 11. 11 Ready Made Garments, for the last couple of decades, have been the life- line ofBangladeshs economy. At the last count, the sector accounted for nearly 80 per cent ofexport earnings. Consequently, it provides profits for the currently surging consumerclass that drives the economy further forward and jobs for hundreds of thousands of semi-skilled workers, mostly women, who in turn provide livelihood for millions And woman entrepreneurship is practiced here from the very beginning. As one of theoldest export-oriented garment factories, the Baishakhi Garment in 1977. Still ourIndustries have employed fifty lacks of people and 90 percent of them are illiterate ruralwomen. Many women hold top executive positions in RMG industry. • Political Prospect: With the rise of Industrialization specially RMG sector activities of many Ministry asMinistry of Industries, Ministry of Textile & Jute, Ministry of Trade, Ministry of ForeignAffairs, Ministry of State and related Government Institutions become more pro-active insense of overall development of the country. Many institutions raised to assist this sectorlike BGMEA, BKMEA, ITET and many more which act as the representative of thissector to collaborate with Government. In July 1996, 2,357 garment factories wereregistered with the Bangladesh Garment Manufacturers and Exporters Association(BGMEA). The growth has indeed been phenomenal, since the ready-made garmentindustry began modestly as late as the 1970s. Creation of a separate ministry would unburden the ministry of industries. And theBangladesh Garments Manufacturers and Exporters Association (BGMEA) have beenjustifiably pleading for long for the creation of a separate ministry to exclusively dealwith RMG issues. So far, the suggestion failed to create any impact on the government.
  12. 12. 12 More on in case in joint venture projects related ministries political activities becomemore meaningful with the rise of RMG industries in Bangladesh. Bangladesh has manyjoint venture projects with China, Korea, Japan, India etc. This helping attitude, in turn, would have had a beneficial spillover effect on thepolitical climate, which would have improved the prospects of cooperation in other areas. • Cultural Prospect: In EPZ’s and in outside factories many foreign workers, technicians, engineers workwith Bangladeshi related persons. Though these RMG industries we become able toenrich & expand our culture and cultural identity and trends with the whole world. So thisis a great opportunity for Cultural Prospect of Bangladesh. More on, in these industries, people tethered from all-over the country, from differentparts, having different trend & culture. Through the expansion of RMG industries, peoplethere get opportunity to meet with different cultural traditions. Now-a-days world of Fashion & Dresses moving forward rapidly. And most importantcontribution of this movement is the contribution of RMG sector. It is surely helping theCulture of Bangladesh in the way of prospect with a strong hand. • Social Prospect: In light of growing competition among readymade garment (RMG) exportingcountries and consumers preference for products which meet internationally recognizedsocial standards, it is essential for Bangladeshs RMG suppliers to improve socialcompliance in their factories. Training and upgrading the skills of government inspectors, social compliance trainersand especially factory staff, including midlevel managers and workers, is a necessity. Factory Impacts: A survey revealed that in most factories where PROGRESS has trained socialcompliance professionals, social compliance has improved. The following good practiceswere noted: Senior factory management is involved n social compliance training, and at least onesenior officer is responsible for social compliance. The senior social compliance officersup-date their social compliance knowledge regularly and have good relationships withsupervisors and workers. Floor supervisors and workers assisting in social complianceactivities are regularly trained and supported by the senior social compliance officer.Employees receive special training, for instance, on reproductive health and HIV/AIDSprevention. Workers are more knowledgeable about labor law issues and the handling ofadministrative procedures. Workers sense of responsibility towards their factory hasincreased. Communication and relationships between management and workers hasimproved. Grievance handling has improved. Protective equipment is regularly used.Housekeeping has improved. The accident rate is low. • Environmental Prospect:
  13. 13. 13 With the rise of RMG industry the utilization of nature and natural resources becomemore. To give back-up the RMG industry many backward linkages rise as spinning,weaving, knitting, dyeing, finishing and many others. If all these factories follow Eco-friendly technologies then Environmental Prospect can be ensured. There is nothing more to mention about the Environmental Prospect with the rise ofany kinds of industry. But Eco-friendly technologies like Effluent Treatment Plant (ETP)can be used to keep nature livable to the next generations. • Prospect of Women Contributions: The Bangladesh garment industry is the largest employer of women in the formalmanufacturing sector. The conditions of the 1971 war, in fact, created the proto-capitalists, and the post-1975 economic policies of the military regime enabled them tobecome capitalists. The work has different meanings for women of different classes andthese perceptions influence gender roles and practices within the household. Womenfrom various class backgrounds are employed because they can be molded into compliantworkers. Some single women feel empowered by their earnings. Most married womenare unable to leverage their income into greater decision-making power.These Industries have employed fifty lacks of people and 90 percent of them are illiteraterural women. About 80 percent of our export earning comes from this sector.Table-5: Women Employment in RMG industries in the 1990s:Problems of Garment Industry in Bangladesh:
  14. 14. 14 • Political Problem: Due to political problem in the past two years around 4000 factories in Dhaka havebeen on wildcat strike, 16 factories were burnt down by strikers and hundreds moreransacked and looted, pitched battles were fought with cops and private security forces inworkplaces. These events have ignited a wave of fierce class struggle in the garmentindustry up and down the country. These revolts are spreading beyond the workplace andare absorbing the wider working class community. Garments industries often pay dearly for political unrest, hartal and terrorism etc. Theinternational market has withdrawn quota advantage over garments export formBangladesh since December 2005. The allegations of planned and rumour-fed violence against the garments industryshould be duly investigated. If the allegations prove to have any basis, the authoritiesneed to find out who are investigating the violence from time to time and why. TheChairmen of BGMEA and the Bangladesh Knitwear Manufacturers and ExportersAssociation (BKMEA) alleged time and again, that the incidents, instigated from outside,were deliberate attempts to foment unrest in the garments industry. Some unknownquarters, they say, are out to destroy the vibrant garments industry of Bangladesh topromote their hidden agenda. No aggrieved worker can do what the unknown elements are doing to damage theindustry, they say. Only outsiders, without any sense of belonging to the industry can beas unruly as they are. Such elements smash and loot anything in the factories without anyhesitation. In the process 400 garments factories were damaged in recent years. Some ofthe incidents, according to allegations, were prompted by non-government organizations(NGOs). A separate ministry can obviously pay the needed attention to all these concerns. Thegovernment needs to give up its indifference to create a separate ministry as suggested byBGMEA. • Social Problem:
  15. 15. 15 Since freedom is the birth right of a man, mother’s milk, fathers affection and loveare the birth right of a child. Mother and father are working in garments all the day roundand earn money not enough to live together. So, they are bound keep their child in thevillage with their mother, mother in law or sister in law. The child must not be growinglike any other child who lives with their father and mother. As a result, this child isbecoming irrigative. Its mental growth is downward. He or she is not getting a goodenvironment of education. He is always dejected. The child is growing up in anunwelcome world. In the long run, this child will not honor the parents since relationshipis not as such. What will happen after 50 years if the children are not grown properly? From the law of business, we have seen that if the owner is unable to provide goodworking environment for the worker, it is the violation of law. Side by side the workersmust get a good compensation package from the owner. This compensation package mustinclude salary, medical service, home allowances, transportation, trainings and education.Many workers have the potentialities to do something better. If they are providedtraining, they can go in higher ranks and lead a good life. This opportunity also motivatesthem to work spontaneously. The recommended minimum average wages (which include Traveling Allowance,House Rent, Medical Allowance, Maternity Benefit, Festival Bonus and OvertimeBenefit) in the units within the Bangladesh Export Processing Zones (BEPZ) are givenabout 40% lower than outside the BEPZ. These discriminations mental strength to theunrest situation, which creates social problems. • Environmental Problem: Photo: Industrial waste indiscriminately dumped in water body to the peril of the localities around. Environmental problems of today are of complex character as industrialization hasbeen diversified in quality and by regions. Environmental pollution depends on variousfactors like type of industry, raw materials, production technologies, location ofindustries, etc. For a particular type of industry, change in energy source e.g. shifting
  16. 16. 16from coal to petrol/diesel, and raw materials as well, caused significant change in types ofdiseases as well as magnitude of damages. Even before becoming industrial powers, the industrialized nations caused a variety ofenvironmental problems. They are still confronting with serious environmental issues ofwater, food and air pollution. Some of them have been solved by the application ofengineering techniques or by imposing legal constraints, while others still remainuntouched or unresolved. They are now thinking of striking a balance between industrialdevelopment and environmental problems. Till 1962 the number of industries in Dhaka was about 100, most of them of small tomedium scale and located mostly in present old Dhaka area. The important industries inthe country are textile & dyeing, leather, paper and pulp, fertilizer, sugar, steel, oilrefining, chemical and pharmaceuticals and other small scale agro-based and agro-alliedindustries and of course the readymade garments. In 1986, DoE identified 903 industries as most polluting that swelled to 1176 in 1997.Currently the list of polluting industries is expected to be much longer. Many industriesare located on the banks of natural streams or rivers while many others in the residentialareas causing air and water pollution through smoke emission and dumping of untreatedeffluent. Monitoring results by the Department of Environment (DoE) and other researchorganizations indicated alarming level of the localised air and water pollution by thoseindustries. The condition of Buriganga, Balu, Turag, Shitalakshya, Karnafuli, Bhairabrivers is a glaring example of deteriorating environment. Rapid and unplanned urbanization, commercial development along with very highpopulation pressure have made Dhaka an environmentally polluted city in the world. Thenumber of tanneries has increased to over 200 from 26 in 1975. Nearly 2000 garmentsindustries have been established all over the city since the early 1980s. Rapid andunplanned establishment of industries in different places of the city is responsible forlocalized pollution effects. As a result, water of those surrounding rivers and lakes hasalready exceeded the national standard limit in pollution. The concern about environmental issues, however, has been reflected in differentpolicy initiatives taken by the government of Bangladesh. The major policy initiatives,strategies and plans emphasized environment and natural resources management toachieve sustainable development. The National Environment Policy 1992, NationalForest Policy 1994, National Water Policy 1999, National Agriculture Policy 1999,National Land Use Policy, 2001 all aimed to ensure development in harmony with thenatural environment. The Wetland Policy (Draft) puts special emphasis on theconservation of wetlands. Government along with industry owners should come forward to minimize thisproblem and people from all sectors should be concern not to pollute the environment anymore. • Financial Problem:
  17. 17. 17 Though financial prospects are more in case of RMG industry than financial problem,there have some financial problem. Sometimes due to political unrest situation like inter-factory strike, hartal & manyother causes delay or missing of garments order delivery. These things causes serioushamper in industry finance & in overall export & earnings too. On the other hand, these industries are causes massive environmental pollutions. Andfinancial losses due to these pollutions are now measuring by money. A strategiccost/benefit analysis indicates that, with continuing increase in the urban population andongoing deterioration of the environment of Dhaka city consequent, losses would mountfrom year to year. Without any action, the total estimated minimum financial loss (cost tothe economy of Dhaka and Bangladesh as a whole) would be US$ 51.1 billion over thenext 20 years. Contrarily, if appropriate measures are taken to clean up Dhaka, estimatednet economic benefit would be more than US$ 50.0 billion. Results of environmentalprotection will be realized through increased agricultural and industrial productivity,improved human health, increased biodiversity, etc. • Technological Problem: Bangladesh is unique in RMG production in comparison with the other RMGproducing country because of less cost of labour. For this reason, upgraded technologiesare used less in this country. Beside this, for economic & quality production quiteupdated technologies are used. For pattern & marker making Computer Aided Design (CAD) & Computer AidedManufacturing (CAM) are using. In Sewing Section, which is the largest part of the garments industry using Special typeof sewing machines like Button hole machine, Button attaching machine, Bartakmachine, Blind stitch machine etc. are using. High speed Lock stitch machine (SPM:1500-5500), Chain stitch machine (Stitch length: 1.5-4.5mm), Over lock machine (SPM:6500-8500), Flat lock machine (SPM: 6000) etc. are used in most of the modernfactories. Maximum 9 needle sewing machines are using too. And for final Finishing, High quality washing machines with Stone wash, Normalwash are using in individual Washing Plants. After-all the aim is to produce Economic production by ensuring high quality. • Problem with Women in Garments:
  18. 18. 18 From the Table-5 of page no.-12 we see the actual percentages of womenemployment in RMG industry is around 88% on average. After being the greatest part ofthis industry they still discrimination in comparison with international standard of wageor salary.Table-6: Average Hourly Wages in RMG Industry (Where 88% of total is women):Ref: Journal of Textile & Apparel Technology & ManagementVolume-6, Issue-2, Fall-2009. Even they discriminate in comparison to men workers in the RMG factories. More on,the participation of women in administration is very rare. Beside this, they also faced problem in work place due to environment of work,attitude towards them, mental & even physical harassments too. Due to over-night dutythey have to face social problems too.SWOT Analysis for the Analysis of RMG Industry inBangladesh:
  19. 19. 19 By SWOT (Strength, Weakness, Opportunity & Threat) we can analyze the Problems& Prospects of RGM industry.Strength:>>Bangladesh offers cheapest labour among RMG producing countries.>>It has a Compact, Organized & Favorable infra-structure.>>It has lots of Pre-export Financing institutions for assistance.>>Management appears to be very dynamic & capable of improved performance.>>There are various associations like BGMEA, BKMEA, BEPZA etc. to build the strongcollaboration with various related organizations.Weakness:>>Limitations for some modern machinery in some specific sectors.>>Lack in establishing large companies to attract buyers directly.>>Lack of high skilled labour.>>Limitation of technical know-how.>>Limitation in Producing Raw Materials.>>Political unrest situation, which making buyers step back in some cases.>>Improper use of Ports & not so smooth & strong Transportations.>>Problem in Power & Gas supply.>>Improper attention of Governments policy makers.Opportunities:>>Good reputation of product quality in outside world will increase more option ofexport.>>Strong rise of knitting sector.>>Very good quality yarn is now producing.>>More options of new employments.>>Great pricing capability.>>Attracting new buyers by establishing new buying houses.>>Encouraging new joint venture projects.>>Change in Governments attitude towards RMG sector.Threats:>>Rise of competitiveness in export market for India, China, Cambodia etc.>>Political unrest situation of the country.>>Rise of price of raw materials.>>Environmental pollutions are threat for survival.>>Labour unrest in RMG factories.>>Capability to hold the market for long term future.SWOT Analysis of Three RMG Industry:
  20. 20. 20 To give concept about recent status of RMG industries in Bangladesh, outcomes ofFocus Group Discussion (FGD) from SWOT analysis of three RMG industries ismentioned below.The industries which took part in analysis process:1. Micro Fiber Ltd. Kutubpur, Fatullah, Narayanganj.2. Badhon Garments. BISIC Shelponogory, Fatullah, Narayanganj.3. Be-con Knit Wear Ltd. Kutubpur, Fatullah, Narayanganj.Outcomes of Focus Group Discussion (FGD) from SWOT analysis ofthese three RMG industries:Strength:>>Getting enough orders of RMG products for a long time.>>Good reputations on keeping commitments.>>Strong marketing & management department.>>Structural & Financial infrastructure.>>Good co-operative relation with BGMEA, BKMEA, BEPZA etc which helping all thetime in development.Weakness:>>Limitation in own backward linkages.>>Limitation in Producing Raw Materials.>>Political unrest situation, which making buyers step back in some cases.>>Improper use of Ports & not so smooth & strong Transportations with Narayanganj.>>Problem in Power & Gas supply.Opportunities:>>Great pricing capability.>>Strong rise of knitting sector.>>More options of new employments.>>Good reputation of product quality in outside world will increase more option ofexport.Threats:>>Labour unrest in RMG factories.>>Political unrest situation of the country.>>Rise of competitiveness in export market for India, China, Cambodia etc. Questioner used for SWOT Analysis
  21. 21. 21Name of the Factory:Address:Year of Establishment:By taking permission let’s start questioning………..[To administrative person as General Manager, Manager or others]Question-1: Do you know about SWOT analysis of an industry? (If not) May I explainabout it?Answers: ………………………………………………………………………………….Question-2: What are the points you would like say about the strength of your factory?Answers: ………………………………………………………………………………….Question-3: What are the points you would like say about the weakness of your factory?Answers: ………………………………………………………………………………….Question-4: What are the points you would like say about the opportunity of yourfactory?Answers: ………………………………………………………………………………….Question-5: What are the points you would like say about the threat of your factory?Answers: ………………………………………………………………………………….Question-6: What do you want to tell about the recent condition of the RMG industries ofBangladesh?Answers: ………………………………………………………………………………….Thank you for giving me time & for helping me in SWOT analysis.Name of the person took interview:Time taken interview:Date taken interview:Recommendations:
  22. 22. 22 In writing of this assignment I have to face some limitations. In data collection most ofthe time I have to depend on secondary data’s which were collected from various sources,research papers, books, internet etc. To enrich the paper I have to give some personalopinions too. But, to prepare it in a practical & useful concept I used a questioner in an analysis &tried to bring the outcomes of it. There were limitations on specific data for political prospect, cultural prospects, socialprospects, political problem, social problem etc. Overall these limitations were tried to overcome by closely related data’s.Conclusion: The contribution of readymade garment (RMG) to the national export is around 80%,which represents the importance of this sector. It makes scope of employment of around3500 millions women of the country. May it not be very old sector of industrialization,but it provides biggest contribution in national economy. It may have some problems but prospects of this sector are so good & important thatexpectations from this sector are very closely related to the fortune of the country. The RMG sector will overcome from all the problem & expectation is that, Bangladeshwill stand as the world’s largest RMG exporter as soon as possible.References:
  23. 23. 23• Case of the Garment Industry of Dhaka, Bangladesh; by-Khandaker Mainuddin.• IMF Working Paper: The End of Textile Quotas: A case Study of Impact on Bangladesh; Prepared by –Montfort Mlachila & Youngzheng Yang.• Growth of Garment Industry in Bangladesh: Economic & Social Dimension; Edited by Pratime Paul & Majumder Binayak Son.• An Introductory Knowledge About Garments Manufacturing Technology; by-Md. Saiful Azam, Md. Abu Saleh, Khondokar Abu Nafis.• Export Promotion Bureau (Website).• Economic Trend (Website).• Bangladesh Bank (Website).• World Bank (Website).• Asian Development Bank (Website).• Bangladesh Garments Manufacturers and Exporters Association (BGMEA) (Website).• WTO Trade Statistics.• Garments industries are the silent killers in Bangladesh; Author: Dulal Chandra Pattak.• Challenges facing the garments industry; by-Shahiduzzaman Khan.• gtz-compliance (Website).• Revolutionary Wave engulfs Bangladesh by Lal Khan and Adam Pal (January 15, 2007)• Bangladesh and the World Bank saga by Jamil M. Iqbal (May 23, 2005).• RMG sector problems need focussed attention; by-Amin Ibrahim.• ‘Economic and Political Developments and Prospects in Bangladesh’ by- International Consulting Economists Association.• : http://www.thedailystar.net/newDesign/news-details.php?nid=126016• The development-environment conflict: Lessons learnt; by-Md Sohrab Ali.• Becoming a Garments Worker: The Mobilization of Women into the Garments Factories of Bangladesh; Author: Nazli Kibria.• Journal of Textile & Apparel Technology & Management; Volume-6, Issue-2, Fall-2009.• The Rise of the Bangladesh Garment Industry: Globalization, Women Workers, and Voice, by Fauzia Erfan Ahmed; The Johns Hopkins University Press.• www.fibre2fashion.com/industry-article .