International corporations like H&M have invested in Bangladesh's textile industry due to ownership, location, and internalization advantages: - H&M has a $3.5 billion ownership stake in Bangladeshi apparel factories, making it the largest foreign clothing buyer in the country. - Bangladesh offers low wages and energy prices as well as a large skilled workforce. Clothing can be produced at extremely low costs. - The country's large domestic market of over 170 million people and strategic location allow for internalization of production and distribution within South Asia.

1. International Economic
Corporation
International Investment in Bangladesh
FARIHA ALAM
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2. Contents
• Introduction
• Ownership Advantage
• Location Advantage
• Internalization Advantage
• Conclusion and Discussion

3. Introduction
• Bangladesh is located in South Asia and shares a border with India and
Myanmar. The country has a population of over 150 million people.
Bangladesh produces a variety of textiles, including cotton, jute, silk,
synthetics, and wool. Ready-to-wear garments are the largest textile export
from Bangladesh. This includes items like sweaters, T-shirts, trousers, and
jackets. According to the International Trade Administration, the ready-made
garment sector comprises over 80% of the total exports from Bangladesh. In
the fiscal year 2020-21, ready-made garment exports produced $31.46 billion
for Bangladesh.

4. Global Position of Bangladesh

5. Bangladesh is a greenfield for investment in the growing apparel sector, said
Faruque Hassan, president of the Bangladesh Garment Manufacturers and
Exporters Association (BGMEA).
• Bangladesh is the 2nd largest Ready Made Garments (RMG) exporter in the
world after China. About 81% of its export earnings are coming from RMG.
Textile and Apparel sector’s contribution to Bangladesh GDP is around 20%
• Retailers in the United States and Europe are the main buyers of
Bangladesh-made clothes. Like most consumer goods retailers, fashion
companies are grappling with high inventories and a slowing global economy,
where shoppers in key markets are buying less as they feel the pinch. 9 Nov
2023

6. Foreign Direct Investment

8. Ownership Advantage
• H&M is a Swedish based clothing retail multinational company. In a
landmark move towards environmental stewardship, two fashion
powerhouses, H&M Group and Bestseller, have teamed up with the Global
Fashion Agenda (GFA) to propel Bangladesh into a new era of renewable
energy. Announced at COP28 on December 5, the collaborative initiative
pledges an impressive $100 million investment to establish Bangladesh’s first
offshore wind project, setting the stage for a revolutionary shift towards
sustainability in the fashion and textile industry.

9. H&M is the single largest foreign clothing buyer in Bangladesh, sourcing more
than $3.50 billion worth of apparel last year. The Swedish clothing retailer
sources 20 per cent of its products from the country.

11. Home and Host Country
Home Country is
Bangladesh
Host Country is
Sweden

12. Location Advantage
• Bangladesh is the eighth most populous country in the world and is among the most
densely populated countries, with a population of around 170 million in an area of
148,460 square kilometers (57,320 sq. mi). Dhaka is Bangladesh's most populous
city and is one of the largest metropolises in South Asia.
• Bangladesh clothing manufacturers have many advantages in establishing a
successful textile industry:
• Low energy prices
• Small employee salaries
• Skilled workforce

13. Bangladesh clothing companies can produce high-quality products for extremely
low prices. The average worker in the Bangladesh textile industry will make $95
each month while laboring 12 hours a day. For example, it is only $0.54 in labor
cost for a shirt made in Bangladesh that sells for $18.35. Major clothing
distributors like H&M, Target, and Marks and Spencer contract with garment
factories in Bangladesh.

14. RMG export WTO

15. Internalization Advantage
• Bangladesh is the second largest garment-producing country in the world
after China with its nearly 3,500 factories. Some 4 million workers are
employed in them, most of them women, according to the Bangladesh
Garment M. The H&M Foundation is running a long-term project to
support women garment workers in Bangladesh where we are preparing
them for a future where the textile industry is defined by automation and
digitalization. The aim is to create new job opportunities for the women and
safeguard their livelihoods.

16. Conclusion and Discussion
• Output has grown at annual rates in excess of 15% over the last half dozen
years, and Bangladesh is now the second largest exporter of clothing in the
world, behind China. The sector now accounts for more than 12% of
Bangladeshi GDP and 80% of exports.
• The Bangladesh Textile Manufacturing Market size is expected to grow from
USD 17.99 billion in 2023 to USD 23.86 billion by 2028, at a CAGR of
5.81% during the forecast period (2023-2028).