Investment to rise in RMG sector
News Report

The global recession has created a golden opportunity for the Bangladesh''s garment industry as demand for low and medium cost apparel products has increased substantially in recent times.
Most of the consumers, especially in the developed nations, are cutting their expenditure and are opting for low-cost garments. This has boosted market opportunity for low cost apparels, said industry insiders.
In a bid to take the opportunity some local apparel giants have stared expanding their production units, engaging huge capital investment, they said.
The BGMEA sources said DBBL and KDS group, country''s two top garments exporters, are expanding their production units by investing Tk 300 crore each.
Opex, Apex, Hamim and Standard Group are investing Tk 200 crore, Tk 100 crore, Tk 100 crore and Tk 100 crore respectively to boost their production capacity.
Moreover, in the last three months more than 92 new RMG factories have come into operation to execute additional orders, said BGMEA sources.
Of them 32 are knitting factories and others are woven and sweater factories.
Meanwhile, BKMEA, an apex body for the local knitwear exporters, said around 65 new knitting factories have registered their membership to the association during January-May period of this year.
Meanwhile, at least 21 sick RMG units have come into production recently, clearing their financial burden of the banks to grab the present opportunity.
RMG export orders have been marking an upward trend from the last three months. The utilisation declaration (UD) in the month of February was on an average 300-350 in a day, whereas the figure is now stood at 450-500 per day.
Bangladeshi apparels have already earned reputation in the global clothing market for supplying quality garments products at cheaper price, said industry insiders.
At present manufacturing cost of ready-made garment (RMG) is about 20 per cent, 12 per cent and 7 per cent higher respectively in China, India and Vietnam compared to Bangladesh, they added.
China, the world''s biggest garment supplier, faces a worsening operating environment as demand for their apparels have dropped due to uncompetitive price.
"Inability to compromise in price thousands of garments units in China faced closure in the recent times. Moreover, the country is now mainly concentrating on to produce high value garments products instead of low cost apparels," according to a leading RMG exporter.
Meanwhile, other RMG exporting nations like India, Pakistan, Vietnam and Cambodia are also facing set back due to high production cost.
He said that the local RMG products are still competitive in the global market and so that the global buyers favoured Bangladesh as a top RMG outsourcing country.
"If the present situation continues export earning from this sector may cross US$ 20 billion in the upcoming fiscal year," he added.
The latest global textile data showed that RMG exports of some leading apparel exporting nations like China, India, and Pakistan dropped drastically posting a negative growth in this year due to the recession fall out. But Bangladesh garments sector is successfully facing the global crisis due to competitive price and quality, said industry insiders.
Despite the fact that export earning from RMG sector grew by around $ 2.0 billion or around 26.52 per cent during the July- March period of the current fiscal year compared to that of the previous corresponding period.
The country''s apparel exports rose to $ 9.2 billion during July-March period from $ 7.28 billion over the same period of the previous fiscal year, according to the Export Promotion Bureau (EPB).
RMG sector is the leading industrial sector in Bangladesh in terms of export earning and employment. The country had fetched US$ 10.7 billion from this sector in the fiscal year 2007-08.
The BGMEA in its latest annual report unveiled that about 4740 garment units were engaged in production in the year 2007-08, and the number was 4490 in 2006-07.