Strength of Knitwear Sector of Bangladesh

Competitiveness of Bangladesh Apparel Sector: 
The worldwide textile and clothing business are going through a major shift– it is now more modernized, more dimensional and more vibrant. Also the global value chain for clothing trade integrates more rapidly than ever before!

Competitive wage rate together with easily trainable workforce, entrepreneurial skill, expanding supply side capacity, and government policy support helped to translate the comparative advantages into competitive advantages.

  • Flexible functioning of the labor market is a positive factor for export competitiveness in Bangladesh.
  • On average, labor markets in Bangladesh respond to productivity improvements and incentives and government interventions are comparatively minimal.
  • This favorable endowment of labor and flexibility of the labor markets provide Bangladesh a great competitive edge on specializing in labor-intensive products, especially in the manufacturing sector.
  • Bangladesh being the second largest apparel exporters is expected to play a major role in the global apparel market.
  • ith three decades of experiences, supply of enthusiastic labors, huge number of entrepreneurs grown over the years, Bangladesh has established a structural competitiveness in the apparel industry, which is likely to sustain for the years to come as the economic structure of most developed countries has declined in last 5 decades since the LTA (long term agreement regarding international trade in cotton textile) came into force in 1962, (Source: Discussion paper no 5, WTO).

Specific Advantages of Knitwear Sector of Bangladesh:

  • Knitwear is a self-sufficient sector in all respects; currently the sector is supplying 90% of the knit fabric requirements.
  • Local yarn suppliers provide a large sum of yarn demand for the industry.
  • Many garments have their own dyeing and finishing units.
  • A separate dyeing and finishing industry also has grown up over the time to support the sector.
  • More than 200 composite factories;
  • Bangladeshi Knitwear is almost unbeatable in price advantages in the. world
  • Bangladesh provides not only a cheap labor force, which is unbeatable but they are also peerless in stitching capability.
  • Knitwear is exported to 153 countries of the world.
  • Strong backward linkage facilities.
  • Long experience of apparel business and a created value chain across the globe.
  • More than 2000 knitwear factories.

Comparative Advantages of Bangladesh Knitwear Industry: 
The core strength of the Knitwear sector is its backward linkage. The entrepreneurs of the sector not only increased their stitching capacity overtime but also invested in the allied industry to augment the overall capacity of the sector with the same pace. As the earning from export increased the development of the sector also increased in the same row. Now a days, The Knitwear sector of Bangladesh has the unique structure as well as the competitive advantage not only in terms of price but also the product quality. There are many other advantages of Bangladesh Knitwear sector, such as:

  • High quality diversified products.
  • Duty-free and quota-free access to the markets of several developed and developing countries, such as EU, Canada, Australian, Japan etc.
  • Strong backward linkage industry in the knit sector & growing capacity in the woven sector
  • Socially and environmentally compliant factories
    • Child labor free factories
    • Environmentally compliant ISO, BSCIS, WRAP, OKETEX etc. certified factories
    • Vertically integrated
  • Implementation of social compliance, fire safety mechanism in the factories.
  • Productivity campaign to ensure the best quality products.
  • Ensuring quality assessment process for the products-to-be-made.
  • Linkage the factories with environmentally and chemical sustainability program.
  • Adopting the Green factory mechanism for a sustainable industrial build-up.
  • Application of CPM (Clean production mechanism) into the factory production strategy.
  • Structural adjustment policies of the factories according to the demand of ILO, ACCORD, ALLIANCE & Other related international bodies.
  • Most factories being inspected by Bangladesh University of Technology and Engineering (BUET), thus ensuring structural safety for the importers of the world.

The domestic value addition in this sector is about 75%, which is much higher than woven products. The Knitwear sector’s value addition contribution in the GDP is about 10%. In the export field, the knitwear industry of Bangladesh has managed to make a big name across the world. BKMEA has taken different initiatives to promote the export growth of knitwear products. BKMEA is working to incorporate the latest technology, which in turn will increase the domestic value addition.

Table: Value Addition and Net Retention Rate of Bangladesh Knitwear Sector

Value Addition
Net Retention