Desk Report,
Now is the time for transformation in the garment industry.
The United States has imposed a 20 percent tariff on Bangladesh’s garment exports. This decision has created a new balance in the supply chain. Because now Bangladesh, Vietnam (20 percent) and India (25 percent) – all three countries will pay almost equal or close tariffs.
Now is the time for transformation in the garment industry.
Although this decision creates pressure in the short term, it can create important opportunities for Bangladesh in the long term. For that, Bangladesh has to establish itself as a country capable of providing quality, sustainability and fast delivery. This opportunity is for a limited time. Now our garment industry has to move towards production, product diversification, and fast delivery. Then we can take this opportunity.
To take this opportunity, Bangladesh will have to emphasize several things. One. In the last decade, the Bangladeshi ready-made garment sector was mainly ahead in the export of basic products like T-shirts, hoodies and pants. But now US buyers are leaning towards small orders, fast delivery and new trend-based products. For that, in addition to large orders, 15 to 20 percent of the factory space must be allocated for small and fast production lines. We need to build a workforce that can produce a variety of garments in a week. We need to negotiate prices based on the order volume. Many people want fast delivery even if they pay a little more.
2. We need to increase the variety of garments like China and Vietnam. Our competitor Vietnam is not only supplying the United States quickly, but their variety of garments is also very wide. The same is true of China. On the other hand, Bangladesh is still dependent on yarn fabrics. To increase the variety of garments, we need to invest in modern machinery for laser cutting and seamless bonding in the production sector. If large investments are not possible right now, we need to build small teams that can produce synthetic or artificial garments with existing machinery. We need to take diverse garments to mid-range brands instead of just leaning towards large purchasing organizations.
3. We need to emphasize domestic sources of synthetic fabrics. Our competitor Vietnam often gets orders easily. Just as they have developed their own sources of synthetic fabric clothing, they can import these fabrics from China at a lower cost and time due to their geographical proximity.
Bangladesh is still dependent on China, Korea and Taiwan for synthetic fabrics. It takes 15 to 25 days to import fabrics from these countries. This increases time and costs. Therefore, it is necessary to ensure that domestic textile mills are encouraged to invest in making and dyeing fabrics with synthetic fibers. Those with less capacity can make new designs of clothing by adding a little synthetic material to products made from cotton yarn.
Four. Not only compliance, but also transparency must be ensured. Now it is not enough to just meet the conditions of compliance. Global buyers, especially those from the United States, now want to see environmentally friendly production, energy and water conservation, chemical management and the condition of workers, i.e. sustainable production systems. The authorities regulating buyers are also vocal about these issues.
In this case, the following information needs to be collected and stored regularly: how many liters of water are needed to make each kilogram of cloth, how many units of electricity are needed per piece of clothing, how many workers stay employed in the long term. This information needs to be organized in a simple and attractive report so that it can be easily shown to foreign buyers. Many buyers may not want to know this on their own, but if they see it, they will appreciate it and gain confidence. These things are now essential to stay ahead of the competition in the garment industry.
Five. It is necessary to utilize financing opportunities. Many factories do not dare to go large-scale. The uncertainty of financing, raw material prices, and purchase orders is holding them back. However, now is the time to invest in the right place. It is necessary to know about financing schemes like the Export Development Fund of Bangladesh Bank. You should try to get some advance from new buyers. Again, purchase orders can be shared with other factories. In this way, it is possible to take large purchase orders at once. If you invest correctly, it is possible to capture new markets.
Time to move forward
Donald Trump’s 20 percent counter-tariff may seem like an additional burden at first, but it has actually opened new doors of opportunity. The era of Bangladesh relying on cheap labor and tariff concessions for a long time is over.
Now we have to fight on the basis of quality, diversity, innovation, transparency and dynamism. Global buyers still prefer Bangladesh. We also have to change to maintain their preferred position. This is not the time to lag behind. Now is the time to move forward.
Syed Tanzim Mozaher: Director, Independent Apparels
A second-generation ready-made garment entrepreneur based in Chittagong
