February 20, 2017
Garments accessories and packaging manufacturers eye doubling their export income by 2021 in line with the projected $50 billion apparel shipment.
To realise the goal, the manufacturers have taken several initiatives including development of workers' skill, ensuring factory compliance according to the buyers' requirement and searching for new markets.
"We are expecting to double the foreign currency income from exports by 2021 after meeting the local demand," Md Abdul Kader Khan, president of Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA), said.
He also sought necessary policy support needed to boost exports.
The export earnings from the sector in the fiscal year (FY) 2015-16 were $6.12 billion, nearly 9 per cent higher than previous fiscal's $ 5.6 billion, according to data available with the BGAPMEA.
Terming the accessories sector an 'integral' part of the country's export-oriented business, Mr Khan said the government's vision to become a middle-income country largely depended on the steady growth in foreign currency earning.
"We cannot maintain export growth at the expected level with just our own efforts. Keeping this in mind, we are regularly raising our voice for facilitating our activities," he said.
He also said: "We are expecting to raise the export earnings to around $12 billion in 2021 and $18 billion in 2025."
Around 1,600 manufacturers are involved in business, whose total investment is estimated to be Tk 300 billion. Most of the factories are located in Dhaka, Gazipur, Narayanganj and Chittagong.
The sector's export income rose to $4.75 billion in 2014, up from $3.07 billion in FY 2012 and $4.10 in 2013, according to available data.
He noted that unlike readymade garments (RMG) factories, which are big, most of the accessories and packaging manufacturers are small and medium enterprises (SMEs), for which the latter requires support to thrive.
The association is seeking the government's support for getting bank loan at lower interest rate as SMEs do, preserving exports earnings data separately with the Export Promotion Bureau (EPB), providing authority over Utilisation Permission (UP) for better record keeping, and ensuring uninterrupted power and gas supply to the factories.
"Factory compliance is essential for securing work orders and good price," he said, adding, "Most of the factories will face trouble for making the factories compliant unless they get bank interest at lower rate," he said.
He also said the government should provide cash incentive to encourage exports.
Industry insiders said while the accessories and packaging manufacturing sector was facilitating every export-oriented sector such as apparels, pharmaceuticals, food processing, ceramic and leather goods, they remain out of attention. The global packaging industry is valued at $600 billion.
The sector is now capable of meeting the bulk demand for exporters. For example, it earns 15 per cent of its total exports earnings from direct sales to the buyers from countries such as India, Pakistan, Vietnam and Cambodia.
Showkat Ali Khan, secretary of BGAPMEA, told the FE that despite many challenges in the country many new entrepreneurs are entering this sector considering the substantial market around the world.
"Around 100 new entrepreneurs have entered the business in each of the last five years," he informed.
The government should consider the businesses a thrust sector as it is making substantial contribution to the economy, creating employment for more than 0.4 million people, he said.
The BGAPMEA is taking several measures for sustaining the business of Bangladeshi manufacturers.
For instance, the association has established a testing lab for ensuring standards of export-based accessories items with the support from the government and the European Union, he said.
Still, he added, the testing capacity is limited to cartons only.
"A complete testing lab is essential for increasing the credibility of other types of accessories," he said.
The association is undertaking skill development programme with the help of international experts to increase productivity.
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