The second largest garment exporter globally, the contribution of shirts in shaping the destiny of the Bangladesh garment industry is beyond question. Starting its journey as an apparel export hub in 1980s with quality formal shirts, shirt as a product category has been a key growth driver for the Bangladesh apparel industry over the years, complemented aptly by knits and bottoms (non-denim and denim) at later stages that helped the country cement its position as the preferred sourcing destination for the global buyers. With increased efficiency and expertise, the shirt manufacturers have started catering to all the major brands and retailers globally including names such as H&M, US retail giant Walmart, British retailer Primark, Germany’s posh brands Hugo Boss and Olymp (formal shirts), and many, many more.
In the global shirt market (as per data from Statista, one of the biggest data management company in US and EU), which stood at US $ 51 billion with total consumption of 2.5 billion pieces in 2016 and is expected to reach US $ 58.5 billion (in terms of value) and 2.83 billion pieces (in terms of volume) by 2020, Bangladesh’s role – which contributed around 10 per cent to the total global shirt import in 2016, is expected to play a pivotal part in shaping the global landscape as far as shirts are concerned.
But despite this positive projection, shirt as a product category has somehow failed to keep pace with the growth of other products. “Of late we are getting more demand for sweaters, jackets, denim and other products which found base in Bangladesh after shirts. This is not to say that there is no demand for shirts, but the increase is only marginal, while for other products, the growth is very significant,” says Khondoker Mahibur Rahman, Managing Director, Stanley Fashion B.D., a buying office that sources shirts in 100% cotton, cotton polyester blends, PV, tencel, modal blends, with fabric mainly coming from China.
Rahman’s statement is not a one-off case and there are facts to substantiate his claim. Data records from BGMEA show that in 1996-97, the export earnings from shirts was US $ 759.57 million, while for trousers, jackets, T-shirts and sweaters, the value of exports were US $ 230.98 million, US $ 230.98 million, US $ 391.21 million and US $ 196.6 million, respectively. Fast forward to 2015-16, in terms of value (export), shirt stood at US $ 2,317.09 million while trousers, jackets, T-shirts and sweaters registered drastic growth to touch US $ 6,319.00 million, US $ 3,774.08 million, US $ 6,118.53 million and US $ 3,182.47 million, respectively. Today knits and bottoms account for a major share of the country’s apparel exports, a trend which is rather surprising considering that formal shirt was the mainstay of Bangladesh’s exports until the early 1990s.
In fact, even as late as 2006, US retailers imported about 33 million pieces of shirts worth over US $ 2.4 billion and nearly one of every four shirts, was made in Bangladesh, but now that the US market is diverting to higher value-added and fashionable shirts, the country is trying to find better efficiency and product development skills in making casual shirts with value that comes from different fabrics and styling options. On the other hand, better technology is also moving in as some high-end brands from Europe are looking at sourcing formal shirts, which is another challenge. Few years ago, Hugo Boss started sourcing T-shirts and formal shirts from Bangladesh from limited number of very compliant garment factories and though the volumes are not so high, it has encouraged some bigger companies to invest in the shirt segment. The company is increasing its volume in the country every year with the improvement of the working environment and compliance practices. Another German high-end brand Olymp has also started sourcing formal shirts from Bangladesh.
In the meanwhile, the unprecedented growth and popularity of denim (Bangladesh has overtaken China to become the largest denim supplier to the European Union and also the third largest denim supplier to the US after China and Mexico) in the last one decade is seen by many as a major reason behind shirt’s fledgling show. Rahman shares that about 75% of his demand is for denim today. “The way the industry has been investing in denim is unprecedented in itself, no other product has grown like this and today we have integrated strengths that did not exist about a decade ago, and this has been pushed by buyers who now look at Bangladesh as a major supplier, both in the basic and fashion segment,” reasons Rahman.
Contributing further to the slowdown in shirt growth has been the diminishing profit margins in the basic shirts and challenges in value addition consequent to inadequate local supply of quality fabrics. Many companies have shifted their focus to other products. One such company is NIPA Group, which has invested heavily in jackets, where the margins are much better and growth opportunities still largely unexplored in the country. “We are offering a wide variety of jackets and the buyers are very happy with our infrastructure, so the product is our growth engine. In shirts, which was once our biggest category, we are mostly now doing casual denim shirts, which is another hot product today, for our existing buyers but there is no real focus on the category as there are many players in the segment and the price offered is very competitive,” shares Md. Khosru Chowdhury, Chairman & MD, NIPA Group.
Are shirts really a stagnant segment or is its growth being overshadowed by emerging categories?Apparel Online interacted with some of the prominent shirt manufacturers and exporters to get the pulse of the shirt business in Bangladesh today and where they feel it’s headed for…
The journey continues…
Given the challenges and bottlenecks that a shirt manufacturer is faced with, one might wonder if shirt as a product category has many takers. On the contrary, there are multitude of garment makers who not only loath at the idea to give up on shirts as yet, rather they have devoted all their resources and energy to carry forward the rich legacy of shirt making which once used to be Bangladesh’s forte; and they have their reasons for it!
Considered an integral part of a man’s wardrobe – wheather one’s style is chinos or suit and tie – there’s no denying the importance of shirts… A white shirt still holds its sway amidst the array of fancy apparels in anybody’s closet. Be it a business meeting with clients or a weekend get-together with friends and family, white shirt continues to be the preferred choice, which finds an apt reflection in the business forecast for shirts.
As per predictions of Statista, if the global demand for shirts stands at US $ 53.36 billion (in terms of value) and 2,580 million pieces (in terms of volume) in 2017, the same would register a steady increase in the coming years to touch US $ 55.17 billion (in terms of value) and 2,657 million pieces (in terms of volume) by 2018 to further increase to US $ 56.8 billion and 2,740 million pieces respectively by 2019.
In this issue dedicated to shirts, Apparel Online handpicked a few shirt manufacturers, who have upped their capacities and competencies to cash in on the opportunity that the global shirt market has to offer.
BSA Group
Currently working from its four production units, BSA Group chiefly supplies formal shirts besides trousers in addition to kidswear to US retail behemoth Walmart. Managing Director of BSA Group, Sarwaruzzaman Khan, shares his views on shirts.
Shirt business today
It is not bad, but is running quite smoothly.
The demand scenario
The demand for shirts is not bad, but overall the demand is more for casual shirts than the formal, which again is dependent on seasons. In terms of percentage, I would say 70% demand is for casual and 30% for formal.
Major buyers
Walmart… Apart from Walmart, we are currently in talks with Carter.
Potential market (USA/Europe)
As we work for Walmart, our two main markets are USA and Canada.
Fabric
We source the fabrics from nominated suppliers only, who are mostly from China.
Bangladesh’s strength – yarn dyed or solids…
Both, I would say.
Production capacity/expansion
We have expanded our business over the years. Now we can produce about 2 million shirts per month, and even more sometimes. Apart from the existing units (with combined machine strength of 7,000 machines), we have established another factory with 16 blocks, with each block containing around 100 machines.
We’re also going to set up another factory within 2-3 months in Sagorika area of Chittagong. This factory will have about 15 to 16 blocks, which will increase our production capacity by about 10-15%.
FOB range
From US $ 2 to US $ 2.5
Turnover
BDT 500 crore (approximately)
Product development
We have a merchandising unit but no R&D team. We use the nominated fabrics and buyers’ designs.
Dressmen Limited
Traditionally a woven shirt manufacturer (dress shirts, casuals and formals) with combined production capacity of 8,00,000 pieces monthly and catering to names such as Ralph Lauren, TESCO, VF Corporation, MANGO, Eddie Bauer, Nautica, TARGET Stores, HAGGAR, Springfield, etc., Dressmen was established in 1984 as a partnership business with just 60 machines and 150 workers under a project loan from Pubali Bank Ltd., but has come a long-long way to own five production units today with combined workforce of 4,000, and plans to establish a couple of more units soon. Director of Dressmen Limited, Maashed R Abdullah shares his views…
Shirt business today
The business is much more difficult these days as the customers are not realising how much effort is put into manufacturing quality products. The prices have dropped significantly but the demands of the customers are increasing daily… We really need to find a middle ground where the customer and the manufacturer stand to gain.
Demand scenario
According to me, the demand is relevant to a company’s strength and how the company markets itself. I think people are more into casual shirts these days. Shirts that are ‘different’ are in demand… Every customer is looking for something that is unique and which has never been done before.
Major buyers
H&M, TESCO, VF Corporation, CARREFOUR, Li & Fung etc.
Potential market (USA/Europe)
I think for formal shirts, US is definitely a better market as we are doing a lot of non-iron wrinkle-free shirts for it. For casual shirts, Europe is a better market as we get to work with a lot of different types of washes.
Fabrics
For performance and RFD fabrics, we are importing from China; we have no choice but to import because a lot of our fabrics are polyester blended and are not available at competitive prices locally. For lower end fabrics, we are usually going to the local mills in Bangladesh.
Bangladesh’s strength – yarn dyed or solids?
I think if one is going for yarn dyed with 100% cotton fabric, then definitely yarn dyed would be our strength as we would be working on a much shorter lead time. However for blended fabrics in solids, I wouldn’t rule out Bangladesh either as we are a big supplier for uniforms globally.
Well Group
Established in 1973 by founder Chairman Abdus Salam as Bangladesh Textile Industries (BTI) in a small workshop in Chittagong to produce sewing thread, Well Group in just over four decades expanded into a conglomerate with interests in sewing threads – WELL THREAD (flagship product), packaging, food, hospitality, real estate and readymade garments and employing over 20,000 people.
In readymade garments, Well Group initially started with manufacturing shirts in a very small way with just 100 machines but later shifted focus exclusively to trousers. Going forward, Well Group has now invested in a new manufacturing unit to resume producing shirts… Here CEO of the Well Group Industries Syed Nurul Islam shares his views on shirts…
Shirt business today
Shirt business is good and growing in Bangladesh.
Demand scenario
Casual and sports shirts are more in demand.
Major buyers
Our target customers are UNIQLO/TOMY/GAP/GEORGE and NEXT.
Potential market (USA/Europe)
Traditionally our customers are based in USA, but now we are trying to move to Japan and EU.
Fabrics
We prefer our in-house fabrics as we have spinning, yarn dyeing and weaving facilities.
Turnover (combined)
US $ 100 million
M&M Shirts Ltd.
A part of Shanin Group, M&M Shirts Ltd., produces around 1,60,000 pieces of shirts (men’s formal & casual) apart from ladies blouses, school shirts & blouses. M. A. Haque Howlader, General Manager of M&M Shirts Ltd. shares his views…
Shirt business today
Well, I would say shirt business is not at its best today. Compared with other RMG products, shirt is not the frontliner in Bangladesh any more. Fact is that, we have failed to explore markets for shirts. To grow in shirts, we would have to find new customers and new markets. Also the price from buyer must be increased; otherwise it would be very difficult to survive in the market.
Demand scenario
There is demand for both casual and formal shirts in the proportion of 50-50. Men’s formal & casual shirts, ladies blouses, school shirts are items that are in big demand.
Major buyers
Primark, Penny’s, Frank-Q, Jacks Clothing, Zara, Comma, Collins, etc.
Potential market (USA/Europe)
We work for the European market mainly as we feel more comfortable in the European market compared to that of USA.
Fabrics
Actually we procure all kinds of fabrics – 100% cotton, semi-cotton, even blends. We source the fabrics mainly from China; sometimes we also source fabrics from India, Pakistan and Indonesia. In Bangladesh, these fabrics are not available.
Bangladesh’s strength-yarn dyed or solids?
In Bangladesh we can produce both yarn dyed and solids.
Turnover
US $ 70 million
