Experts blame competition, reliance on overseas destinations for raw materials for falling profit margins

by Apparel Resources News-Desk

02-December-2019  |  1 min read

Bangladesh Garment Industry
Image Courtesy: www.thedailystar.net

Entrepreneurs in Bangladesh involved in the business of readymade garments have had to face declining profit margins for some time now.

And as per industry insiders, the principal reason behind this is the intense price competition among the RMG makers in Asia which have hit the profits of garment makers in Bangladesh as the country has to import most of the raw materials for the sector.

Also to be taken into consideration in this regard is the sluggish demand for apparel items globally.

“Fashion industry drastically changes and it’s the nature of the industry. We have a higher lead time and we import cotton from abroad which increases the cost and impedes our export,” stated former President of the Bangladesh Garment Manufacturers’ and Exporters’ Association (BGMEA) Siddiqur Rahman speaking to the media, adding, “On the other hand, Pakistan and Vietnam source most of the raw materials locally and for this reason, their products are marked with lower prices.”

It may be mentioned here that the first 4 months of the current fiscal year 2019-20 of RMG sector (July-October) fetched US $ 10.57 billion, which is a decrease of 6.67 per cent when compared to US $ 11.33 billion in the same period of FY 2018-19.

However, shipment from Vietnam increased by 10.54 per cent between July and September, the ex-BGMEA chief underlined.

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