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Diversification, the name of the game…

by Deepak Mohindra

13-August-2019  |  4 mins read

aob august editorial

Europe and USA have long been the export strongholds of Bangladesh…It is but time to look beyond to maintain that winning streak and export dominance, which Bangladesh rightfully commands as the second biggest apparel exporter globally.

A staunch believer of market diversification for business growth, it gives me immense happiness to note that Bangladesh, lately, is making rapid progress in so far what have been ‘unchartered territories’.

As per data released by the Export Promotion Bureau (EPB), Bangladesh’s apparel exports to non-traditional markets have posted a sharp growth by 21.77 per cent to US $ 5.68 billion in the just concluded fiscal year, with overall apparel export to both traditional and nontraditional destinations hitting US $ 34.13 billion during the period.

Apart from USA and Europe, most others are considered nonconventional marketplaces including Australia, Brazil, Chile, China, India, Japan, Korea, Mexico, Russia, South Africa and Turkey.

Japan imported apparels worth US $ 1.09 billion, which is 28.90 per cent higher from the previous year while China, the second largest nontraditional market for the country’s RMG offerings, imported products worth US $ 506.51 million, up by 29.33 per cent from the previous year. Similarly, Bangladesh’s apparel exports to India rose by 79.09 per cent to US $ 499.09 million during the period, the highest growth of apparels registered in the just concluded fiscal year.

A prime focus area for the Bangladesh Government as well, the Sheikh Hasina-led regime has put in action a multi-pronged approach to ensure that garment exports to new countries get the much-needed traction in every possible way. If on one hand, it has given the highest 5 per cent export incentive to the RMG sector besides allocating additional Taka 2,825 crore for the same in the proposed budget for fiscal 2019-20, it is also working towards increasing apparel exports to South America, Russia and Brazil amongst others.

A high-power trade delegation comprising senior Government officials and business leaders would be off to Brazil, Argentina, Uruguay and Paraguay this August to try tapping the export opportunities in the South American region.

Additionally, to streamline the production process keeping future in perspective, the Government is encouraging entrepreneurs to set up units within the planned industrial zones and has decided against providing gas and electricity connections to those who set up factories outside the demarcated precincts.

It also recently finalised the subcontracting guidelines, making it binding for subcontracting factories to have membership of BGMEA and BKMEA.

Taking cue from the Government’s futuristic stance and intent, stakeholders are also pitching in. Following the recent initiative of BGMEA to digitise wage payment of garment workers to give an impetus to the Government’s goal of ‘Cashless Bangladesh’, three more factories tied up with mobile financial service provider bKash to facilitate payment of workers’ salary through their mobile wallets. At present, 180 RMG factories in the country are disbursing salary through bKash to more than 0.2 million workers.

It’s just a matter of time before the results of these well-meaning moves would be here for all of us to see… Till then, I would like to wish the industry the very best and call upon all to keep the good work going!

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