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| The Textile Magazine
MARCH 2012
events
Bangladesh’s apparel exports could triple
by 2020 as European and US buyers plan
to strengthen their presence in the country
and new players enter the market seen as
‘next China’, according to a study by McKin-
sey & Company.
The global management consulting firm and trusted
adviser to the world’s leading businesses, governments
and institutions said Bangladesh’s high growth in the
readymade garment sector would continue for a decade.
The country’s sourcing market will get crowded amid
incumbent buyers’ plan to stay for long, and new mar-
kets are increasingly becoming important customers for
Bangladesh.
“Depending on how well the most severe issues can
be managed, the market will realistically develop at an
annual rate of 7-9 per cent within the next 10 years, re-
sulting in an export value of around $36 billion to $42
billion,” the study said.
Bangladesh fetched $12.59 billion from garment ex-
ports in 2010-2011, accounting for around 80 per cent of
national exports and 13 per cent of gross national prod-
uct, according to government data.
Recently, McKinsey conducted a study to review
Bangladesh’s RMG growth formula. It is an extensive
interview-based survey of chief purchasing officers
from leading apparel players in Europe and the US, who
account for $46 billion in total apparel sourcing value
and covering 66 per cent of all apparel exports from
Bangladesh. The study also included a telephone-based
survey of more than 100 local garment suppliers and in-
depth research.
It said while China is starting to lose its attractiveness
due to a rise in costs of doing business, the sourcing
caravan is moving on to the next hot spot. Costs have
also increased significantly in other key sourcing mar-
kets, leading buyers to question their current sourcing
strategies.
In 2010, China dominated RMG imports into Europe
and the US, accounting for about 40 per cent of the im-
port volume in each region. But the McKinsey survey
shows that CPOs almost unanimously favour moving
some of their sourcing away from China. Fifty-four per