Page 67 - The Textile Magazine March 2012

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The Textile Magazine
MARCH 2012
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cent of them shared their plans to decrease their activi-
ties in the world’s second largest economy by up to 10
per cent, while 23 per cent stated that they sought to de-
crease their share of sourcing by more than 10 per cent
over the next five years.
“As Western buyers search for the ‘next China’, they
are evaluating all options to strengthen their proximity
sourcing, moving on to north-west China, South-East
Asia and other Far East supplier countries. Bangladesh
is clearly the preferred next stop for the sourcing cara-
van.”
The study further said other markets in South-East
Asia will increase their exports too, but will not be able
to replace – at least in the near future – Bangladesh as a
viable RMG sourcing hub.
Bangladesh offers the two main “hard” advantages –
price and capacity. It also provides satisfactory quality
levels, especially in value and entry-level mid-market
products. All CPOs named price attractiveness as the
first and foremost reason for purchasing in Bangladesh,
and said the country’s price levels will remain highly
competitive in the future.
Half of the CPOs mentioned capacity as the second
biggest advantage of Bangladesh. With 5,000 RMG
factories employing about 3.6 million workers, the
country is clearly ahead of South-East Asian suppliers
in terms of capacity offered (e.g., Indonesia has about
2,450 factories, Vietnam 2,000 and Cambodia 260 fac-
tories).
The other markets such as India and Pakistan would
have the potential to be high-volume supply markets,
but high risk or structural workforce factors prevent uti-
lisation of their capacity.
A high share of European CPOs strongly emphasise
the advantages of sourcing in Bangladesh due to favo-
rable trade agreements, with the broadening of the EU
Generalised System of Preferences rules on duty-free
imports of garments from the country.
Taking these drivers into account, Bangladesh’s
RMG industry will continue to face growing demand.
The CPOs want to increase the value of their sourcing
in Bangladesh by about 10 per cent annual growth rate,
whereas mid-market players plan an annual growth rate
of around 14 per cent.
events