Top clothing retailers like H&M, Walmart, JC Penney, Inditex, Zara, Gap, M&S, Uniqlo, C&A, Tesco, Hugo Boss, and Adidas have purchased billions worth of garments from Bangladesh every year.
Bangladesh has risen to be the world’s second-largest garment exporter, they have seen the value of its overseas sales rise to a record $40.5 billion in the year ended June 30, coinciding with Trump’s increase of Chinese tariffs from 10% to 25% and the exploration of additional tariffs.
Bangladesh’s garment industry, which employs 4 million people, accounts for 13 percent of gross domestic product. Due to the pressures in China, they are looking to double their total exports to $72 billion by 2024.
Siddiqur Rahman, President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said, “We have a bright future in apparel business but we need to do a lot more homework. As much as 40 percent of Bangladesh’s garment exports comprise value-added items, which fetch more money for exporters,” he added
He explained about one factor that consolidated Bangladesh’s position in global apparel trade is its bulk order for value-added items in recent times.
“The buyers are coming here with the bulk of work orders as the country’s image has now brightened after the near-completion of factory remediation as per the recommendations by the Accord and Alliance,” he continued.
Finally, Rahman urged for improvements in roads and highways, airport and seaport in Chittagong for faster movement of goods and reducing the cost of doing business.
Opportunities and Challenges
With one of the lowest minimum wages in Asia, Bangladesh is an obvious choice for garment importers looking for lower production costs. But lower wages are a reflection of Bangladesh’s lower economic development compared with that of India, Vietnam or China.
Many garment importers think “the cheaper, the better” when manufacturing garments abroad. But these trends suggest that brands which fail to partner with factories that treat their workers fairly may risk losing customers, as well as garnering negative press.
With some companies proactively emphasizing human rights and equal pay in the manufacturing of their products, simply addressing compliance violations reactively might not suffice.
Poor economic development and noncompliant factories can interfere with your supply chain in some unforeseen ways (Physical condition of buildings, fires, building collapse, and treatment of workers). Social compliance violations can lead to distribution problems.
Unfair treatment of workers can also lead to strikes, which can delay the production and shipment of your goods.
A trade body of export-oriented apparel makers in Bangladesh has joined the Fashion Industry Charter for Climate Action, a milestone agreement to collectively address the climate impact of fashion production across the entire value chain, beyond previous industry-wide commitments.
The (BGMEA) Bangladesh Garment Manufacturers & Exporters Association stands alongside fellow industry groups such as:
- Business for Social Responsibility
- China National Textile and Apparel Council
- Global Fashion Agenda
- Global Organic Textile Standard
- Outdoor Industry Association
- Textile Exchange
- World Wildlife Fund International
- Zero Discharge of Hazardous Chemicals
Bangladesh companies have begun to support the charter’s principles and targets that follow the climate-change arm of the United Nations based on the framework of the 2015 Paris Accord.
“The ready-made garment industry of Bangladesh is steadily heading towards sustainability,” Rubana Huq, president of the BGMEA, said in a statement. “By joining the Fashion Industry Charter for Climate Action, BGMEA commits to working collaboratively with brands, suppliers and other organizations towards GHG emission reductions pathway that puts fashion industry towards a low-carbon future.”
“We welcome BGMEA to the Fashion Industry Charter family and we look forward to their leadership and contribution in inspiring manufacturers in Bangladesh and beyond, to raise climate ambition in a united effort to limit global warming to 1.5 degrees [Celsius],” said Niclas Svenningsen, head of global climate action at UN Climate Change.