SUNDAY SPECIAL
Next big export earning sector
Apparel accessories
FAISAL MAHMUD
With a net export earnings of $5.6 billion in 2014-15 fiscal, apparel accessory makers and packagers are not only providing the most important backward linkages to the countrys golden goose- readymade garments sector (RMG)- but also could be the next big export earning sector by itself as 20 per cent of that $5.6 billion came as direct export.
According to experts, accessory makers and packagers have earned around $1.4 billion in the last fiscal by directly exporting various accessories and packaging materials. The sector has earned another $4.2 billion through indirect export as accessories and packaging materials have also been used in RMG, leather, pharmaceuticals and other export-oriented sectors.
Accessories supplied to RMG alone constitutes 80 per cent of the $4.2 billion earnings. Stakeholders said accessory makers and packagers can supply 48 types of products in the garment sector. They added that with proper policy support and financial incentives, both indirect and direct export earnings of the sector can be increased three times in the next couple of years.
For instance, Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA) aims to earn at least $12 billion by 2018, buoyed by robust growth in global garment shipment. From January 13 to January 16, BGAPMEA, in collaboration with Zakaria Trade and Fair International and ASK Trade, organised the 15th edition of the four-day Garmentech Bangladesh 2016. A total of 300 companies from 30 countries put up 400 stalls and pavilions, exhibiting products including corrugated cartons, back board, neck board, sticker, hang tag, barcode, size tag, price tag, collar insert, collar bone, sewing thread, tape, elastic, printed and woven labels, zippers, hangers, buttons, and quilting and embroidery at the four-day fair.
President of BGAPMEA, Rafez Alam Chowdhury, termed the expo a success story and said that such exhibits brought local and international stakeholders under one roof. This sector is growing and we need to sit under one roof because that opens new doors of opportunities and business growth, he said. Chowdhury added that they now have around 1,400 members and each year, the number is growing. The sector is growing at an annual rate of 13 per cent, with its value addition standing at over 40 per cent.
Director of Montrims Ltd (largest accessory maker in the country), Mohammed Mashud HK Siddique, said, The fair is an opportunity for accessory makers to expand their business as well as to be introduced to updated technologies. Montrims Ltd of Mondol Group of Industries produces around 25 accessory items, including woven labels, leather badges, stone and metal motifs, rubber patches, gum tapes and satin and cotton ribbon hangers among others. Siddique told The Independent that Montrims is a 100 per cent export-oriented company with 10 per cent direct export and 90 per cent foreign export. The biggest buyers obviously are our RMG factories who make clothes for global brands like HM, Tommy Hilfiger and many others. This means, the accessories that we produce are used in global brands and they are of international standards.
Managing Director of RSS Thread and Accessories Ltd, Sheikh Mohammad Khobir Uddin, told The Independent that with the right policy support, the sector can grow big. Only in Asia, there is a $24 billion market for garment accessories and China is grabbing a lions share of it. Our products are no less than theirs and we have the potential to grab that market, he said.
Director of Cosmo Group, Md Shahriar, said, We want to prove to international buyers that our packaging and accessories products meet international standards and we are exporting those with reputation. The Cosmo Group makes sewing thread, polybag, gum tapes, hangers and neck boards.
Meanwhile, Chowdhury informed that Bangladesh fully relied on imports of accessories two decades ago to feed its growing garment industry. But the sector has helped the country become self-sufficient in backward linkage in garment accessories, he said. Accessory makers have increased capacity and are able to meet the demand of garment exporters almost entirely, he added.
Chowdhury said that they are anticipating a pick-up in fortune as interest on the part of local and international buyers has increased this year with recovery of the global economy. This is the time to give us policy support and financial incentives. We fail to grow at a pace like the apparel industry despite our immense contribution as a backward linkage industry, he said, adding that they have demanded cash incentives on exports several times as they have been contributing to almost all export-oriented sectors. Accessory makers are not under the governments incentive policy although the garment sector has been enjoying such benefits for a long time. We have also urged the finance minister to allocate funds to facilitate establishment of a packaging and accessories institution for skills development, he said.
Senior Vice President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Faruque Hassan, said that when the RMG industry was first launched in the country, there was no backward linkage sector. However, now it is available and manufactures locally 25-30 such items. I think, with the right policy support, this accessories sector itself could be the next big export earning sector of the country, he said.
