Swing

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry
1.0: Background of the Report

The internship report
entitled as Opportunity
Establishing
Thread
Sewing
Manufacturing
Analysis
Industry
of
in
Bangladesh is prepared to fulfil the requirements for the degree

of Masters of Business Administration from the Department of
Marketing, University of Dhaka. This report has been prepared
under the supervision of Professor. M. A. Quddus.
This report actually focuses on the market scenario of ready-made
garment sector of Bangladesh and the position as well as
requirements of sewing thread industry in Bangladesh in respect
to the garment sector, the major national earning source for our
country.
1.1: Introduction
Sewing Thread is the out put product of yarn manufacturing
industry, mostly known as spinning industry .In fact it is a
backward linkage industry of Ready Made Garments (RMG)
industry .The RMG industry is highly globalise industries because
of its low technology and labour-intensiveness. This industry
migrates from high-wage to low-wage countries like a "flying
goose". Any slow down in this sector will slow the economic
progress of Bangladesh. The recent changes in global environment
had adversely affected the RMG industry in Bangladesh. The
nature of competitions has changed. As yarn is a fundamental raw
material of garments industry so any beneficial findings on
polyester yarn marketing could play a positive role in RMG
industry.
1
The future of this industry is now threatened by a number of

factors. The phasing out of MFA has become a matter of concern.
Bangladesh is struggling to formulate strategies that will enable
the country to retain its good position in the global export market
of readymade garments during the post MFA era. So an attempt to
study on the above-mentioned topic is a very important topic in
present situation.
1.2: Importance of the Study

Sewing Thread is the prime accessories for garments industry. The
quality of the finished apparel is partially depends on the quality of
Sewing Thread. So Sewing Thread marketing plays a vital role in
the garments business fields.
Bangladesh had a glorious past in the field of production of quality
fabrics. Its muslin was once considered as the finest fabrics in the
world. Export oriented knitwear and ready-made garment (RMG)
industry with their phenomenal expansion is a big success story of
Bangladesh. It is the largest manufacturing sector contributing
about 5% to our total GDP and around 67% of total export earning
of country.
From the modest beginning in 1978 as an insignificant in
significant non-traditional items on export facing only US$6.4 m in
1981, garments sectors of Bangladesh has Now became a US$2.0
billion foreign exchange earner enjoining the status of fifth largest
garments exporters to both USA ,and EU. However, total thread
demand of the countries export oriented industries in 2003-2004
was around 10.3 million cones per dozen. Out of this only 70-75%
2
our local producers supplied thread and rest of the quantity was
imported from abroad.
The demand of 100% polyester yarn for RMG industry is growing
up. There are lots of 100% polyester yarns manufacturing
companies in Bangladesh. Among them Coats Bangladesh Ltd.,
Dhaka Beijing, Unlima Yarn, K.D.S., Well thread, B.H.T., Apex
Thread, Etafil Thread etc. are the major competitors in the thread
manufacturing market. So it is required effective marketing plan
for fight with competitors in thread market. So, by studying the
market demand of thread manufacturing I think that it is possible
by someone to play an important role in thread marketing.
As Bangladesh has been entered into the global market and our
garments industries now in front of a great challenges and
opportunity so we must have to analyze the situation with a great
prudent. In the mean time our competitors has been reorganize
themselves with this changing business environment so there is no
better alternative in front of Bangladesh to take the decision so
that these industries can survive in this competition. Either our
economical and social stability must be fallen down into a deep
frustration
1.3: Objective of the Study

a) Broad Objective
To analyze and to evaluate the opportunity of establishing sewing

thread industry in Bangladesh.
b) Specific Objective
To determine the export trend of Sewing Thread as a
accessories item of apparel goods.
To determine the requirement of thread for garments
industry.
To determine the market share of different sewing thread
factory.
To provide the best service to the buyer.
Analysis of the production cost of different count of sewing
thread
Reduce the production cost price by introducing modern
technology.
To determine the future production facilities in connection
with future demand.
To determine market characteristics and present demand.
To analyze the marketing function of thread industry.
To fulfil the partial requirement of Evening MBA program .
1.4: Methodology
a) Data Sources
01. Secondary Data Sources:
Companies Statistics
Official sources
4
Company's own record

02. Primary Data sources
Market survey, Consumers( Field experiments)
By interviewing company executive
b) Data Collection Technique
Review and analysis of relevant reports, studies and
documents.
Discussion with concerned officials.
Interviewing the relevant personnel following a
questionnaire.
c) Data Processing Method
Comparative study.
Tabulation,
Classification,
Analysis
and
interpretation.
Trend analysis.
Analysis market situation through questionnaire.
1.5: Limitation of the Study

I have to contact with various personnel and organization to
complete my report. Sometimes I got very warm co-operation and
in many cases I faced many unexpected situation during collecting
data. In a brief the types of problems that I faced can be
underlined as below:
Time was limited for the study.
Data recording system of various organizations was found
disorganized so their actual business figure was not found
accurately.
5
From individual organization level of cooperation of their

personnel was not appreciateable.
Up to date data was not found in the hand of relevant
organization.
In maximum cases officials told that they are too busy to talk.
So not today please come later.
Factory personnel told data and records are sent to head
office and head office personnel said information are kept by
factory management.
To collect information about factory and business a written
permission is required from factory director level who is not
available when required.
BGMEA (Bangladesh Garments Manufacturer & Exporters
Association)
only
responsible
body
to
hold
proper
information about thread marketing but unfortunately their

arrangement and information level is not up-to-date and
organized regarding the mater.
Most of the thread industry is out of Dhaka city so it requires
more time to visit maximum factory to collect data. So
factory location is a barrier to collect data.
2.0: Over View of Thread Industry

2.1: Government Projection
Textile policy 1995 envisages establishment of the following
number of mills to meet domestic and export needs of the country
for knit and woven export by the year 2005. These are as follows:
2 multinational factory
7 joint venture factory
30 small local factory with capacity of dyeing and wending
Near about 100 factory which provide only wending facility
To attain self sufficiency in thread (in terms of both domestic and
export needs) in 2005, Bangladesh will need to establish
additional.
10 composite factory
50 wending factory
To create these new capacities, an additional investment of Tk.
1,000 core will be required. Obviously, this is a huge amount. It
will be too much to expect that Bangladesh entrepreneurs will be
able to raise such amount of fund, and take such a high business
risk. It will be necessary for the government to arrange some
special fund for the development of backward linkage industries in
textile-clothing chain. Another way is to invite foreign direct
investment.
2.2: Cost Competitiveness Assessment
It is necessary to assess critically the cost effectiveness and

operational efficiency aspects in detail before making huge
investment to develop backward linkage industry. In order to
assess the level of competitiveness and viability of new thread
projects in Bangladesh, conversion and total manufacturing costs
be
carefully
compared
with
those
of
the
competitors
of
Bangladesh, particularly India, China and Pakistan.

Sponsored
by
International
Finance
Corporation
(IFC),
Washington, a consulting firm Dr. Martelli Associates (DMA), has

recently completed a detailed study (referred to IFC Report). The
IFC report has examined all the cost components including cost of
fund, cost of improved raw- materials electricity cost, labor cost,
depreciation charges, etc. Then they have compared these cost
those of India, Pakistan, China and several other competing
countries. A major cost component is the cost of yarn, which
constitutes more than 60% of total cost of thread. In this
component, India, Pakistan
and China, the three powerful
competitors of Bangladesh. Bangladesh must overcome these

disadvantages
by
reducing conversion
costs
and improving
managerial efficiency and established yarn manufacturing factory.
2.3: Market Scenario in Recent Past

With changes in the production location, the composition of major
markets has also changed. Until early eighties of the 19th century,
the USA was the largest and fastest growing importer. But in the
last decade the EU and Japanese imports shot up by about 400%.
Loosely, the Triad-USA, EU and Japan have become three "trading
blocks" as far as apparel markets are concerned.
It is to be noted that rich countries are not only importers, but

they also exporter. In fact until 1960 they were major exporters.
But because of changes in the production cost the rich countries
concentrated only on the capital intensive components of the
textile chain. As a result, apparel exports from high cost countries
continued to decrease.
From the above discussion it can be cleared that to meet this
changing apparel business Bangladesh must have to take steps to
back-up its backward linkage textile industry i.e. Bangladesh
needs to set up more spinning, weaving and dyeing finishing mills
rapidly to capture the potential apparel market.
3.0: Market Scenario Analysis

3.1: Development of Backward Linkages
The success of an industry greatly depends on how effectively its
backward and forwards linkages operate. If the manufacturer has
effective control over the supply of raw materials, components and
ancillary services needed to produce the final product, then the
production flow is unlikely to be interrupted. The level of selfsufficiency in input supply is presented for Bangladesh and six of
its competitors are stated below:
(i) Woven Garments
Chine
India Indone
Banglad
Spinnin
esh
20
70
100
g
Weavin
20
70
30
Pakista
Sri-
sia
30
n
100
lanka
20
30
100
20
9
g
Process
20
70
95
30
100
20
ing
Garmen
100
100
100
100
100
100
ts
%
(ii) Cut and Sew Knitted Garments

Banglad Chine
India Indone Pakista
Spinnin
esh
70
90
g
Weavin
95
g
Process
ing
Garmen
Sri-
100
sia
80
n
100
lanka
30
90
100
80
100
70
95
90
100
80
100
80
100
100
100
100
100
100
Pakista
Sri-
n
100
lanka
40
ts
(iii) Knitwear
Chine
India Indone
Banglad
Spinnin
esh
10
100
100
sia
60
g
Weavin
20
100
100
90
100
70
g
Process
100
100
100
100
100
100
ing
Garmen
100
100
100
100
100
100
ts
Table 3.1:
The Status of Backward Linkages in Six
Countries
As shown in Table (i) of Table 3.1, Bangladesh has only 20% selfsufficient in production of yarn and fabrics, i.e., it domestically
produce only 20% finished fabrics and imports the rest of 80% to
keep the export-oriented RMG industry running, while China is
70% self-sufficient of yam production.
10
Table (ii) Bangladesh has achieved lowest level of self-sufficiency

except Sri Lanka. In Table (iii) Bangladesh has achieved 100% selfsufficiency only in knitting and finishing, but in other two
categories its self-sufficiency is by far lower than that of other six
countries.
From the above discussion it has been cleared that Bangladesh is
far behind position in regards of spinning industry rather than its
international competitors. So, Bangladesh has huge scope to setup spinning industry to make-up the growing apparel market
demand in domestically and internationally.
3.2: Backwards Integration & its Rationale

Strictly speaking, a complete backward integration in RMG
industry should include growing cotton to make it ready for
spinning, establishing spinning mills to spin the cotton into yarn,
developing manufacturing capacities to weave the yarn into fabric,
developing capacities to dye, print and finish the fabrics, and then
making the garments using the finished fabrics. In most cases,
complete integration is neither possible nor necessary .Each of
them may be independent unit owned and operated by separate
management.
Currently, Bangladesh has a very limited capacity to produce yam
required by the RMG factories. The total yarn demand in year
2004-2005 is 554 million kg. Among it, domestic demand is 186
million kg and export demand is 368 million kg. But Bangladesh
has capacity to produce only 242 million kg. Rest of the yarn has
to be imported by our country .This requirement will continue to
11
grow at the rate of 20% per year in future, and local spinning mill
can supply only 20% of total demand. To retain its competitive
edge, it needs to.
Restructure its textile and RMG industry with appropriate
backward integration
Formulate and implement appropriate product and market
diversification strategies
Improve substantially its labour productivity and managerial

efficiency; And
Develop infrastructures including telecommunications, port
management, etc., with a view to reducing lead time and cost
of doing business in Bangladesh.
For Bangladesh RMG industry, three stage integration is ideal and

hence desirable. Three stage integration includes, spinning yarn
from imported cotton, weaving fabrics using locally produced
yarn, and making the final product, namely, garments using local
fabrics.
Therefore, by developing new spinning and weaving capacities or
establishing more composite textile mills, Bangladesh can improve
the situation. In addition, Bangladesh must also develop additional
weaving, dying and finishing capacities.
3.3: Conversion Cost Comparison (Yarn Spinning)
12
Cost
Banglade
India
Pakistan
Labour
Breakdown
7.50%
sh
7.5
7.5
Power
12.50%
12.5
16
14
Depreciati
30%
30
30
30
on
Interest
32.5%
32.5
32.5
32.5
Other
17.5%
17.5
15
15
costs
Total
100%
100
101
98.5
Source: DMA (Dr. Martelli Associates, IFC Report) 1999.

p.38&39.
According to the IFC study, the establishment of additional
spinning mills running on cotton imported from India and
Pakistan, and using new machinery will not be economically viable
in Bangladesh. The cost in Bangladesh will be higher than that in
India and Pakistan. Primary reason is that price of cotton buys by
spinner of India and Pakistan is lower than the prices Bangladesh
spinners are required to pay. Since from the above table it is seen
that the conversion cost are almost similar, the cost of raw
materials tends to determine the competitive position. Wages in
Bangladesh are 30% lower compared to that in India (not show in
the table). However, due to the lower labor productivity in
Bangladesh's mills, it is estimated that total labor costs in modem
mills are at least as high as in India. Besides, equipment of India
and Pakistan is already heavily depreciated, and that Bangladesh
will have to use relatively new machinery, depreciation charge will
be higher in Bangladesh; therefore, the conversion cost will be
eventually higher in Bangladesh. After making all adjustments, the
report concludes that the combined raw materials and conversion
cost are 16% and 14% cheaper in India and Pakistan respectively.
13
The total cost per unit of yam in Bangladesh eventually becomes

4.5 and 6.2 percent higher than that in India and Pakistan
respectively.
Due to the above challenges spinning industry set-up is viable in
Bangladesh as per a group namely Development in Democracy
(DID) .According to DID spinning projects are may be viable due to
Energy cost is lower in Bangladesh rather than India and
Pakistan because most of the pinner has their own gas
generator. Cost of gas is lower than other fuels.
Yarn quality is better than Indian and Pakistan's spinners.
Bangladesh use high quality cotton so high quality fabric also
found from Bangladesh's spinning mills.
Government incentives on apparel export using local yarn.
So, Bangladesh must have to take many effective steps like
managerial
skills
development,
developing
various
types
of
increase
labour
communication,
productivity,
port
facilities,
reducing lead time for apparel export etc. to be improved soon to

compete with the international competitors.
3.4: Facilities for Industry Setup at EPZ

Not all spinning industry is setting up in EPZ area. But if someone
establishes thread factory in EPZ area the following facilities can
afford from Bangladesh government:
Land for factory is available on rental basisElectricity , tele -communications, gas and water are provided
by the zones
authority
Import & export permit are issued by EPZ within 24 hours.

14
Work permit are issued by BEPZA.

EPZ are secured and protected area.
"Many recreational facilities are available. A available of food
stuff and beverages on payment of nominal tax for foreigners
working in EPZ area. Tax holiday for 10 years.
Duty free import of machines, equipment and raw material
and duty free export of goods.
GSP facilities for export to USA, EU, Canada and Japan.
No ceiling of foreign investment and many other facilities.
Foreign investors can return the full profit in their country
without any tax payment.
Price of land is fixed low rate rather than that of out side of
EPD area.
3.5: Apparel Export on Sewing Thread

3.5.1: Quantity & Value of Total Apparel Export
Total apparel export in
Total apparel export in
Year
MN. Us$
1992-1993
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
1998-1999
MN. DZ
Tota
l
Woven
Knit
Total
Woven
Knit
1240,48
1291,65
1835,09
1948,81
2237,95
2844,43
204,54
264,14
393,26
598,32
763,30
937,51
1445,02
1555,79
2228,35
2547,13
3001,25
3781,94
36,05
34,35
47,21
48,82
53,45
65,59
10,66
10,81
15,30
23,18
27,54
32,60
46,71
45,16
62,51
72,00
80,99
98,19
101,4
2984,96
1035,02
4019,98
64,79
36,66
15
111,9
1999-2000
3081,19
1268,22
4349,41
66,63
45,27
0
124,0
2000-2001
3364,32
1495,51
4859,83
71,48
52,54
2
140,4
2001-2002
3124,82
1458,93
4583,75
77,05
63,39
4
152,0
2002-2003
3258,27
1653,82
4912,09
82,83
69,18
1
182,0
2003-2004
2004-2005
3538,07
2148,02
5686,09
90,48
91,60
8
190,5
( Jul-May)
3219,60
2535,72
5755,32
82,49
108,04
3.5.2: Main Apparel Items Exported from

Bangladesh(value in US$)
Shirt
Year
Trousers
Jackets
T- shirt
Sweater
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
805,34
791.20
807,66
759,57
961,13
1043,1
80,56
101,23
112,02
230,98
333,98
126,85
146,83
171,73
309,21
467,19
225,90
232,24
366,36
391,21
388,50
70,41
196,60
296,29
1998-1999
1
1021,1
394,85
393,44
471,88
271,70
1999-2000
7
1073,5
484,00
439,77
563,68
325,07
2000-2001
2001-2002
9
871,21
1019,8
656,33
636,91
573,74
412,34
597,42
546,28
476,87
517,83
2002-2003
7
1116,5
643,66
464,66
642,62
578,37
2003-2004
2004-2005(Jul-
1334,85
1334,85
1062,10
616,31
946,87
1495,25
1495,25
1227,07
801,68
May)
Yea
3.5.3: Quantity & Value of Total Apparel Exported

( Value in US$ & Quantity in '000 dozen)
Total apparel export in MN.
Woven
Us$
Knit
Total
1544,89
341,53
1886,42
r
199
Total apparel export in MN. DZ

Woven
Knit
Total
41642,4
13768,85
55411,34
16
4
199
9
49377,1
5
199
1976,40
512,18
2488,58
1
47536,8
19828,10
69205,21
6
199
1942,37
686,27
2628,64
4
60560,4
26107,21
73644,05
7
199
2621,33
810,49
3431,82
9
64229,7
27997,84
88558,33
8
199
2871,06
976,29
3847,29
7
64938,8
34587,54
98817,31
9
200
2987,73
1169,90
4157,63
2
71634,0
41303,64
106242,46
123
0
200
3376,49
1448,22
4824,71
3
67724,5
51588,27
1
200
3162,28
1432,72
4595,00
0
83443,7
50180,09
117904,59
2
200
3076,28
1573,40
4649,68
8
85829,2
70714,60
154158,38
3
200
3398,84
1850,36
5249,20
9
94223,2
80503,80
166333,09
3686,78
2532,62
6219,40
104904,34
199127,57
222,30
From the above table we find that the total export quantity of
apparel garments is increasing. Specially knit export trend is
higher than woven export. For woven market Bangladesh mainly
depends on U.S. market and for knit market Bangladesh specially
targets the European market. But now after the quota free market
Bangladesh is trying to enter the knit market in U.S. For knit
garments sewing, only 50/2 count & 40/2 count polyester sewing
thread used. These are two ply thread and these type thread is
cheaper compare to higher count thread specially 20/2 count ,
20/3 count , 20/9 count or 40/3 count. For knit garments sewing,
fabrics doesnt need any special wash like bleach wash, enzyme
wash, silicon wash or stone wash. They only need detergent wash.
17
For these advantage sewing thread factory can easily produce

50/2 count or 40/2 count thread because they dont need any
bleach treatment. For the above reason the percentage of the
possibility of bleeding for the knit sewing thread is very low.
Only for tipping purpose knit garments thread need special
treatment but only for a few buyer or fancy
buyer need tipping
thread. Ofcourse tipping thread is expensive but the buyers are

ready to pay more money for
tipping
thread. So tipping adds
more value
From the above tables we found that among the main export item
like shirt, trousers, jackets, T- shirt and sweater, shirt export trend
is lower then any other item. Sweater export trend is higher then
any other item but sweater doesnt need polyester yarn they need
only acrylic yarn that is totally different from polyester yarn and
its dyeing and other processes are also different from polyester
yarn.
In some cases sweater garments need polyester yarn for
linking purpose but the requirement is very low.

For jackets sewing we basically uses filament yarn (150/D count),
which also doesnt need any bleach on enzyme
treatment.
Filament thread price is very high but its production cost is very
low because its main raw materials that is 150/D count yarn is
mostly produced in Bangladesh which quality is up to the mark.
Filament (150/D count) is a non span yarn and doesnt have any
twisting.
Its manufacturing process is little difficult but not
complicated. For some cases some garments factory uses filament

yarn for tipping purpose. Sometime for tipping filament give
better output compare to polyester yarn.
18
For trousers sewing we mainly use 20/3 count, 20/2 count, 40/2
count. For denim use we have to use 20/3 count, 20/2 count, and
40/2 count but for twill fabric we can use only 20/2 count and 40/2
count.
Basically for denim garments required heavy wash like
bleach wash and stone wash. After these sort of wash thread
colour may be bleed. For avoiding bleed problem thread need
special treatment like bleach proof treatment. These bleach proof
thread is more expensive compare to non-bleach thread. Moreover
for denim sewing thread should be specially silicones otherwise,
thread many break or burn at the time of sewing. If the thread
break or burn at the time of swing it will hamper
the production
tremendously.
For shirt we mainly use 50/2 count 40/2 count, or 60/2 count
thread. 60/2 count is expensive and this thread called finer count
thread.
For high quality shirt or branded shirt buyers choose
these finer thread like 60/2 count thread.
But for sewing shirt
thread doesnt need any sort of wash treatment. For using

chemical or dye-staff finer count thread easily absorb dye-staff.
Another advantage of these count is that after dyeing these thread
never shows any metamaric shade. For metamaric shade it is very
difficult to match the thread with the fabric because metamaric
colour always vary in day -light and factory or tube light.
metamaric we have to use D-65 light cabinet or LT-85
For
light
cabinet for matching purpose.

3.5.4: Percentage of Main Apparel Items Export from
Bangladesh
Year
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
Shirts
65
62
55
45
45
Trousers
6
8
8
13
15
Jackets
10
11
11
18
22
T-shirt
19
19
26
24
18
Sweater
19
19
26
24
18
19
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
45
41
37
35
37
29
17
19
23
26
23
34
17
17
20
17
17
9
21
23
20
22
23
28
21
23
20
22
23
28
From the above table we have found that shirt export reduces
continuously. It means 60/2-count thread consumption reduces.
Jacket export for the first 05 years increase but again it reduces.
So it means 40/3 thread consumption and filament or 150/D denier
thread consumption for first five years Increase
then again it
reduces.
T-shirt or knit export trend is always upward. As a matter 50/2
thread consumption always increases.
Trousers export increases rapidly. So we find that 20/3, 20/2 and
40/2 thread consumption increases. Most of the heavy count
thread need bleach treatment. So for special bleach treatment
thread industry need more specialized persons to keep the best
quality.
3.5.5: Item wise Export Quantity of Apparel Goods
Trouser Jacket
Year
Shirts
293540
T- shirt
Sweater
451600
4516000
1993-1994
00
387562
2709600
0 85800400
687610
0
6251000
1994-1995
00
396000
5000800
0 11876900
792000
0
7200000
1995-1996
00
364455
5760000
0 18720000
145782
0
8099000
1996-1997
00
441855
10528700
00 19437600
216018
0
9819000
1997-1998
1998-1999
00
456525
14728500
00 17674200
172465
0
1014500
00
17246500
00 21304500
00
20
458790
190230
1119000
1999-2000
00
458874
21261000
00 25737000
248040 24804000
00
1240200
2000-2001
00
491540
28524600
00
238748
00
1404400
2001-2002
00
562437
36514400
00 30896800
258417
00
1520100
2002-2003
00
528032
34962300
00 34962300
163872
00
1820800
2003-2004
00
61907200
00 50982400
00
From the above table we find the same trend in exporting apparel
goods form Bangladesh to abroad for the last 10 years. Trousers
export increase rate is very high, which gives us more money but
need special or highly expert technical person in dying sector and
washing sector. We also need more denim factory in Bangladesh to
boost up high value apparel items.
3.5.6: Item wise Sewing Thread Production
Pe r Ye a r
Ye a
S h i r t
Con
Tr o u s e
Con
Jacke
Con
T-
Con
Sweat
es
rs
es
ts
es
shirt
es
er
1993-
29354000X200/
14677
2709600X300/
3251
4516000X400/
4506 8580400X100/
2145
24589
1994
1994-
4000
38756200X200/
00
19378
2500
5000800X300/
52
6000
4000
6876100X400/
00
4000
6876 11876900X100/
10
29692
62
35224
1995
1995-
4000
39600000X200/
10
19800
2500
5760000X300/
96
6912
4000
7920000X400/
10
4000
7920 18720000X100/
2,5
4680
39
39312
1996
1996-
4000
36445500X200/
00
18222
2500
10528700X300/
00
12634
4000
14578200X400/
00
4000
14578 19437600X100/
00
4859
00
50294
1997
1997-
4000
44185500X200/
75
22092
2500
14728500X300/
44
17674
4000
21601800X400/
20
4000
21601 17674200X100/
40
4418
79
65787
1998
1998-
4000
45652500X200/
75
22826
2500
17246500X300/
20
20695
4000
17246500X400/
80
4000
17246 21304500X100/
55
53261
30
66094
1999
1999-
4000
45879000X200/
25
22939
2500
21261000X300/
80
25513
4000
19023000X400/
50
4000
19023 25737000X100/
2,5
6434
68
73909
2000
2000-
4000
45887400X200/
50
22943
2500
28524600X300/
20
34229
4000
24804000X400/
00
4000
24804 24804000X100/
25
6201
95
88178
21
2001
2001-
4000
49154000X200/
70
24577
2500
36514400X300/
52
43817
4000
23874800X400/
00
4000
23874 30896800X100/
00
7724
22
99993
2002
2002-
4000
56243700X200/
00
28121
2500
34962300X300/
28
41954
4000
25841700X400/
80
4000
25841 34962300X100/
20
87405
28
104658
2003
2003-
4000
52803200X200/
85
26401
2500
61907200X300/
76
74288
4000
16387200X400/
70
4000
16387 50982400X100/
7,5
12745
89
129823
2004
4000
60
2500
64
4000
20
4000
60
The above table shows how many cones required for making shirt,
Trousers, jackets, and T- shirt. Same time the table also shows
how many cones produces
in Bangladesh for exporting shirt,
trousers, jackets and T-shirts. In 1993-94 the garments industrys

thread requirement was 2458962 cones polyester sewing thread.
And in 2003-04 the garments industry uses 12982304 cones
polyester sewing thread. The table shows very clearly how
important the sewing thread market in Bangladesh to the investor.
As the export of appeal items increases every year in Bangladesh
the sewing thread demand also increasing. Without sewing thread
it is not possible to make one single garments.
3.5.7: Year wise Increase Trend of Sewing Thread

Production
Year
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
2003-2004
3.16
4.52
5.05
6.46
8.45
8.49
9.50
11.33
12.85
13.45
16.68
22
04
The above statement shows the increase trend of sewing thread

market in Bangladesh. The most important factor is that not a
single year the sewing thread requirement decreases from the
past year. This is a very clear picture for the investor to invest
their valuable money in this sector.
3.5.8: Count wise Consumption Per Year

60/2(10
50/2(30%
40/2(20
20/2(15%
20/3(20
Year
1993-
%)
245896,
%)
491792,
%)
491792,
Others(5%)
1994
1994-
2
352243,
737688,6
1056731,
4
704487,
368844,3
528365,8
4
704487,
122942801
1995
1995-
176121,95
1996
1996-
393120
502947,
1179360
1508843,
786240
1005895
589680
754421,8
786240
1005895
196560
1997
1997-
,8
,8
251473,95
1998
1998-
657873
1973619
1982840,
1315746
1321893
986809,5
1315746
1321893
328936,5
1999
1999-
660946
739099,
04
2217298,
,6
991420,2
1108649,
,6
330473,5
2000
2000-
5
881782,
5
2645346,
1478199
25
1322673,
1478199
1763564
369549,75
2001
2001-
2
999932,
6
2999798,
1763564
1999865
3
1499899,
,4
1999865
440891,1
2002
2002-
8
1046588
4
3139766,
,6
2093177
2
1569883,
,6
2093177
499966,4
2003
2003-
,9
1298230
7
3894691,
,8
2596460
35
1947345,
,8
523294,45
2004
,4
,8
2596460
649115,2
The garments industries need different count thread for different

type of garments. The sewing thread which uses for making shirt
cannot uses for making trousers. Similarly
the sewing thread

23
which uses for making trouser cannot uses for making jackets.
Mostly the sewing threat uses in Bangladesh are 20/2 count, 20/3
count 40/3 count, 40/2count, 60/3 count, 60/2 count 50/2 count,
20/9 count and 150/D count. The table shows how many cones
uses in Bangladesh for each count and it also shows the demand
trend for each count in Bangladesh for the last 10 years.
3.5.9: Production Capacity of Different Sewing Thread

Factory
Sl.
01
02
03
04
05
06
07
08
09
10
11
12
Factory Name
COATS
DHAKA BEIJING
B.H.T
K.D.S
ETAFILL
UNLIMA
WELL THREAD
APEX
FABIAN
YOUTH
IMPORT
LOCAL SMALL FACTORY WHICH
PRODUCTION CAPACITY ( 03 TO 04 LAC)
Capacity
30%
4%
3%
4%
4%
2%
5%
3%
2%
3%
25%
15%
The table showing the market share of the major sewing thread
company
in Bangladesh. Except coats Bangladesh the market
share of the different branded sewing thread manufacturer in

Bangladesh are almost same. But the most important factor is that
still Bangladeshi garments manufactures importing 25% sewing
thread from abroad. So there is a big chance to capture this
market. This will help the garments manufacture to reduce their
cost price and also reduce the lead time to manufacture the
garments. It will also help the economy. Another major important
part is that the local small manufactures have captured almost
15% market share but they dont have any modern machinery or
technology. As a result they produce less or inferior quality thread
24
compare to branded factory. If the new investors can introduce

modern factory with a sound technical persons then they could
easily capture this share without fail.
3.5.10: Costing of Sewing Thread on 131, 761 Kgs Raw Yarn Used
for Production if 1186256 Cons During 01, 10, 04 to 31,03,05
Cost as per latest conveyance factor
20/2
20/3
30/3
40/2
40/3
50/2
60/2
60/3
( 25
( 150
( 250
( 450
( 300
( 400
( 500
( 250
00
mtrs)
mtrs)
mtrs)
mtrs)
mtrs)
mtrs)
mtrs)
mtrs)
2.220
2.220
2.320
2.320
2.320
2.530
2.820
2.820
0,014
0,014
0,015
0,015
0,016
0,018
0,018
0,018
charges
( Tk. 4300,00)/$6400 basis
0,007
0,007
0,007
0,007
0,007
0,007
0,007
0,007
9072-kg/lot
c)L/C Amendment charges ( tk.
4
0,001
4
0,001
4
0,001
4
0,001
4
0,001
4
0,001
4
0,001
4
0,001
1050,00)
C&F, charges at average of
0,028
0,028
0,028
0,028
0,028
0,028
0,028
0,028
current bills
Transport-CTG to Factory Tk.
13400,00
basis per lot of
0,023
0,023
0,023
0,023
0,023
0,023
0,023
0,023
9072 kg
cost per kg. at
0
2,313
0
2,313
0
2,414
0
2,414
0
2,414
0
2,627
0
2,921
0
2,921
0,180
0,180
0,180
0,180
0,180
0,180
0,180
0,180
Description
150 D
Filame
nt
A)
DYED/COLOURED
C&F CTG. COST PER KG IN
US$
BANG
CHARGES
a)L/C opening & acceptance
com 0,67%
b)Others bank
factory
Dyes &
chemicals /kg
25
1.5200
0,0102
0,0074
0,0018
0,0283
0,0230
1,6028
0,1809
lubrication @ 3% on cost of lub. ($
0,075
0,075
0,075
0,075
0,075
0,075
0,075
0,075
2,5/KG)
Factory
0
0,858
0
0,858
0
0,858
0
0,858
0
0,858
0
0,858
0
0,858
0
0,858
overhead /kg
administrative
9
0,237
9
0,237
9
0,237
9
0,237
9
0,237
9
0,237
9
0,237
9
0,237
overhead /kg
Financial & Distribution
6
0,030
6
0,030
6
0,030
6
0,030
6
0,030
6
0,030
6
0,030
6
0,030
Overhear
selling & distribution
overhead
C&F, customs, bank
0,409
0,409
0,409
0,409
0,409
0,409
0,409
0,409
charges/kg
Discount for negotiation of discounts
5
0,099
5
0,099
5
0,104
5
0,104
5
0,104
5
0,113
5
0,126
5
0,126
@ 4,5%
Discount based on provision foe
9
0,056
9
0,056
4
0,056
4
0,056
4
0,056
8
0,056
9
0,056
9
0,056
unite-01
Total cost per kg in
8
4,262
8
4,262
8
4,368
8
4,368
8
4,368
8
4,590
8
4,898
8
4,898
Cost per cone at conversion
0,682
0,682
0,716
0,541
0,629
0,459
0,516
0,394
factory
packing materials
0
0,036
0
0,036
4
0,036
7
0,036
0
0,036
1
0,036
8
0,036
3
0,036
per cone
cost/cone ( Dyed &
3
0,718
3
0,662
3
0,752
3
0,665
3
0,495
3
0,553
3
0,430
US $
colour)
20/2 of 3000 mtrs at C.F
0,826
0,194 and
20/3 of 2000 mtrs at
9
0,822
C.F 0,193
packing materials
0,036
6
0,036
per cons
cost per cone ( Dyed &
3
0,863
3
0,858
colour )
Ja ya sree
yarn :
19,7/2(20/2) of 2500 mtrs at C.F.
0,158 &
19,7/2(20/3) of 1500 mtrs at
0,578
0,673
4
0,609
C.F. 0,143
Packing
0,036
5
0,036
Materials
Cost per cone ( Dyed &
3
0,709
3
0,645
26
0,0750
0,8589
0,2376
0,0309
0,4095
0,0684
0,0568
3,5208
0,3415
0,0363
0,3778
colour)
19,7/2(20/2) of 3000 mtrs at
7
0,809
C.F. 0,190
19,7/2/3(20/2) 2000 mtrs at
0,814
C.F. 0,191
Packing
0,036
1
0,036
Materials
cost per cone ( dyed &
3
0,846
3
0,850
colour)
Hing pings
yarn :39,3/2(40/2) of 4000 mtrs at
0,537
C.F. 0,123
50,2/2(50/2) of 4000 mtrs at
3
0,449
C.F. 0,098
60,3/2(60/2) of 5000 mtrs at
C.F. 0,102
58,9/3(60/3) of 25000 mtrs at
0,499
0,391
C.F. 0,080
Packing
0,036
0,036
0,036
0,036
Materials
Cost per cons ( dyed &
3
0,583
3
0,486
3
0,535
3
0,428
colour)
Net profit
margin
B)
WHIT E
C& F cost of optical
2,220
2,220
2,350
2,380
2,380
2,590
2,880
2,880
yarn/kg in us $
expenses for dyed & colour
0
2,042
0
2,042
0
2,048
0
2,048
0
2,048
0
2,060
0
2,078
0
2,078
( as above)
Cost per kg. basis dyed
5
4,262
5
4,262
4
4,398
4
4,428
4
4,428
9
4,650
4
4,958
4
4,958
& colour
Less: expenses not applicable
to white
As per note-1
0,341
0,341
0,341
0,341
0,341
0,341
0,341
0,341
below
cost per kg.
9
3,920
9
3,920
9
4,056
9
4,086
9
4,086
9
4,309
9
4,616
9
4,616
0,619
0,568
0,665
0,498
0,579
0,415
0,477
0,364
/white
Cost /cone at conversion
factor
27
1,5200
2,0008
3,5208
0,3419
3,1789
0,302
Add: packing
0,036
0,036
0,036
0,036
0,036
0,036
0,036
0,036
materials/ Cone
Cost per cone-
3
0,655
3
0,604
3
0,701
3
0,534
3
0,615
3
0,452
3
0,514
3
0,401
white
20/2 of 3000 mtrs at C/F
0,192 and
20/3 of 2000 mtrs at C/F
0,3383
0,752
7
0,756
0,193
Packing
0,036
Material
cost per cone
3
0,789
( white)
0,0363
7
0,036
3
0,793
Average price for dyed &

colour
Net profit
Margin
Note 1 : Not applicable
for white
Dyes/chemic
0,180
0,180
0,180
0,180
0,180
0,180
0,180
0,180
als
Overheads ( Lab &
9
0,129
9
0,129
9
0,129
9
0,129
9
0,129
9
0,129
9
0,129
9
0,129
Dyeing)
Depreciation
0
0,302
0
0,302
0
0,302
0
0,302
0
0,302
0
0,302
0
0,302
0
0,302
( Lab/Dyeing)
Total
0
0,341
0
0,341
0
0,341
0
0,341
0
0,341
0
0,341
0
0,341
0
0,341
( Note:1 )
From the above statement, we can have a overall idea of sewing

thread price for every count including white or colour thread. In
this cost sheet we include all kind of cost. For white thread we
dont need any dyes or chemical cost. Cost price of different count
are not same because for different count we use different type of
yarn. And different yarn price are also different. Conversion
factors of cost price are also different.
For the above reason the market price for different count sewing
thread are also different. Market price is 05 to 10 cents higher
from the cost price of any polyester sewing thread.
28
0,1809
0,1290
0,3020
0,3419
So from all the tables and statement we find that there is big
demand already existing in Bangladesh and
it is growing rapidly
day by day, and at the same time market is vary reasonable

compare to its cost or production price. As a result we can assure
a investor that they can easily
invest their money for sewing
thread market in Bangladesh which will give them a very good

return and by this the garments sector in fact the whole country
will be benefited.
4.0: Marketing Strategy

After developing the product marketer has to think how he can sell
the product to the potential buyers. Many activities have to furnish
to make a successful selling. A brief discussion has been stated as
below regarding the matter:
4.1: Product Selection

This is the prime job for a marketer. The product of yarn
manufacturing industry is spanned "Yarn". Its potential buyers are
export oriented knit and woven garments that supplies garments
29
to the foreign buyer. So, first, it has to be cleared that what will be
the product character. The following major things must have to
consider during taking manufacturing decision of yam:
Count of yarn.
Quality
of
yarn
i.e.
yarn
strength,
CV%
of
count,
imperfection, hairiness etc.

Type of raw material used.
Purpose of end use of the product.
In Bangladesh, most of the cases polyester yam count is used

20/2,50/2,40/2,20/3,60/2,60/3,.for preparing garments. In some
cases blended (cotton+ polyester) yarn also required for making
garments.
Any
way,
marketer
has
to
analyze
the
market
requirement before taking product decision.
4.2: Price of the Product

Pricing is the value that buyers exchange for a product in the
marketing transaction. Before establishing prices, marketers must
decide their pricing objectives. Survival is the most fundamental
one; firms will tolerate losses and others difficulties if needed for
survival. Besides survival, firms use price to increase sales and
market share, boost profit, achieve a return on investment, and
maintain their present position in the industry.
30
For export market, thread is being sold by L/C and

currency is US dollar . However, the market is open and pricing
has been fixed on cost-oriented- pricing strategy .The price of
purchasing raw materials (yarn) plays a vital role for pricing
decision. So, firm to firm price of yarn vary a little (up to S-10
cents per kg) due to purchasing cost variation of raw materials.
Rests of the cost are almost same for maximum factories.
Polyester yarn is a by product of petroleum so as a result yarn
price is mostly depend on the prices of petrol.
4.3: Channel of Distribution

A marketing channel is a group of inter related organizations that
direct the flow of products from producers to ultimate buyer. The
channel organizations that provide the link between the producers
and the consumers are called marketing intermediaries.
Depending on the needs of the target market firms utilize many
different types of marketing channels to distribute products.
Generally channels for industrial product are different from
channel for consumer product.
A typical marketing channel for industrial product (thread is an
industrial product) is shown below
A. Producer ----------------------> Industrial users or
garments owner
B. Producer ----> Buying house -----> Industrial users or
garments owner
31
In Bangladesh, both types of channels are seen in doing marketing

function. Some factories are seen marketing their product by their
own sales personnel and there are some factories who market
their product through local distributors. So, it is a major task to
take decision what will be the marketing channel of the "company.
4.4: Promotional Activities

The communication of favourable, persuasive information about a
firm or product in order to influence potential buyers is called
promotion. Before buying a product consumer must know about
availability of the product, its characteristics or benefits and
where it can be purchased. Promotion Consisting of advertising,
personal selling, sales promotion and publicity .Most of the
company's promotional objectives are informing about their
product, increasing sales, stabilizing sales, positioning the product
among their customer mind. Due to the above purpose company
followed the advertisement media as direct mail, Professional
magazine,
out
door
display
(Trade
Fair),
especially
they
emphasized on personal selling mostly.

So, analyzing the overall situation the marketer has to select the
appropriate promotional tools for successful selling.
4.5: Procurement
Various types of procurements are involved in yarn manufacturing
industry Most of the buying responsibility is on marketing people.
Some major area of procurements is as below:
32
Purchasing of raw materials i.e. raw yarn purchasing from

abroad.
Purchasing of machineries and parts of machineries.
Accessories purchasing.
Generators parts and fuels purchasing. .
Purchasing of various tools and materials for workshop.
Purchasing of yarn packaging and carton making materials.
Maintain satisfactory inventory level in store of factory .etc.
Purchasing of chemical and dye staff
A marketer must be sincere regarding the above things for smooth
production and marketing the product. In practical, it has been
found that most of the factories do not organize the purchasing
and procurement systematically. As a result, they face many
problem like raw material shortage, failure of timely delivery of
yam to the customer, shortage of accessories. So, machine idle and
break down time became increase etc. In a nutshell, factory
productivity has been fallen down.
It is also seen that a few no. of factories maintained proper
procurement policy as a result their productivity is higher and
market reputation is appreciate able.
4.6: Transportation
Transportation mainly includes the arrangement that related with
moving the goods from one place to another place. Generally, two
ways this transportation function has been done in the thread
industry. Firstly, the major part is carrying the raw materials i.e.
33
raw yarn transportation from growers to users. Most of the

grower's location is Africa, CIS countries; Pakistan, China, India,
Australia and USA etc .Bangladesh has to import raw yarn from
these countries. Import of yarn has been done 100% by using
ocean
vessels
from
exporting
country
ocean
shipyard
to
Chittagong sea port. Latter yarn bales are carried by truck from
Chittagong to factory location. Major transportation costs are
related in this line. Secondly, transportations are involved to
transfer the spun thread from thread factory to garments
factory .This transportation is ensured mostly by thread mills
authority .But sometimes it can be done by thread buyers i.e.
transportation decision depends on buyer and seller bilateral
discussion.
4.7: Warehousing
Thread factory is a vast processing industry .A lot of things are
required each and every time. Specially, it need smooth supply of
raw materials, accessories. However, a minimum level of inventory
of packaging materials, spun yarn and other things that are
directly related with processing must has to maintain to keep the
production smooth. Basically yarn demand is fluctuate over the
year. Generally demand of yarn is highest in between
October to February and rest of the time a normal demand is
found in market. It is called peak seasons and off season. During
odd season the surplus production (Thread) has to store in the
warehouse and by this surplus production later companies could
meet access of peak season.
34
In practical, it was found that most of the factories have no good

warehouse. However, they have no good production and marketing
plan. As a result they are facing problem to marketing their
product and they are failing to build up loyal relationship with
potential customers.
4.8: Standardisation & Grading

There are some important marketing impacts of standardization. If
widely used, uniform raw material and final product quality grades
and standard Call, potentially, contribute to both operational and
pricing
efficiency
in
the
industry
.Some
important
market
potentiality is stated as below:

Grades and standards allow marketing by description,
rather than inspection.
It can avoid personal meeting and inspection for buying
and selling.
It can lower the marketing cost.
Grading can contribute to market competition and
pricing efficiency.
Uniform grades and standards also can contribute to
market
Development
in
the
form
of
greater
consumer
satisfaction and increased producer returns.

Grading can affects both domestic and foreign sales.
35
In practical, it has been found that raw materials of spinning

industry i.e. raw yarn are maintained highly standards and grades.
According to grades yarn are familiar like as follows:
GM ( Good Middling)
SM ( Strict Middling)
SGM( Strict Good Middling)
M ( Middling)
LW( Low Middling)
SLM (Strict Low Middling) etc.
One the other hand produced spun yarn is also standardized by its
popular
count. Such as:24/1 count
20/1 count
26/1 count
30/1 count etc.
Yarn grading is known on its quality level. Such as high quality
yarn means low or minimum CV% of count, less variation of mass
per unit length, low level of thin and thick place per unit length
etc.
4.9: Financial Strategy

Thread manufacturing industry is a matter of big investment.
Minimum 100 core tk. is required for setting up thread factory
with capacity of 1000 spindles. However, its operating cost,
36
maintenance cost, salary , wages, bank interest, annual general

report, bill paying for various purchase, accounts for bill payable
and bill receivable etc. huge no. of financial activities are involved
into this business. In a broad sense the total financial activities
can highlights into three major categories:
A. financial
activities
involve
with
procuring
materials
and
machineries involve with procuring materials and machineries

i.e. up to start processing:
This involved from the purchasing the raw yarn to reach the
material to mill premises. Basically, yarn is being purchased from
the international market. Besides, import various machineries;
spare parts, auxiliaries etc. has been imported from abroad to
keep run the industry .It is the major cost of this industry
.Business payment is performed by L/C. It requires huge amount
of dollar to purchase raw materials. Here Banks and others
financial institution plays vital role. About 70% money can get
through credit from bank with getting necessary government
facilities. However, many leasing company also can lend money
regarding this matter. But in most cases companies are prefer to
take bank loan rather than leasing company.
B. Financial activities involved with production & marketing:
In this field major costs are involved in production. Executive's
salary, workers wages, maintenance costs, incentives, bonus etc.
are the major cost creating area. Banks and other financial
institution provides loan to meet this requirements. For marketing
the product, there are several costs such as packaging cost,
37
cartooning the yarn, transportation cost for moving the finished

goods, paying commission to distributors, promotional cost and
cost of attending various fair and exhibition in home and abroad.
C. Annual Financial Statements:

Almost all thread industry is a private limited company. So, they
have to prepare annual financial statements for their share
holders.
In
the
financial
statements
all
types
of
financial
transaction has been presented. So, only analysis the financial

statement it is possible to know the company's financial condition.
In practical, I fond that a higher portion of the company did not
prepared their annual. financial report for share holders and stock
exchange commission not yet been too strict to them. But very
recently they are become aware to the matters.
4.10: Risk Taking

Each business has risk. As thread is being used for making
garments and garments is an exporting item for Bangladesh so
thread manufacturing industry and its marketer has to faced
challenged from both internal environments as well as external
environment. Internal uncontrollable environment consists of
following things:
Internal competitors.
Government Policy.
38
Political Situation.
Legal factors.
Economic condition
Law and order situation.
Uncontrolled business operating cost. etc.
On the other hand, external uncontrollable challenging factors are
consists of as bellows:
External competitors.
International politics.
Legal factors.
Global economic condition.
Various international business contracts.
Influences of various pressure groups. etc.
In fact the real internal challenges of this business in Bangladesh
is political instability , improper government policy, hartal,
instable state policy to the business, insufficient port facility ,
inadequate
infrastructure
facilities,
smuggling,
the
weak
governance etc. And the probable external risk may be SAARC

cumulation , elimination of quota in USA Pressure from EU in
respect to asp facilities, pressure of Aid group, World Bank, Asian
Development Bank, etc. in respect of low level law and order
situation in the country.
39
5.0: Problems of Sewing Thread Manufacturing

Industry
There are a lot of problems in this sector. I will discuss in a short
that are directly related with marketing function. These are stated
below:
5.1: Problems Related to Product Selection

Bangladesh still produces only some ordnary count that are mainly
using in producing knitting garments and plain type woven
garments. But in world garments market are now using fancy
yarn, core yarn, and slubby yarn etc. modern types of yarn for
making more attractive apparels. But Bangladesh still now doesn't
introduce this high technology in their product manufacturing
40
system. As a result Bangladesh is losing to create new potential

market.
5.2: Problems Related to Product Pricing

It is true that cost of our local yarn is higher than that of our
competitors. For an example, 1 kg of 26/1 carded yarn price in
India is US$2.90, Pakistan US$2.95, Sri-lanka US$ 3.00 and in
Bangladesh US$ 3.45. Bangladesh import 100% raw material from
international market where as Pakistan, China and India both has
100% self sufficiency in growing raw materials. So, Bangladesh
has to face uneven price competition with its competitors in
international market.
5.3: Problems Related to Distribution Channel

As yarn is an industrial product and our yam is being marketed to
our local garments manufacturers who are sold their fabric both
for local market and for export market. Marketing channel is very
short. Most of the cases it is marketing directly by the
manufacturer own sale people. Normally this channel is for export
market. In some cases there are some distributors. This channel is
for local sales. For local buyer sometimes they are bound to
purchase yarn paying high price. Its happened due to this market
is controlled by only a few no. of sellers (oligopoly). Most of the
spinners selling their product for export market sharing with L/C.
41
So, create perfect competition in local yarn market it is necessary

to increase more company into local market. It is possible only
developing proper distribution channel.
5.4: Problems in Promotional Activities

Bangladesh yarn manufacturers are very weak in promotional
aspect. To familiar the product in international market and create
and enter new potential market regular seminar, symposium,
participation
in
international
fair,
advertising
in
respective
international journals etc. should be must for a marketer.

However, physical travelling in abroad for seeking market is also
essential. A special handsome promotional budget is required
regarding the matter. But most of the company has no such
preparation. As a result our textile business has been depends on
only a few countries.
5.5: Problems in Procurement Section

Not only textile spinning industry successful procurement systems
is the key to any processing industry .Timely procure the raw
materials, maintain economic inventory level of machineries and
spares parts, keeping the safety level stock of final product to
maintain a continuous supply to the market etc. are must for a
success company. F or doing the jobs it is necessary to develop a
separate
department
who
will
take
all
responsibility
of
procurements. Trained up staffs and necessary budget is to be

42
provided to maintain the system and furnish the jobs. But most of
the factory did not give importance on the matter. So, their
productivity
is
not
high
in
respect
of
their
international
competitors. However, due to lack of proper inventory their fund

distribution is also imperfect. As a result their overall business
performance is. found poor.
5.6: Problems in Transportation

Bangladesh has been export the raw cotton 100% from abroad. So,
its major transportation cost depends to import the materials i.e.
on ocean freight, cost of freight forward and finally truck fair from
Chittagaong seaport to factory destination. Most of the factory
location is near to Dhaka so these factories have to do nothing but
paying the cost. This transportation costs is almost nil of our
international competitors. So, they are in forward position in view
of cost competitiveness of raw material cost. Political instability
and various political agitations like hartal, dock workers strike etc.
harms seriously this industry .Due to hartal and strike sometimes
imported raw material can not be transferred from port area to its
destination. As a result, factory production may be stopped due to
lack of raw materials
5.7: Problems in Warehousing

Most of the factories have no proper warehouse to stock raw
materials, accessories and surplus production. In fact from survey
I came to know most of the factory did not use their full
production capacity through out the year. As a result they are
43
failing to create loyal relationship with the customers. It is true

that for utilizing factories full capacity factories needs more raw
material, more financial support and strong marketing network to
sell the product to the customers. But there is a remarkable no. of
spinners who are in crisis of sufficient cash in their business. As a
result they are facing problems to maintain proper warehousing of
their product. It is also seen that there are some factories that are
doing well in warehousing management. Location of warehouse is
also an important thing. It is seen that warehouse location is not
the proper place into the factory area. It happened due to
misaligning. So, access time and labours are required for internal
transferring the materials.
5.8: Problems Related to Standardisation & Grading

Standardization mainly related with yarn count and there is no
problem. Because it is internationally recognized system. But
problems are found in cotton grading. Cotton grading normally
done considering its fibre maturity, colour, degree. of yellowness
and fibre thickness. Year of crops is also important. Because fibre
strength varies on it. In cotton marketing sometimes cotton
growers blend the previous year crops with new crops as a result
fibre quality has been deteriorated. It is a high risk for cotton
buyers. So, it requires expertise knowledge to identify the
problems. Either factory can incur loss for purchasing bad quality
fibre.
5.9: Problems in Financial Field

Thread businesses need high capital. Company itself can not
afford all the money. So, they have to get loan from public and
44
private bank, arrange money from share market. Sometimes they

borrow money from various money lending company. There are
some spinning industry where international banks invest their
money and provide loan. Facts are bank interest in Bangladesh is
too high near about 14%. One the other hand business-doing-cost
in Bangladesh is higher than its international competitors.
Besides, Bangladeshi entrepreneurs are doing well and they are
telling that fund is not their main problems. They urge to
government for implementing friendly policies, political stability,
and prudent international business contact etc.
5.10: Problems of Risk Taking

Each and every business has a more or less risk. Textile is a global
business so its risks and opportunities are more than any other
business. The last two decades Bangladesh actually gains huge
opportunity from this business due to American quota. From Jan
2005 quota has been abolished but Bangladesh export more
quantity of apparels in world market. It happens because
Bangladesh overcomes its primary level of this business. Our
entrepreneurs, workers are now more skilled than before and
their level of performance is competitive to our international
competitors. However, our government continuing 15% cash
incentives on export, government established separate EPZ; duty
free access of raw material and machineries etc. incentives has
been offered from the beginning. Besides, Bangladeshi garments
exporters are facing tough challenge in international marker in
view of price competitiveness, lead time problems, Shipment
problems and problems of higher business operating cost and
overall Bangladesh facing its image problems internationally. It is
obviously a business risk. So, if government takes the steps like
45
port problems, lowering bank interest for investment this field,

taking steps to improve country image internationally and help
this business community with the changing global situation then
the
rest
of
the
business
risk
can
overcome
Bangladeshi
entrepreneurs successfully.
5.11: Sufficient Backward Linkage

Bangladesh still depends on imported yam and fabric for its
garments export. So, it requires immediate steps to set sufficient
number of spinning and weaving industry to meet the excess
demand of this industry. Either only depending on importing raw
material the business will not cost effective.
5.12: Competitiveness in Bangladesh

Bangladesh and its others competitors level of competitiveness in
respect to labor, .power depreciation rate, capital interest etc. are
same but now Bangladesh has only one competitive advantage to
increase its management efficiency for higher productivity .In
respect of raw material Bangladesh position is not worthy than its
competitors.
5.13: Problems Related to Banks

46
Problem in banking sector for exporting:

Force/Demand loan
Back to Back p .A.D/ Force loans.
Overdue F.B.P.
Exporter cannot open L/C due to clear the liability .
Stock-lot problem cannot permit BB L/C open.
Banking irregularities.
Bangladesh bank doesnt provide enough money for cash
incentive.
Need the separate bank for garments industry.
Export goods against stock lot.
Documents negotiation time.
L/C acceptance charges of the commercial bank.
Fresh law.
Procedure of making down payment for rescheduling loans.
5.14: Miscellaneous Problems

Exporters
may face these challenges of total globalization
competitiveness in the quota free regime from 2005. Such

problems like:
Illiterate
workers
involved
in
textile
industry
and
garments.
Gender quality.
47
Problem of child labor.

Political instability.
Duty free market access for all product export.
Smuggling.
Leakage from bonded warehouse.
SAARC Cumulation.
Central Bonded Warehouse.
6.0: Recommendation & Results

6.1: Recommendation
Evaluating the total study, analysis and problems there are some
suggestion that can help this industry to be worthy and strong.
The recommendations are stated below:
6.1.1: The SAARC Cumulation rules
48
The proposal of SAARC Cumulationg rule is opening the textile

trade among SAARC countries. Bangladesh must not agree with
the proposal because Bangladesh will not be benefited from this
accord rather its textile industry will be destroyed in front of
Indian and Pakistani industry.
6.1.2: Large scale of smuggling
India is a very big neighbour of Bangladesh. However, India is a
textile giant and one of the important competitors of Bangladesh
so Bangladesh must be taken -steps to stop any types of smuggling
of textile product like yam, fabrics, accessories etc.
6.13: Duties & taxes on spare parts, accessories and
consumable
Our product cost is normally high due to many reasons. So, to gain
more competitiveness it should necessary to reduce duties and
taxes on spare parts, accessories and others consumable items.
6.1.4: Low interest rate and bank charge
Bank interest in Bangladesh is still higher than our competitors.
Bank interest should to fix up maximum 6% for capital assets.
Then this industry might be stronger to face global challenges.
49
6.1.5: Bank loan available and easy access

Bank loan should be available and easily access. Bangladesh bank
can playa vital role regarding the matter.
6.1.6: Develop skilled and trained manpower
Labour cost in Bangladesh is cheap it is true but labours
productivity, effectiveness, skilled are very low. As a result this
cheap labour could not bring profit for the industry .So, steps
should to take to train up this unskilled and semiskilled worker.
6.1.7: Setting up training institution
Garments are the chief exporting product that earns almost 68%
of our total export. But yet there are no remarkable steps by that
the personnel of this trade can be specially trained up. So,
immediately some quality level training institute should be
established.
6.1.8: Encourage introduce adept professional
From the survey it has been revealed that there is a lot of industry
where there is no professional Textile engineer. As a result their
produces are inferior quality and buyers claim are common for
their product. Introducing professional body factory productivity
and effectiveness can
be increased.
6.1.9: Increase productivity and effectiveness
Implementing
more
methodology
factories
modem
technology
production
and
and
efficiency
production
must
be
increased. Now there is a lot of software by which production

monitoring, measuring efficiency, inventory control, performance
appraisal etc. can be done successfully. So, our textile factories
50
should
introduce
the
latest
technology
for
its
operational
accountability.
6.1.10: Taking initiatives to solve various problems
Besides the above things there are some problems related with
marketing
functions
such
as
product
selection,
pricing,
distribution, promotion, procurements, transportation, internal

warehousing, standardization & grading, financing and risk-taking
etc. Proper market research and analysis these problems can be
solved.
6.1.11: Agreement with international business partner
Textile is a global business. Its business potentiality is increasing
gradually. So, Bangladesh should have made good relationship
with its business partners. However it can make various bilateral
businesses
6.1.12: Maintaining political stability into the country
Bangladesh is the one of the small country in the world in respect
of its land area. But its political chaos is well known in the world.
World is becoming smaller and competitive. Bangladesh must have
to create political stability for increasing its foreign investment, to
increase it export and business.
6.1.13: Increase port facilities in Chittagong seaport
Chittagong is only one seaport by which major export-import has
been occurred. But due terminal problems, loading-unloading
problems always ship jammed have been happened. As a result
importers and international shipping companies are loosing their
interest
to
do
business
with
Bangladesh.
So,
immediately,
Bangladesh must have to solve these problems.

51
6.1.14: Establish more EPZ for textile industry

It has been proved that establishing textile factory into EPZ area is
more safe and profitable for both investors and importers.
However, in EPZ area infrastructure facilities, law and order
situation are more improved that out of it. So, Bangladesh should
establish more EPZ for their textile industries then obviously
investment of this sector will be increased.
6.1.15: Government policy
Government policy should be friendly so that textile industry can
be build up and sustain facing the global challenges. Government
may
be
change
but
the
industrial
policy
should
not
be
unfavourable for the industry with the changes of government.
6.2: Conclusion
Bangladesh is a very densely populated country but have not
enough natural resources. But god has given us plenty of labour
resources. For survival we have the only alternative to use the
labor force properly. At present we dont have the ability to
establish
heavy industry
but we have enough opportunity to
establish medium and small scale industry
which needs huge
manpower with less investment and high profit. Garments industry

is such a type of industry which needs less investment, lot of
quality or skilled people and gives high return. That is why
garments industry is increasing in Bangladesh rapidly and
contributing to the economy in a big volume. But now after lifting
the quota, garments markets become more competitive and at this
stage it has been difficult to uphold the trend in garments industry
though it is not impossible. Bangladeshi garments industry can
fight in the world market if it can reduce or minimise its
52
manufacturing cost. Any finish garments need 25 to 40 accessories

items. Among all the items sewing thread is the most important.
After studying the whole situation we can firmly say that the
demand of the sewing thread will further increase. As a result if
we dont established new modern sewing thread factory then
garments owners will have to import the thread from abroad. This
will increase the cost price rather than reduce.
So, for the
betterment of the garments industry as well as our economy we

should invest more money in sewing thread industry as early as
possible.
53

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Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

1.0: Background of the Report

Bangladesh is prepared to fulfil the requirements for the degree

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

The future of this industry is now threatened by a number of

1.2: Importance of the Study

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

1.3: Objective of the Study

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

To analyze and to evaluate the opportunity of establishing sewing

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

Company's own record

1.5: Limitation of the Study

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

From individual organization level of cooperation of their

information about thread marketing but unfortunately their

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

2.0: Over View of Thread Industry

2.2: Cost Competitiveness Assessment

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

It is necessary to assess critically the cost effectiveness and

Bangladesh, particularly India, China and Pakistan.

Washington, a consulting firm Dr. Martelli Associates (DMA), has

and China, the three powerful

competitors of Bangladesh. Bangladesh must overcome these

managerial efficiency and established yarn manufacturing factory.

2.3: Market Scenario in Recent Past

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

It is to be noted that rich countries are not only importers, but

3.0: Market Scenario Analysis

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

(ii) Cut and Sew Knitted Garments

The Status of Backward Linkages in Six

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

Table (ii) Bangladesh has achieved lowest level of self-sufficiency

3.2: Backwards Integration & its Rationale

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

Improve substantially its labour productivity and managerial

For Bangladesh RMG industry, three stage integration is ideal and

3.3: Conversion Cost Comparison (Yarn Spinning)

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

Source: DMA (Dr. Martelli Associates, IFC Report) 1999.

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

The total cost per unit of yam in Bangladesh eventually becomes

reducing lead time for apparel export etc. to be improved soon to

3.4: Facilities for Industry Setup at EPZ

Import & export permit are issued by EPZ within 24 hours.

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

Work permit are issued by BEPZA.

3.5: Apparel Export on Sewing Thread

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

3.5.2: Main Apparel Items Exported from

3.5.3: Quantity & Value of Total Apparel Exported

Total apparel export in MN. DZ

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

Opportunity Analysis of Establishing Sewing Thread Manufacturing Industry

For these advantage sewing thread factory can easily produce

buyer need tipping

thread. Ofcourse tipping thread is expensive but the buyers are

thread. So tipping adds

In some cases sweater garments need polyester yarn for

linking purpose but the requirement is very low.

Its manufacturing process is little difficult but not