Introductory Background

Bangladesh, the southern Asian country has a population of approximately 164 million
people. The economy of Bangladesh is significantly dependent on agriculture. But it is great
news for the country that, readymade garments (RMG) sector of Bangladesh has risen as the
biggest earner of foreign currency. This sector creates about 4.2 million employment
opportunities and contributes significantly to the GDP. A readymade garment (RMG) of
Bangladesh is powered by young, urbanizing, workers, where most of them are women.
History of RMG Sector in Bangladesh
The foundation of textile sector was first established in the 60th decade of 19th century. For
the first time, the industry exported shirts (Mercury shirt) to the European market in 1965-66,
which was produced from Karachi. In the latter, 9 exporting industries were available in
1977-78. The three largest industries in that time were Riaz Garments, Jewel Garments and
Paris Garments. Among those, Riaz Garments was the most famous and oldest industry in
that time.
In the earlier stage, Riaz Garments of Mohammad Riaz Uddin started its business with some
tailoring shop in the name of Riaz store.
In the later, the name turned into Riaz Garments from Riaz store in 1973 and from 1978 the
company started exporting products in the abroad by exporting 1 million pieces of shirts in
the South Korean Company named Olanda. Desh Garments is another pioneer of
Bangladesh RMG sector. In 1979, Desh Garments started a joint project with South Korean
company Daiyuu. At the same time, several garments were introduced such as-Style craft
limited by Shamsur Rahman, Aristocraft Limitd by AM Subid Ali, Azim Group by Engineer
Mohammad Fazlul Azim and Sunman Group by Major (Retd) Abdul Mannan.
By following the beginners of RMG sector, some others discreet and hard-working
entrepreneurs started their RMG business in the country. From there, RMG sector of
Bangladesh was developing day by day and not needed to look back. Though this sector had
passed various critical stages through the path. In that time, we learned about child labor
1994 and in 1995 we made our garments industry free from child labor very successfully.
Present Situation of RMG Sector in Bangladesh

Quota system was a great blessing for establishing our garments industry. We were strongly
benefited by using that. As a result we can see a matured garments industry today. But while
quota system was approaching to an end in 2004, theres so many got upset about the RMG
sector of Bangladesh. Though in the latter it cant be affected here as the experts were
seemed. We conquered the post quota challenges and made that a successful story.
In RMG sector of Bangladesh, there are more than 5000 garment factories (private statistics)
at the current time, employing more than 12 lack labors, where 85% of the labor force is
women. But, according to BGMEA the number of garment factories in Bangladesh around
4000. Now, RMG industry is the countrys largest export earner with the value of over
$24.49bn of exports in the last financial year. Its great news for us that, Bangladesh is clearly
ahead from other South Asian suppliers in terms of capacity of the readymade garments
industry.
Though, there are various types of garments are manufactured in Bangladesh, but all the
readymade garments are classified into two broad categories, where one is woven products
and another one is knitted products. A woven product includes Shirts, Pants and Trousers. On
the other hand, knitted product includes T-Shirts, Polo Shirts, Undergarments, Socks,
Stockings and Sweaters. A woven garment still dominates the export earnings of the country.
From BGMEA website its seen that, Day by day knitted items production is increasing in
considerable rate and now about 40% export earnings has achieved from knitted products.
Contribution of RMG Sector to the National Economy
The role RMG sector in Bangladesh economy is remarkable. Its seen that, from the last
decade, RMG sector contributes to the national economy in considerable rate. About 76% of
total export earnings come from RMG sector. From a statistics its known that, in FY 2003-04
RMG sector of Bangladesh earned US$ 5,686.06 million, in FY 2004-05 the value was US$
6,417.67.67 million, in FY 2005-06 the value was US$ 7900.80 million, in FY 2006-07 the
value was US$ 9,211.23 million, in FY 2007-08 the value was US$ 10,699.80 million, in FY
2008-09 the value was US$ 12.35 billion and finally in FY 2013-14 the value stands at
$24.49 billion.

Opportunity of RMG Sector in Bangladesh

RMG sector of Bangladesh has some key factors which inspired for steady growth of this
sector. Though its a matter of great surprising for so many that how RMG sector of
Bangladesh continues to show its robust performance in the world.
The main key factors which have great influence on RMG sector of Bangladesh are in the
following:
1. Vast labor force,
2. Skilled human resources,
3. Technological upgrades,
4. Government supports for textile and clothing,
5. Special economic/export processing zones,
6. Creation of textile and clothing villages,
7. Incentive for use of local inputs,
8. Duty reduction for the import of inputs/machines,
9. Income tax reduction,
10. And international supports like GSP, GSP+, duty free access etc.
By using the above key points we can easily take place the worlds readymade garments
market very strongly. But there are other key factors. If we apply those key factors in our

readymade garments sector, then we will achieve the first priority to the worlds famous
buyers note book.
Those key factors area.
b.
c.
d.

Cost Effective Strategy,

New Product Development strategy,
Product Diversification Strategy and
Market Diversification Strategy.

All the above points are discussed in the below:

a. Cost Effective Strategy:
Cost Effective Strategy includes the following two key points:
1. Cost Reduction Strategy and
2. Labour Productivity Improvement.
Those key points are discussed in the below:
1. Cost Reduction Strategy:
Cost reduction strategy should begin with assigning the highest priority for establishing
backward linkages. The establishment of backward linkages will reduce our dependence on
foreign sources which will reduce the total and average production cost of garments. This
Strategy will make our products more competitive in the worlds readymade garments
market.
2. Labour Productivity Improvement:
Bangladeshi workers are not efficient as of Hong Kong, South Korea and Sri Lankan
workers. Wages are low in Bangladesh, but it does not necessarily mean that relatively low
wages workers automatically lead to higher productivity. So, to keep place in the worlds
largest competitive market, labor productivity must be improved.

b. New Product Development strategy:

Its a matter of great sorrow for us that, we are regularly produced the same products. Our
product categories are very less in quantities. Our product items that are exported into foreign
market are Shirts-60%, Jackets-11%, Knit items-10%, Trousers-7% and Others-11.50%. To
survive in the worlds most competitive RMG market, we have to develop new product items
with a lot of variations.
c. Product Diversification Strategy:
Product Diversification Strategy is an important factor to keep place in the worlds
readymade garments market. Different types of products should be produced by applying
fashion. Thailand, China, India, Pakistan, Hong Kong, Singapore, Malaysia, Indonesia and
others are the main competitors of Bangladesh. They are already ahead of Bangladesh in
product diversification strategy areas.
d. Market Diversification Strategy:
Bangladesh has exported their products in the worlds limited market. Mostly are in USA,
Canada and Europe. About 46% of its total garment exports goes to USA, 14% to the Canada
and rest of those into the European market. The competitors of Bangladesh are regularly
expands their markets and keep changing their products by using fashion.
The following key factors must be undertaken during market diversification strategy:
i.
ii.
iii.
iv.

Market research on product design

Market research on product development,
Market promotion through trade fairs, exhibition, etc.
Human resources development by providing training.

Challenges for RMG Sector of Bangladesh:

Though RMG sector of Bangladesh has achieved the second spot for the highest number of
garments exporter, but it has a lot of problems. The major problems faced by RMG sector
currently is the lack of safety in working place and working conditions for the millions of
garments workers. Its become a great challenge for the upcoming financial year of
Bangladesh. Another important one is political stability.
Two major incidents in RMG sector of Bangladesh are the Tazreen fire and the Rana Plaza
collapse, which have brought the issue of workplace safety to the fore and led all stakeholders

to act accordingly. But its good news for RMG sector that, following the unfortunate
incidents, various platforms such as the Bangladesh Accord on Fire and Building Safety, the
Alliance for Bangladesh Worker Safety and National Plan of Action have been formed to
improve building and fire safety of Bangladeshs garment industry. Also BGMEA and
BKMEA are working together here to solve such kinds of problems. They have also taken
necessary actions and invested huge amount of money.
Its a huge responsibility for the government of Bangladesh to ensure working place safety in
all the garments manufacturing factories. If we cant do it, foreign buyers will refuse to place
order here, which will be a massive blow for RMG sector of Bangladesh. We hope, the
government of Bangladesh, BGMEA and BKMEA, with the support of global brands and
international development partners, will be able to ensure the safety of the RMG industry and
maintain the momentum of socio-economic development in the country.
Political stability creates a negative impact on RMG sector of Bangladesh. If it continues, it
will be a massive blow to destroy our most valuable sector. So, political leaders should come
out immediately to solve such kinds of problems.
Hoping for RMG Sector of Bangladesh:
According to the McKinsey survey, its seen that 86 percent of the chief purchasing officers
in leading apparel companies in Europe and the United States planned to decrease levels of
sourcing in China over the next five years because of declining profit margins and capacity
constraints.
Also they said in that survey, Western buyers are evaluating a considerable number of
sourcing options in the Far East and Southeast Asia, many chief purchasing officers said in
the survey that they view Bangladesh as the next hot spot. Many chief purchasing officers
mentioned Bangladesh as the hot spot in the readymade garments market.

McKinsey survey also reported that, with about $15 billion in exports in 2010, ready-made
garments are the countrys most important industrial sector; which represents 13% and more
than 75% of GDP and total exports, respectively. McKinsey forecasts, export-value growth of
7 to 9% annually within the next ten years, so the market will double by 2015 and nearly
triple by 2020.
Conclusion:
Its a prime duty for us to provide a perfect working place for the readymade garments sector
of Bangladesh which has given our economy a strong footing, created jobs for millions of
people, especially for women, lifted them from the abyss of chronic poverty and given them a
magnificent life. Now what we have needed to do is dealing with all the challenges facing our
readymade garments industry, paving the way for its further development.
References:
http://textilelearner.blogspot.com/
https://en.wikipedia.org/wiki/Bangladesh_textile_industry
http://www.dhakatribune.com/
http://www.mckinsey.com/
http://www.bgmea.com.bd/
http://www.textiletoday.com.bd/

The readymade garments industry acts as the backbone of our economy and as a catalyst for
the development of our country. We take pride in the sector that has been fetching billions of
dollars as export earnings and creating jobs for millions of people in the country.
The Made in Bangladesh tag has also brought glory for Bangladesh, making it a prestigious
brand across the globe. Bangladesh, which was once termed by cynics a bottomless basket,
has now become a basket full of wonders. The country with its limited resources has been
maintaining 6% annual average GDP growth rate and has brought about remarkable social
and human development.
It is really a matter of great interest to many how the economy of Bangladesh continues to
grow at a steady pace, sometimes even when rowing against the tide. Now we envision
Bangladesh achieving the middle-income country status by 2021. We firmly believe that our
dream will come true within the stipulated time and the RMG industry will certainly play a
crucial role in materializing the dream.
After the independence in 1971, Bangladesh was one of poorest countries in the world. No
major industries were developed in Bangladesh, when it was known as East Pakistan, due to
discriminatory attitude and policies of the government of the then West Pakistan. So,

rebuilding the war-ravaged country with limited resources appeared to be the biggest
challenge for us.
The industry that has been making crucial contribution to rebuilding the country and its
economy is none other than the readymade garment (RMG) industry which is now the single
biggest export earner for Bangladesh. The sector accounts for 81% of total export earnings of
the country.
When our lone export earner the jute industry started losing its golden days, it is the RMG
sector that replaced it, and then, to overtake it.
The apparel industry of Bangladesh started its journey in the 1980s and has come to the
position it is in today. The late Nurool Quader Khan was the pioneer of the readymade
garment industry in Bangladesh. He had a vision of how to transform the country. In 1978, he
sent 130 trainees to South Korea where they learned how to produce readymade garments.
With those trainees, he set up the first factory Desh Garments to produce garments for
export. At the same time, the late Akhter Mohammad Musa of Bond Garments, the late
Mohammad Reazuddin of Reaz Garments, Md Humayun of Paris Garments, Engineer
Mohammad Fazlul Azim of Azim Group, Major (Retd) Abdul Mannan of Sunman Group, M
Shamsur Rahman of Style craft Limited, the first President of BGMEA, AM Subid Ali of
Aristocrat Limited also came forward and established some of the first garment factories in
Bangladesh.
Following their footsteps, other prudent and hard-working entrepreneurs started RMG
factories in the country. Since then, Bangladeshi garment industry did not need to look
behind. Despite many difficulties faced by the sector over the past few years, it has carved a
niche in world market and kept continuing to show robust performance.
Since the early days, different sources of impetus have contributed to the development and
maturity of the industry at various stages. We learned about child-labor in 1994, and
successfully made the industry free from child labor in 1995.

The MFA-quota was a blessing to our industry to take root, gradually develop and mature.
While the quota was approaching to an end in 2004, it was predicted by many that the phaseout would incur a massive upset in our export.
However, the post-MFA era is another story of success. Proving all the predictions wrong, we
conquered the post-MFA challenges. Now the apparel industry is Bangladeshs biggest export
earner with value of over $24.49bn of exports in the last financial year (from July 2013 to
June 2014).
Despite the epic growth of our RMG industry, and its bright prospects, challenges are still
there. One of the biggest challenges currently faced by our RMG industry is to ensure
workplace safety and better working conditions for the millions of garment workers.
Two major accidents, the Tazreen fire and the Rana Plaza collapse, have brought the issue of
workplace safety to the fore and led all stakeholders to act accordingly. Following the
unfortunate incidents, various platforms such as the Bangladesh Accord on Fire and Building
Safety, the Alliance for Bangladesh Worker Safety and National Plan of Action have been
formed to improve building and fire safety of Bangladeshs garment industry.
All members of the BGMEA and BKMEA are working all-out to carry out the corrective
action plans suggested by the Accord, Alliance and National Plan of Action after inspections,
even investing huge amount of money.
Moreover, the factories which were set up in an unplanned way and housed in risky buildings
have started relocating to safer buildings. Besides, a project has been taken to set up a wellplanned garment industrial park beside the Dhaka-Chittagong Highway where the structurally
weak garment factories will be able to relocate.
However, ensuring workplace safety at all garment factories is a gigantic task and will take
time to accomplish. But we believe the government of Bangladesh, BGMEA and BKMEA,
with the support of global brands and international development partners, will be able to
ensure the safety of the RMG industry and maintain the momentum of socio-economic
development in the country.

With challenges on one side, a more glittering future is waiting for the ready-made garment
industry of Bangladesh on the other side; at least facts and figures have made us believe so. A
recent study jointly conducted by the United States Fashion Industry Association (USFIA)
and the University of Rhode Island (URI) has made us more optimistic about the potentials of
our RMG industry.
According to the study, the US-based fashion companies are expected to boost their sourcing
from Bangladesh in the next two years. McKinsey, a global management consulting firm,
described Bangladesh as the next hot spot in apparel sourcing. The renowned firm forecasts
export-value growth of 7-9% annually and our apparel export will double by 2015 and nearly
triple by 2020 provided that we can successfully overcome a few challenges including
developing infrastructure and skill workforce.
It is the responsibility of all of us to protect the interest of this industry which has given our
economy a strong footing, created jobs for millions of people, especially for women, lifted
them from the abyss of chronic poverty and given them a dignified life. Now what we need to
do is deal with all the challenges facing our garment industry, paving the way for its further
development.
The main highways namely Dhaka-Chittagong, Dhaka-Mymensingh, Dhaka-Tangail through
which our apparel products and the raw materials for apparel and textile are transported from
factories to port, are being widened (from two lanes to four lanes) and drive-worthy for
tapping our export potential. This work needs to be completed as urgently, preferably by
December 2014.
Connection of gas to the factories and uninterrupted power supply are prerequisite for the
steady growth of the industry. So, the government should consider giving gas and electricity
connections to RMG and textile units as the top priority. Producing the required number of
skilled workers is another challenge and overcoming it will determine whether the country
will be able to sustain the boom that is waiting to happen.
Although BGMEA along with the government and other international organizations has taken
the initiatives of developing skills of workers, yet more initiatives as such are required to

meet the demand of the industry and enhance the productivity of the industry. The budget
allocation of the government for the skill development also needs to be increased.
BGMEA University of Fashion and Technology (BUFT) is offering graduate and postgraduate degrees to students on fashion design, knitwear technology and apparel
merchandising related subjects. Nonetheless, to meet the current shortfall of competent
professionals in the mid-level of our garment factories, fashion, textile and industrial
merchandising related departments need to be established at all of our major public and
private universities.
Bangladesh mainly produces five products T-shirts, sweaters, trousers, mens and womens
shirts. Moreover, we are dependent mainly on two markets namely the EU and North
America (the US and Canada). Though we reduced our dependency on these two markets
from 93% to 85% in last five years (From fiscal 2009-10 to 2013-14), we need to diversify
the destinations of our apparel export and concentrate on high-end products like suits,
lingerie, etc more for the sustained growth of our apparel industry.
Inadequate infrastructure, bureaucratic inefficiency and corruption are still the major
problematic factors in industrialization and for growth of an industry. These are also
increasing entrepreneurs cost of doing business. We are also losing price and delivery
competitiveness to our business competitor. The last but not the least, political stability of the
country is the key to steady growth of the industry.
Starting from scratch, Bangladesh has come a long way and is now one of 10 new emerging
countries in the world. The macroeconomic stability, 6% annual average GDP growth, robust
performance of remittance and export, strong foreign currency reserve, and remarkable social
and human development over the past decade all reflect our underlying strengths.
Given the dominance of the RMG industry in the overall economy of Bangladesh, we have to
protect this sector. Rather than basking in the glory we should work hand in hand to retain
sustainable growth and competitive edge of this industry.