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Lead time, the span undertaken for delivering shipment, has been identified as the most critical challenge faced by the Bangladesh apparel business, a survey report has said.
The survey‘ Trade Facilitations in RMG by Banks: Risks and
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Mitigation Techniques’, done by Bangladesh Institute of Bank Management( BIBM) says that about 66 per cent of apparel exports could not be shipped to destination on time.
The workshop was organised by BIBM, in association
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with Bangladesh Garment Manufacturers and Exporters Association( BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association( BKMEA).
Dearth in knowledge regarding domestic and international regulations has been identified as the root cause behind the big lead time and late presentation of documents, the survey said. Also, the survey raised an alarm that late submission of documents – in 53 per cent of the cases – could be related to symptoms of money laundering.
Fazlee Shamim Ehsan, Second Vice President of BKMEA, acknowledged the country’ s shortcoming in lead time delivery, blaming inefficient manpower – at
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ports, transportation and relevant sectors – for it. He said Bangladesh must reduce the lead time to stay competitive in business.
Shah Md. Ahsan Habib, Director of BIBM, presented the research paper at the workshop. He underlined that incidents of trade-based money laundering is a growing concern for policy makers and central banks throughout the globe, and added,“ It is affecting the RMG trade and service providing banks.”
Also, apparel manufacturers pointed out some key challenges faced by the bank for trade facilitation, namely lower usage of packing credit, inefficiency in accessing working capital, absence of tolerance in credit limit, absence of customised collateral system, etc.
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Denim exports from Bangladesh have been exceptionally positive over the last few years. Even the first half of 2019 was quite impressive for Bangladesh as far as the USA market is concerned.
According to the data released by OTEXA, Bangladesh exported denim apparels to USA worth US $ 245 million in January to June 2018 period this year. The country stood after China and Mexico in the denim exporters’ tally.
Bangladesh posted surge in all four major categories: Skirts, Jackets, Mens & Boys( MB) jeans and Womens & Girls( WG) jeans of denim apparels.
Bangladesh is known for basic garment manufacturing but
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the rising automation trend in the country has enabled it to manufacture value-added garments too. As a result, WG jeans export from the country grew by 16.19 per cent and clocked US $ 104.17 million during H1’ 18.
Interestingly, Mexico, which is one of the major denim apparel suppliers to USA, was far behind Bangladesh and could only earn US $ 44.07 million in WG jeans segment. This indicates the denim export was skewed towards MB jeans segment with 54.18 per cent contribution coming from it.
Bangladesh noted steep climb of 16.88 per cent and accommodated US $ 132.75 million, beating the top exporter China which could merely
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stand at US $ 98.97 million figure in its MB jeans exports to USA. On the other hand, denim skirts export was up by 17.49 per cent to clock US |
$ 3.72 million, while denim jackets export to USA from Bangladesh was worth US $ 7.56 million noting 32.66 per cent rise in H1’ 18. |