Monday, September 7, 2015

RMG comebacks and challenges


Low price offers from foreign buyers, devaluation of the Euro and rise in production costs make our RMG exports bleak, compared to the 58.17% rise from the last fiscal year of 2014-15. The volume posted was at 1.57 bn units exported earning a total of US $25.49 bn, a 4% rise. Knitwear and woven products scaled up 3.13% and 5% respectively. Improvement in productivity and technology is required to meet the devaluation in the EU and possible monopsony of buyers worldwide.

Upholding safety standards, the Executive Director of Alliance for Bangladesh Workers safety stated six factories have completed full remediation work to meet the highest international standards. The trudging process is occurring with sluggish imports and equipment availability domestically. The Alliance have provided US $50m to ensure ease of credit access to the process through banks. The remediation process, is uninspiring with 154 with low, 251 semi-moderate and 133 moderate (upto 60%) remediation  out of 528 inspected.

It is no surprise that due to political turmoil, Bangladesh’s exports fell significantly in 2014. Nowadys, however, with The largest buyer US registered US $3.19 bn, a 8.51% rise. This came as political steadiness and safety assurance was brought about recently, although we are still behind the growth of our US competitors Sri lanka (16%), Vietnam (15%) and India (9.6%).

Bangladesh’s RMG has shown tremendous potential throughout the years. They attract buyers like no other sector. Although with significant challenges, it still remains a profitable investment sector for businesses in the country.

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