State of Cotton and Textile Industry of Bangladesh 2010 and Beyond Quamrul Ahsan, Ph.D. Editor-in-Chief Cotton Bangladesh [email protected] III International Cotton Fair and IV International Cotton.
Download ReportTranscript State of Cotton and Textile Industry of Bangladesh 2010 and Beyond Quamrul Ahsan, Ph.D. Editor-in-Chief Cotton Bangladesh [email protected] III International Cotton Fair and IV International Cotton.
Slide 1
State of Cotton and Textile Industry of Bangladesh
2010 and Beyond
Quamrul Ahsan, Ph.D.
Editor-in-Chief
Cotton Bangladesh
[email protected]
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 2
Why Phenomenal Growth in Textile Sector Occurred
in Bangladesh?
Three synergic and intrinsic factors:
Resources:
● Abundant Labor Forces, Energy and Natural Gas
● Population 140 m with Growth Rate 3%
● Improved Life Style and Increased Per Capita Income
Opportunity:
● Preferential access of RMG to US and EU under MFA and GSP agreements
(Prior to 2005)
Policy Decision:
● Liberalization of Economy
● Encourage Private Sector Investment
● Favorable Textile Policy: “Textiles a Thrust Sector”`
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 3
Labor and Power Cost in Bangladesh
Parameters
Bangladesh India
Pakistan China
Labor Cost (US $/hr)
0.23
0.43
0.41
0.89
Energy (US cents/KWH)
7.56*
9.33
6.72
7.84
Energy (US cents/KWH)
(Gas Burned)
1.90
-
-
-
*Rural Electrification Board (REB)
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 4
Textile Policy
Introduced Support System
●
Fiscal Benefits
○ Duty Drawback- Draw back the duties paid for exported goods
○ Cash Incentives – 25% (Until 2005 and now 5%) Cash payment by
Bangladesh Bank who are not covered by the Duty Drawback or
Bonded Warehouse program.
●
Financial Benefits
○ Bonded Warehouse – Allowed duty free import of Yarns and Fabrics
○ Back-to-Back L/C – Exporters opened back-to-back LC to import raw
materials
●
Institutional Support
○ Skill Development and Labor Training
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 5
Textile Policy
Tariff Structure Stimulated the BLI Growth
Item
Raw Cotton*
Textile Machinery*
Import of Yarn
Fabrics
Tariff
0%
0% (5% 2007-08)
5% (Total Duty is 28%)
37.5% (Total 60.5%)
*Tariff in Spinning Sector is Strikingly Absent
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 6
Textile Policy
Directed to Expand the Domestic Textile Capacity
Strengthened the Backward Linkage Industry (BLI)
Achievements Made:
● Increased local value addition (1994-25%, 2006-75%) and lower lead-time
● Ensured uninterrupted supply of Yarns and Fabrics for RMG
● Generated a vibrant collaboration between all sectors vertically integrated
that helps achieve innovation and product diversification and quality
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 7
Ring Spinning Capacity
Growth of Ring Spinning Capacity
77000000
5.7m
Spindles (million)
66000000
55000000
4 4000000
3 3000000
2 2000000
1.5m
1 1000000
0
0
Year
Million
1
1996
1996
1,500,000
2
2001
2001
2,352,300
3
2002
2002
3,390,000
4
2003
2003
3,419,500
Years
5
2004
2004
3,931,600
6
2005
2005
4,837,900
7
2006
2006
5,720,000
Rotor: 1994-3,000 and 2006-7,876 Frames
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 8
Textile Export
250
5
5,000
250
Knit ($)
Woven ($)
4,500
Knit (Doz)
4
200
4,000
200
150
3
3,000
150
2
Series2
Series1
2,500
2,000
Export Volume
(million Dozens)
Export Sales
(billion US $)
3,500
Series3
Woven
(Doz)
100
100
1,500
1
Series4
50
1,000
50
500
0-
-
1993-94
1
1999-00
2
US $1.5b
2003-04
3
Years
2005-06
4
2006
5
0
US $9.56b
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 9
Components of Textile Industry, 2005-06
Sector
No of Units
Installed Machine
Production Units
Capacity
Capacity
Cotton Spinning
232
4.94 m Spindles
538*
m Kg
Weaving
380
25,000 SL/SLL
1200
m meter
Powerloom
1066
23,000 SL/SLL
300
m meter
Handloom
148,342
498,000 Handlooms 837
m meter
Knitting & Dyeing
2,950
18,000 KM
2300
m meter
4637
m meter
Woven/Knit Fabrics
Dyeing and Finish
310
-
1050
m meter
RMG Factory
4,400
-
300
m Doz
* Total yarn Capacity 600.06 m Kg including Synthetic Yarn
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 10
Origin of Imported Cotton, 2006
(Market Share)
CIS 70%
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 11
ORIGIN OF IMPORTED COTTON, 2006
(TOTOAL 488,691 MT)
Origin of Imported Cotton, 2006
(Total 488,691 MT)
BURKINA FASO 3,342
ZAMBIA 5,308
INDIA 45,438
KAZAKHSTAN 3,150
MALI 9,258
NIGERIA 8,932
PAKISTAN 19,985
SUDAN 9,272
SYRIA 4,350
TAJIKISTAN 6,080
TCHAD 3,028
TURKMENISTAN
20,004
UZBEKISTAN 309,138
USA 26,946
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 12
SUPPLIERS ORIGIN, 2006
(MARKET SHARE)
Suppliers Origin, 2006
(Market Share)
UZBEKISTAN
4%
USA
4%
UK
19%
FRANCE
2%
GERMANY
1%
INDIA
9%
ITALY
5%
KOREA
7%
PAKISTAN
3%
SINGAPORE
13%
SWITZERLAND
32%
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 13
Projected Demand by 2010
Year
Fabrics (m meter)
Domestic Export
Yarns (m Kg)
Total
2004-05 (Base)
1,960
3,880
5,840
973
2005-06
2, 050
4,465
6,515
1,086
2006-07
2,150
5,055
7,205
1,201
2007-08
2,252
5,620
7,872
1,312
2008-09
2,360
6,160
8,520
1,420
2009-10
2,475
6,640
9,165
1,519
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 14
Projected Capacity Building by 2010
Type of
Present Production Demand
Demand-Supply
Number of Units
Industry
Capacity
Gap by 2010
Need to be Built
by 2010
Spinning Unit*
600
1,519
919
200
Weaving Units**
1,740
4,558
2,818
217
Knitting Units+
2,300
4,558
2,258
216
W/Fabric Processing++
1,050
4,558
3,508
175
*25,000 Spindle with 4.6 m Kg capacity
**120 Shuttleless, 13 m meter capacity
+1,725 Tons per year capacity
++ 20 m meter annual capacity
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 15
Cotton Consumption
Cotton Consumption
Projected
1,045,087 MT
1200000
1200
Tons (1000)
1000
1000000
800800000
600600000
400400000
200200000
0
0
1
1998
2
1999
3
2000
4
2001
5
2006
6
2010
2001
2006
2010
488,796
1,045,088
Year
1998
1999
2000
Tons
156,258
204,670
239,229
Years 261,272
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 16
Conclusions
1. A robust textile sector has been emerged over 20 years
contributing US $ 9.5b to Bangladesh Economy
2. Textile sector is the key to export earning which accounts
for 76% of total export
3. Bangladesh enjoys competitive advantage over China,
India and Pakistan in terms of Labor and Energy.
4. Bangladesh will continue to stand high in the export
market especially in knit garments
5. Significant capacity building is imminent
6. Favorable Conditions for Foreign Investment
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
State of Cotton and Textile Industry of Bangladesh
2010 and Beyond
Quamrul Ahsan, Ph.D.
Editor-in-Chief
Cotton Bangladesh
[email protected]
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 2
Why Phenomenal Growth in Textile Sector Occurred
in Bangladesh?
Three synergic and intrinsic factors:
Resources:
● Abundant Labor Forces, Energy and Natural Gas
● Population 140 m with Growth Rate 3%
● Improved Life Style and Increased Per Capita Income
Opportunity:
● Preferential access of RMG to US and EU under MFA and GSP agreements
(Prior to 2005)
Policy Decision:
● Liberalization of Economy
● Encourage Private Sector Investment
● Favorable Textile Policy: “Textiles a Thrust Sector”`
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 3
Labor and Power Cost in Bangladesh
Parameters
Bangladesh India
Pakistan China
Labor Cost (US $/hr)
0.23
0.43
0.41
0.89
Energy (US cents/KWH)
7.56*
9.33
6.72
7.84
Energy (US cents/KWH)
(Gas Burned)
1.90
-
-
-
*Rural Electrification Board (REB)
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 4
Textile Policy
Introduced Support System
●
Fiscal Benefits
○ Duty Drawback- Draw back the duties paid for exported goods
○ Cash Incentives – 25% (Until 2005 and now 5%) Cash payment by
Bangladesh Bank who are not covered by the Duty Drawback or
Bonded Warehouse program.
●
Financial Benefits
○ Bonded Warehouse – Allowed duty free import of Yarns and Fabrics
○ Back-to-Back L/C – Exporters opened back-to-back LC to import raw
materials
●
Institutional Support
○ Skill Development and Labor Training
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 5
Textile Policy
Tariff Structure Stimulated the BLI Growth
Item
Raw Cotton*
Textile Machinery*
Import of Yarn
Fabrics
Tariff
0%
0% (5% 2007-08)
5% (Total Duty is 28%)
37.5% (Total 60.5%)
*Tariff in Spinning Sector is Strikingly Absent
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 6
Textile Policy
Directed to Expand the Domestic Textile Capacity
Strengthened the Backward Linkage Industry (BLI)
Achievements Made:
● Increased local value addition (1994-25%, 2006-75%) and lower lead-time
● Ensured uninterrupted supply of Yarns and Fabrics for RMG
● Generated a vibrant collaboration between all sectors vertically integrated
that helps achieve innovation and product diversification and quality
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 7
Ring Spinning Capacity
Growth of Ring Spinning Capacity
77000000
5.7m
Spindles (million)
66000000
55000000
4 4000000
3 3000000
2 2000000
1.5m
1 1000000
0
0
Year
Million
1
1996
1996
1,500,000
2
2001
2001
2,352,300
3
2002
2002
3,390,000
4
2003
2003
3,419,500
Years
5
2004
2004
3,931,600
6
2005
2005
4,837,900
7
2006
2006
5,720,000
Rotor: 1994-3,000 and 2006-7,876 Frames
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 8
Textile Export
250
5
5,000
250
Knit ($)
Woven ($)
4,500
Knit (Doz)
4
200
4,000
200
150
3
3,000
150
2
Series2
Series1
2,500
2,000
Export Volume
(million Dozens)
Export Sales
(billion US $)
3,500
Series3
Woven
(Doz)
100
100
1,500
1
Series4
50
1,000
50
500
0-
-
1993-94
1
1999-00
2
US $1.5b
2003-04
3
Years
2005-06
4
2006
5
0
US $9.56b
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 9
Components of Textile Industry, 2005-06
Sector
No of Units
Installed Machine
Production Units
Capacity
Capacity
Cotton Spinning
232
4.94 m Spindles
538*
m Kg
Weaving
380
25,000 SL/SLL
1200
m meter
Powerloom
1066
23,000 SL/SLL
300
m meter
Handloom
148,342
498,000 Handlooms 837
m meter
Knitting & Dyeing
2,950
18,000 KM
2300
m meter
4637
m meter
Woven/Knit Fabrics
Dyeing and Finish
310
-
1050
m meter
RMG Factory
4,400
-
300
m Doz
* Total yarn Capacity 600.06 m Kg including Synthetic Yarn
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 10
Origin of Imported Cotton, 2006
(Market Share)
CIS 70%
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 11
ORIGIN OF IMPORTED COTTON, 2006
(TOTOAL 488,691 MT)
Origin of Imported Cotton, 2006
(Total 488,691 MT)
BURKINA FASO 3,342
ZAMBIA 5,308
INDIA 45,438
KAZAKHSTAN 3,150
MALI 9,258
NIGERIA 8,932
PAKISTAN 19,985
SUDAN 9,272
SYRIA 4,350
TAJIKISTAN 6,080
TCHAD 3,028
TURKMENISTAN
20,004
UZBEKISTAN 309,138
USA 26,946
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 12
SUPPLIERS ORIGIN, 2006
(MARKET SHARE)
Suppliers Origin, 2006
(Market Share)
UZBEKISTAN
4%
USA
4%
UK
19%
FRANCE
2%
GERMANY
1%
INDIA
9%
ITALY
5%
KOREA
7%
PAKISTAN
3%
SINGAPORE
13%
SWITZERLAND
32%
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 13
Projected Demand by 2010
Year
Fabrics (m meter)
Domestic Export
Yarns (m Kg)
Total
2004-05 (Base)
1,960
3,880
5,840
973
2005-06
2, 050
4,465
6,515
1,086
2006-07
2,150
5,055
7,205
1,201
2007-08
2,252
5,620
7,872
1,312
2008-09
2,360
6,160
8,520
1,420
2009-10
2,475
6,640
9,165
1,519
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 14
Projected Capacity Building by 2010
Type of
Present Production Demand
Demand-Supply
Number of Units
Industry
Capacity
Gap by 2010
Need to be Built
by 2010
Spinning Unit*
600
1,519
919
200
Weaving Units**
1,740
4,558
2,818
217
Knitting Units+
2,300
4,558
2,258
216
W/Fabric Processing++
1,050
4,558
3,508
175
*25,000 Spindle with 4.6 m Kg capacity
**120 Shuttleless, 13 m meter capacity
+1,725 Tons per year capacity
++ 20 m meter annual capacity
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 15
Cotton Consumption
Cotton Consumption
Projected
1,045,087 MT
1200000
1200
Tons (1000)
1000
1000000
800800000
600600000
400400000
200200000
0
0
1
1998
2
1999
3
2000
4
2001
5
2006
6
2010
2001
2006
2010
488,796
1,045,088
Year
1998
1999
2000
Tons
156,258
204,670
239,229
Years 261,272
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007
Slide 16
Conclusions
1. A robust textile sector has been emerged over 20 years
contributing US $ 9.5b to Bangladesh Economy
2. Textile sector is the key to export earning which accounts
for 76% of total export
3. Bangladesh enjoys competitive advantage over China,
India and Pakistan in terms of Labor and Energy.
4. Bangladesh will continue to stand high in the export
market especially in knit garments
5. Significant capacity building is imminent
6. Favorable Conditions for Foreign Investment
III International Cotton Fair and IV International Cotton and Textile Conference, Tashkent, Uzbekistan, September 17-19, 2007