SWOT Analysis on Readymade Garment Industry in Bangladesh RMG is the leading industry in Bangladesh.

It is basically a labor-intensive industry and it needs limited financial investment and relatively simple technology compared to other high technical industries. The success story of Garment Industry in Bangladesh is the story as to how the readymade garments starting in the late seventies as an insignificant non-traditional item of export. In 1998-99 this sector has earned 4019.98 million US$ through exporting which is 75.67% of the total export (Redwan, 1995). The tremendous success of Readymade Garment (RMG) exports from Bangladesh over last two decades has surpassed the most optimistic expectations. At present Bangladesh is the 6th largest exporter to USA and in 1997 Bangladesh becomes 18th largest exporter in the world. Now Bangladesh ranks first export of T-shirts to Europe (BGMEA, 1997-98) The overall impact of the readymade garment export industry is certainly one of the most significant social end economic developments in contemporary Bangladesh. The remarkable achievement of RMG sector is now exposed to each and every country. Despite these impressive achievements and the probable challenges in the near future, if properly managed, the prospects for further expansion and growth for this sector remain bright. There are some major threats still exits in this sector but Bangladesh has the ability to overcome these threats. Readymade Garment (RMG) industry holds a key position in the economy of Bangladesh in terms of foreign exchange earning, employment generation and poverty alleviation. Right now RMG sector is the highest foreign currency earner in Bangladesh. Apart from contributing to huge foreign exchange earnings, RMG industry has become the largest source of employment generation. Around 2 million people are presently involved of whom 90% are distressed women in the RMG industry of Bangladesh. In addition a rough estimate shows that the sector through linkage effects is currently generating about US$ 2 billion worth of domestic economic activities (Bhattacharya, 2000) RMG industry is the most important sector for the economy of Bangladesh. It accounts for 75.14% in 2000-2001 of the country¶s total export earnings (BGMEA Newsletter, 2001) About 1.5 million workers of whom 90% are distressed women are engaged in about 3200 garment factories as on June 2000(BGMEA, 1997-98). It is largest manufacturing sector contributing about 5% to the GDP. But this RMG sector is now facing some challenges especially after 2004. Bangladesh is still at its infancy in terms of quantity production in the readymade garments industry. We still have problems in our country for the production of quality goods. Standard is also not satisfactory. The quality of the readymade garments of Korea, Hong Kong, Taiwan and other countries is far superior to that of ours.

value-addition is 30% only because a RMG unit has to import 70% of the total value of the product. The findings show that the workers needed significantly shorter time to produce a shirt of a given specification than the time . Pakistan. 481 dyeing-printing-finishing units each with same capacity for yarn and woven fabric by the year 2005. it is very necessary to find out opportunities and challenges of RMG industry of Bangladesh in order to face firm competition in the free market environment. Thailand. Bangladesh will lose competitive position relative to those 72 countries. The low value added represented that the backward linkage industries such as fabrics and accessories. Thus it is a challenge for RMG sector in Bangladesh to get right quantity of fabrics. The recent US Trade and Development Act 2000 provide duty free and quota free access to the US market from 48 countries of Sub-Saharan African (SSA) from October 1. This sector will remain in intense competition in the context. The package of textile sector incentive has been aimed at primarily to boost up the exporters. About 70% of the total fabric requirement of the knit sector is domestically produced as reported by the BTMA. A lot of research works should be done cordially how to face challenges of the coming changes in the world business for the continued existence of this sector. 481 weaning mills each with capacity to produce 17 million meters of fabrics. Quality and fashion conscious Japan is importing readymade garments from Bangladesh at an increasing rate even though this increase is very negligible. Right now Bangladesh has a very limited capacity to produce fabrics required by the RMG factories. Malaysia and other countries have their textiles mills that can produce quality fabrics for the respective apparel industries. Textile policy 1995 envisages established of 246 spinning mills with 25000 spindles each. From the above discussion we have found some weaknesses and threats of RMG sector. product diversification strategy. Japan is one of the potential markets for exports from Bangladesh. have not satisfactorily developed. There exists supportive policy environment in the RMG sector of Bangladesh. market diversification strategy. which directly feed into the garment sector. 2008. The weakest point of the Bangladeshi apparel industry is that it is still at the mercy of the exterior suppliers of its main raw materials namely the fabrics. As USA is the single largest importer of Bangladesh RMG. Government has extended some major incentives and facilities for the local and foreign investors to help increase investment in the country for all industrial sectors including textiles and clothing Still there are some threats existing in our RMG sector. According to the Ministry of Textiles. An extremely large program has to be taken to increase the exports.In RMG sector. Bangladesh can overcome its weaknesses if it formulates and implements some strategies like cost reduction strategy. the local fabric manufacturers currently supply less than 19% of total woven fabric requirement. Her competitors India. 2000 to September 13.Though after 2004 quota system will be benefited for access duty free to USA till 2008.

Ministry of textile. This means that labor productivity in RMG factories has improved during the last 9 years. BGMEA. Quality and standard of RMG products can be improved by practicing Total Quality Management. intense competition. The growth and development of Bangladesh Ready Made Garment is highly satisfactory as it is found in number of factories. The major problems of RMG are low net exporting. The experiences of Japan. Hong Kong. Institute of Fashion Technology and other concerned authorities should work strengthening the RMG industry of Bangladesh. South Korea and other suppliers of RMG confirm this type of relationship between productivity and wages. Ministry of commerce. preparing and following a quality manual for the products. elimination of quota and GSP. Export Promotion Bureau. low quality and standard. Unlike in the public sector of Bangladesh. Bangladesh need to improve its working condition. low value addition. training Quality Control and Quality assurance Personnel etc. in RMG sub sector. . share in total foreign exchange earnings and value added to the economy.presented in another study completed by Khan and Chowdhury in 1986. scarcity of backward linkage industries etc. Appropriate training to the workers focusing on awareness of safety and what is to be done during the time of emergency will be effective in improving employee morale. to comply with the set standards by the importing countries and global RMG marketers. low productivity. wages have increased during the last 9 years but productivity has increased more than wages have. Government of Bangladesh.

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