Chapter One

Introduction

1.0 Introduction
1.1 Background of the Study
1.2 Objectives of the Study
1.3 Method of data collection
1.4 Scope of the study
1.5 Limitation of the study

1.0 Introduction

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Bangladesh is a developing country RMG play a vital role in our economy. It's contribution in
GDP 76%. Bangladesh has recently emerged as an important supplier of quality readymade
garments in the global market. Initially the market for this product was limited to a few west
European countries, which have been subsequently expanded to the U.S.A. Canada.
Scandinavian, Nordic, Middle East countries. It is a fact that increasing production and export
earnings of RMG hold the key to save the country from the present economic depression. The
sector has now occupied an important place in our national economy. The tremendous success of
readymade garment exports from Bangladesh over the last two decades has surpassed the most
optimistic expectations. Today the apparel export sector is a multi-billion-dollar manufacturing
and export industry in the country. The overall impact of the readymade garment exports is
certainly one of the most significant social and economic developments in contemporary
Bangladesh. With over one and a half million women workers employed in semi-skilled and
skilled jobs producing clothing for exports, the development of the apparel export industry has
had far-reaching implications for the society and economy of Bangladesh.

1.1 Background of Study

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The tremendous success of readymade garment exports from Bangladesh over the last two
decades has surpassed the most optimistic expectations. Today the apparel export sector is a
multi-billion-dollar manufacturing and export industry in the country. The overall impact of the
readymade garment exports is certainly one of the most significant social and economic
developments in contemporary.
Bangladesh

With

over

one

and a

half million women workers employed in semi-

skilled and skilled jobs producing clothing for exports, the development of the apparel export
industry has had far-reaching implications for the society and economy of Bangladesh.
This report may help one to know about the whole contribution of garments industry, different
types of garments product, whole L/C process and procedure, necessary documents for exporting
product, employment facilities in garments sectors and contribution in economy and how they
are processing garments activities.

1.2 Objectives of the study

Page 3 of 66

 To know the export performance of Bangladesh garments in international

market;
To identify the difficulties and barriers faced in the international market;
To identify possible threats to the Bangladesh garments in the international
market in near future;
To identify the opportunities of the Bangladeshi garments that may be realized
in the international market.
To recommend the measurers needed to be taken for increasing the
export volume.
To know the current RMG export status of Bangladesh.
To analyze the recent labor unrest in the garment industry of Bangladesh.

1.3 Method of Data Collection

1. Primary Data: Basically this type of information is very much difficult to collect from
direct source, thats why I have not used any primary date in the project work.
2. Secondary Data: Certainly I have used secondary data for preparing this project work.
Few sources of secondary data are as follows:
Publications obtained from different libraries and from internet
Export volume report
bangladeshgarments.info
Documents
BGMEA report

1.4 Scope of the Study

Scope means how many uses for completing this report space. The scopes are given bellow Library work

Page 4 of 66

 Discussion
Internet

1.5 Limitations of the Study

From the beginning to end the study has became a challenge for me to prepare this report into a
presentable form. During the period of preparing this report I have to face some kinds of
problems such as Time limitation: The time allotted for doing the project work in not adequate; as this
type of project work requires minimum 1 years to be accomplished.
Lacking of adequate information in internet: It is very difficult to collect this type of
information through internet as they dont want to expose their internal data.
Lacking of primary sources: For this kind of project work primary data collection is
somehow impossible.
Expenditure: This type of project work requires huge amount of expenditure but we are
not funded by any one rather we are bound to do this with own funding.

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Chapter Two
Performance of RMG in Bangladesh

2.1 Contribution of RMG in Bangladesh

2.2 Reason behind the growth of RMG in Bangladesh
2.3 Current export of RMG in Bangladesh
2.4 Export facilities of RMG industry
2.5 History of RMG industry in Bangladesh
2.6 Export activities of different garments association

2.1 Contribution of RMG in Bangladesh

The ready- made garments (RMG) industry of Bangladesh started in the last 1970s and became a
prominent player in the economy within a short period of time. The industry has contributed to
export earning, foreign exchange earnings, employment creation, poverty alleviation and the
empowerment of women. The export- quota system and the availability of cheap labor are the
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two main reasons behind the success of the industry. Shirts, T-shirts, trousers, sweaters and
jackets are the main products manufactured and export by the European Union. The Ready Made
Garments (RMG) sector plays a pivotal role in the economy of Bangladesh. This sector accounts
for approximately 76% of the total export earning and nearly 10% of GDP.

2.1.1 Macro Contribution

The Bangladesh RMG industry, with its woven and knit sub-components, is a pre-dominantly
export oriented sector, with 95 per cent of the woven and 90 per cent of the knit exports being
directed to foreign markets. The cumulative foreign currency earnings by the sector, since 1978,
when first export was registered, is estimated at 36.6 billion dollars. Bangladeshs RMG export
earning stood at 4.58 billion US dollars in FY2002. In 2002 this sector contributed 76.6% of the
total Bangladesh export of 5.9 billion dollars in the same year. RMG export in FY2002 was
equivalent to 9.5% of Bangladeshs GDP over the corresponding year. At present the local value
addition by the RMG sector is estimated to be 45%. Accordingly, local value addition by the
sector in 2002 was about 2.1 billion US dollars which was equivalent to 4.3% of GDP for the
same year. The value addition created by the sector itself is estimated at 25% of total RMG
export earnings which amounted to about 1.2 billion dollars or equivalent to 2.4% of GDP.

Macro Contribution of RMG sector

RMG Earnings
Total RMG Exports
Local Value Retention
Direct Value-Addition by
RMG Sector

Amount(billion US$)
4.5
2.1
1.2

As Percentage of GDP
9.5
4.4
2.4

Emergence of Knit-RMG
The growth dynamics of the sector over the last decade evince two clearly discernible phases:
during the initial period it was the woven-RMG which dominated the structure of apparel exports,
whilst in recent years which could be termed as a second phase, it is the knit-RMG which

Page 7 of 66

emerged as no less of an important segment in the RMG sector with its share growing up steadily
and local value retention fast approaching the level of woven-RMG.
Diversification
Within the apparels sector, Bangladesh has been able to accomplish product diversification.
RMG sector has been able to extend its product line from T-shirts, pajamas, ordinary shirts,
shorts, caps, womens and childrens wear to shirts of complicated designs and jackets; and some
brand items have also emerged where the value was added to both the export earnings and the
local value retention.

2.1.2 Sectoral Contribution

Backward and Forward Linkages
Growth of RMG sector has spawned a whole new set of linkage industries and facilitated
expansion of many service sector activities. The RMG industry not only propelled the growth of
spinning, weaving, dyeing and finishing industries, production of accessories and spare parts, but
also rendered large externalities by contributing to other economic activities in such areas as
banking, insurance, real estate, packaging, hotels and tourism, recycling, consumer goods utility
services and transportation.

Banking and Insurance

Growth of the RMG sector and the related activities has contributed a lot to the robust growth of
the financial sector in Bangladesh. In FY 2002 the banking sector earned about 37 million dollars
from business with the RMG sector in the form of interest and charges and L/C charges. More
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than one-tenth of the commercial banks asset portfolio belongs to the RMG and textile sector in
the country. In FY 2001 commercial banks lent Taka 4400 crore to the textile sector, while the
amount lent to the woven-RMG sector was Taka 812 crore. The export financing business of the
commercial banks is largely dependent on the textile and RMG sectors. The RMG sector
received Taka 2175 crore as export-finance in FY 2001 which was 46.14% of the total export
financing portfolio of the banks. A World Bank survey revealed that almost all firms (98%) are
the clients of the commercial banks for working capital and procurement of machines and
equipment (57%). The RMG sector has also contributed to the growth of the countrys insurance
sector.
On average, every year the premium paid by the RMG sector to the insurance companies was
about 6 million dollars. All firms have their machines and plants insured and, additionally, 87%
of importers of input and 15% of the RMG exporters get their imports/exports insured.
Shipping and Logistics
The RMG sector has contributed to the shipping business in Bangladesh and stimulated setting
up of several container yards, expansion of port facilities to handle large container carrying
trains, increase of cargo handling and storage facilities. RMG manufacturers also extensively use
services of Clearing & Forwarding Agents for the purpose of customs clearance of inputs and
finished goods. It is estimated that port usage fees earned from the RMG sector account for more
than 40% of the income of the port authority. RMG sector contributed about US$65 million in
FY2002 to earnings of the Shipping business of the country by way of port charges, C&F
Agents commissions, freight charges, forwarding charges etc.

Transport Communication
The growth and development of inland transport services to a considerable extent owe to the
growth of the RMG industry. Both wheel transport service and railway service are widely used
by RMG sector for activities related to manufacturing and cargo movement. The concept of
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covered van emerged in Bangladesh for safe transportation of the RMG products in particular. In
2002 the inland transport industry received about 27.3 million dollars as revenue from the RMG
sector.
Contribution to Government Exchequer
The RMG sector contributes to the government exchequer both directly and indirectly. In FY
2002 the sector paid 6.3 million dollars as stamp and postage, license renewal fee etc. Payments
made for visa form, license form, GSP form and other forms to the Export Promotion Bureau
amounted to 58.85 million dollars in FY 2001. The sector also paid USD 2.4 million to the
government as direct taxes in FY 2002.
Professional Services
The RMG sector extensively uses professional services from CA firms, legal agencies, and
business consultants. In FY 2002 total payment for professional services is estimated at 3.61
million dollars.
Engineering Sector
The RMG industry paid 14.2 million dollars to the engineering sector which included payments
to repairing and maintenance service industry (USD 4.29 million), electrical engineering (USD
4.38 million), transport vehicle maintenance service ( USD 2.87 Million), and machine tools
service (USD 2.63 Million).
Utility Services
Payment of Electricity bill by the RMG industry is estimated to be 14.74 million dollars in
FY2002. Utility payments for gas, WASA etc. amounted to an additional 3.75 million dollars.
Information and Communication Technology
The RMG sector also plays a catalytic role in the growth of the countrys ICT sector. The
services consumed by the RMG industry generated revenue for the ICT sector. Payments for ICT
Page 10 of 66

services which include communication, hardware and software services are estimated at 9.88
million dollars in FY 2002.
Real Estate
Demand for real estate development by the garment industry to accommodate offices and
factories of over 3400 garment units has generated a lot of activities in the Construction Industry.
The RMG industries paid approximately 26.24 million dollars as factory, office and garage rent
in FY 2002.
Hotel and Tourism
About 1000-1500 overseas apparel buyers and their representatives visit Bangladesh every year
for business purpose. In FY2002 the RMG industry created a business of approximately 4.42
million dollars for the countrys tourism industry.
Waste Recycling Industry
Approximately 0.2 million people are engaged in waste (mainly, the waste out prices of fabrics)
recycling industry of the country which get their materials from the RMG industries. With these
waste materials, they are making stuff toys, patterns, quilts, cushions etc.
Emerging Consumer Market
The 1.6 million workers in the industry have created a large demand for consumer goods. A
regular source of earning increases the basic consumption needs such as improved diet, better
healthcare, improvements in family utensils and housing conditions etc. The sector has created
an increasing demand for consumption of low cost commodities, cosmetics items, dresses,
footwear, fast food and other products. A whole industry has been created to service this growing
demand and created employment opportunities for hundreds of thousands of people.

2.1.2 Contribution of the Knitwear in Bangladesh

The RMG sector of Bangladesh contributed a lot in terms of employment generation,
Page 11 of 66

involving women in the formal sector, increased substantial export earnings etc. One
significant aspect of the RMG's contribution is in human development aspect. The sector has
been contributing a lot in the following areas:
Women empowerment
Reduce Child Labor
Gender equality
Improved health & nutrition
Reduced child marriage
Reduced infant mortality
The sector's unique contribution is in the growth and development of backward linkage
industry of the country. Country's total backward linkage industry in the RMG sector has
flourished based on the knitwear industry. It is providing crucial impetus to the spinning,
fabric, and dyeing industry. A good number of printing factories are totally dependent on knit
sector as well.

2.1.4 Contribution in National Income

When the garment industries 1st started to export, the sector was not gain much attention but the
situation has changed and at present it is earning the highest amount of foreign currencies in our
country.
Major product export from Bangladesh
Year

2012-2013

Product
RMG
Frozen Food
Tea
Raw Jute

Export
1234777
454.53
12.29
148.17
Page 12 of 66

%
79.33
2.92
0.08
0.95

Chemical Product
Jute Goods
Leather
Agricultural products
Other

421.58
373.18
177.32
122.3
1508.19

Total=15565.19

2.71
2.40
1.14
0.79
9.69
=100.00

Source: Export Promotion Bureau, Bangladesh (Value in Million us $)

Bangladesh Export by Major Product during 2012-13

2.2 Reason behind the growth of RMG in Bangladesh

The prime reason why garment industries have come out to be the champion in the cheap labor.
Women contribution to the working force in these garment factories, as they are relatively
cheapest them men.
Low cost labor: As Bangladesh is an over populated country it is very easy for the garment
industries to hire labors at a lower rate. At present the government of our country has announced
minimum wage to the garment workers but the industries can still earn a handsome amount of
profit by exporting their product, although it is still low

Page 13 of 66

Class
Grade- 1
Grade- 2
Grade- 3
Grade- 4
Grade- 5
Grade- 6
Grade- 7
Apprentice

Existing wage
5,140.00
3,840.00
2,449.00
2,200.10
2,046.00
1,851.00
1,662.00
1,200.00

Announce wage
9,300.00
7,200.00
4,120.00
3,763.00
3,455.00
3,210.00
3,000.00
2,500.00

Increase in %
80.93%
87.50%
68.23%
67.24%
68.87%
73.47%
80.45%
108.33%

Source: Ministry of labor and Employment, Bangladesh, July 26, 2010.

Export-quota system
The export quota system in trading garment products played a significant role in the success of
the industry. However, that quota system came to an end in 2004. Therefore, the competitiveness
issuer needs to be addressed, with special attention given to the long-term sustainability of the
industry. Unilateral restriction, short-term arrangement(STA), long- term arrangement (LTA),
Multi-fiber arrangement(MFA) and finally the WTO agreement and Textiles and clothing (ATC)
are the chronological steps through which the export-quota system was administered Unit it was
finally abolished an 31 December 2004, making worldwide textile and garments trade quota-free.
Easy communication
It is very easy industries to collect raw materials from other countries and they can easily export
their produced goods to the other countries.
Government support
Government is supporting directly and indirectly the industries and monitors their activities so
that they can perform properly. Government reduces tariff and supply production factors like
electricity and water to them.
Product Tree
Bangladesh exports about 63 items to different apparel markets. Readymade garments
manufactured in Bangladesh are divided mainly into two broad categories: woven and knit
products. Shirts, T-shirts and trousers are the main woven product and under garments, socks,
Page 14 of 66

stockings, T shirts, sweaters and other casual and soft garments are the main knit products.
Woven garment products will dominate the garment export earning of the knit country, the share
of knit garment products has been increasing since the early 1990s; such products currently
account for more than 40 per cent of the country is total RMG export earnings (BGMEAA
website) Main apparel items exported from Bangladesh in shown in the tree-diagram drawn
below:

TKSRPJSTW
w.neoahr
eSialciov
ahtdokrue
tiwyetsn
ermste
rtahsr
rdis
er
Gt
a
r
m
e
n
t

2.3 Current export performance of RMG

Page 15 of 66

There is that old adage, dont kill the golden goose. Why I compare Bangladesh garments sector
with the golden goose? The reason is the garment sector in Bangladesh has been giving for many
years. Bangladesh is the second largest exporter of readymade garment products trailing China
according to the McKinsey report (2011). Bangladeshs garment exports during July-June 201213 period climbed by about 12.7 percent to US$ 21.515 billion over exports of US$ 19.089
billion made during the corresponding period of 2011-12. In 2012-13, the top three export
destinations for Bangladesh garments were Europe, which accounted for US$ 12.56 billion,
followed by the US and Canada, which accounted for US$ 4.99 billion and US$ 980 million,
respectively. But now it has received bad news. Recent incidents like fire in the Tazreen Fashions
factory in November last year that killed more than 110 and the collapse of the Rana Plaza
garment factory building in April that killed over 1,100 people and more than 2,500 were injured
in the disaster. It may be the second biggest industrial accident in recent history.
As a result, The President Barack Obama-led US government in June suspended Bangladesh
from the Generalized System of Preferences (GSP), which allows duty-free entry of over 5000
goods to the US market from least developed countries. Now, RMG products (which make up
most of the US import from Bangladesh) are not included in the list of duty-free products in GSP,
Page 16 of 66

there will an export fall of about $40 million .At present, Bangladesh exports about $5 billion
worth of goods (mostly RMG products) to the USA every year and hence, the suspension from
US

GSP

will

account

for

fall

in

export

of

about

0.8

%.

Losing the GSP facility will cost Bangladesh millions of dollars in taxes. It is also influence the
European Union to take similar action, which would have a much bigger impact on Bangladesh
and its garment sector. In August, Garment factory workers clashed demanding a Tk 8,000
minimum monthly wage. Many factories closed for clashing. The owners finally agreed to pay
Tk 5,300 as prescribed by a government-endorsed wage board on Nov 4.In November, 18,800
people lost their work for fire in Standard Group. The factory was among the ten biggest in the
country and it was the biggest supplier of Gap in Bangladesh. The loss to the firm could run into
more than US$100-million.In December, The European Parliament has threatened to withdraw
GSP, the duty and quota-free access to EU market that Bangladesh enjoys. The European Union
buys more than $12 billion in Bangladeshi garments each year, or roughly three-fifths of the
countrys production. If the EU were to withdraw or suspend the facility, the price per unit of
garment will rise and this may lead to many European buyers turning their backs on our
products. So, Bangladesh would suffer a huge setback. Due to the recent political unrest,
Bangladesh RMG sector losses in billions of taka every day. The blockades have put the garment
sector in a tight corner as exporters are counting losses from order cancellation and rising
transport costs.Buyers are cancelling orders as exporters fail to meet the lead time due to
transport crisis. Some buyers are also imposing penalties in case of delayed shipment, cutting
prices of garment products and transport costs have surged by around 30 percent due to
expensive air shipment. Many factories have halted production as they cant bring imported raw
materials from ports.The BGMEAs research and development team has collected three-day data
(December 1-3) from 10 exporters to assess the overall losses caused by the blockade.
Orders worth $3.96 lakh were cancelled during the period, while the exporters spent $3.08 lakh
on air shipment. Many small factory owners may go bankrupt due to failing shipment on time.
So thats the trap: the golden goose is caught between a rock and a hard.

Membership & Employment

Page 17 of 66

Year

Number of Garment
Factories

Factory
Growth
Rate

Employment
in Million
Workers

Workers
Growth Rate

1984-85
1985-86
1986-87
1987-88
1988-89
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00

384
594
629
685
725
759
834
1163
1537
1839
2182
2353
2503
2726
2963
3200

54.69
5.89
8.90
5.84
4.69
9.88
39.45
32.16
19.65
18.65
7.84
6.37
8.91
8.69
8.00

0.12
0.20
0.28
0.31
0.32
0.34
0.40
0.58
0.80
0.83
1.20
1.29
1.30
1.50
1.50
1.60

66.67
40.00
10.71
3.23
6.25
17.65
45.00
37.93
3.75
44.58
7.50
0.78
15.38
0.00
6.67

2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08

3480
3618
3760
3957
4107
4220
4490
4743

8.75
3.97
3.92
5.24
3.79
2.75
6.40
5.63

1.80
1.80
2.00
2.00
2.00
2.20
2.40
2.80

12.50
0.00
11.11
0.00
0.00
10.00
9.09
16.67

2008-09
2009-10

4925
5063

1.73
2.80

3.50
3.60

10.71
2.87

2010-11
2011-12
2012-13
Source: BGMEA

5150
5400
5600

1.72
4.85
3.70

3.60
4.00
4.00

0.00
11.11
0.00

Total Export

% of RMGS

RMG Export & Total Export

Year

Export of

RMG Export

Total Export of

Page 18 of 66

1983-84
1984-85
1985-86
1986-87
1987-88
1988-89
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09

RMG(In
Million US$)
31.57
116.2
131.48
298.67
433.92
471.09
624.16
866.82
1182.57
1445.02
1555.79
2228.35
2547.13
3001.25
3781.94
4019.98
4349.41
4859.83
4583.75
4912.09
5686.09
6417.67
7900.80
9211.23
10699.80
12347.77

2009-10
12496.72
2010-11
17914.46
2011-12
19089.69
2012-13
21515.7
2013-2014
24491.88
Source: BGMEA

(%)

(%)

13.15
127.16
45.28
8.57
32.49
38.88
36.43
22.19
7.67
43.23
14.31
17.83
26.01
6.29
8.19
11.74
-5.68
7.16
15.76
12.87
23.11
16.59
16.16
15.40

Bangladesh(in
Million US$)
811.00
934.43
819.21
1076.61
1231.2
291.56
923.70
717.55
993.90
382.89
2533.90
472.56
882.42
418.28
161.20
5312.86
752.20
6467.30
986.09
6548.44
602.99
8654.52
10526.16
12177.86
14110.80
15565.19

-12.33
31.42
14.36
4.90
48.94
-10.72
16.09
19.51
6.34
37.04
11.80
13.80
16.81
2.94
8.27
12.43
-7.44
9.39
16.10
13.83
21.63
15.69
15.87
10.31

To Total
Export
3.89
12.44
16.05
27.74
35.24
36.47
32.45
50.47
59.31
60.64
61.40
64.17
65.61
67.93
73.28
75.67
75.61
75.14
76.57
75.01
74.79
74.15
75.06
75.64
75.83
79.33

1.21
43.35
6.56
12.71
-

16204.65
22924.38
24287.66
27018.26
30186.62

4.11
41.47
5.95
11.24
-

77.12
78.15
78.60
79.63
81.13

Bangladesh's RMG Export to World (FY 11-12, FY12-13 & FY13-14 )

Million US$

Woven

Knit

Page 19 of 66

Total

Major EU
Countries

2011-12

2012-13

Austria

17.50

23.07

25.33

34.49

29.26

31.81

51.99

52.33

57.15

Belgium

238.61

248.61

335.29

320.46

317.19

440.63

559.07

565.80

775.92

Bulgaria

0.54

0.20

0.10

0.68

0.92

0.82

1.23

1.13

0.91

Denmark

86.80

125.91

145.24

318.72

375.62

450.71

405.51

501.52

595.94

Finland

7.85

10.81

10.07

29.25

25.55

26.10

37.10

36.36

36.18

France

416.72

498.00

579.52

855.18

892.45

964.27

1271.90

1390.44

1543.79

Germany

1,358.9
2

1,509.79

1,803.85

2,168.49

2,573.70
3398.89

3678.28

4377.55

8.14

4.14

5.59

21.17

12.77

14.16

29.31

16.91

19.76

Italy

291.15

358.26

447.23

571.46

554.94

731.91

862.62

913.20

1179.14

Ireland

63.03

67.51

68.36

123.92

133.44

149.87

186.95

200.95

218.24

252.99

294.52

331.48

385.48
552.04

584.47

680.00

Greece

Netherland
s

2013-14

2011-12

2012-13

2013-14

2039.97

226.76

325.28

2011-12

2012-13

2013-14

Portugal

6.68

6.43

9.98

25.57

22.91

32.53

32.25

29.33

42.51

Romania

4.30

3.23

3.39

7.62

5.66

6.07

11.93

8.89

9.47

410.39

515.33

651.29

660.73

702.90

856.28

1071.12

1218.23

1507.56

Spain

Page 20 of 66

Sweden

109.07

125.88

120.39

U.K.

1,026.7
7

1,189.09

1,262.79

0.08

0.05

0.15

39.38

66.65

Cyprus

220.50

244.07

1,259.84

1,335.25

203.87

1103.30

1.11

1.12

2.38

32.92

43.69

312.94

346.37

364.46

2130.07

2448.93

2598.04

1.18

1.17

2.53

63.75

72.30

110.33

Czech
Republic

37.99

Estonia

0.74

1.08

0.26

2.52

2.14

1.29

3.26

3.21

1.55

Hungary

0.21

0.11

0.71

2.14

3.88

8.71

2.34

3.99

9.41

Latvia

0.29

0.12

0.50

1.22

1.90

2.05

1.51

2.01

2.56

Lithuania

0.18

0.28

0.00

0.98

1.94

0.82

1.16

2.23

0.82

Malta

0.02

0.02

0.79

0.45

0.80

1.70

0.47

0.82

2.49

Poland

112.77

159.73

204.57

209.96

240.79

304.99

322.74

400.52

509.57

Slovakia

20.31

30.25

30.19

36.54

40.54

43.60

56.85

70.79

73.79

Slovenia

1.04

3.60

6.16

6.33

11.05

19.57

7.37

14.65

25.73

4446.87

5173.86

6072.91

6928.69

7390.99

8672.47

11375.56

12564.85

14745.39

46.31

46.87

48.81

73.04

70.55

71.97

59.59

58.40

60.21

Sub-Total
(EU)

EU % of

25.77

Page 21 of 66

World

Growth%

23.18

16.35

17.38

0.27

6.67

17.34

8.13

10.45

17.35

3515.45

3,865.68

3,943.52

1013.95

1,130.90

1,197.85

4529.40

4996.58

5141.38

% of USA

36.61

35.02

31.70

10.69

10.80

9.94

23.73

23.22

20.99

Growth%

0.27

9.96

2.01

-9.39

11.53

5.92

-2.07

10.31

2.90

Canada

473.04

518.29

556.87

401.82

461.97

445.10

874.85

980.26

1001.97

% of
Canada

4.93

4.69

4.48

4.24

4.41

3.69

4.58

4.56

4.09

Growth%

2.44

9.57

7.44

-7.18

14.97

-3.65

-2.21

12.05

2.22

Australia

94.83

132.46

142.52

212.72

295.98

288.24

307.54

428.44

430.76

Brazil

50.45

56.50

72.54

77.33

115.33

97.70

127.78

171.84

170.24

Chile

5.57

7.17

10.31

11.36

21.13

22.70

16.93

28.31

33.01

China

57.83

86.55

142.08

46.69

52.59

99.29

104.52

139.14

241.37

India

42.20

60.87

76.44

12.82

14.34

19.81

55.02

75.21

96.25

Japan

239.99

280.17

318.92

163.65

198.31

253.35

403.65

478.48

572.27

USA

NonTraditional
Markets

Page 22 of 66

Korea Rep.

61.27

73.66

77.63

18.75

40.73

57.96

80.01

114.39

135.60

Mexico

36.74

46.22

51.50

61.91

63.99

73.12

98.65

110.21

124.63

Russia

27.67

51.04

74.92

48.82

88.52

132.82

76.49

139.55

207.74

30.46

26.18

27.19

22.38
55.76

57.66

48.55

South
Africa

29.31

Turkey

231.20

263.39

440.41

124.73

151.92

181.96

355.93

415.31

622.37

Other
Countries

290.92

393.51

435.30

336.68

421.99

485.06

627.60

815.5

920.36

Sub-Total
(NonTrade.)

1167.98

1482.01

1868.77

1141.90

1492.03

1734.38

2309.88

2974.04

3603.15

% of NonTraditional

12.16

13.42

15.02

12.04

14.24

14.39

12.10

13.82

14.71

% Growth
of NonTraditional

36.62

26.89

26.10

11.91

30.66

16.24

23.17

28.75

21.15

9603.34

11039.85

12442.07

9486.35

10475.88

12049.81

19089.69

21515.73

24491.88

13.88

14.96

12.70

0.05

10.43

15.02

6.56

12.71

13.83

GRAND
TOTAL

% Growth

26.45

Source: EPB, Compiled by: RDTI Cell, BGMEA

Page 23 of 66

Export Performance of RMG of Bangladesh for 2012-13, 2013-14 & 2014-15 in Million US
($) Monthly Growth Rate Compared to Last Year (%) Monthly Growth Rate Compared to Last
Year (%) Monthly Growth Rate Compared to Last Year (%)
Export Performance of RMG of Bangladesh for 2012-13 in Million US ($)

Export of RMG in FY 12-13 (in Million USD)

Year

Monthly Growth Rate Compared to Last Year (%)

Month

Knit

Woven

Total

Month

Knit

Woven

Total

July

1001.07

993.84

1994.91

July

-0.68

+11.92

+5.22

August

792.53

765.85

1558.38

August

-24.70

-12.03

-18.96

September

746.32

697.17

1443.40

September

+43.72

+46.49

+45.04

October

873.16

761.48

1634.64

October

+9.68

+8.05

+8.92

November

653.96

710.04

1364.00

November

+5.18

+13.26

+9.24

December

908.93

1042.68

1951.62

December

+14.44

+17.06

+15.83

January

944.96

1147.64

2092.60

January

+22.17

+23.29

+22.78

February

811.24

979.71

1790.71

February

+10.81

+12.19

+11.56

March

854.68

991.77

1846.45

March

+22.24

+17.01

+19.38

April

795.00

835.17

1630.28

April

+13.80

+15.72

+14.77

May

1008.37

997.72

2006.09

May

+15.11

+15.13

+15.12

June

1085.63

1116.78

2202.41

June

+18.59

+23.20

+20.88

Total FY 12-13

10,475.88

11,039.85 21,515.73

Total FY 12-13 +10.43

+14.96

+12.71

Share in National
Export

38.77%

40.86%

2012

2013

79.63%

Export Performance of RMG of Bangladesh for 2013-14 in Million US ($)

Export of RMG in FY 13-14 (in Million USD)

Monthly Growth Rate Compared to Last Year (%)

Year

Month

Knit

Woven

Total

Month

Knit

Woven

Total

2013

July

1253.76

1262.38

2516.14

July

+25.24

+27.02

+26.12

August

848.15

796.05

1644.2

August

+7.01

+3.94

+5.50

Page 24 of 66

September

1058.29

985.26

2043.55

September

+41.82

+41.32

+41.57

October

862.01

820.49

1682.50

October

-1.28

+7.75

+2.93

November

877.61

889.35

1766.96

November

+34.20

+25.25

+29.54

December

1048.87

1229.98

2278.85

December

+15.40

+17.96

+16.77

January

1045.83

1195.20

2241.03

January

+10.67

+4.14

+7.09

February

915.76

1049.64

1965.40

February

+12.88

+7.14

+9.74

March

920.69

993.37

1914.06

March

+7.72

+0.16

+3.66

April

972.38

944.95

1917.33

April

+22.30

+13.14

+17.61

May

1115.73

1092.26

2207.99

May

+10.65

+9.48

+10.06

June

1130.74

1183.14

2313.88

June

+4.16

+5.94

+5.06

Total FY 2013-2014

12,049.81

12,442.07 24,491.88

+12.70

+13.83

Share in National
Export

39.93%

41.22%

2014

Total FY 2013+15.02
2014

81.15%

Export Performance of RMG of Bangladesh for 2014-15 in Million US ($)

Export of RMG in FY 14-15 (Jul-Oct) (in Million USD)

Monthly Growth Rate Compared to Last Year (%)

(Jul-Oct)

Year

2014

Month

Knit

Woven

Total

Month

Knit

Woven

Total

July

1307.90

1210.08

2517.98

July

+4.32

-4.14

+0.07

August

898.44

815.34

1713.78

August

+5.93

+2.42

+4.23

September

1064.12

937.29

2001.41

September

+0.55

-4.87

-2.06

October

787.96

731.53

1519.49

October

-8.59

-10.84

-9.69

-4.40

-1.70

November

November

December

December

2015
Total FY 2013-2014 (Jul4,058.42
Oct)

3,694.24

7,752.66

Share in National
Export

38.27%

80.32%

42.04%

Total FY 2013+0.90
2014 (Jul-Oct)

Source: Export Promotion Bureau, Bangladesh

Export Performance of RMG over Government's Strategic Target for 2013-14
Product

Target (million USD) 2014-15

Page 25 of 66

Performance Over Target 2014-15 (Jul-

Oct)

Knitwear

13,215.61

4,058.42

Woven

13,681.77

3,694.24

Region wise Export Performance FY 2011-12 & 2012-13

Region

2012-13

2013-14

EU

7306.28

8682.25

USA & Canada

1592.87

1642.96

European Free Trade Association

125.98

133.89

Latin American Integration Association

216.81

216.22

Emerging Markets

937.81

1134.54

Others

296.13

239.95

2.4 Export Facilities for RMG Industry

Steps will be taken to shorten the lead time for export of readymade garments by means
of development of port management, simplification, of goods unloading, resolving the
electricity problem and similar activities.
Initiatives will be taken to establish textile village in more than one place with adequate
infrastructural and utility-related facilities.
Page 26 of 66

 Steps will be taken to establish waste water treatment plants in textile villages.
Establishment of backward and forward linkage industries will be encouraged.
Emphasis will be given on product diversification by improving the skills of workers and
staff and by providing information and technology of the product markets to the
entrepreneurs.
In order to increase the productivity of the worker and staff of the textile industry, and to
diversify products, initiatives will be taken to provide trainings of different tenures to the
workers and staff.

2.5 History of RMG Industry in Bangladesh

Page 27 of 66

In the 1950s, labors in the Western World became highly organized; forming trade unions. This
and other changes provided workers greater rights including higher pay; which resulted in higher
cost of production. Retailers started searching for places where the cost of production was
cheaper. Developing economies like Hong Kong, Taiwan and South Korea presented themselves
as good destinations for relocations because they had open economic policies and had nonunionized and highly disciplined labor force that could produce high quality products at much
cheaper costs. In order to control the level of imported RMG products from developing countries
into developed countries, Multi Fiber Agreement (MFA) was made in 1974. The MFA agreement
imposed an export rate 6 percent increase every year from a developing country to a developed
country.It also allowed developed countries to impose quotas on countries that exported at a
higher rate than the bilateral agreements. In the face of such restrictions, producers started
searching for countries that were outside the umbrella of quotas and had cheap labor. This is
when Bangladesh started receiving investment in the RMG sector. In the early 1980s, some
Bangladeshis received free training from Korean Daewoo Company. After these workers came
back to Bangladesh, many of them broke ties with the factory they were working for and started
their own factories. The hundred percent export-oriented RMG industry experienced phenomenal
growth during the last 15 or so years. In 1978, there were only 9 export-oriented garment
manufacturing units, which generated export earnings of hardly one million dollar. Some of these
units were very small and produced garments for both domestic and export markets. Four such
small and old units were Reaz Garments, Paris Garments, Jewel Garments and Baishakhi
Garments. Reaz Garments, the pioneer, was established in 1960 as a small tailoring outfit, named
Reaz Store in Dhaka. It served only domestic markets for about 15 years. In 1973 it changed its
name to M/s Reaz Garments Ltd. and expanded its operations into export market by selling
Page 28 of 66

10,000 pieces of men's shirts worth French Franc 13 million to a Paris-based firm in 1978. It was
the first direct exporter of garments from Bangladesh. Desh Garments Ltd, the first non-equity
joint-venture in the garment industry was established in 1979. Desh had technical and marketing
collaboration with Daewoo Corporation of South Korea. It was also the first hundred percent
export-oriented company. It had about 120 operators including 3 women trained in South Korea,
and with these trained workers it started its production in early 1980. Another South Korean
Firm, Youngones Corporation formed the first equity joint- venture garment factory with a
Bangladeshi firm, Trexim Ltd. in 1980. Bangladeshi partners contributed 51% of the equity of
the new firm, named Youngones Bangladesh. It exported its first consignment of padded and
non-padded jackets to Sweden in December 1980. Within a short period, Bangladeshi
entrepreneurs got familiar with the world apparel markets and marketing.
They acquired the expertise of mobilizing resources to export-oriented RMG
industries. Foreign buyers found Bangladesh an increasingly attractive
sourcing place. To take advantage of this cheap source, foreign buyers
extended, in many cases, suppliers' credit under special arrangements. In
some cases, local banks provided part of the equity capital. The problem of
working capital was greatly solved with the introduction of back-to-back
letter of credit, which also facilitated import of quality fabric, the basic raw
material of the industry. The government assigned high priority to the
development of RMG industry. Till the end of 1982, there were only 47
garment manufacturing units. The breakthrough occurred in 1984-85, when
the number of garment factories increased to 587. The number of RMG
factories shot up to around 2,900 in 1999. Bangladesh is now one of the 12
largest apparel exporters of the world, the sixth largest supplier in the US
market and the fifth largest supplier of T-shirts in the EU market. The industry
has grown during the 1990s roughly at the rate of 22%. In the past, until
1980,jute and jute goods topped the list of merchandises exported from
Bangladesh and contributed more than 50% of the total export earnings. By
late 1980s, RMG exports replaced jute and jute goods and became the
number one in terms of exports. The history of the Readymade Garments
Sector in Bangladesh is a fairly recent one. Nonetheless it is a rich and varied
Page 29 of 66

tale. The recent struggle to realize Workers' Rights adds an important

episode to the story.

2.6 Export activities of different Garments associations

BGMEA:
Bangladesh Garment Manufacturers and Exporters Association (BGMEA)
Introduction: The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) is
the apex trade body that represents the export oriented woven, knit and sweater garment
manufacturers and exporters of the country. Readymade Garment (RMG) is the leading sector of
Bangladesh in terms of employment, production and foreign exchange earnings. Readymade
garment (RMG) alone earned about 78% of the yearly foreign exchange earning of the country.
About 4.0 million people are employed in the garment sector. The growth rate of RMG export
was over 20% per over the last two decades.
A Success Story of RMG Sector: The importance of RMG sector can hardly be over
emphasized. There has been a steady growth in the field of RMG during last two decades. The
RMG industry enjoyed a meteoric rise from 30 enterprises in 1980 increased to about 5700 in
2011-12 fiscal years. Out of 4.0 million manpower employed in BGMEA member factories,
3.20 million are women (80%), majorities of them are disadvantaged and economically poverty
stricken women folk. The country's RMG sector, to a creditable level has relieved Bangladesh
from over populous unemployment burden through providing the largest employment next to
agriculture, transport, and trade and industry sector. This sector has uplifted the neglected section
of the population, thus radically transforming the socio-economic condition of the country. Such
empowerment and employment raised awareness regarding children education, health safety,
population control disaster management only so for. It is an epoch making event in the history of
Bangladesh.
Main Functions of BGMEA: BGMEA is being run by a 27-member elected Board of Directors.
Four Vice Presidents having important portfolios, along with a secretariat of experienced
officials, assists the Board in formulating and executing vital policies and programs of the
organization. The President is the highest executive authority of the BGMEA.
Page 30 of 66

The fundamental objective of BGMEA is to establish a healthy business environment for a close
and mutually beneficial relationship between the manufacturers, exporters and importers in the
process ensuring a steady growth in the foreign exchange earnings of the country. BGMEA
issues UD to its exporters thereby monitors export as well. BGMEA plays a very strong role to
lead the industry in concurrence with the government. The following are the regular activities of
BGMEA for its members, apparel buyers and other partners.
To Protect and uphold the interest of the industry by aiding the formulation of
government policies consistent with a congenial growth of the sector.
Committed to protect the interests of its members and their employees by implementing
legitimate rights and privileges for garments workers.
To negotiate and consult with foreign and local agencies to promote the garments sector
in every possible fields.
To maintain liaisons with foreign buyers, business associations and chambers.
To provide foreign buyers with all necessary information regarding all issues concerned
with the RMG sector.
BGMEA brings the opportunities for local manufacturers to interact with foreign buyers
and form new rapport by arranging different apparel fairs at home and abroad.
To keep the BGMEA factories child labor free through continued monitoring.
Continue and expand collaboration with relevant Ministries of the Governments.
Continue educational support to workers children and make a provision for skill training
for children removed from the BGMEAs member factories.
Provides information services to its members by publishing monthly newsletters,
issuance of circulars and through Dhaka's first B2B web portal, which directly links
exporters and buyers around the world.
BGMEA also established its own Institute called "BGMEA Institute of Fashion &
Technology (BIFT)" in 2000. Till the day BIFT is continuously developing professionals
for this sector through the courses of Fashion Designing and Garment Merchandising;
and other certificate, diploma and short courses. Transforming it into University is under
process.
Promotes computer-oriented solutions for better management to its member units.
Participate actively in all trade negotiations for the sector in order to get easier market
access and GSP benefits.
BGMEA has introduced Service Books for each and every workers employed in the
factories.
Page 31 of 66

 BGMEA is going to launch a workers welfare committee in the factories.

BGMEA has ensured the minimum wage implementation to the tune of 99.99% of all
factories.
BMGEA has set up a Crisis Management Committee for emergencies.
BGMEA provides scholarship to meritorious children of the garments workers. Each year
2000 students are getting the scholarships at Dhaka and Chittagong.
BGMEA runs training programs through 27 Technical Training Centers and 3 other
centers with the objective of producing skilled workers for the RMG sector. More than
15000 trainees will be shaped up through this program and BGMEA will appoint them in
the factories. BGMEA has trained and employed 15,000 people till the date.
BGMEA regularly conducts fire drills and fire safety program at the member factories.
Although 9 fire incidents took place in 2010, there were no casualties.
BGMEA is going to develop a central database system for the garment workers, which
will cover all workers' information of the readymade garment sector.

BTMA: Bangladesh Textile Mills association (BTMA) is the national trade organization of
Primary Textile Industry i.e. Yarn Manufacturing, Fabric Manufacturing and Dyeing-PrintingFinishing mills of the country under private sector. BTMA is registered in 1983.

Organ gram of BTMA:

Page 32 of 66

Function and Activities of BTMA:

Objectives
1. To promote and protect the trade, commerce and manufacturers of Bangladesh in general
and of the textile related trade in particular.
2. To collect and circulate statistics and to collect, classify and circulate information relating
to the trade, commerce and manufactures of its members.
3. To take all steps which may be necessary for promoting, supporting or opposing
legislative and other measures affecting the trade, commerce or manufactures of its
members.
4. To make representations to the appropriate authorities on any matter connected with the
trade, commerce and manufactures of its members.
5. To advance and promote commercial and technical education connected with the trade
and commerce of its members

Regional Activities

Page 33 of 66

SAARC Chamber of Commerce and Industry organized the 3rd SBLC regional cooperation. A
catalyst for socio-economic growth in South Asia was held in Sri-Lanka between SBLC is a
prestigious event of SAARC CCI. Head of the government of the Socialist Republic of SriLanka, leading politician
1. Prominent speakers, scholars and elite corporate leaders from SAARC region addressed
on trade, investment, social security, HRM, Environment protection etc.. The third SBLC
focused mainly on the following issues:
2. Global financial crisis and its impact on South Asia.
3. Addressing food crisis through enhanced investment in agriculture.
4. Interactive dialogue between business leaders and triumphant entrepreneurs.
5. Trade facilitation: A fosterer of regional integration.
6. Trade in services: Prospects and challenges for regional integration.
7. Climate change & depleting water resources: emerging priority concerns for South Asia.
8. Culture and Tourism: A fosterer of socio-cultural interactions.
9. Creating synergies in the area of enhanced regional cooperation.

BKMEA:
BKMEA established in 1996 as a national trade body to represent solely the knitwear sector of
Bangladesh. BKMEA mission is to promote & enhance knitwear sectors competitiveness,
productivity & profitability in the global market through support services to members, capacity
building of the sector & networking with all stakeholders. Starting with a minimum membership
base, now it is an association of more than 1600 knitwear manufacturers that represents the
largest export earning sector of the country.

Page 34 of 66

Chapter Three
Process of Operation
3.1Yarn Manufacturing Process
3.2 Fabrics Manufacturers
3.3 Fabric Dyeing and Finishing Unit:
3.4 Production flowchart
3.5 Garments Quality control flow chart
3.6 Garments Planning:
3.7 Benefit of team in garments:
3.8 Control
3.9 Prepare a garments budget:

3.1 Yarn Manufacturing Process

Textile mills purchase cotton and receive the bales from gin yards or cotton warehouses. These
mills start with raw bales of cotton and process them in stage until they produce yarn (fibers
twisted into threads used in weaving or knitting) or cloth (fabric or material constructed from
weaving or knitting).
Page 35 of 66

The first stage is in the opening room. Here, bales are opened and laid in a line on the floor, side
by side, near a cotton opening machine. This machine travels along the line of opened bales,
puling fibers to be sent to a mixing machine and them on to the carding system.
Carding is the process of pulling the fibers into parallel alignment to form a thin web. High speed
electronic equipment with wire toothed rollers performs this task. The web of fibers is eventually
condensed into a continues, untwisted, rope-like strand called a silver. These silvers then
continue to a combing machine. Here, the fibers shorter than half-inch and impurities are
removed from the cotton.
This process makes the silver smoother so more uniform yarns can be produced. The drawing or
pulling of this sliver is next. Cotton trivia khaki is derived from a Hindu word that means dust
color. Originally, khaki referred to a dull yellow-brown cotton or wool uniform fabric used for
its camouflage effect.
The sliver is drawn out to a thinner strand and given a slight twist to improve strength, and then
wound on bobbins (spools wound with the thread like product for storage). Having completed
this process. It is now called roving. The roving bobbins are now ready for the spinning process.
Spinning is the last process in yarn manufacturing. Todays mills draw and twist the roving into
yearn and place it on bobbins. They do this quite efficiently. A large, modern mill can produce
enough yarn of thread in 30 days to wrap around the earth 23000 times or go to and return from
the moon 235 times. With the use of automatic winding, the yarn bobbins are transferred to large
bobbins called cheese cones can be stored until they are needed in the weaving process.

The weaving process uses yarn that, depending on how it lies in the woven goods. This yarn may
now be either a warp or a weft yam. Warp refers to yarns that run lengthwise in woven goods. In
preparation of warp yarns for weaving, hundreds of yarn strands are wound from cheese cones
onto a large warp beam. Yearns on this beam are then coated with a sizing compound (a starch
mixture) to add strength for weaving. The sized yarns are then wound onto a loom beam that will
be placed on the loom (a machine used to interlace yarns to from cloth). Weft is the yarn that
runs crosswise in woven goods and may be referred to as filling yarn. Sizing is not placed on
Page 36 of 66

weft because flexibility is needed in the weaving process. In todays most modern mills, the weft
is fed into the loom from cheese cones with air-jets at such a high speed that its movement
cannot be seen.
The woven cloth from the loom, called greign or grey, is whitish but has a natural yellow tint.
This cloth is further treated by various means to improve its appearance and feel, and then either
bleached, dyed or printed to produce the fabrics used in various products seen on store shelves.
There are three basic weaves that are used. The plain weave, the most common, is produced by
passing the weft yarn over and under each warp yarn, alternating each row. This is used for
cotton print cloth, sheeting, muslin and more. The twill weave is produced by interlacing yarns in
an angle to form straight, diagonal ridges across the fabric. The satin weave, has a surface that
consists mostly or warp yarn which is passed over and under all but one weft yarn that intersects
in a regular or irregular formatting, not a straight line.
This weave produces a fabric with a smooth surface. It is used for upholstery, home decorating
and fashionable apparel.
Knitting is another method of turning yarn into fabric. Knit fabric is constructed of yarns made
into loops (stitches) which are linked together by the use of needles. There are two basic types of
knitted fabric. The weft knit fabrics are made with yarns forming loops the width of the fabric on
a circular machine, producing jersey knit used in T-shirts and underwear. The warp knit fabrics
are produced by feeding yarns to form loops in a lengthwise direction and are used for tricot
fabrics and cotton lace. Knitted fabrics are softer and more flexible than woven fabrics. Making
them ideal for sweaters, active sportswear and hosiery.

3.2 Fabrics Manufacturers

Knitted Fabric
Knitting is one of the ways of turning thread or yarn into clothes. Knitted fabric completely
consists of horizontal parallel courses (crosswise) or yarn. These courses are joined to each other
by interlocking loops where a short loop of one course of the yarn is wrapped over the bight of
another course.
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Knitted fabric is obtained either by hand knitting process or then by machine. In hand knitting
process, a base series of twisted loops of yarn are made on a knitting needle before starting the
process. A second needle is then used to reach through each loop in succession to snag a bight of
yarn and pull a length back through the loop. Knitting by machine use a different mechanical
system producing nearly identical results.
Knitted fabric composites show higher impact tolerance compared to the traditional composites
or even to woven fabric composites. It is believed that the hand knitting originated among the
nomads of the Arabian Peninsula about 1000 BC.
Types o knitted fabrics:
Weft knitted fabric-It is either made by hand or machine by looping together the lengths of the
year. This supports the fabric to become stretchy and comfortable. Weft-knitted fabrics are used
in socks. T-shirts and jumpers.
Warp knitted fabric- It is made by machine only. The loops, in this kind of fabrics interlock along
the length of the fabric. It is only slightly stretchy and it do not ladders. These are used as
swimwear, underwear etc.

Advantages of Knit Wears:

Because of casual and soft in nature as well as inherent good properties such as hygienic
properties, fashionable design and color, knit wears have become the popular wear all over
the world. Knit wears are informal but fashionable usually with short sleeves. Knit wears are
commonly made of knitted fabrics of single jersey, Ribs, Interlock, etc due to the
specifications in raw materials by using lower count of yam, construction of fabrics and
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stitching. Knit wears possess certain properties which are essential for good apparels; some
special advantages of knitted-wears are given below:
1) Knit garment products are softer and more comfortable;
2) Knit wears/garments are usually used as underwear
Garments i.e. used for soft skin abrasion.
3) Usually lower count of yam is used for knitting fabrics.
So, knitwear has more socking capability.
4) More profitable production can be made due to lower
project cost and cheaper management cost.
5) Knitting wears can be handled more easily while using
and washing. ,
6) Its market price is comparatively cheaper.

Manufacturing process:
For setting up Composite Industries consists of Knitting unit, Fabric Dyeing Finishing unit and Garments
unit. The product of one unit will be the raw material of other unit:The sequential process from yam
manufacture to Garments product may be described as follows!
For Knitting Unit:
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Knitting machine is various types where various design produces. Fabrics will also be produce in the
circular -Knitting machines by altering some attachments mainly changing of camas. Rib Knitting and
Interlock (double Knitting) fabrics will be produces in the Rib circular and Interlock Knitting machine.
Flat Knitting fabrics for collar and cuff will be 'produced in the flat Knitting machine. After the Knit
fabrics are produced, it is inspected in running condition while passing over a table of the inspection
machine. The technology involved in Knitted fabrics is fairly simple which may be seen in the following
flow process chart:

1
2
3
4
5
3.3 Fabric Dyeing and Finishing Unit:
The technology involved in dyeing finishing of Knitted fabrics may be seen as below:

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CBDSFWIET nuaocxtallomyirasseoy dpilacernuroahecpgoniscihdacntofedarandig&net igtnfh ag eheatb/ &SrK iofcnS ith estr ei ntd k i an g e
bn&/ionCsor(F Bwataligonsnulbheigtdrnactiercg orsh) li n g

Garments Making;

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The operation process with two outputs i.e. T-shirts and Polo shirts are pre-sewing and
finishing. A typical process flow-chart for Garments making is shown below: Process Flow
Chart for Garments Making

3.4 Production flowchart

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Page 43 of 66

3.5 Garments Quality control flow chart

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3.6 Garments Planning

To establish a garments factory the location choice is an important factor for correct
manufacturing, worker management and proper transport system.
The following are some of the factors which will influence the choice of location:
Availability of worker.
Availability of housing facility (In Bangladeshi system it is not provided by any
garments authority)
Availability of staff amenities.
Availability of transport.
Availability of materials.
Availability of cover-van parking space.
Adequacy of circulation.
Availability of services.
Gas
Electricity
Water
Drainage
Disposal of waste
Suitability of land and climate.
Local building and planning regulation.
Safety requirements.
Site cost.
Political situation.
Special grants.

According to the place and types of manufacturers goods the building shape has been Chosen.
Here I mentioned both the advantages of single and multi-story building. It depends on the size
of the garments factory, which prefers most.

3.7 Benefit of team in garments

Increase the group activities in production.

Makes a competition among the team worker.
Workers get satisfaction to work.
Instrumental benefits.
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3.8 Controlling system

Control is a regulation of organizational activities so that some targeted elements of
performance remains within acceptable limits.
Purposes of control:

Adapting to environmental changes.

Limiting the accumulation of errors.
Coping with organizational completes.
Minimizing cost.
Keeping the organizational work on track (according to plan)

In garments sector the control is divided in three sections:

Production control.
Overall/Operational control.
Financial control
Overall/Operational control:
Preliminary control
Screening control
Post action control

Preliminary control:
Preliminary control concentrates on the resources-financial, material, and human and
information-that the organization brings in form the environment. Preliminary control attempts
to monitor the quality or quantity of these resources before they enter the organization.
Screening control:

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Screening control focus on meeting standards for products or service quality or quantity during
the actual transformation itself. Screening control relies heavily on feedback process.
Post action control:
Post action control focus on the outputs of the garments after the transformation process is
complete. Coming's old system of Post action control-final inspection after the product is
completed. Although corning abandoned its Post action control system, this still may be an
effective method of control, primarily if a product can be manufactured in only one or two
steps or if the service is fairly simple and routine. Although Post action control alone. may not
be as effective as preliminary or screening control, it can provide management with
information for future planning.
Financial control:
Financial Control is the control of financial resources as they flow into the garments (i.e.,
revenues, investments), are held by the garments (i.e., working capital, retained earning), and
flow out of the garments (i.e., pay expenses). Business must manage their finances so that
revenues are sufficient to cover costs and still return a profit to the firm's owners.

3.9 Prepare a garments budget

Budget is a numerical expression. A good budget can provide a good exported or productive
garment. Without budget a garments can't run correctly. Only by the help of a good budget the
goals can come out. Budget helps to take correct decision and divers the organization properly
in right way. Budget also, shows the capacity of garments in productive market. Only a suitable

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and acceptable budget can run the garments correctly. For this reason budget is essential for the
garments.

The processes of preparing budget in garments are as follows:

o Submission of budget request by the units to division head.

o Integration of unit budget and consolidated into division budget.
o Forwarding of division budget to budget committee.

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Chapter Four
Problems and Prospects

4.1 Problems of readymade garments sector

4.2 Prospects of the RMG Industry

4.1 Problems of readymade garments sector:

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The garment industry of Bangladesh has been the key export division and a main source of
foreign exchange for the last 25 years. National labor laws do not apply in the EPZs, leaving
BEPZA in full control over work conditions, wages and benefits. Garment factories in
Bangladesh provide employment to 40 percent of industrial workers. But without the proper laws
the worker are demanding their various wants and as a result conflict is began with the industry

1. Raw materials:
Bangladesh imports raw materials for garments like cotton, thread color etc. This dependence on
raw materials hampers the development of garments industry. Moreover, foreign suppliers often
supply low quality materials, which result in low quality products.
2. Unskilled workers:
Most of the illiterate women workers employed in garments are unskilled and so their products
often become lower in quality.
3. Improper working environment:
Taking the advantages of workers' poverty and ignorance the owners forced them to work in
unsafe and unhealthy work place overcrowded with workers beyond capacity of the factory floor
and improper ventilation.

4. Gendered division of labor:

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In the garment industry in Bangladesh, tasks are allocated largely on the basis of gender. This
determines many of the working conditions of women workers. All the workers in the sewing
section are women, while almost all those in the cutting, ironing and finishing sections are men.
Women workers are absorbed in a variety of occupations from cutting, sewing, inserting buttons,
making button holes, checking, cleaning the threads, ironing, folding, packing and training to
supervising. Women work mainly as helpers, machinists and less frequently, as line supervisors
and quality controllers. There are no female cutting masters. Men dominate the administrative
and management level jobs. Women are discriminated against in terms of access to higher-paid
white collar and management positions. When asked why they prefer to employ women foe
sewing, the owner and managers gave several reasons. Most felt that sewing is traditionally done
by women and that women are more patient and more controllable than men.
5. Wages:
The government of Bangladesh sets minimum wages for various categories of workers.
According of Minimum Wage Ordinance 1994, apprentices helpers are to receive Tk500 and
Tk930 per month respectively. Apprentices are helpers who have been working in the garment
industry for less than three months. After three months, Apprentices are appointed as helpers.
Often female helpers are discriminated against in terms of wages levels, and these wages are also
often fixed far below the minimum wage rate. A survey conducted in 1998 showed that 73% of
female helpers, as opposed to 15% of their male counterparts, did not receive even the minimum
wage.
6. Insufficient of loan:
Insufficiency of loan in time, uncertainly of electricity, delay in getting materials, lack of
communication, problem in taxes etc. Often obstruct the industry. In the world market 115 to 120
items of dress are in demand where as Bangladesh supplies only ten to twelve items of garments.
India, South Korea, Hong Kong, Singapore, Thailand, Taiwan etc, have made remarkable
progress in garments industries. Bangladesh is going to challenge the garments of those countries
in the world market.
7. Unit labor cost:
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Bangladesh has the cheapest unit labor cost in South Asia. It costs only 11 cents to produce a
shirt in Bangladesh, whereas it costs 79 cents in Sri Lanka and 26 cents in India. Clearly,
Bangladeshs comparative advantage lies in having the cheapest unit labor cost.
8. Working hours:
Though the wages are low, the working hours are very long. The RMG factories claim to operate
one eight-hour shift six days a week. The 1965 factory Act allows women to work delivery
deadlines; however, women are virtually compelled to work after 8 oclock. Sometimes they
work until 3 oclock in the morning and report back to start work again five hours later are 8
oclock. They are asked to work whole months at a time the Factory Act, which stipulates that no
employee should work more than ten days consecutively without a break.
9. Poor accommodation facilities:
As most of the garment workers come from the poor family and comes from the remote areas
and they have to attend to the duties on time, these workers have to hire a room near the factory
where four to five huddle in a room and spend life in sub human condition. For four to five
workers there is one common latrine and a kitchen for which they have to pay from Tk=2000 to
Tk=2500/-.They share this amount among themselves to minimize the accommodation expense.
One cannot believe their eyes in what horrible condition they have to pass out their time after
almost whole day of hard work in the factory. After laborious job they come into their roost,
cook their food and have their dinner or lunch in unhygienic floor or bed and sleep where they
take their food. They share the single bed or sleep on the floor. The owners of these factories
must not treat the workers as animals. The owners of these factories who drive the most
luxurious car and live in most luxurious house do ever think that these are the workers who have
made their living so juicy. Will these selfish owners ever think of these workers of their better
living for the sake of humanity by providing better accommodation for these workers in addition
to providing with the job?
10. Safety Problems:

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Because of the carelessness of the factory management and for their arrogance factory doors
used to be kept locked for security reason defying act Safety need for the worker is mandatory to
maintain in all the organization. But without the facility of this necessary product a lot of
accident is occur incurred every year in most of the company. Some important cause of the
accident are given below- Routes are blocked by storage materials

Machine layout is often staggered

Lack of signage for escape route
No provision for emergency lighting
Doors, opening along escape routes, are not fire resistant
Doors are not self-closing and often do not open along the direction of escape
Adequate doors as well as adequate staircases are not provided to aid quick exit
Fire exit or emergency staircase lacks proper maintenance
Lack of proper exit route to reach the place of safety
Parked vehicles, goods and rubbish on the outside of the building obstruct exits to the

open air
Fire in a Bangladesh factory is likely to spread quickly because the principle of
compartmentalization is practiced

11. Political crisis:

Garments industries often pay dearly for political unrest, hartal and terrorism etc. The
international market has withdrawn quota advantage over garments export form Bangladesh
since December 2005. Bangladesh has to advance cautiously for getting better position of her
garments in the world market. Finally destruction of twin tower in 11 September 2001. invasion
of Afghanistan and Iraq and depression in world Economy have seriously affected the export
trade of Bangladesh.
12. Price competitiveness:
China and some other competitors of Bangladesh have implemented sharp price-cutting policies
in exporting garment products over the last few years, but Bangladesh has failed to respond
effectively to such policies. China was able to drop the export price of 29 garment categories by
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46 per cent on average in the United States within a year, from $6.23 per sq meter in December
2001 to $3.37 per sq meter in December 2002. Bangladesh needs to respond to such price-cutting
policies of its rivals in order to remain competitive in the quota-free global market.
13. Lead time:
Lead time refers to the time required for supplying the ordered garment products after the export
order has been received.
14. Lack of managerial knowledge:
There are some other problems which are associated with this sector. Those are- lack of
marketing tactics, absence of easily on-hand middle management, a small number of
manufacturing methods, lack of training organizations for industrial workers, supervisors and
managers, autocratic approach of nearly all the investors, fewer process units for textiles and
garments, sluggish backward or forward blending procedure, incompetent ports, entry/exit
complicated and loading/unloading takes much time, time-consuming custom clearance etc.

4.2 Prospects of readymade garments sector the:

Despite many difficulties faced by the RMG industry over the past years, it continued to show its
robust performance and competitive strength. The resilience and bold trend in this MFA phaseout period partly reflects the imposition of safeguard quotas by US and similar restrictions by
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EU administration on China up to 2008, which has been the largest supplier of textiles and
apparel to USA. Other factors like price competitiveness, enhanced GSP facility, market and
product diversification, cheap labor, increased backward integration, high level of investment,
and government support are among the key factors that helped the country to continue the
momentum in export earnings in the apparel sector. Some of these elements are reviewed below.
1. Market Diversification:
Bangladeshi RMG products are mainly destined to the US and EU. Back in 1996-97, Bangladesh
was the 7th and 5th largest apparel exporter to the USA and European Union respectively. The
industry was successful in exploring the opportunities in markets away from EU and US. In
FY07, a successful turnaround was observed in exports to third countries, which having a
negative growth in FY06 rose three-fold in FY07, which helped to record 23.1 percent overall
export growth in the RMG sector. It is anticipated that the trend of market diversification will
continue and this will help to maintain the growth momentum of export earnings. At the same
time a recent WTO review points out that Bangladesh has not been able to exploit fully the duty
free access to EU that it enjoys. While this is pointed out to be due to stringent rules of origin
(ROO) criteria, the relative stagnation in exports to EU requires further analysis.

2. Product Diversification:
The growth pattern of RMG exports can be categorized into two distinct phases. During the
initial phase it was the woven category, which contributed the most. Second phase is the
emergence of knitwear products that powered the recent double digit (year-on-year) growth
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starting in FY04. In the globalized economy and ever-changing fashion world, product
diversification is the key to continuous business success. Starting with a few items, the
entrepreneurs of the RMG sector have also been able to diversify the product base ranging from
ordinary shirts, T-shirts, trousers, shorts, pajamas, ladies and childrens wear to sophisticated
high value items like quality suits, branded jeans, jackets, sweaters, embroidered wear etc. It is
clear that value addition accrues mostly in the designer items, and the sooner local entrepreneurs
can catch on to this trend the brighter be the RMG future.
3. Backward Integration:
RMG industry in Bangladesh has already proved itself to be a resilient industry and can be a
catalyst for further industrialization in the country. However, this vital industry still depends
heavily on imported fabrics. After the liberalization of the quota regime some of the major textile
suppliers Thailand, India, China, Hong Kong, Indonesia and Taiwan increased their own RMG
exports. If Bangladesh wants to enjoy increased market access created by the global open market
economy it has no alternative but to produce textile items competitively at home through the
establishment of backward linkage with the RMG industry. To some extent the industry has
foreseen the need and has embarked on its own capacity building.
4. Flow of Investment:
It is plausible that domestic entrepreneurs alone may not be able to develop the textile industry
by establishing modern mills with adequate capacity to meet the growing RMG demand. It is
important to have significant flow of investment both in terms of finance and technology. The
investment outlook in this RMG sector is encouraging, although the uncertainties before the
MFA phase-out period caused a sluggish investment scenario. In part the momentum in the postMFA phase-out period is indicative of the efforts underway towards capacity building through
backward integration.
This is evident in the pace of lending to the RMG sector and in the rising import share of RMG
related machinery. However further progress would be necessary to improve and sustain
competitiveness on a global scale.

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5. Policy Regime of Government

Government of Bangladesh has played an active role in designing policy support to the RMG
sector that includes back-to-back L/C, bonded warehouse, cash incentives, export credit
guarantee scheme, tax holiday and related facilities. At present government operates a cash
compensation scheme through which domestic suppliers to export-oriented RMG units receive a
cash payment equivalent to 5 percent of the net FOB value of exported garments. At the same
time, income tax rate for textile manufacturers were reduced to 15 percent from its earlier level
for the period up to June 30, 2008. The reduced tax rates and other facilities are likely to have a
positive impact on the RMG sector.
6. Infrastructural Impediments
The existence of sound infrastructural facilities is a prerequisite for economic development. In
Bangladesh, continuing growth of the RMG sector is dependent on the development of a strong
backward linkage in order to reduce the lead time. However, other factors constraining
competitiveness of Bangladeshs RMG exports included the absence of adequate physical
infrastructure and utilities.
7. Labor Productivity
The productive efficiency of labor is more important determinant for gaining comparative
advantage than the physical abundance of labor. In Bangladesh, the garment workers are mostly
women with little education and training. The employment of an uneven number of unskilled
labors by the garment factories results in low productivity and comparatively more expensive
apparels. Bangladesh labor productivity is known to be lower when it compared with of Sri
Lanka, South Korea and Hong Kong. Bangladesh must look for ways to improve the productivity
of its labor force if it wants to compete regionally if not globally. Because of cheap labor if our
country makes the labor productivity in the apex position, then we think the future of this sector
is highly optimistic.
8. Research and Training
The country has no dedicated research institute related to the apparel sector. RMG is highly
fashion oriented and constant market research is necessary to become successful in the business.
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BGMEA has already established an institute which offers bachelors degree in fashion designing
and BKMEA is planning on setting up a research and training institute. These and related
initiatives need encouragement possibly intermediated by donor-assisted technology and
knowledge transfer. A facilitating public sector role can be very relevant here.

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Chapter Five
SWOT analysis, Findings, Recommendations

5.1 SWOT analysis of RMG industry in Bangladesh

5.2 Findings
5.3 Recommendations
Conclusion
References

5.1 SWOT analysis of RMG industry in Bangladesh

Strength:
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 Adequate supply of labor force of both sexes, attributed with less attitudes problem (less
absenteeism and, aptitude for learning, and loyal) and high morale
Cheaper labor cost
Low cost of captive power generation using gas as fuel
GSP facility up to 2015 (renewed recently)
Weakness:
Bangladesh produce mostly basic products- which are low cost items; the share of
fashion products i.e., high value added product is very low.
Bangladesh does not produce the basic raw materials (only a negligible quantity of cotton
but no manufactured fiber) and as such has to depend totally on sensitive global market.
Because of inadequate backward linkage, lead-time happens to be long, nearly 3 months.
Public power supply is erratic.
Bank interest rate is still high enough, particularly of private sector bank, for investment
of export oriented high value project.
HRD facility, productivity and quality support, testing and accreditation support, design
support and compliances are yet to be enhanced.
Cost of doing business is high because of under table money
Opportunity:
Bangladesh has now a scope to go for more fashion oriented products deserving high
price in the global market.
With the help of further increase of productivity & quality and design support,
Bangladesh can minimize cost and maximize profit and export value.
Bangladesh, as a proven experienced RMG manufacturer, can expand share in the
existing market (USA, EU, Australia, Canada, etc.) and can also explore opportunity in
Japan & CIS countries.
In the long run, Bangladesh has a scope to target huge populated country like China and
India- where demand as well as cost of manufacturing will be wider.

Threat:

Unless new strong market is explored in home or abroad, any non-cooperation from
USA & EU may jeopardize the whole Bangladesh RMG export business and
consequently the textile manufacturing.
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 Sudden price hike of cotton and yarn in the global market may push Bangladesh to a very
awkward situation to devastate the business.
The type of labor and political anarchies of the recent days if prevails in the future,
Bangladesh may lose the business in the way Sri Lanka has lost.
Growing terrorism, or its false/amplified propaganda, is also a big threat.
The poor political culture and violence is one of the most important threats.

Findings
The garment industry of Bangladesh has been the key export division and a main source of
foreign exchange for the last 25 years. National labor laws do not apply in the EPZs, leaving
BEPZA in full control over work conditions, wage and benefits. Garment factories in Bangladesh
provide employment to 40 percent of industrial workers. But without the proper laws the worker
are demanding their various wants and as a result conflict is began with the industry. Low
working salary is another vital fact which makes the labor conflict. Worker made strike, layout to
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capture their demand. Some time bonus and the overtime salary are the important cause of crisis.
Insufficient government policy about this sector is a great problem in Garments Company. There
are some other problems which are associated with this sector. Those are: Credit problem
Lack of marketing tactics
Absence of easily on- hand middle management
Lack of training organizational for industrial workers, supervisor and manager
Autocratic approach of nearly all the investors
Sluggish backward or forward blending procedure, incompetent ports, entry
Time-consuming custom clearance
Raw materials
Quota problem
Communication gap
Poor government policy

Problem with Letter of Credit:

Most problems result from the seller's inability to fulfill obligations stated in the letter of credit.
The seller may find these terms difficult or impossible to fulfill and, either tries to fulfill them
and fails, or asks the buyer to amend to the letter of credit. As most letters of credit are
irrevocable, amendments may at times be difficult since both the buyer and the seller must agree.
Sellers may have one or more of the following problems:
The shipment schedule cannot be met;
The stipulations concerning freight costs are unacceptable;
The price becomes too low due to exchange rates fluctuations;
The quantity of product ordered is not the expected amount;

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 The description of product is either insufficient or too detailed; and,

The stipulated documents are difficult or impossible to obtain.

Safety Problems
Safety need for the worker is mandatory to maintain in all the organization. But without the
facility of this necessary product a lot of accident is occur incurred every year in most of
the company. Some important cause of the accident are given below

Routes are blocked by storage materials

Machine layout is often staggered
Lack of signage for escape route
No provision for emergency lighting
Doors, opening along escape routes, are not fire resistant
Doors are not self-closing and often do not open along the direction of escape.
Adequate doors as well as adequate staircases are not provided to aid quick exit
Fire exit or emergency staircase lacks proper maintenance
Lack of proper exit route to reach the place of safety

There must have some training institutions in where workers and supervisor can take their proper
training. As garments sector has become a golden economy sector, privately or publicly some
institution should establish in order to training the workers and supervisors.

Recommendation
The exporter should maintain all the rules and regulations and the quality of
Bangladeshi RMG should be increase to survive in the global market.
Duty on garment spares should be reduced and the production cost should be
minimized,
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 The new wages-structure for the garments workers must be fully implemented as
soon as possible.
To improve working skill of the workers more training programmed should be
arranged.
In the garments rehearsal of taking preventive step against fire should be held
regularly so that no workers die being fire burnt in future.
To give health service to the workers the owners have to ensure conducive working
environment by facilitating strong lift, sufficient light, proper ventilation system,
sanitation system etc.
The workers should be allowed to enjoy weekly holiday and other govt. holidays.
Each & every workers must be provided appointment letter and given relief from

the fear of being retrenched any time. Thus their job security should be ensured.
The workers must be given opportunity to participate in constructive Trade Union.
Transporting facilities should be developed.
Product quality should be maintained.
Need to develop the technical sector.
Manufacturing process should be developed

Conclusion
The Ready-Made Garments (RMG) industry occupies a unique position in the Bangladesh
economy. It is the largest exporting industry in Bangladesh, which experienced phenomenal
growth during the last 25 years.RMG industry, is the driving force of Bangladesh economy
accounting for 80 percent of foreign exchange earnings by directly employing 35 lakh people in
about 5000 factories. By taking advantage of an insulated market under the provision of Multi
Fabre Agreement (MFA) of GATT, it attained a high profile in terms of foreign exchange
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earnings, exports, industrialization and contribution to GDP within a short span of time. The
industry plays a key role in employment generation and in the provision of income to the poor.
To remain competitive in the post-MFA phase, Bangladesh needs to remove all the structural
impediments in the transportation facilities, telecommunication network, and power supply,
management of seaport, utility services and in the law and order situation. The government and
the RMG sector would have to jointly work together to maintain competitiveness in the global
RMG market. Given the remarkable entrepreneurial initiatives and the dedication of its
workforce, Bangladesh can look forward to advancing its share of the global RMG market.

References

BGMEA (2014), Available at: www.bgmea.com.bd

EPB (2014), Available at: www.epb.gov.bd
BKMEA (2014), Available at: www.bkmea.com.bd
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BTMA (2014), Available at: www.btma.com.bd

www.google.com
BGMEA research cell, BGMEA, BTMC, Bhaban, 7-9, Kawranbazar, Dhaka.
Bhattacharya, D., Rahman, M., Raihan, A. (2002), Contribution of the RMG Sector to the
Bangladesh Economy, CPD Occasional Paper Series 50.
Zafour, Abu. (2009). Problems and Prospects of Garments Industries in Bangladesh. [Online]
Available.

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