Faruque - PowerPoint Presentation

Slide1

Faruque Hassan, Senior Vice President, BGMEACONFERENCE ON SUSTAINABLE SOURCING IN THE GARMENT SECTORDhaka, 29 September, 2016

GLOBAL TRENDS IN THE GARMENT SECTOR AND OPPORTUNITIES FOR BANGLADESH

:

THE DUET OF SUSTAINABILITY & COMPETITIVENESSSlide2

INTRODynamics of global sourcing has been evolving with the changes in global trade and tariffs, realities, rules and policies. The emerging sourcing opportunities are creating opportunities for all – EntrepreneursWorkersBuyersConsumersBangladesh being the second largest apparel sourcing country and a leader in sustainable and responsible business has immense potentials to further grow its market share.Slide3

TIMELINE

RMG industry started its journey with $10000 exports made by 1200 workers

Export reached $116 million

0.12 million workers and 384 factories

Export hit $2.2 billion

Eliminated Child Labor through Earn

& Learn program

Rise of purpose built compliant factories

Export $6.4 billion

MFA Quota phased out which was predicted

to have severe consequence

Export $12.5 billion

Ranked 2nd largest RMG exporting

country

despite global recession

Export $21.52 billion

Rana

Plaza &

Tazreen

accidents

erupted the issue of workplace safety

Export $28 billion

10-years of MFA phase out.

Export quadrupled, e

mployment 4.4 mil.

Major progress in safety & workers rights

Vision has been set at

$50 billion

exports

Workplace safety, environmental sustainability, & excellence

in product & market diversification envisionedSlide4

WORLD CLOTHING TRADE 2015IN BILLION US DOLLARSlide5

?

ASIA

EMERGING GLOBAL TEXTILE & CLOTHING HUB

Share of Asia and rest of the world (ROW)

in global clothing exports, measured in US$Slide6

Y-O-Y EXPORT GROWTH% OF MAJOR CLOTHING SUPPLYING COUNTRIES, MEASURED IN US$Slide7

Last 10 years compound annual growth rate (CAGR) is 12.43%

APPAREL EXPORT OF BANGLADESH

VALUES IN BILLION US$, FY1985-FY2016Slide8

Number of Clothing Factories 3800 around

Export

$28

billion

Exports to

around

130

countries

4.4

Million workers

Investment

$11

billion

around

394

spinning &

777

textile mills

99%

accessories

made locally

SNAPSHOT: TEXTILE & CLOTHING INDUSTRY IN BANGLADESHSlide9

MAJOR MARKETS OF BANGLADESH’S APPARELSlide10

WHY BANGLADESHSlide11

SAFER PRODUCTION IN BANGLADESHSlide12

A PLATINUM LEED CERTIFIED WASHING FACTORY AT DHAKA

A PLATINUM LEED CERTIFIED

WOVEN FACTORY AT DHAKA

GLOBAL AWARD WINNER GREEN LANDSCAPING APPAREL FACTORY AT DHAKA

150 more factories in LEED certification pipeline

World’s highest rated knitwear, woven, washing and Denim mills

33 LEED certified factories

WORLD’S TOP RATED LEED CERTIFIED INDUSTRIAL ESTABLISHMENTS ARE IN BANGLADESHSlide13

70% of the population is under 40 yrs oldLarge educated and motivated youthHigh literacy rate (72%) among youths aged 15-24Inspired young, hungry for work and growth2 million youth entering in job market each yearLabor cost advantage117 million mobile phone users

33% internet penetration

BANGLADESH IS BLESSED WITH HUMAN RESOURCESSlide14

Within the Niche project "CSR & SRHR in the RMG sector in Bangladesh", funded by the Ministry of Foreign Affairs, an international consortium and the BGMEA University for Fashion & Technology (BUFT) is working to improve vocational training on CSR & SRHR in the textile sector in Bangladesh.Part of the project is the establishment of a Centre of Excellence (CoE) which will offer research, training and consultancy services to the textile sector in Bangladesh. The CoE will be operational in 2017.The CoE will mainly respond to the changing (market) demand for Dutch buyers because of the textile covenant, the sustainable procurement policy of the government and the transition trajectories  by CSR Netherlands.It involves, for example, the increasing demand for circular fabrics and mass customization.

BUFT and the CoE will provide the industry in Bangladesh soon the opportunity to get familiar with these new trends and developments and how circular garment concepts in Bangladesh can take shape.

A well-functioning technical university as BUFT is indispensable to maintain the Bangladesh textile industry modern and competitive in a rapidly changing world.

THE NICHE PROJECTSlide15

EU (28) GSP: Duty free access for apparel on 1-stage Rules of Origin. Japan GSP: Duty free access for apparel on 1-stage Rules of Origin.

Canada GSP:

Canada provides Zero duty access on 25% value addition requirement

Switzerland GSP:

Duty free access for apparel on 1-stage Rules of Origin.

Norway GSP:

Duty free access for apparel on 1-stage Rules of Origin.

Australia & New Zealand GSP:

Australia & New Zealand provides Zero duty access on 25% value addition requirement (subject to additional 25% sourcing from GSP beneficiary countries)

China Duty Free:

China provides Zero duty access for 60% items under global initiative through WTO, this will be enhanced to 97% products.

India:

Zero duty access to all apparel items under SAFTA.

Chile:

Duty free access for apparel.

Malaysia, Thailand & South Korea:

Provide duty free access to a number of apparel items from Bangladesh.

MARKET ACCESS FOR BANGLADESHSlide16

OUR PRIORITIESSlide17

BANGLADESH IS GETTING READY

PADMA BRIDGE – connecting people to prosperitySlide18

 July2008-June2009July2015-June2016GDP Growth

5.74%

7.05%

Manufacturing

Growth

6.68%

10.30%

Export

$15.57 billion

$34 billion

Import

$22.51 billion

$

40.03 billion

Private Investment

as

% of GDP

19.67%

21.78%

FDI Inflow (In US

$)

$960.50

Million

$2.24

billion

Per Capita GNI (US$)

$676

$1466

Poverty rate

40%

22.4%

Remittance

$9.69 billion

$14.93 billion

Foreign Exchange reserve

$15.57 billion

$30.14

Billion

Inflation

8.7%

5.92%

Bangladesh has become the Lower Middle Income Country from an LDC based on GNI performance

Vision to graduate to a Middle Income Country by 2021

Becoming a Developed Country by 2041

BANGLADESH ECONOMY STANDING STRONGSlide19

COLLABORATION MODEL FOR WIN-WIN-WINSlide20

BGMEA has been providing Grievance Management facilities to the garment workers at free of cost since 1998. The Committee is headed by a retired District Judge and participated by workers and owners representatives.BGMEA is providing regular training programs on worker-management relations and Bangladesh Labor Act for both factory management and workers. Already 1072 workers and mid-level management staffs have been trained. BGMEA has opened a Trade Union Advisory cell having an ex-Joint Director of Labor as its head.The BEF, BGMEA and BKMEA with the support of ILO (ITC) has trained 114 senior master trainers. These master trainers will train 8,000 mid-management officials and 8,00,000 workers gradually by end of 2016. Such programs should be continued and expanded to build the capacity of the industry to facilitate harmonious industrial relations.

12 Health Centers for the workers; serves more than 60,000 patients per year

WELFARE ACTIVITIESSlide21

BGMEA is constructing two full-fledged Hospitals for the workers, one 100 bedded in Chittagong (part of it came in to operation already) and another 150 bedded in DhakaAwareness raising for prevention of HIV/AIDS, Tuberculosis, reproductive health and the use of contraceptive devicesBGMEA in collaboration with the Govt. runs several Skills Training Centers in different areas of the country. BGMEA runs Five Schools for the workers’ children and provides books & study materials at free of cost. The BGMEA University of Fashion & Technology (BUFT)

BGMEA jointly with the Government of Bangladesh has taken initiative to establish Dormitories in Chittagong and Ashulia

BGMEA organizes musical talent hunt program

GORBO

WELFARE ACTIVITIESSlide22

BGMEA runs awareness program on regular basis to motivate the entrepreneurs in adopting energy efficient technologies, machines and work processIn order to institutionalize the process, BGMEA has set up an Environment Cell

“Partnership for Cleaner Textile - PaCT

” between BGMEA,

the Government of the Netherlands IFC

and a number of apparel buyers

Toward Resource Efficiency & Environmental Sustainability (TREES) with GIZ to build capacity of relatively smaller factories on environmental best practices.

SUSTAINABILITYSlide23

Thank You !