Readymade Garments (RMG) is one of the auspicious sectors in Bangladesh. The apparelindustry of Bangladesh started its journey in the 1980s and has come to the position it is intoday. In this long run, a series of garment industries have been growing up in different areaslike Narayanganj, Gazipur, Narsingdi, Mymensingh, Chittagong and so on. It also should bementioned that, further expansion in these area is not a viable thing and will be considered asa threat to the environment and safety requirements.
However, this sector has experienced atremendous growth of 55% from 2002 to 2014. As a result Bangladesh is now exporting 35types of garment products to almost 31 countries among which 60% are European buyers andthe rest are American. In 1972, the World Bank approximated the gross domestic product(GDP) of Bangladesh at USD 6.29 billion and it grew to USD 173.
82 billion by 2014, withUSD 31.2 billion of that generated by exports, 82% of which was ready-made garments.However, though the RMG sector in this country has been a successful story over a long time,it is only based on day to day experience rather than any relevant educational skill or properplan. Till today the back-linkage supplies are directly or indirectly related to import processwhich is a very critical factor for sustainable growth of any business. At present Bangladeshoccupies the 2nd position in RMG manufacturing just after China and it has been claimed to bethe “Next China” in few years, but still now, this market is mostly producing basic and semivalue added garments. In the meantime the global market in this industry has experienced arapid change in last couple of years. China produced a lot of engineering value added productto the market to maximize the customer satisfaction.
So there is a possibility of bringing achange in product line in near future. As textile industries have an adverse impact onenvironment, there are difficulties in environment friendly manufacturing. Despite a few RMGindustries of Bangladesh has played a notable role in green manufacturing practices which isvery expensive. Then again one of the fundamental needs of human civilization is cloth. Withthe growing population the demand of cloth will increase anyway. But it is a matter of concernwhether the demand will continue with the same product range or it will change.
Moreover thecustomer response time is a critical factor to satisfy customer demand. In Bangladesh the leadtime is 90-120 days which is quite higher than other countries in this region.Again cost of manufacturing is exponentially increasing with the passing of time and rising ofeconomy. At the same time the market is very competitive. So it is a great challenge for themanufacturer to produce products in the affordable buying range. And because of being a denseindustrial area the scope of erecting more industries has become narrow with limitedinfrastructure growth.
In that case another relevant option may be to explore new potentialareas like- Khulna, Rajshahi and Barisal where new industrial zone can be established otherthan EPZ and EZ but there might be difficulties involving legal approvals from regulatorycommission and logistics. Moreover Bangladesh is a politically instable country and naturalcalamities are very common throughout the year.Now, suppose, you are Mr. Steve and you work as a business analyst for a leading readymadegarment Industry named Agile Apparel Solution Ltd. Which is located at Gazipur, Dhaka. Youexperienced an excellent business growth in last five years starting from 150 million to 175million export. You are trying to continue the current growth level in future. To do so you candecide on expanding the existing facility or go for setting up a new factory.Now you have to make a suitable proposal to convince the managing director considering allthe facts described above.