Bangladesh Apparel Industry Recovers From Cyclone Damage

The apparel manufacturing industry in Bangladesh has overcome the impact of Cyclone Sidr that struck the entire coastal region on Nov. 15.

DHAKA, Bangladesh — The apparel manufacturing industry in Bangladesh has overcome the impact of Cyclone Sidr that struck the entire coastal region on Nov. 15.

The calamity caused production and exports to fall off for a few weeks, as logistics, power and other infrastructure were disrupted and many of the workers from the affected coastal region left the workplace to return home. But major stoppages were avoided, and the key port of Chittagong escaped major damage.

“Export performance of apparel factories during November-December helped much to recover the shortfall of the previous quarter of July-September,” said Anwar-Ul-Alam Chowdhury Parvez, president of the Bangladesh Garment Manufacturers & Exporters Assoc.

A similar quick recovery from the impact of Cyclone Sidr helped knit apparel factories to expand their exports.

“Sales and shipments in November-December increased by about 15 to 20 percent,” said Fazlul Hoque, president of the Bangladesh Knitwear Manufacturers & Exporters Assoc.

The exporters said they are meeting growing demand and maintaining shipment schedules for their customers in the U.S., European Union and Canada, the main destinations for their products. They forecast exports will reach $9.3 billion to $10 billion in the 2007-2008 fiscal year ending June 30.

In 2006-2007, Bangladesh’s apparel exports were $9.21 billion, split fairly evenly between woven garments and knitwear, according to the government-run Export Promotion Bureau. Apparel fabrics, home textiles, terry towels and jute textiles netted $720 million.

The world’s fifth-largest clothing supplier, Bangladesh is aiming to overtake Turkey and India and move into third place behind China and the EU, and the quick recovery from Cyclone Sidr has helped to boost its credibility, said industry executives.

“To keep commitments, we left no stone unturned,” said A.B.M. Shamsuddin, managing director of Dhaka-based Fancy Fashion Sweaters Ltd. and a vice president of the garment manufacturers association.

“The buyers in their dealings with us will enjoy more flexibility, as some 16 percent of the workers who left for home in the cyclone-affected areas are expected to resume work shortly,” he said.

Last week, the industry organizations claimed Bangladesh will be able to stay competitive even after the EU’s removal of import restrictions on Chinese garments on Jan. 1, and with the U.S. set to do the same next year.

This story first appeared in the January 8, 2008 issue of WWD.  Subscribe Today.

They are counting on a continuation of the duty free status extended by the U.S. to countries struck by the tsunami in 2004, given the damage done by Cyclone Sidr. The U.S. is Bangladesh’s largest export market, with $3 billion worth of apparel shipped there in 2006-2007, and local manufacturers hope to substantially increase their market share in the next two to three years as China becomes more costly and companies look to diversify their sourcing.

However, many in the industry fear that Bangladesh’s lack of domestic sources of machinery and limited local supplies of fibers, yarns, fabrics, chemicals and dyes pose a threat to such growth in the garment sector, the nation’s main export industry, employing some 2.5 million workers.

Sidr struck the nation’s southern delta with tidal surges as high as 15 to 30 feet, killing more than 3,500 people and leaving over 1,000 missing and several million homeless. As a result, U.S. congressmen increased efforts to pass the U.S. New Partnership and Development Act trade bill.

“Economic devastation caused by Sidr and recent twin monsoon floods have strengthened Bangladesh’s grounds for getting duty free access to the U.S. market,” said U.S. Rep. Jim McDermott (D., Wash.), who introduced the bill, designed to eliminate tariffs and quotas on all products originating in Bangladesh and other less-developed countries.

The majority of exports to the U.S. are woven apparel, manufactured almost entirely by 3,000 woven garment production facilities, located mainly in and around the cities of Dhaka and Chittagong.

Another 1,300 factories manufacturing knitwear, located mostly in Dhaka and neighboring districts of Narayanganj and Gazipur, exported $762 million worth of goods in 2006-2007, an increase of 23.26 percent.

Bangladesh apparel exports to the U.S. reached $3.12 billion in 2006, according to the World Trade Organization. The EU imported $5.78 billion worth of garments that year, while Canada imported $434 million in clothing.

Bangladesh is the sixth-largest apparel supplier to the U.S., after China, Mexico, Indonesia, India and Vietnam. It is the third-largest supplier to Canada and the fourth-largest to the EU.

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