- Bangladesh has registered its highest monthly export turnover in the US market and shipped US $ 694.13 million worth of garments to its top exporting destination during October 2021, noting 29.50 per cent growth on Y-o-Y basis.
- Pakistan is all set to cross US $ 2 billion apparel export turnover in US market in 2021 for the first time ever!
- India’s export growth (33.72%) in the US market is the highest among top 7 exporting countries till October ’21 and the country is expected to conclude 2021 with 4th rank in the tally, beating Indonesia for the first time in years…
The above-mentioned figures indicate towards quite a satisfactory conclusion that South Asian manufacturing hubs are busy catering to the abundant number of orders being placed by the buyers – particularly from USA. This festive season, 2021 was always expected to fill the capacities of factories, especially after the dried up season in 2020, however the order booking scenario outshined expectations of the industry to a large extent!
So, is this just a sudden influx of orders or the countries are getting benefits from businesses that are leaving China? Seemingly, both are reasons…China has been a dominant apparel manufacturing destination for decades but its status is dwindling now. China will end up losing around US $ 7 billion in its export values to USA in 2021 as compared to 2019 figures and around US $ 10 billion as compared to 2018 figures. However, the US market is expected to conclude the year with import value reaching to more or less to pre-COVID levels. This resonates the fact that China’s business is actually being grabbed by other destinations.
Not just USA, but EU market too is seeing growth…The EU is expected to cross € 78 billion worth of imports (from countries outside EU) this year which is close to pre-COVID levels when it imported around € 83 billion worth of apparels in 2019.
As far as India is concerned, it was speculated the country will be the preferred country after China faced backlash in its cotton industry due to unethical practices being followed there, but that’s still a far-fetched speculation. But, yes, orders are flowing and, as per our conversation with some Indian manufacturers, it can be validated…
Amrutesh Jaghuva, Executive Director, Quality Knitwears Pvt. Ltd., Madurai (India)that supplies premium knitwear to the EU market, commented, “We have witnessed some great inquiries lately from our European buyers, especially from Italy and Spain. Even for next season, we are in touch with our existing clients for kids’ outerwear and women nightwear. So, situation is positive as of now after the huge setback we all witnessed last year and we are closely observing the market trends amidst rising raw material prices and logistics issues which are still a challenge.”
Commenting on the current order booking scenario, Prashant Agrawal, Managing Director, BRFL Textiles Pvt. Ltd., stated, “We have been witnessing strong demand for the festive season and we are seeing a significant growth in exports as well. During the pandemic, domestic business went on a pause mode and export orders dried down. However, since the onset of the festive season, orders have started flowing in, and the industry is on the path to recovery. The fall in cases and strong vaccination efforts are encouraging retailers to plan for a big festive season, and there is a growing sense of hope within the industry. There is a strong revival in the buying sentiment, and we are expecting a huge uptick in demand across the festive season till the year end.”
Noida-based Moissanite Apparels which is a premium womenswear manufacturer has also validated the fact of increasing spurt in orders from buyers. “With China going down, it was obvious orders will be shifted to other countries and I can vouch for the fact that India is one of those countries that has been able to grab the skewed orders…We are experiencing rising number of inquiries and sealing the deals with our buyers that is keeping our plants on working mode always,” informed Vivek Saxena, Managing Director, Moissanite Apparels.
Pakistan is one country that has kept its head above tides all through the pandemic period in its apparel manufacturing industry and showed resilience. It is making strong footprints mainly in cotton-based apparels and the steep rise of its denim and trouser exports in first 10-month period of 2021 justifies its increasing dominance.
Chris Bryer, President, Selective World Sourcing(USA)– a sourcing company having strong base in Pakistan through its Lahore office – mentioned during a conversation with AR’s editor on LinkedIn, “I have been talking about the rise of Pakistan as a prime sourcing destination for several years now and 2021 has been evident of what I had been predicting. The business is booming and capacities of factories are being challenged. Of course, yarn is still a pain but situation of raw material is more or less the same everywhere.”
The challenges Pakistan is facing are not restricted to just raw material…Of late, its garment sector is facing shortage of skilled workforce across manufacturing hubs within the country that is being seeing as a growth impediment factor, especially in the EU market and, in words of Sheikh Luqman Amin, North Zone Chairman, Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), the shortage of skilled manpower has deprived the country of taking the full advantage of its access to the European Union market, despite orders are continuously being flowed in from the EU.
As far as Bangladesh is concerned, it is tapping continuous growth both in US and EU markets in 2021. Some market challenges as well as fear of Omicron are certainly trying to derail the momentum but exporters are staying positive…
Sandeep Golam, Operation Director of Armana Group – one of the leading Denim garment exporters in Bangladesh, has given his opinions on the current market situation and order booking scenario. Though Armana Group’s capacities are booked for the next 6 months, the existing challenges such as high yarn prices, logistics issues and high cost of manufacturing are still causing uncertainties in the export market.
Armana is also witnessing a shift from China and Vietnam as the buyers have now understood the importance of ‘China plus One’ strategy for their sourcing needs. The political unrest in Ethiopia and Myanmar have also made the situation uncertain for the long run, however, currently, there has been a big boost for Bangladesh’s garment industry due to all these reasons. Ethiopia will still remain an LDC so you never know if more buyers will leave this country or not! Another reason for Bangladesh to be successful in grabbing shifting orders is its ability to establish the most compliant factories across the South Asian region and all the investment done in the last 5 years to build world-class green factories is now paying off! Which company knows the importance of setting fully compliant factories better than Armana, which is setting footprints for others to follow in denim garment manufacturing even in COVID-19 times!
“Our entire 3 million pieces per month capacity across factories is booked till the latter half of 2022. We are getting a good mix of orders from our existing buyers and our existing infrastructure is able to cater to those orders. However, like others, we are also grappling with some inevitable issues as mentioned above, plus Omicron has come as a fear among the global consumers, hence the subsequent months still look fluctuated,” commented Sandeep.
Reflecting the trend of increased work orders coming in from global buyers to Bangladesh lately, Bangladesh’s Concorde Garments Group has its capacities booked till April next as work orders pour in from its existing/new clients, which is in sharp contrast to the scenario of last year when garment makers in Bangladesh had to deal with large-scale order cancellations, thanks to the COVID-19 pandemic.
“There is an increase in orders as orders are being diverted from China and Vietnam due to the pandemic,” maintained the Managing Director of Concorde Garments Ltd., Sayeeful Islam, referring to recent spurt in orders. However, despite the encouraging trend in the work order front, Sayeeful is more concerned about the faltering price points which is making things uncertain for long run!