Bangladesh’s RMG exports are growing daily, but the spinning industry is still suffering from a serious lack of profitability. Bangladesh’s spinning industry expanded in the last few decades in tandem with the growth of the export-oriented apparel industry, however this expansion was made without considering the potential future market. The spinning industry has been facing a serious survival problem for the past two years. The demand for export-oriented clothing has increased slightly in recent months, but the purchasers aren’t giving competitive rates.
Yarn costs are consequently cheap. Because of this, spinning mills must figure out their loss per unit even while orders for clothing rise. Except for some premium yarn orders, almost all yarn types are experiencing losses.
Now mills are getting competitive prices for slub, cyro, inject, Cotton-Modal, Cotton-tencel etc. As a result, it can be said that except for fancy yarn spinning mills are facing losses for all regular yarn.
The spinners will still have hope that if order quantities increase, they will make an effort to reduce losses because the RMG sectors will require assistance from this backward-linking business. A robust and healthy spinning sector is essential for the export-oriented apparel industry to enable seamless production and business operations.
Conversely, gas prices have gone up significantly compared to a few years ago. The workers’ salaries have also gone boosted. The government may take some gas pricing considerations into account for those who generate their own electricity through the use of gas. However, to fully utilise the capacity, the bank’s working capital limit must be used.
Additionally, in the shortest amount of time, all spinners must change their product line from regular to diverse. Now is the critical moment to decide whether we will continue to rise or close each floor one at a time.