To drive home their point, the garment manufacturers underlined that Bangladesh basically used to produce tubular-shaped basic T-shirts in the ’90s and the wastage rate was 16 per cent at the time. However, in the current era of fashion, production types and qualities are completely different as various types of yarns and fabrics are used to make knitwear products of different designs and qualities where the wastage rate is 20-40 per cent and in some cases, the wastage rate is even higher.
So a committee is now being formed, which has been tasked with submitting a report on the actual wastage rate at different stages of production after visiting factories, and that of different countries (including India, Pakistan, and Sri Lanka). It will put forth its recommendations, to address this contentious issue of wastage.
Notwithstanding being the second-largest apparel exporter globally after China and catering to almost all the retail biggies world over, Bangladesh has long been talked about for its so-called dependence on basic apparels.
To put things in perspective, according to a research carried out by the apex garment makers’ body in the country, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), around 80 per cent of the garment exports fall within the price range of US $ 15 per kilogram, and only 20 per cent items get a price more than US $ 15 and a tiny fraction gets US $ 35. Although it is difficult to capture the trend for the product range above US $ 15 per unit, this may be generalised that Bangladesh’s progress towards adding higher values has been slow, the research said.
However, lately the industry is said to be gradually shifting away from basic and semi-high-end products as around 40 per cent of all garment items shipped from Bangladesh, industry insiders claim, are high-end products.
Nevertheless, even if the industry is steadily moving towards making valued-added and high-end items, the so-called issue of wastage, garment makers claim, has emerged as a major stumbling block in their endeavour towards adding value to their offerings.
Keeping the same in consideration, the apparel factory owners have written to the Commerce Ministry demanding a 2.5-fold increase in the export-oriented knitwear industry’s wastage rate on the grounds that the wastage rate has increased in the production of high-cost knitwear items.
It may be mentioned here that the current wastage rate is 16 per cent — in the export-oriented composite knitwear industry, the 16 per cent wastage rate is set by the Commerce Ministry for the whole process of production (from cotton to yarn to fabric to finished products) — has been in effect for more than two decades.
But garment makers want this to be raised to 40 per-cent now!
With reference to the same, the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), last month, wrote to the concerned ministry proposing the hike in terms of wastage that is to be allowed.
Now, if media reports are something to go by, the proposal put forth by the garment manufacturers have somewhat surprised the officials of the concerned Ministry as they feel that the garment makers’ demand belies the popular belief that with advancement in technology, wastage percentage is supposed to come down rather than going up.
To add to it are apprehensions that bond facility (cotton imported under bond facilities for export purposes) might be abused if the demands are met.
It may be mentioned here that misuse of bond facility has become a major concern for Bangladesh so much so that the Bangladesh Textile Mills Association (BTMA) in separate letters to the Prime Minister and the Textile and Jute Minister submitted a plea, in which the association requested the Textile Minister to issue a demi-official (DO) letter to the Finance Minister, so that drives to stop the local market from being flooded with illegally imported textile materials under duty-free facility, continues.
“…a good number of mills might turn into sick ones due to misuse of bonded warehouse facility as well as illegal import of yarn and fabrics through misdeclaration,” the letter read even as citing the National Board of Revenue (NBR) data, the BTMA officials said Customs Bond Commissionerate conducted a total of 223 drives during January-October in 2020, and seized 85 trucks and covered vans laden with fabrics and yarn brought by misusing bonded warehouse facility.
The apprehensions of the Ministry officials are thus very much understandable.
Meanwhile, according to media reports, a meeting was held between the concerned officials and the garment makers on this issue of wastage, which was reportedly chaired by the Additional Secretary (Export) to the Commerce Ministry, Md Hafizur Rahman and was attended by BGMEA Director Shehabudduza Chowdhury, BKMEA Senior Vice-President Mohammad Hatem, Bangladesh Textile Mills Association (BTMA) President Mohammad Ali Khokon, and officials of the tariff commission and the Customs Bond Commissionerate.
In the meeting, a committee was formed, which has been tasked with submitting a report on the actual wastage rate at different stages of production after visiting factories, and that of different countries, including India, Pakistan, and Sri Lanka while also put forth its recommendations on the issue of wastage.
As per media reports, which cited unnamed Ministry officials, who were part of the meeting and privy to issues being discussed in the same, concerned officials were of the view that the use of technology in the RMG industry, which had increased a lot over the years, should have reduced wastage even as the garment makers on their part demanded increasing the wastage rate 2.5 times.
This naturally raises a question… Have they been doing business despite facing losses for all these years, as reportedly asked by one of the Ministry officials.
“That is why the committee was formed; its members will review the cost sheets of different factories and collect information on the wastage rates of other countries before recommending a new rate,” claimed the concerned official even as garment makers on their part, reportedly explained as to why they want wastage rate to be increased citing examples.
Taking part in the discussions during the meeting, garment makers reportedly maintained that they used to make seamless T-shirts in the past and those only had stitches in sleeves and no sewing was needed on either side. However, now they need to sew both sides, and consequent to which fabric needs to be cut from both the sides, which causes increase in wastage, and that is why they have demanded an increase in the wastage rate, the apparel makers stated even as in their earlier letter to the Commerce Ministry, the garment manufacturers reportedly underlined that Bangladesh basically used to produce tubular-shaped basic T-shirts in the ’90s and the wastage rate was 16 per cent at the time.
However, in the current era of fashion, production types and qualities are completely different as various types of yarn and fabrics are used to make knitwear products of different designs and qualities where the wastage rate is 20-40 per cent and in some cases, the wastage rate is even higher.
The letter further reportedly underlined that when the wastage rate was set at 16 per cent, knit clothes were processed using local methods, dyed using local machines, dried in open fields and home-made calendar machines were used to give the finishing touch. However, these methods have become completely obsolete, and the processes now need state-of-the-art machinery and that is why it is not possible to keep the wastage rate at 16 per cent.
The garment makers also reportedly underlined that the wastage rate was currently determined using modern machinery and customers are charged for products accordingly and added that therefore increasing the wastage rate would not harm industries.
Now, if the Government would increase the same, if so, by what percentage, would all be known it seems, in the days to come only.