BD garment accessories sub-sector hope to achieve $12bn export by 2025


Mohammad Nurul Alam

The global packaging market size is around $ 700 billion

After China, Bangladesh is the second largest apparel exporter globally but the sector is still not able to earn revenue in line with the apparel business due to some unavoidable situation. Apparel exporters are still purchasing garments accessories mainly from China or Hong Kong. The reason is though some local accessories company started their business but very few accessories manufacturers are able to get brand nominations globally. On the other hand, the sub-sector industries have numerous opportunities to boost the business and thus it could be an unbeatable sector to compete with any other business if the accumulated efforts can be made by entrepreneurs and the government.

Current Accessories business status 

According to the Bangladesh Garments Accessories & Packaging Manufacturers & Exporters Association (BGAPMEA), the value addition is around 40% amounting to 350 billion taka by the packaging and accessories sector.

The sector earned about US$ 7.67 billion (deemed and direct export) for the country in FY 2021-22, of which about $ 1.0 billion was direct export.

BGAPMEA has set an export target of $12 billion by the end of 2025.

The global packaging market size is around $ 700 billion at present mentions BGAPMEA.

The mid-1990s to 2000 and the growing period of the sector 

During the growing period of the Accessories and Packing sector in the mid-1990s to 2000, the RMG sector was heavily dependent on imports for the items. Importers were spending as much as 80% to 90% of the export value to purchase them. But today accessories sector is developing and promising to expand in business locally and internationally with foreign competitors.

Mahbubul Alam Shohag, Director (Marketing), Dody Trims Ltd. said-

“Today Bangladesh RMG sector is collecting 60-70% of accessories and packing items from local sources and 30-40% of materials we still need to collect from abroad.  Some accessories like fancy buttons, Rhinestones, Security Tags (RFID), Metal Clip, Beads, Buckle, PU Leather, Studs, hangers, and poly bags Materials, zippers, and cartons carton Materials were not made locally and had to be imported. But through the last two decades, a large number of accessories industries have come up to fill in this gap to the extent of about 70% of the total requirement of the industry.”

Investment and earnings from the Garment Accessories unit

According to BGAPMEA  Bangladeshi garments accessories and packaging makers have made massive

investments in the sector is about Taka 35 thousand crore and value addition is about 40%. After all, it is the first backward linkage industry of the RMG sector.  Tk. 1,000 crore to push up exports and meet the demands of the apparel sector and presently, around 1,900 factories produce accessories in the country.

The accessories produced locally include woven labels, leather badges, stone and metal motifs, rubber patches, gum tapes, satin and cotton ribbon hangers, price tags, buttons and zippers.

This sector earned about US$ 7.67 billion (deemed & direct export) for the country during the year 2021-22, out of which about US$ 1.0 billion was direct export.

Accessories and packaging industry is the new hub of employment 

As per BGAPMEA, More than 7 lac employees are working in this sector of whom 20% are women. Now global packaging market size is about US$ 700 billion. The GAP sector can earn US$ 7.0 billion by capturing a 1% market share. There is also an opportunity to export to emerging countries like Myanmar, African nations, etc. The garments Accessories sector can extend its contribution from 17% to 20% in achieving US$ 50.0 billion export of the RMG sector.

Challenges  of the sector 

1) False purchase – Sector insiders opined there are a lot of false purchases that have been shown some time by the garment manufacturers instead of taking goods from the real suppliers.

“Maximum Group of Companies and Buying Houses has been doing their all accessories by opening a small manufacturing unit, Trading Unit, or a commission agent to take the whole profits. They have been taking B2B LC by their factories (sometimes false) and agents. And finally, the real manufacturing units are losing profits and facing huge payment-related hassles.” said Mahbubul Alam Shohag, Director (Marketing), Dody Trims Ltd.

2) Payment kept unpaid or not given totally 

It has been said that some garment manufacturers are not willing to pay accessories suppliers on the due date. Even they try to pay without back-to-back LC and in most cases this makes the situation tough to survive when the work order gets canceled without prior notice.

During the COVID period, lots of payments are not being made by the RMG manufacturers just because of order cancellation by the buyer.

3) Increasing raw materials price 

The accessories and packaging industry mostly depends on abroad for its raw materials but globally materials cost is getting higher but backward linkages are not able to provide materials at low cost as a result many backward linkage industry shut their factories down.

Mr. Rezanur Sohel, Managing Director, eS Trims Ltd. said “Day by day production costs are increasing but prices are decreasing, so that’s another challenge are facing. As an SME manufacturer, the government needs to support young entrepreneurs by providing low-interest loans for further investment. Still, we sourced raw materials from abroad. To save cost we need to set up raw material factories. Besides, the government has to provide an uninterrupted supply of gas and electricity.”

4) Lacking of expertise to provide quality products 

Industry insiders express an opinion that Bangladesh accessories and packaging manufacturers are not enough capable of providing quality products same to rival countries. So they need to improve their overall expertise in the development of various items.

Opportunity and progressing 

Besides challenges, Bangladesh’s backward linkage of accessories and packaging industries are achieving LEED Gold Certification.

Bangladesh-based one of the largest packaging & accessories manufacturing company, Swisstex Packaging & Accessories Ltd a concern of Swiss Tex Group achieved the USGBC (LEED) GOLD Certificate with 65 LEED points.

Dekko Accessories Ltd. is the world’s first LEED PLATINUM Certified Green garments accessories manufacturing factory.

Dekko Accessories Ltd & Agami Accessories Ltd have taken an exemplary initiative to set up a Library for their employees, workers and their families at the factory premises.

Union Accessories Ltd” installed a brand new Tagtrans 225 Printing Machine, from UK Based “Focus Label Machinery Company”.  This machine is Single and multi-color Halo-free Transfers.

An initiative from the BD garments 

A high-powered panel has been formed by  The BD Ministry of Commerce (MoC) and has assigned the seven-member body to identify –

1)The bottlenecks of the RMG accessories and packaging sector.

2) To suggest remedial measures to help boost up the export earnings from the sector.

3) The recommendations will be submitted within the next couple of months sources said.

A senior official at the MoC. pointed out BD garments are taking necessary efforts to mitigate possible shocks after the country’s LDC graduation by 2026. A vast preparations has been taken out ahead of graduation of Bangladesh from the least developed country (LDC) status.

The sources said to increase earnings from the subsector that mainly supplies to local readymade garments factories the commerce ministry has asked the country’s 18 missions abroad to explore potentiality and find barriers to boost up the business.

In conclusion, there is a growing need for sub-sectors to diversify industrial technology, and economy and to find new sources of accelerating growth to face possible challenges. So production capacities of garment accessories and packaging products, Bangladesh needs to make efforts to explore the export potentials of such items worldwide.