Harnessing the Potential of Synthetic Fibers Vital to the Bangladesh Economy
MIR MOSTAFIZUR RAHAMAN |
Sept. 18, 2021, 8:34 a.m.
Sept. 18, 2021, 8:44 a.m.
As Bangladesh struggles to maintain its position as the world’s second-largest apparel exporter, the country desperately needs political support to firmly establish itself on the potential of synthetic fiber (MMF) in which its rival is advancing.
This clothing sub-sector has the prospect of being a game-changer in the global textile trade, as evidenced by its growth, overtaking traditional clothing.
Over the decade, the world has experienced spectacular growth of the MMF sector in the clothing trade, but in Bangladesh the contribution of MMF to the country’s clothing basket is less than 30 percent, well below of the world average of 63 percent.
Industry experts say if the country fails to increase MMF’s share of the trade pie, it could lose its current ranking as one of the top garment exporters.
Cotton’s share of fiber consumption was 41 percent 10 years ago, but has now fallen to 26 percent as MMF’s share has risen to 63 percent.
“There is no doubt that we need to increase our share in MMF products, but we do not have the proper political support,” Mohammad Ali Khokon, president of the Bangladesh Textiles Mills’ Association (BTMA) told FE. .
“We urged the government to reduce the VAT on MMF from TK 6 to TK 3, but this has not yet materialized,” he said, adding that the VAT for cotton yarn is TK. 3.
“On the other hand, setting up the MMF factory is a very expensive problem and we have requested exemption from import duties on machinery and equipment for setting up MMF factories. concerned authorities have not responded positively to our request, “Khokon said. noted.
According to the president of the BTMA, textile factories have 13 million spindles of which only 15 contribute to MMF products.
Dr Mostafizur Rahman, Distinguished Fellow at the Center for Policy Dialogue (CPD), believes that a range of measures can be taken by the government to boost the MMF sector.
“There should be credit support from various government funds, including the export fund of the Bangladesh Bank, as it is a capital intensive sector. The government can also establish an industrial park. dedicated to this sector with infrastructure support, ”he said.
“There should also be support for skills development as this is a relatively new sector for us,” he suggests.
Vietnam, which is Bangladesh’s main competitor, is “ahead of us in the MMF sector,” he recalled.
The President of the Policy Research Institute, Dr Zaidi Sattar, believes that attracting foreign investment is crucial for strengthening the MMF sector.
“Worldwide, demand for MMF is growing, and it is a high added value product, so we need to take action to strengthen this sector,” he said.
Global fiber consumption is increasing, reaching 108 million tonnes in 2019, up from 100 million tonnes in 2016.
The share of synthetic fibers is 63%, and according to an international survey by Lenzing, the MMF market will grow steadily at a rate of 3-4% until 2024.
Experts say the global fiber consumption will increase to 140 million tons, of which MMF’s share will be 108 million tons.
Wood Mackenzie, an international industrial research company, said in 2018 that cotton accounts for only 26% of total fiber consumption, while polyester accounts for 56%, followed by polypropylene with 4.9%, nylon 4, 8% and acrylic 1.6%.
Industry insiders say MMF’s growth is driven by the growing demand for MMF-based clothing in the fashion industry.
“It is also cost effective and easily recyclable, unlike cotton,” said a buyer from RMG.
MMF has versatile use in end use categories such as sportswear, leisure wear, women’s dresses, home textiles, automobiles, carpets and other industrial sectors. All of this makes it an ideal fiber of the future, he added.
Bangladesh has established itself as a major producer in the ready-to-wear sector with more than 4,600 factories in operation. In the spinning sector, around 430 factories are operating, of which only 27 produce synthetic yarn, in particular polyester. Facilities for the production of other synthetic fibers such as polypropylene, nylon, acrylic, etc. have not yet been established in Bangladesh
Global human-made clothing trade in 2019 was around $ 179 billion, according to a report, with Bangladesh holding around 5% of the market share, while its main rival Vietnam had a share. by 10%.
The 27 factories producing synthetic yarns in Bangladesh meet only 20 percent of national demand.
However, foreign investors are eager to set up MMF factories in Bangladesh as they feel a huge untapped demand. Korean textile company Youngone has invested $ 65 million in 3 factories and has announced plans to invest an additional $ 120 million for 2 more MMF factories in the Korean free zone, owned by the company.
Speaking to FE, company president Kihak Sung said Youngone has already started manufacturing polyester fabrics at the two state-of-the-art factories, each with a floor space of 430,000 square feet.
“The two factories will soon be expanded,” he added.
Industry analysts suggest that FMM’s production incentives may also attract huge FDI to the country, as Bangladesh has strong downstream links in the garment sector.