Bangladesh Strategic
Opportunities &
Planning for the
Future
Date: 24th Nov’ 12
Venue: Lake Shore Hotel
ICTA 2012
John T. Smith
Comp TI, CText, FTI, CMC, MIMC.
International Coordinator / Long Term
Adviser
Textiles and RMG
UNIDO – BEST
& Chairman, International Events
The Textile Institute
Where Are We Now?
• Textiles and Clothing accounted for 87.9%
for export in 2011/12
• EU demand for Bangladeshi textiles and
clothing surged by 28.6% in 2011
• The EU was also Bangladesh’s largest market
for woven clothing
Source: McKinsey Report
Where Are We Now?
Source: McKinsey Report
Where Are We Now?
Source: McKinsey Report
Implication of McKinsey
Competitive International Factors
• SWOT Analysis
STRENGTH
-EPZ’s
-Back to Back L/C
-Plentiful Population
-Modern Equipment
-Dynamic Entrepreneurs
- Financial Model
WEAKNESS
-Infrastructure : Electricity, Gas,
Roads, Rail, Ports
-Slow Reaction
-Product Development
-Technical Management
-Literacy
- Lack of integrated thought
OPPORTUNITY
-Broaden Categories of Products
-Move Up market
-Introduce more linkages
-Cooperation Partners
-Introduce non-woven
-Introduce fibre production
- Change Philosophies
THREATS
-Worker Unrest
-Uncompetitive Practices
- outdated administration
THE WAY FORWARD
New Opportunities for Textiles &
Garment Entrepreneurs
New Opportunities…
• Primary Textiles
- Backward/ Forward linkages
- New processes
- Value raw material for its positive
properties
- Use international research results
- New Fibre use e.g. Bamboo
- New Fabric finishing
New Opportunities…
•
-
Garments
More effective production
More CAD/ CAM
More Design Groups
More Fast Response /ERP
More Integrated Product Design
More Mix & Match
New Opportunities…
- Comprehensive Integrated Manufacture!
- Use Critical Path Analysis
- Product friendliness (change easy
parameters)
- Many products from few inputs (raw
materials)
New Opportunities…
• Literate Educated Workforce
• Design & Build Eco-Friendly Economic Factories
New Buying Markets
Source: McKinsey Report
Challenges for Growth
•
•
•
•
•
Major Issues
Infrastructure
Compliance
Supplier
Performance
Raw Materials
Economy &
Political Stability
Source: McKinsey Report
The Next Sourcing Hot Spot
Source: McKinsey Report
The Next Sourcing Hot Spot
• Goldman Sachs includes Bangladesh in the
Next 11 (N-11)
• J P Morgan – ‘Frontier Five’
stating that major advantages of Bangladesh
is ‘ Price & Capacity’
• Labour cost expected to rise by 30%
Efficiency Increase to Match Wage
Increase
RMG Factories in Different Countries
Bangladesh
5000 +
Indonesia
2450
Vietnam
2000
Cambodia
260
Expected Trends
• Shift from ‘Knitwear’ to ‘Woven’ expected
• Upgrade Service Level e.g. Design, Package,
Ticketing, Warehousing, Delivery
Expected Trends
• Government
• Supplies ( Garment Makers)
• Buyers
‘The story of Bangladesh has just begun’ – Head
of Sourcing Office
‘ Battle for Capacity is on the Horizon’
Expected Trends
• China dominated in 2010
Source: McKinsey Report
CPO Forecasts
• 32% will decrease sourcing from China
• 54% plan to decrease their sourcing from
China i.e. 86% are reducing
• Wages in Coastal China increasing rapidly
• Shortage of Garment Workers in the area
• China will eventually be a net importer –
not exporter!!
Sources
With thanks to :
- The McKinsey Report
- Textiles Intelligence Reports 145 & 157
- UNIDO BEST BWTG Reports
Thank You For Your Attention