#Title

Spinners on an expansion spree

Aim to capture greater share of growing domestic market
Apparel orders staging a strong comeback
Refayet Ullah Mirdha
The flow of work orders to the garment industry is rebounding strongly on the back of the reopening of stores of retailers and brands in Europe and the US, the two main export destinations for the apparel manufacturers in Bangladesh.
Local suppliers estimate that their exports in the next summer might go up by 20 to 30 per cent. The production for the season runs from September to March.
“Usually, the work orders for the summer season are higher in volume than that for the winter season due to the nature of the garment items produced in Bangladesh,” said Bakhtiar Uddin Ahmed, chief operating officer of Narayanganj-based Fakir Apparels.
Bangladesh is strong in the manufacturing of knitwear and woven clothes, which are mainly worn during the days of summer and mild winters.
The value of monthly exports from Fakir Apparels varied between $10 million and $11 million over the past one year. But Ahmed expects it will go up to $13 million to $14 million from September.
His factory mainly exports comfortable knitwear items worn at home, the demand for which is greater than that of woven items because people are spending more time indoors owing to the coronavirus pandemic.
Moreover, work orders are shifting to Bangladesh from Myanmar and China because of the competitive prices offered by the local items.
Many western buyers are also relocating work orders from China to Bangladesh and Vietnam as the production cost has gone up in the world’s second-largest economy.
Narayanganj-based Kappa Fashion Wear Ltd has received nearly 25 per cent higher work orders from its buyers for the next season.
The company mainly ships T-shirts and polo shirts. The pandemic has forced it to cut production by half.
Before the pre-pandemic, it used to export garment items worth Tk 100 crore per month. The receipts stand at Tk 75 crore per month now.
“But business is making a revival now,” said Ahmed Fazlur Rahman, chairman of Kappa Fashion Wear.
Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association, said confidence in Bangladesh had been restored as local manufacturers had been able to supply items to international retailers and brands even during the pandemic.
Refayet Ullah Mirdha
The spinning industry in Bangladesh is witnessing massive investment as local entrepreneurs are either expanding their production capacities or setting up new units as the demand for garment raw materials is rising.
Local spinners have a combined capacity to process 13.43 million bales of cotton each year. But due to various drawbacks, they are unable to run at full steam.
As a result, the mills currently manage to make use of 8.5 million bales of cotton annually, shows data from the Bangladesh Textile Mills Association (BTMA), a platform for entrepreneurs from the primary textile sector.
“Just earlier this year, around Tk 1,900 crore was invested in the spinning industry despite the ongoing coronavirus pandemic,” said Monsoor Ahmed, chief executive officer of the BTMA.
Three new spinning mills will go into operation within the next two years, while some of the existing millers plan to expand their capacities to meet the growing demand.
As such, the industry will be able to process 16 million bales of cotton within the next two years, Ahmed said.
The addition of the new spinning capacity will raise the investment in the primary textile sector to nearly $11 billion from $10 billion.
Of the investment, 75 per cent is in the spinning segment, while the remaining 25 per cent is divided amongst the weaving, dyeing, finishing and sizing segments.
“We get a lot of queries from the local garment sector for yarn and fabrics, and so BTMA members are investing a lot to increase the production of the raw material,” Ahmed said.
Shorter lead-time, improved quality, and private consumption are pushing the domestic demand for yarn and fabrics higher.
For instance, if local garment exporters import yarn and fabrics from countries such as China and India, it will take at least 20 days to bring in the raw materials. In contrast, they can buy the items from the local market instantly.
Besides, most local spinners have export-oriented garment factories. So, they consume the yarn and fabrics.
The demand for yarn and other fabrics in the garment sector is increasing on the back of an increased volume of work orders from international clothing retailers and brands.
Moreover, Bangladesh needs a lot of diverse raw materials as local apparel makers are diversifying their product basket to include denim and artificial fabrics.
“So, the import of yarn and other fabrics is also increasing to meet the demand,” Ahmed said.
In 2020, Bangladesh imported $1.32 billion worth of knitted fabrics, $2.76 billion worth of woven fabrics, and $0.10 billion worth of yarn for the local garment industry.
Currently, local spinners can supply 80 per cent of the raw materials required by the knitwear sector and 40 per cent of the woven sector. So, local spinners are trying to expand their footprint in the market.
Jinnat Spinning Mills Ltd (JTML), a concern of DBL Group, is one of the new millers set to go into production.
“We are investing $83 million in JTML, and it will be operational by January 2023,” said MA Jabbar, managing director of DBL Group, a major garment exporter.
The new mills will be set up at Sherpur in Moulvibazar with 56,544 spindles to produce 840 rotor drums, 31 tonnes of ring yarn, and seven tonnes of rotor yarn per day.
“Our garment factories will consume all the yarn as we have a lot of work orders from international buyers,” Jabbar said.
Currently, DBL Group’s Matin Spinning Mills Ltd produces 60 tonnes of yarn per day for its own consumption.
“We can install an additional two million spindle capacity even in the next one year,” said Mohammad Ali Khokon, president of the BTMA.
Md Wahid Mia, managing director of Karim Tex Ltd, says he is investing Tk 676 crore to produce 80 tonnes of yarn a day by 2023 to sell to export-oriented garment manufacturers.
Mahin Group is investing nearly Tk 500 crore to produce 60 tonnes of yarn per day by 2023.
The factory’s spindle capacity will be 55,000, said Abdullah Al Mahmud Mahin, chairman and managing director of the group.
“The local demand for yarn is robust now,” said KM Rezaul Hasanat, chairman and CEO of Viyellatex Group.
He has installed additional spindle capacity to take it to 1.32 lakh spindles from 42,000.
“I am running at full production capacity to meet the demand for yarn,” said Hasanat, adding that more work orders were coming from China as well.
Photo: Collected
Local spinners have a combined capacity to process 13.43 million bales of cotton each year. But due to various drawbacks, they are unable to run at full steam. As a result, the mills currently manage to make use of 8.5 million bales of cotton annually.
rEad more on b3