**Bangladesh**: The Ready-Made Garments industry, vital to the nation’s economy, grapples with increasing production costs stemming from higher wages, utility charges, and raw material prices. Experts urge the adoption of strategies like energy efficiency and automation to sustain competitiveness in the global market.
The Ready-Made Garments (RMG) industry in Bangladesh, a crucial pillar of the nation’s economy, is currently facing significant challenges primarily due to rising production costs. This sector plays a vital role in ensuring the country’s competitiveness on the global stage, yet various factors are straining its sustainability.
Key issues impacting the cost structure of the RMG industry include soaring wages, increased utility expenses, higher bank interest rates, and elevated raw material prices. Additionally, inefficiencies within the supply chain and intense international competition exacerbate these financial burdens, placing additional pressure on manufacturers.
Mohiuddin Rubel, former director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), highlighted the urgency of addressing these challenges effectively. Speaking to Textile Focus, Rubel emphasised the need for the industry to adopt multiple strategies to alleviate these cost pressures and enhance competitiveness.
Among the proposed strategies are:
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Energy Efficiency: Implementing energy-saving technologies to help reduce operational costs is seen as a critical step.
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Automation and Technology: The incorporation of advanced machinery is recommended to boost productivity and decrease overall costs.
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Lean Manufacturing: Adopting waste reduction measures would optimise production expenses significantly.
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Supplier Collaboration: Strengthening partnerships with suppliers can lead to more stable raw material costs.
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Policy Support: Leveraging government subsidies and improving loan conditions could help alleviate financial pressure on manufacturers.
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Developing Backward Linkages: Fostering domestic production of raw materials may reduce reliance on imports and subsequently lower costs.
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Infrastructure Development: Ensuring a consistent energy supply is crucial to prevent operational disruptions.
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Regulatory Simplification: Streamlining regulatory processes can enhance operational efficiency within the industry.
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Diversification of Export Markets: Expanding trade networks would lessen dependence on a limited number of buyers, thus providing a buffer against market fluctuations.
According to the insights shared, without proactive interventions such as enhancing energy efficiency, utilising automation, and improving supply chains, Bangladesh’s RMG industry risks diminishing its competitive edge in a fiercely global market. These strategic actions are deemed necessary to sustain growth and ensure long-term viability for the industry moving forward.
Source: Noah Wire Services
