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Bangladesh Textile Mills Association (BTMA)

Presents Opportunities in Bangladesh

Textile Industry for

Investment from

TaiwanBTMA, Dhaka

22 November, 2004

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Distance Bangladesh to Taiwan 3,000 Km Only.

WE ARE CLOSE TO YOU

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Bangladesh Textile Mills AssociationExtends its thanks to H.E Dr. Chii Ming Yiin

Vice Minister Ministry of Economic Affairs of

Taiwan&

The distinguished delegates for attending this briefing.

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We plan to cover the following :

1. Location wise concentration of Textile Industry in Bangladesh

2. Size and growth of textile and RMG industries in Bangladesh.

3. Advantages for the Bangladesh textile industry.

4. Opportunities for co- operation between Bangladeshi & Taiwanese textile industries.

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Location wise concentration of

Textile Industry in Bangladesh

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Concentration of Textile in 1983

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9

Dhaka ComillaCTG Others

8

4

3

7

Concentration of Textile in 1994

54

59

7

Dhaka ComillaCTG Others

54

9

5

8

Concentration of Textile in 2004

637

741

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Dhaka ComillaCTG Others

41

637

7

9

637

41

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Comparative picture of Textile Mills

8

54

637

4 941

3 5 7 9 7 15

Dhaka Ctg. Comilla Others

1983 1994 2004

10

637

41

7

Comparative picture of Textile Mills in (%) area basis

33.33%

72.00%

91.00%

16.67%12.00%

5.86%

12.50%

6.67%

1.00%

37.50%

9.33%

2.14%

Dhaka Ctg. Comilla Others

1983 1994 2004

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1983

33%

17%13%

37%

1994

72%

12%

7% 9%

637

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Comparative picture of Textile Mills in (%) area basis

2004

91%

6%

1%

2%

Dhaka Ctg. Comilla Others

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Why in Dhaka Region ?

-International Communication available- Easy for buyers to visit, inspect etc.

-Trained technical manpower easily available- All financial institutions H.Q in Dhaka

-Five to six hours travel time to Chittagong by road-ICD Kamalapur enables goods to arrive/export directly

-Utilities such as gas, electricity, water availability better

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SIZE AND GROWTH OF

BANGLADESH TEXTILE INDUSTRY

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Size and Membership of BTMA

• Membership : 700 Mills

Spinning, Weaving, Dyeing and Finishing Mills.

• Investment : Euro 2.50 billion.

• Employment : 3 million people.

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Developments in the Textile Industry since 1994

BTMA mills planned for export market in 1994, and since then the development has been as follows:

4 weeks 16 weeksLead time

75% 25%Value addition on Knit and woven

46% of the exportUS$ 2.20 billion

NegligibleExport using local Fabric

4.2 million1.4 millionSpinning Capacity

20041994Description

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Demand Supply Position of Yarn up to 2007

  Total Demand of YarnExisting production of

Yarn GAP of Yarn

Item Domestic Export Domestic Export Domestic Export

Knit  -459 Million Kgs. - 

200 Million Kgs.  -

259 Million Kgs.

Woven270 Million Kgs.

130 Million Kgs.

90 Million Kgs.

60 Million Kgs.

180 Million Kgs.

70 Million Kgs.

  Total Demand of FabricExisting production of

Fabric GAP of Fabric

Item Domestic Export Domestic Export Domestic Export

Knit  -2271 Million mtrs  -

990 Million mtrs.  -

1281 Million mtrs.

Woven1606 Million mtrs.

717 Million mtrs.

1100 Million mtrs

330 Million mtrs.

506 Million mtrs.

387 Million mtrs.

Demand Supply Position of Fabrics up to 2007

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Market Segments

Domestic :

With a population of 135 million the market is already big and the consumption per capita is growing. Although the domestic production is growing, with increased demand, gap is widening.

Fabric demand 2003, 1.50 billion meters expected growth 2010, 2.14 billion meters

Most fabrics are now cotton based – enormous scope for synthetic and blended fabrics.

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Growth of RMG Exports

RMG Products by value (in Million US$)

3,5382,9841,292Woven Garments

2,1481,035264Knit Garments

2003 - 0498 - 9993 - 94Year

Export of RMG Products by volume (in mln. dozen)

1,085.86777.47412.21Woven Garments

1,099.20439.98129.78Knit Garments

2003 - 0498 - 9993 - 94Year

Most woven export are with imported fabric hence large opportunity for woven mills.

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Growth of RMG Exports

264

12921035

2984

2148

3538

0

500

1000

1500

2000

2500

3000

3500

4000

(in

Mln

. US

$)

93-94 98-99 2003-04Year

Knit Garments Woven Garments

0.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00

(in

mill

ion

Doz

ens)

93-94 98-99 2003-04Year

Knit Garments Woven Garments

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ADVANTAGES

OF THE BANGLADESH

TEXTILE INDUSTRY

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Transition from MFA to WTOUnder MFA, importing countries (i.e., developed countries) have quota and duty to protect their industry. With phasing of MFA their industry will become uncompetitive and open to competition from developing and LDC countries. As such there is apprehension that RMG industries in developed countries will close down, thus creating supply gap which will be filled by developing countries. Bangladesh is a strong contender for this.

A study by Gherzi Textil of Switzerland has shown that the global textile and clothing exports are expected to increase from $199 billion (2000) to $ 350 billion in 2006-07. Bangladesh has 2.6% (US $ 5bn) of global market share now with increased global export this volume will increase to US $ 10bn approx.

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Potential of Textile Production1. In Bangladesh fabric used for domestic and export market, 80% Cotton and

20% Synthetic.

2. Ratio between use of Cotton/Synthetic or Blended fabric varies as per demand globally.

3. In Bangladesh local production of Woven fabric is not substantial.

4. Therefore, a large potential for Cotton, Synthetic, Blended fabrics & MMF exists in Bangladesh for both domestic and export market.

5. Taiwan has big capacity for production of Synthetic, blended fabrics & MMF has advantages in fabric production.

6. Therefore, Taiwan can take advantage of the gaps available in Bangladesh by setting up Production facilities under 100% owned, or Joint Venture or relocation.

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Market Access Advantages for Bangladesh

In the EU under GSP Scheme and also under EBA agreement, Bangladesh textile products are quota free and duty free. This is a great advantage over other competitors, which will continue even after MFA.

Export to EU under GSP facility:In the last few years the volume of export to EU under GSP (export using local fabric) has increased from EURO 399 mln to US$ 2,015 mln.

Year Value in mln. EURO

1999 574

2000 1,047

2001 1,319

2002 1,585

2003 2,015 US$

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Market Access Advantages for Bangladesh (cont.)

• Has recently obtained quota-free and duty-free access to Canada, Norway, Japan, New Zealand and Australia.

• As an LDC, favorable market access to continue in the post-MFA era.

• This facilities will continue until per capita income reaches to US $ 1000.

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Taiwan Textile Industry• Taiwan has a well-developed textile industry. • Taiwan is one of the most developed manufacturers of

Synthetic yarn, Fabric and Garments.• Taiwan has good image and presence in global textile

markets.• With high economic growth Taiwanese per capita

income is also increasing.• Now Taiwan is concentrating on high value added

products.• Taiwan can keep her market of Textile products by

using Bangladesh as a manufacturing base.• This would benefit both the countries.

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BANGLADESH-TAIWAN CO-OPERATION OPPORTUNITIES

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OpportunitiesBangladesh and Taiwan can co-operate in following areas :

1. Synthetic Yarn and Synthetic fibre and fabric manufacturing.2. Retain Taiwanese global market for Garments by using high

technology in production of Taiwanese yarn and fabrics in Bangladesh.

3. Taking advantage of Taiwanese presence in the market place, promote and develop Bangladeshi products for high value and high fashion market.

4. Taiwan can come up with their technical know how for capacity building.

5. Taiwan can invest in 100% owned, or joint venture and relocation of Taiwanese textile industries in Bangladesh under present liberal investment package.

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Unique Advantages of Bangladesh Textile Industry

• Currently one of the top five RMG exporters in the world with annual exports of US$5.70 billion.

• Apart from the major players, it is the only country with fairly big backward linkages.

• It is by far the largest exporter of RMG amongst LDCs.

• It has a large population, which has mastered the garment trade with high productivity and low cost.

• Textile being the largest export item of the country, we are very focused on this sector.

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Why Bangladesh?Bangladesh also offers the following competitive advantages for

such investment/ relocation. • Ready market :

* domestic market of 135 million peoples.* US$ 5.700 bn. Present RMG export market.

* US$ 7.500 bn. RMG Export target within 2007. * US$ 10.000 bn. RMG Export target within 2010.• Abundant skilled and easily trainable labour force at an

extremely competitive rate. Monthly total wages of US$52.00.• Very competitive utilities charges for textiles industry-

– Power: US$.033/KWH by captive generation.– Water: No cost - abundantly available from own deep tube

well.

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Why Bangladesh? (Cont.)

As textile and RMG are the largest export sectors and

employers, the government support will continue. Operating mills have necessary infrastructure (i.e.,

buildings and utilities) which can offer accelerated

implementation of investment plan. No restriction on repatriation of profit and capital. Tax free import of machinery and raw materials for

export. Work permit for expatriates liberally given.

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Contact InformationBTMA would be most pleased to assist in any enquiries.

Please contact us at-

Bangladesh Textile Mills Association

Unique Trade Centre (8th Floor)

8, Panthapath, Karwan Bazar

Dhaka, Bangladesh

Phone: 8802-8112361, 9143461

Fax: 8802-9125338

E-mail: btma@citechco.net, btma@dhaka.agni.com

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THANK YOU FOR YOUR KIND ATTENTION