Bangladesh can be world’s No. 1 RMG sourcing hub

Bangladesh can become the world’s most attractive apparel sourcing destination if it can deliver faster lead times, produce more value-added products and ensure seamless collaboration across the supply chain, according to a senior executive at Inditex, one of the world’s largest fashion retail groups.

“I think it is the right time and in the right place that we should not be afraid of what the other countries are doing. We deal with India, Pakistan, Cambodia and Vietnam,” said Javier Carlos Santonja Olcina, regional head for Bangladesh and Pakistan at Inditex.

“Bangladesh has enough capabilities to overtake all of them. This is my personal opinion. My company is trying to communicate to our supply chain in Bangladesh,” he added.

Olcina made the remarks yesterday at the inauguration of the 20th Bangladesh Denim Expo at the International Convention City Bashundhara (ICCB) in Dhaka.

Typically, Western buyers do not disclose their sourcing plan. However, Olcina lauded Bangladesh’s potential. He identified three priorities that could help Bangladesh become the world’s most attractive sourcing destination.

First, he said, the country needs world-class logistics infrastructure.

According to him, Bangladesh still does not have a deep-sea port, a modern airport, reliable energy supplies and faster customs clearance, all of which are critical for improving delivery performance.

He said that both exporters and importers in the garment sector continue to suffer because of weaknesses in the logistics system.

Second, the regional head of Inditex said, Bangladesh must move further into higher value-added garment products, which will require coordinated efforts from manufacturers and other industry stakeholders.

Third, Olcina said, closer collaboration is needed among the government, global brands, multilateral organisations, manufacturers, logistics providers and industry associations to drive the sector forward.

He said the global business environment is complicated, with countries continuing to deal with the fallout from Covid-19, geopolitical tensions and broader economic uncertainty. Despite these challenges, Bangladesh remains better positioned than many of its competitors.

At the event, Mahmud Hasan Khan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said Bangladesh is now the largest exporter of denim to both the European Union and the United States, ahead of China.

“We are approaching LDC graduation. This is being discussed in every boardroom and every policy meeting in Dhaka,” said Khan.

He said their position at BGMEA is clear as the preferences apparel makers currently enjoy will change after graduation.

“If we are not prepared, the industry will feel it. RMG is currently the biggest beneficiary of preferential access. In the post-LDC era, without the right trade arrangements in place, the apparel industry risks becoming the biggest loser,” said the BGMEA president.

European Union Ambassador to Bangladesh Michael Miller said Bangladesh is entering a new phase of its economic development.

“The challenge now is to create decent jobs, skill the workforce, attract high-quality investments to move up value chains, help diversify the economy, ensure a clean energy transition, and prepare effectively for graduation from least developed country status,” he said.

Mostafiz Uddin, founder and chief executive officer of Bangladesh Denim Expo, said more than 50 exhibitors from over 10 countries would showcase products and innovations during the two-day event.

Uddin said, “We are not just showcasing fabric; we are displaying the entire denim value chain -- from sustainable fibres to cutting-edge, eco-friendly finishes.”

Bangladesh remains the largest denim exporter to the European Union, with a market share of around 33 percent, he said.

The country is also a leading supplier to the US market, where Bangladesh-made denim accounts for one in every three pairs of jeans sold through many major retail chains, he added.

With the global denim market projected to reach $105 billion by 2032, the objective is not only to participate in that growth but also to lead it through higher-value products and industry-leading sustainable practices, said Uddin.