Bangladesh Sweater Exports Soar

22 July 2023, Mumbai

Bangladesh Sweater Exports: A Journey of Growth, Challenges, and Opportunities

Introduction: Over the years Bangladesh's sweater exports surged from $3M to $4B, as the country gained increased access to international markets driven by automated factories.

Challenges include infrastructure, skilled workforce shortages, COVID-19 impacts, and geopolitical shifts. Exploiting high-value items and post-China market opportunities is vital.

What all you need to know

The growth is attributed to the establishment of 400 automated sweater factories that replaced manual hand knitting with advanced Jacquard machines. 

Odds; Despite the impressive growth, challenges such as infrastructure limitations, skilled workforce shortages, and the impact of COVID-19 and geopolitical shifts pose hurdles to the industry's continued success.

Sweater Industry's Rapid Growth:

According to a Business Standard report, the sweater factories in Bangladesh have experienced a significant 27% growth in the past six years, outperforming other sectors. 

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) estimates that this upward trend is likely to continue.

Post-COVID-19 Resurgence:

The sweater makers in Bangladesh are showing renewed interest in investments and expansions after overcoming the fear of COVID-19. In 2021, many manufacturers expanded their operations, while five others invested in new production units. 

Entrepreneurs like Shahidullah Azim and Mostafa Golam Quddus plan further investments in their production units, with Quddus emphasizing the need for training the local workforce to boost the country's business.

China's Exit and Expansion Opportunities:

China's exit from the international sweater market has created opportunities for Bangladeshi entrepreneurs. 

With China leaving the market due to rising production costs and complexities, Bangladeshi entrepreneurs like Rafiqul Islam see a chance to increase their investments in sweater production units by the end of 2022.

Unlocking the Potential for High-Value Items:

Bangladesh primarily exports low-cost sweaters, but there is an untapped potential for high-value items like 'cashmere wool sweaters,' which can be sold for $100-$150 apiece. 

Access to raw materials from India, China, and Mongolia opens up new avenues for growth in this area.

Infrastructure Limitations and Skilled Workforce Shortages:

Despite the growth, the sweater industry in Bangladesh faces challenges related to infrastructure and skilled labor. 

Many factories lack innovation and design centers and have weak backward linkages, hindering their ability to secure orders from big brands. Additionally, the cost of setting up new factories poses another challenge.

Impact of Geopolitical Factors:

The global market for sweaters has been affected by geopolitical factors. Europe, the second-largest market for Bangladesh's sweaters, experienced extreme heat, drought, and wildfires, coupled with high inflation rates. 

This situation led to delayed work orders and reduced order volumes, impacting Bangladesh's sweater makers.

COVID-19 and Supply Chain Disruptions:

The COVID-19 pandemic caused disruptions in the supply chain, particularly for raw materials imported from China, which affected almost 80% of man-made sweater yarns in Bangladesh. The country's sweater exporters faced cancellations and delays in orders, impacting the industry's overall performance.

Epilogue:

Bangladesh's sweater export industry has experienced remarkable growth and achieved a prominent position in the global market.

As per sources, the leading destination of Knit Sweaters exports from Bangladesh are Germany ($1.22B), the United States ($703M), Spain ($488M), the United Kingdom ($412M), and Poland ($376M).

Despite facing challenges related to infrastructure, skilled labor, and geopolitical factors, the industry continues to evolve and explore new opportunities. 

To sustain this growth and navigate crises, stakeholders must focus on technological advancements, skilled workforce development, and government support to ensure the industry's resilience and competitiveness globally.

Latest Textile Events