Workers manufacture polybags, one of the major garment accessories, to be used for wrapping garment items. Prices of RMG accessories increased both in local and international markets.
Profit margins on the export of RMG items will erode further as the prices of garment accessories have increased both in local and international markets, said a major manufacturer.
Garment manufacturers in Bangladesh are largely dependent on the international market for garment accessories, market operators said.
President of Bangladesh Corrugated Carton and Accessories Manufacturers' and Exporters Association (BCCAMEA) Safiullah Chowdhury said the prices of accessories on the world market increased more than 50 percent over the last one year. Prices increased 30 percent on the local market in the same period.
Major accessories, which are used in exportable RMG items, include polybags, plastic hangers, cartons, labels, zippers, stone, lace, buttons and stickers.
Chowdhury also said the local manufacturers spend 15-18 percent of total export value of their exportable RMG products on accessories.
"Local companies are able to meet 70 percent of total domestic demand for accessories, and the rest of the accessories are imported from abroad," Chowdhury said, adding that the members of BCCAMEA supplied garment accessories of Tk 7,500 crore to the local manufacturers last year.
"In the country's RMG sector, the rate of value addition is as low as 30 percent due to higher prices of garment accessories. Bangladesh is mainly interested in producing basic garment items," he said.
Khalilur Rahman, managing director of KDS Accessories, one of the largest makers of garment accessories in the country, said garment accessories include a lot of items.
“Investments are coming to meet growing demand for accessories as the country has already turned into a global garments outsourcing hub,” Rahman said.
Local RMG manufacturers have no other way but to import capital machinery, raw materials, dyes, chemicals and fabrics for producing RMG items.
As a result, the local RMG exporters can hardly compete with other RMG exporting nations said the local manufacturers.
Those countries produce their own raw materials and capital machinery.
In fiscal 2007-08, Bangladesh earned $10.69 billion from RMG exports. Bangladesh spent almost a third of export value for importing accessories, raw materials, capital machinery, dyes, chemicals, fabrics, yarn and cotton.
More than four million bales of cotton of $1 billion were imported mainly from Uzbekistan last year, said BTMA President Abdul Hai Sarker.
An official with Bangladesh Textile Mills Association said textile machinery worth $145.8 million was imported in the last two and a half months.
Moreover, the price index of Bangladesh's RMG products declined more than 1 percent last year, although locally the cost of production increased more than 15 percent.
"But charges for making a garment item either declined in some cases or remained stable over the last two years as international buyers are not willing to pay more," said a major manufacturer.
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