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BTMA calls for growth of textiles through self-reliance |
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2004-7-14
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The Bangladesh Textile Mills Association (BTMA) called for steady and unhindered growth of local textile industry to support garment manufacturing for export opposing central bonded warehouse for imported fabrics.
At the Economic Reporters Forum (ERF), the BTMA president M A Awal voiced very critical about the move to allow central bonded warehouse.
ERF president Monowar Hossain conducted the meeting while general secretary of the organisation Nurul Hassan Khan was also present.
According to Awal, setting up of central bonded warehouse would not only flood the local market with leaked out fabrics but also slow down the rise of the textile industry in the country, now growing rapidly to give back up support to local apparel making for export.
Past experience of massive leakage of imported and smuggled fabrics to market from individual bonded warehouses and its perpetrators going remaining unpunished can only indicate how the new system could destroy local textile, he said.
Immediate past president of BTMA, Matin Chowdhury made a presentation on different aspects of the industry including its present manufacturing capacity, global market position of Bangladesh''s RMG export and the post MFA perspectives. Anisul Islam Mahmud and Syed Fakhrul Hassan Murad were among those present in the meeting.
Awal stated that the textile industry here is now quickly expanding meeting 80 per cent demand for knitwear and 90 per cent for yarns and textile for domestic market.
He spoke of its capability to meet 25 per cent demand of fabrics for woven garments and by next three years, would be meet almost entire demand of the readymade garment sector.
He stressed on the selfsufficiency through backward linkages quoting examples of China in case of RMG exports.
The government move to create a Taka 3,000 crore fund annually at 7 per cent interest rate for financing the expansion of textile manufacturing earned the BTMA president’s praise who added that the government would make equivalent amount of fund available over the next two years.
In the three years, it will spend 1.5 billion dollar to facilitate expansion of the country''s textile industry, he said hoping a break-through in the field in coming years.
In his presentation, A Matin Chowdhury said, the foreign exchange retention capacity of exported garment stood at 75 per cent in case of using locally made fabrics in both woven and knitwear.
On the other hand, the country can retain only 25 per cent of the foreign exchange using imported fabrics in both categories of products. Giving another example, he said to achieve one billion dollar foreign exchange retention; the country will have to export four billion worth of RMG made from imported fabrics.
But using locally made fabrics one can achieve it from 1.33 billion dollar exports. This is more practicable than the 4.00 billion export targets, which are really very difficult to achieve, he said.
Another argument is that a country which saw a 20 per cent RMG export over last five years have essentially achieved significant backward linkages in this sector. He said China, India, Turkey, Pakistan and Bangladesh have been able to remain major player in the global market for their success in backward linkage.
But Sri Lanka and Mauritius slipped out because they did not work on that line, he said referring to a study report of the international trade in clothing bulletin (ITCB).
Chowdhury said with the MFA phase out by the year end, fabrics exporters will turn to be exporters of ready-made garments due to absence of quota restrictions that forced them to sell cloths earlier.
In such a scenario, it was better not to rely on central bonded warehouse, which will also tax heavily on the government foreign exchange reserves to pay for the imported fabrics, rather than being self-reliant, argued Chowdhury, dismissing the case for central bonded warehouse as counter-productive to national interest. |
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