Feedback Here

fbook  tweeter  linkin  google
Global contents also translated in Chinese

Bangladesh upstages Mexico as the US’ new denim partner

"Apparel business from the US is gradually skewing towards Bangladesh. Recent OTEXA figures reveal, Bangladesh exported denims worth $507.90 million to the US in 2017, a 9.57 per cent surge over previous year. Mexico’s exports, on the other hand dipped 7.92 per cent to reach $793.46 million. During the first six months of the year from January to June ’18, Bangladesh exported denim worth $245 million, a 16.86 per cent growth, while Mexico, the second biggest denim apparel supplier to the US, reported a 2.73 per cent decline to reach $360 million. Rising wages in Mexico as well as trade negotiations on NAFTA is affecting Mexico’s growth. Bangladesh, on the other hand, has a growing denim fabric base, low wages and automation, which has helped it to manufacture more of value-added garments and beat Mexico in women’s and girl’s (WG) jeans category."

 

Bangladesh upstages Mexico as the US new denim partner 002Apparel business from the US is gradually skewing towards Bangladesh. Recent OTEXA figures reveal, Bangladesh exported denims worth $507.90 million to the US in 2017, a 9.57 per cent surge over previous year. Mexico’s exports, on the other hand dipped 7.92 per cent to reach $793.46 million. During the first six months of the year from January to June ’18, Bangladesh exported denim worth $245 million, a 16.86 per cent growth, while Mexico, the second biggest denim apparel supplier to the US, reported a 2.73 per cent decline to reach $360 million.

Rising wages in Mexico as well as trade negotiations on NAFTA is affecting Mexico’s growth. Bangladesh, on the other hand, has a growing denim fabric base, low wages and automation, which has helped it to manufacture more of value-added garments and beat Mexico in women’s and girl’s (WG) jeans category.

Low unit prices, controlled supply chain driving growth

The key factor behind Bangladesh’s steep rise is its low unit price. The unit prices offered by Bangladesh were around $76.27 per dozen in H1’18, which isBangladesh upstages Mexico as the US new denim partner 001 much less than Mexico whose unit prices were $101.92 per dozen. High unit prices hurt Mexico’s denim exports despite having ‘zero’ duty rates advantage for jeans shipped to the US under the North American Free Trade Agreement (NAFTA).

In FY 2017-18, Bangladesh exported denim apparels worth $2 billion which is expected to cross $6 billion by 2021. This will be drive by new investments by Bangladeshi denim exporters both in fabrics and garments manufacturing which would increase capacity, push up export earnings, offer competitive prices, and take the lead in the global denim market.

Bangladesh has complete control on its entire denim supply chain and has also improved safety standards in apparel units. World’s top LEED certified factories in Bangladesh are producing denim fabric every year.

Challenges hindering investments

Bangladesh, which holds a large share in the US market, has an enormous opportunity to grow its exports, especially in premium denim jeans which is expected to grow at a CAGR of 12.23 per cent by 2020. However, there are numerous challenges on its growth path for example; expensive utility services are hindering new investment in the country’s denim sector. The country is still dependent on imported fabrics for 50 per cent of its production, which increases the cost of the product as well as shipping time. And even though manufacturers are opting for value-added products, it still needs to focus on how to stay ahead in the race.

 

 
LATEST TOP NEWS
 
 
MOST POPULAR NEWS