DHAKA (Arabnews): Bangladeshi garment manufacturers are seeking to boost business with Gulf countries amid a sales slowdown in their traditional export destinations such as the US and EU.
The garment industry makes up more than 80 percent of the total exports of Bangladesh, the world’s second-largest supplier of clothes after China.
The country’s garment exports reached $42.6 billion during the July 2021-June 2022 fiscal year, with the EU accounting for 60 percent of this amount, and 20 percent going to the US, according to data from the Ministry of Commerce.
But amid a political crisis in Europe following Russia’s invasion of Ukraine, the Bangladesh Garment Manufacturers and Exporters Association says sales in these traditional markets have been dropping.
“We want to concentrate also on the Gulf markets to extend our business,” BGMEA Vice President Shahidullah Azim told Arab News. “The Gulf market is right now captured by China, India, Pakistan. We want to be a part of it.”
Currently, Bangladeshi garment exports to the UAE and Saudi Arabia are worth $228 million and $128 million respectively.
Azim estimated that the South Asian nation could increase exports significantly, expanding also to other countries of the Gulf Cooperation Council.
“Out of the $11.2 billion apparel market in the GCC market, we can grab $2 billion initially,” he said. “The Gulf is not far from us. We are exporting to the US, European markets. We can reach the Gulf and the (delivery) time will be shorter.”
But before that happens, the industry will need to diversify its portfolio — which has been focused on the production of jeans and shirts — to adjust to demand in the Middle East.
Azim was confident that Bangladeshi producers would be up to the task.
“We have resources, we have capacity built up in our country. We can serve,” he said. “Over the last 30 years, we have built up our capacities. So, whatever continues, we can supply.”
The current market circumstances in the Gulf, where imports have been increasing for the past years, could offer an opportunity to Bangladesh, Dr. Mustafizur Rahman, a distinguished fellow at the Center for Policy Dialogue in Dhaka, told Arab News.
“This will be an increasing market and there will be opportunities for Bangladesh to get into the market, but we need supply-side diversity and we also need to raise our competitiveness,” he said.
As about 2.5 million Bangladeshi expats live and work in Saudi Arabia, and another 700,000 in the UAE, they could in the beginning become the key target market and then help to introduce Bangladeshi products to the region.
“This can be a captive market for us,” Rahman said. “But obviously it will require a lot of effort on the part of Bangladesh as well because the market in the GCC is quite wide-ranging. They import a lot of apparel.”