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Rising demand for low-cost denim offers a boon for BangladeshWednesday, April 22, 2015 > 10:06:05
(The Financial Express)
Brands, retailers shifting factories from China
A growing demand for denim worldwide and its rising production cost in China have created a new opportunity for Bangladesh, mainly due to its cheap labour.
A large number of brands and retailers including G-Star, Dior, H&M, Tommy Hilfiger, Inditex and Levis have already established their production bases here in Bangladesh while a few more are now planning to explore the potential of the country.
Score is one of the companies that want to expand its production in Bangladesh along with its major manufacturing units in China, Turkey and India.
"We are now planning to explore Bangladesh which is becoming important all over the world," Jan Peters, owner and managing director of Score told the FE last week.
"The world is always looking at prices and China is becoming more expensive," he said adding "Bangladesh offers good price and also taxes are low to buy merchandise from the country."
Denim-- a sturdy cotton warp-faced twill textile - is used to make clothes for all seasons both for men and women with changes in style and fashion.
With the annual turnover of about 800 million euro, the company sells its products mainly in Europe.
Regarding labour conditions, he said the situation in Bangladesh is getting better though the world has asked for improving it further.
"Bangladesh-the labour-intensive country--is rapidly developing and becoming important for the world mainly due to increasing cost in China," Han JA Bekke, chairman of the Board of MODINT said.
MODINT is a well-known trade association of manufacturers, importers, agents and wholesalers of clothing, fashion accessories, carpet and (interior) textiles with approximate 600 business members including the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
The businesses have a combined annual turnover of €9 billion in the Netherlands, of which 50 per cent is exported. The association works with its members.
The MODINT chairman believed that lots of things are going on in Bangladesh after the Rana Plaza building collapse but more are needed to be done.
"We are also working with trade bodies in Bangladesh as to how to improve further," he said adding, "There are too many initiatives including those of Accord, Alliance and the government which should be combined for successful results."
The FE correspondent talked with the business leaders besides attending the week-long 'Denim Days' fair in Amsterdam.
The European denim market is worth about 14 billion euro and the Dutch denim industry has its focus in Amsterdam following the headquarters of some well-known Dutch brands as G-Star, Scotch and Soda, as well as offices of some international brands such as Tommy Hilfiger, Pepe Jeans, Levi's Vintage Clothes and new ones like Denham the Jeanmaker, Kings of Indigo and Glue Jeans.
Within the Amsterdam metropolitan area, over 30,000 people in more than 10,000 companies are employed in the fashion industry including major brands such as Calvin Klein, Nike and Karl Lagerfed.
The Denim Days Fair took place from April 13 to April 18. During the second edition of the event, more than 40 participants from different countries including China, Thailand, Pakistan, Japan, Italy, Turkey, Spain, the Netherlands, and Hong Kong gathered there to display their latest products.
A day-long seminar on ''Kingpins 2029: the Transformers, Jeans Vs Water" was held with the presentation of latest technology for sustainable textile, clothing, packaging, energy and water efficient dying machines, laundry techniques and development of education, innovation, enterprise and networking projects.