Tuesday, 29 November, 2022

Experts call for policy incentives to attract more investment in MMF

  • Special Correspondent
  • 5 October, 2022 12:00 AM
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Experts call for policy incentives to attract more investment in MMF

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Experts at a workshop in the capital Tuesday have called for special policy incentives to attract more investment in man-made fibre (MMF) based textiles and apparel industry.

Increased use of MMF would enable Bangladesh’s readymade garments sector to diversify its products and to move up the value chain as the sector prepares for the post-LDC graduation scenario, they said.

Such observations came during a workshop on ‘Man-Made Fiber for Moving up the Value Chain of RMG in the Context of LDC Graduation’ jointly organised by Support to Sustainable Graduation Project (SSGP) of Economic Relations Division (ERD) and Bangladesh Garment Manufacturers and Exporters Association (BGMEA) in the capital yesterday.

Planning Minister Muhammad Abdul Mannan was the chief guest of the workshop. Additional Secretary of the Ministry of Commerce Noor Md. Mahbubul Haq and the President of BGMEA Faruque Hassan attended the event as special guests. ERD Secretary Ms. Sharifa Khan chaired the workshop.

Bangladesh's ready-made apparel has made a strong footprint in the global market and emerged as the second largest exporter in the world after China. However, the country would lose all the LDC-specific ISMs, including preferential Rules of Origin (RoO) and Duty-Free and Quota-Free (DFQF) market access soon after the graduation from the LDC category in 2026-- except the Everything But Arms (EBA) scheme of the EU GSP, which will end in 2029.

Since Bangladesh could make maximum               utilization of the DFQF facilities, the loss of such facilities after graduation may create some challenges for our exports, particularly the RMG as the sector alone contributes around 83 percent of our total exports.

Meanwhile, the rapid shift in the global apparel market from cotton to non-cotton based Man-Made Fibre (MMF) may thwart the potential growth of the Bangladesh RMG sector as currently the overwhelming portion of our RMG exports are still cotton-based. In this context, expanding the production base of non-cotton yarn and fabric, and manufacturing garment items with it has enormous potential for Bangladesh to graba larger share in global apparel market. It will also give an extra edge in qualifying the stringent RoO after graduation.

In this context, the SSGP Project of ERD and the BGMEA organized this workshop to highlight the current situation of using MMF in the RMG sector of Bangladesh and to discuss how increased use of MMF could help the RMG sector diversify as well as produce high-value-added products.

Speaking on the occasion, Planning Minister Muhammad Abdul Mannan said that switching to manmade fibre would help the country to bring about increased diversification within the RMG sector.

He also observed that such transformation would strengthen the backward linkage of the local RMG industry.

ERD Secretary Sharifa Khan, in her speech, said that Bangladesh would have to grab the potentials of MMF while maintaining the current growth in cotton to increase our global market share.

The President of BGMEA Faruque Hassan called for enhancing the competitiveness of the RMG sector to prepare it for post LDC graduation scenario. He also emphasized on simplification of relevant business processes and improvement in logistics.

Additional Secretary of the Ministry of Commerce Noor Md. Mahbubul Haq,in his speech, emphasized on technological upgradation of the textiles sector.

Chairman of Research and Policy Integration for Development (RAPID) Dr. M A Razzaque delivered the keynote presentation of the event while Director of BGMEA Mr. Asif Ashraf delivered a presentation on ‘Challenges in Production and Use of MMF in RMG and Expectations of the Private Sector’. 

Executive Director of Bangladesh Bank Kazi Rafiqul Hassan, Executive President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Mohammad Hatem and Director of Bangladesh Textile Mills Association (BTMA) Syed Nurul Islam also spoke during the event.

Farid Aziz, Additional Secretary of ERD and Project Director of SSGP delivered the welcome address of the event.

Stakeholders from the public and private sectors as well as research organizations participated in the workshop.