Clothing manufacturers demanded a 10 percent incentive on the export of clothing items made from fibers other than cotton to encourage investment in synthetic fibers (MMF).
Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), made the appeal in a letter to the Minister of Commerce on August 21.
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In the letter, the president of BGMEA said that in the last fiscal year, Bangladesh imported 20.52 lakh tonnes of fiber, of which 93.57 percent was cotton.
Currently, 403 of the 430 active spinning mills in the country produce cotton lint.
Thus, investment and production in the MMF-based fiber industry is still low even though it has very high potential, he added.
For example, last year the global MMF-based garment industry market was worth $ 150 billion.
Currently, Vietnam holds a 10 percent share of the global MMF-based clothing market, while Bangladesh is still struggling to achieve a 5 percent share in this segment, the letter said.
About 75 percent of the global clothing market is MMF-based fibers and this market is growing at 3-4 percent per year. Of the 75 percent of MMF products, some 64 percent contain synthetic fibers, he added.
On the other hand, the world market share of the cotton-based garment industry is only increasing by 1 or 2 percent per year.
As a result, Bangladeshi clothing exporters lost the opportunity.
Thus, the government should incentivize at least 10% export of MMF-based clothing to attract more investment in this segment, Hassan said.
The head of BGMEA also sent two different letters to the finance secretary and governor of the Bank of Bangladesh on August 22, demanding loan rescheduling facilities until December as apparel manufacturers and exporters grapple with the midst of of the ongoing Covid-19 pandemic.
In the letters, he also asked not to classify loans in the clothing sector until December of this year so that they can be more competitive in the sector.