Efficient logistics will help Bangladesh RMG exports

05 Jul '12

2 min read

Effective trade logistics will give Bangladesh a competitive edge in exports of readymade garments (RMG), says a new report, “Consolidating and Accelerating Exports in Bangladesh”, released by the World Bank.

The report predicts that garments, which now constitute three-fourths of Bangladesh’s total exports, will continue to dominate the country’s exports, but encouraging diversification will help guard against shocks and maintain export growth in the longer term.

For the export growth to accelerate, the report stresses on addressing critical bottlenecks, including trade logistics, shortage of skilled manpower, and compliance with Government labour standards.

The garment sector of Bangladesh has grown impressively and captured an increasing share of the world market, but the export growth cannot be taken for granted, says the report.

To ensure sustained growth in the apparel sector, it is most important for Bangladesh to improve logistics so that exports as well as imported raw materials are shipped on time, cost effectively and reliably.

According to the report, improvements in trade logistics can reduce the lead time for fulfilling an order by up to 21 days, even if raw materials continue to be sourced from abroad.

In the RMG sector, the skills gap is becoming increasingly visible and a high rate of rejection of final products provide an evidence for the same, the study says.

The report also highlights the gaps in supervisory and management skills and cites the presence of skilled foreign workers in the Bangladeshi apparel sector.

The report advises the Government to increase the relevance of the publicly-funded Technical and Vocational Education and Training programme to better align it with needs of the country’s clothing sector.

As Bangladesh moves towards higher value garment exports, compliance with the Government’s labour and building standards will become increasingly more important, says the report.

It urges the Government to work closely with the RMG industry to ensure that its labour standards are properly implemented, and also support enterprises to relocate manufacturing units from residential to industrial buildings that are better equipped to provide safe working conditions.

Fibre2fashion News Desk - India

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