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Investments in textile sector decline
Aug '11
Textile industry in Bangladesh is witnessing a decline in new investments owing to inadequate capital and the ongoing gas and power crisis.

The textile industry, which encompasses weaving, spinning, dyeing, printing and finishing, plays an important part as backward linkage industry for knitwear and woven apparel industries.

Bangladesh's primary textile industry presently supplies 40 percent fabric requirement of the country's woven garment sector and over 80 percent of knitwear garment sector.

During 2011, till mid-August, 13 new spinning units have been established, as against 10 during last year, seven in 2009 and 44 in 2008, the Bangladesh Textile Mills Association (BTMA) data showed.

A fall has also been noted in the setting up of number of new weaving units as only 19 mills were established during the review period, as against 2010's 34, 2009's 49 and 2008's 66 mills.

Similarly, the dyeing, printing and finishing industries have witnessed establishment of just five units during January to mid-August this year, as against 10 in 2010, one in 2009 and 24 in 2008.

Such deceleration in setting up of new units is being attributed to power and gas crunch, lack of Government incentives, inadequate financing from banks, and EU's relaxation of the Rules of Origin.

Political instability and fragile infrastructure are also being blamed for slow investment in the country's primary textile industry, which necessitates large-scale capital investment and entrepreneurs analyse the risk factors before deciding on investing in such projects.

Fibre2fashion News Desk - India

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