B'desh sleeping bags sector faces hurdles

06 Feb '12

2 min read

The decision by the US Government at the end of last year to remove sleeping bags from the list of Bangladeshi items that get zero-duty access to the US market, under its GSP facility, is likely to affect the Bangladesh sleeping bags sub-sector, which is still in its early stage.

In September last year, the US Senate passed a legislation to renew the Generalised System of Preferences (GSP) giving Bangladeshi sleeping bags zero-duty access to the US market till 31 July 2013.

However, based on a petition filed by the US-based sleeping bag manufacturer Exxel Outddors, 'Made in Bangladesh' sleeping bags were removed from the GSP list on December 29, 2011.

Hence, Bangladesh has to currently pay an average duty of 12 percent while exporting sleeping bags to the US, which is going to negatively impact the sector, which once exported sleeping bags duty-free to the US.

There are only three companies in Bangladesh that produce sleeping bags. These firms are located inside the Chittagong export processing zones (EPZs), and employ over 12,000 people.

In 2008 and 2009, companies and investors from the US, China and South Korea shifted their sleeping bags manufacturing to Bangladesh, owing to shortage of workers and rising costs of production in China.

These companies opted to relocate their production units to Bangladesh in the hope of producing sleeping bags at competitive prices.

Bangladesh has already conveyed the concerns of these companies to the US officials, Commerce Secretary Ghulam Hussain said.

He added that the renewal of the duty-free facility, however, depends on reviews by the US Government. Hence, these companies would have to wait, at least till the next review, to regain zero-duty access to the US market.

Fibre2fashion News Desk - India

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