As one of the most economically developing countries in South Asia and even the world, an important country along the “Belt and Road” and “Bangladesh-China-India-Myanmar Economic Corridor”, Bangladesh has become a hot spot for Chinese-funded enterprises to invest and cooperate. And How’s it going with the Bangladesh sewing machine market under the influence of the epidemic?
Current situation of sewing machine
1. Natural environment for sewing machinery
Bangladesh is divided into 8 administrative regions: Dhaka, Chittagong, Khulna, Rajshahi, Barisal, Silet, Rangpur and Mymensingh, with 64 cities, 489 counties and 4550 townships. 80% of Bangladesh’s international trade and 40% of its industrial output are generated in Chittagong.
2. Economic status of sewing machine
In terms of investment environment, the advantages of Bangladesh are mainly reflected in the government’s attention, preferential policies, rapid economic growth, large market potential, sufficient labor resources and low prices. According to data released by the Bangladeshi government, in the past 10 years, Bangladesh’s economy has continued to grow steadily, and the average annual growth rate of its gross domestic product (GDP) has remained above 6%. As an important part of the Bangladesh-China-India-Myanmar Economic Corridor, the “Belt and Road” initiative represents a huge development opportunity for Bangladesh.
3. Policy advantages for sewing machine
Compared with other countries and regions, there are three main advantages in the development of garment industry in Bangladesh market:
- First, Bangladesh has an abundant and affordable sustainable workforce. Among the 164 million registered population in Bangladesh, more than 60% are of working age, especially young people in their teens/twenties. The labor cost is very competitive. Bangladesh stipulates that the minimum wage standard for textile enterprises is 8,000 taka (about 664 yuan)/month, and the monthly salary of skilled workers is about 10,000-15,000 taka (about 833-1245 yuan) /month.
- Second, Bangladesh enjoys the GSP policy granted by the European Union, Canada, Australia and Japan, and the export of garments to this market enjoys duty-free treatment. In the U.S. market, Bangladesh has 30 categories of ready-to-wear products subject to quota restrictions, which is much less than China’s restricted product categories. The Bangladeshi government has an extremely loose tax-free policy. In Dhaka and Chittagong, the tax holiday is reduced for 5 years, the first two years are 100% exempt, the third and fourth years are exempted by 50%, and the fifth year is exempted by 25%; foreigners are exempted 3 years of personal income tax, the next 2 years of personal income tax will also be halved.
- Third, as a pillar industry, the Bangladeshi government strongly supports the development of the garment industry. In addition, China and Bangladesh have good relations. The Bangladeshi government has specially set up special economic zones (such as the China Special Economic Zone currently under construction in Chittagong) and other taxation support for Chinese enterprises, laying a good foundation for the trade between China and Bangladesh.
2. Bangladesh Textile and Apparel Industry
As one of the least developed countries in the world, Bangladesh has a proud garment industry, which is the largest foreign exchange earning industry in Bangladesh, accounting for more than 80% of Bangladesh’s total exports. In the past 20 years, the growth rate of Bangladesh’s garment exports has remained at around 20%. In 2019, Bangladesh’s garment exports reached US$34 billion, and its garments were mainly exported to Europe, the United States, Canada, Australia and other markets, and the Chinese market also showed a rapid growth trend. Bangladesh is a major producer of denim garments in the world, with an annual output of about 200 million pieces and a European market share of 27%, surpassing China. And in order to save labor cost and the production time, a high speed automatic can help a enterprise to increase it’s capacity and improve the quality. JYL have exported more than 100 sets of the long arm CNC Round bed automatic jeans pattern sewing machines to Bangladesh from 2019-2022. This jeans sewing machine can stitching the custom pattern on the finished jeans and pants with it’s intelligent computerized control system.
Bangladesh’s textile and garment industry has a considerable scale and a relatively complete industrial chain. About 5 million people are employed, of which more than 80% are women. At present, there are about 7,000 garment enterprises above designated size in Bangladesh, with more than 1,000 employees. The largest factory has even reached 150,000 people. The factory processes products for many world-renowned brands such as Walmart, Zara, H&M, JC Penny and Carrefour. There are also tens of thousands of small processing plants with a size of 100 people and below. Most of the garment industrial areas are located around the capital Dhaka and near Chittagong. The main garment industrial areas are located in Narayangani District, Ashulia District, Gazipur District, Savar District around Dhaka City, and Chittagong District near Chittagong. Among them, about 90% of the knitted garment factories are located in Narayanganj district.
3. Bangladesh sewing equipment market situation
1. Import and export data
The rapid development of the garment industry has brought about a rapid increase in the demand for sewing machinery products in Bangladesh. In 2010, my country’s export of sewing machinery products to Bangladesh was only less than 35 million US dollars, and by 2019, the amount of my country’s exports of Bangladeshi sewing machinery products exceeded nearly 100 million US dollars. In just nine years, my country’s export volume has tripled, and the demand potential should not be underestimated.
At present, Bangladesh has ranked sixth in the export value of my country’s sewing machinery products. Among them, the export value of industrial sewing machines has increased from the 20th in 2005 to the sixth in 2019. Due to the phenomenon of re-export of some Japanese-owned and other brand products produced in mainland China, the actual volume of sewing machinery products exported to Bangladesh from my country is more than the data displayed by the customs.
Changes in the amount of sewing machinery products exported to Bangladesh from my country from 2010 to 2019
2. Sewing machine market situation
At present, the demand for sewing machinery products in the Bangladeshi market is huge. The annual import value of sewing equipment products from China reaches about 100 million US dollars, and the demand shows obvious differentiated development. Some high-quality foreign-funded enterprises and Bangladeshi powerful garment factories have gradually expanded their demand for various types of high-efficiency automatic sewing machine equipment, and intelligent products such as automatic template machines and automatic sewing units have become the focus of attention in the future; a large number of local small-scale garment processing factories have low-end stitching equipment, second-hand phones, and blackhead machines are still in great demand.
At present, the largest stock of industrial sewing equipment in the Bangladeshi market is the Japanese brand like JUKI and Brother, accounting for about 70% of the total market. However, after nearly ten years of hard work, the Bangladeshi market has generally recognized Chinese manufacturing. Jack, ZOJE, hikari, MAQI, Duerkopp, TYPICAL, BAOYU, IMB, SUPREME, JYL and other brands have successively entered Bangladeshi garment enterprises, and have been widely praised by customers. At Garmentech, the Dhaka sewing equipment exhibition, most of the exhibitors are Chinese sewing companies, and all kinds of automatic sewing machine equipment exhibited good results.
Juki, Jack, ZOJE, hikari, MAQI and others all set up offices and distribution points in Bangladesh. In 2019, the sales in Bangladesh ranged from 4 million US dollars to 13 million US dollars. The main sales areas are concentrated in Dhaka and Comilla. And Chittagong, there are also certain sales in SAVAR, Narayangornh. They mostly use a combination of direct sales, specialized stores, agency sales, whole plant solutions, retail and other means of intensive cultivation. The excellent after-sales service of Chinese enterprises has also made Bangladeshi garment enterprises less worried. The combination of Chinese technical personnel and local service personnel can connect in real time and quickly respond to customer needs.
At present, ordinary flat-wrapped lock nail machine, bartack sewing machines, special machines, template machines, automation equipment, etc. all have a certain market in Bangladesh, and the price is slightly higher than that in China. The demand for equipment in the local market is clearly polarized. Large-scale garment factories in Bangladesh mostly demand automatic sewing equipment, and the current situation of frequent power shortages has led to the demand for traditional non-automatic equipment in small garment factories. In the past few years, the number of automatic industrial sewing equipment and non-automatic industrial sewing machines exported from my country to Bangladesh was basically the same. The market demand for automatic industrial stitching machines is also growing rapidly, like the elastic sewing machine, automatic strap sewing cutting machine, Velcro tape sewing machine, eyelet sewing machine and so on.
Epidemic impact and investment advice for automation equipment
Bangladesh, which is highly dependent on clothing exports, is being seriously affected by the epidemic. Orders in the early 2020 have fallen sharply, and brands have cancelled or postponed orders. This will continue as the global outbreak is not well controlled. At the same time, many workers return to their hometowns for isolation. In order to maintain their livelihood, they will process some small orders, which stimulates the sales of sewing equipment to a certain extent. It is believed that with the development and launch of the new crown vaccine, the impact of the epidemic will eventually pass, and Bangladesh is still a hot spot for investment. Previously, the Bangladeshi government was increasing infrastructure construction in various places. The future development of Bangladesh’s economy and garment industry should not be underestimated.
But at the same time, investing in Bangladesh also faces problems in social system, language, cultural differences, trade union system, poor infrastructure, and inconvenient transportation. The economic structure is single and the economic foundation is weak. The demonstrations and strikes caused by the political crisis have affected the Bangladesh’s overall investment environment, weak infrastructure, unsound legal system, and strong local protectionism have virtually increased business operating costs and risks. So the automation production lines with industrial automatic machines is in urgent need accordingly, which will help to decrease the demand of human labor and improve the stability.