Big opportunity beckons local MMF segment

The US buyers are shifting their apparel sourcing base from China, offering an opportunity for the countries like Bangladesh to further develop their apparel industry especially in the manmade fibre (MMF) segment, industry people said.
The potentials have also been hinted by a recent US study titled '2020 Fashion Industry Benchmarking Study' by the US Fashion Industry Association and University of Delaware.
"MMF apparel could be a potential new growth engine for Bangladesh's exports, as US fashion companies are eager to diversify sourcing from China, and the sourcing capacity in Vietnam is not available," the report reads.
The COVID-19 and the escalating US-China trade war have exerted significant and broad impacts on US fashion companies' sourcing practices, it said, adding "COVID-19 and the trade war are pushing US fashion companies to reduce their 'China exposure' further."
As the US fashion companies are sourcing relatively less from China, they are moving orders mostly to China's competitors in Asia. All the respondents of the study said they have "moved some sourcing orders from China to other Asian suppliers" this year, up from 77 per cent in 2019.
Citing US official trade statistics, the report said that the value of Bangladesh's MMF apparel exports to the US enjoyed a 5.5 per cent growth in the five months of 2020.
In contrast, the exports from China and Vietnam suffered a significant decline as value dropped by 44.5 per cent and 8.8 per cent respectively over the same period, it added.
When asked, Mahmud Hasan Khan, managing director of Rising Group, said that there is no denying the fact that there is no option to go for MMF production to diversify the export products and grab the growing demand for the MMF items globally.
Mr. Khan, who also exports apparel items to US, however, reiterated that the bottlenecks hindering the growth potentials included absence of backward linkage industry and infrastructure.
The production of MMF items requires huge investment in backward linkage and there are hardly few ones who want to invest amid absence of required infrastructure including sufficient gas supply, he added.
He also said buyers offer better price for MMF items.
In 2019, Bangladesh shipped apparel items worth US$ 5.93 billion to the US market, out of which cotton items were about 77 per cent.
According to Bangladesh Garment Manufacturers and Exporters Association (BGMEA), out of 430 spinning mills in Bangladesh, only 27 are based on synthetic and acrylic fibre, and rest are cotton spinning mills.
Out of the country's 2.05 million tonnes of fibre import in 2018, the share of cotton was 93.57 per cent, BGMEA data showed.
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