prospects of textile handicrafts in bangladesh

8/2/2019 Prospects of Textile Handicrafts in Bangladesh

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Assignment on

Prospects of Textile Handicrafts in Bangladesh

Submitted to:

Prof. Dr. Khondoker Bazlul Hoque

Course Title: EIB 510

(Theory and Practice of International Business)

Submitted by:

Arafat Uddin Ahmed

ID No. 8011-7044

2nd Semester (Fall 2011)

University of Dhaka

EMBA Program

Department of International Business


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TABLE OF CONTENTS

CHAPTER ONE: Introduction Page No.

1.1 Statement of the Problem 011.2 Scope and Objectives of the Study 01

1.3 Methodology of the Study 02

1.4 Limitations of the Study 03

CHAPTER TWO: Literature Review

2.1 Industry Review 04

2.2 An Overview of the Handicraft Sector: 04

2.3 Flashback of Bangladeshs Handicraft industry 05

CHAPTER THREE: Findings and Analysis

3.1 Current profile of some leading Handicraft manufacturers 07

3.2 Product Composition and Production Base 08

3.3 SWOT analysis of Bangladeshs Handicraft 08

3.4 Prospect for the future 11

CHAPTER FOUR: Recommendations and Conclusions

4.1 Recommendations 16

4.2 Conclusion 18

Bibliography 19


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Executive Summary

Handicrafts and Textile Handicraft business is related to the accumulation of

handmade product from over the country and to sell them in retail shops or to

export in another countries. People have a great passion for this type of product

because it contains flavor of culture and it has a variety of design. The SWOT

analysis of the Handicraft Product can help us to determine the current situation of

business, challenges and gaps between demand and supply, source of raw materials

and manpower, potentiality of employment, and its prospect for future. Bangladeshis a developing and overpopulated country; thus labor intensive technology can be

more appreciable than capital intensive technology for the industries. Application

of a large amount of low compensated workers to produce handicraft product will

be beneficial for us from dual aspects. The first one is reduction in un-employment

thus poverty alleviation and the second one is the earning of handsome amount of

foreign currency. The paper is concerned with narration of the themes. To prepare

this paper I visited some local and export oriented handicraft organizations in

Dhaka, Narayanganj etc. and discussed with the organization authorities about

their business profile and production aspect. I also visited the website of EPB,

Bangladesh to get handicraft goods export data of previous fiscal years,

Banglacraft and ECOTA for Handicraft business related information.


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1.1 Statement of the Problem

The importance of the Textile Handicrafts and Handicraft sector in Bangladesh

cannot be traced back to any particular point of time. Rooted deeply in the long

heritage of the land, it grew gradually over centuries representing the rich, unique

traditions of the soil, its people and their distinctive culture. The nourishing factors

that helped the sector flourish are love of the artisans for their craft, coupled with

their untiring effort to survive against odds. Of late, however facilitating services

offered by the public and various private agencies to organize and strengthen the

sector have paved the way for better and efficient performance of the sector. This

has definitely resulted in an integrated and structured approach toward production

and marketing and today the handicraft industry of Bangladesh look much well

organized then it was a decade back. However, there is no denying the fact that

despite considerable advancement, potential of the sector still appear largely

unexplored and a bulk of the resources untapped. Innovative adaptation is yet to

reach a satisfactory level. Beside the supply side constraints, dearth of technology

and inadequate export marketing drive continue to be the main impediments forspeedy growth of the industry.

1.2 Scope and Objectives of the Study:

People have a great passion for this type of handicraft products because it contains

flavor of culture and it has a variety of design. As it has a unique and certain

market to belong, the industry needed to be in our concern. Getting this extent, the

major objectives of this study is to:


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Determine the current situation of business, challenges and gaps betweendemand and supply, source of raw materials and manpower, potentiality of

employment, and its prospect for future.

To review the origin and growth of the industry. To analyze the performance of the sector. Identify the prospective of labor intensive technology comparing to the

capital intensive technology.

To review the problems and hindrances of the development of handicraftsector in Bangladesh.

To suggest concrete measures for the growth of handicraft sector inBangladesh.

1.3 Methodology of the Study:

The target population is the people engaged directly and indirectly in the

Handloom Industry of Bangladesh. We have segregated our entire population into5 (five) stratum: Weavers, Handloom Board, Exporter, Retailer & Wholesaler and

Private organizations, and these are sample units from which sample elements have

been collected.

Our data collection technique was personal interview. For data analysis, initially I

have used factor analysis for identifying predominant factors and then have tested

each factor by parametric procedures to reach decisions.

To evaluate the strengths, weakness/ limitations, opportunities and threats, I have

used the SWOT analysis (alternately SLOT analysis) method. Its a reputed

strategic planning method used to evaluate the Strengths, Weaknesses/

Limitations, Opportunities, and Threats involved in a project or in


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a business venture. It involves specifying the objective of the business venture or

project and identifying the internal and external factors that are favorable and

unfavorable to achieve that objective.

1.4 Limitations of the Study:

The study is based on secondary data analysis. So it was not always possibleto get the desired data needed for the research job.

Time is an important factor for successful completion of any research work.I have to complete other research and field practicum for other courses in

last semester. So it was hard to concentrate fully instead of my great

desire.

I had to take interview of relevant personnel. But due to their busyschedule, I hardly get the desired feedback.

As this research was a subject of my course curriculum so I have to bear allthe expense. It sometimes hampered the continuous flow of the work.

Due to lack of time and money I couldnt conduct a greater scale of study.


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2.1 Industry Review

Handicrafts:

Handicrafts are mostly defined as "items made by hand, often with the use of

simple tools, and are generally artistic and for traditional in nature. They are also

object of utility and object of decoration. Some common types of handicrafts are

Textile based handicrafts, Clay, Metal, Jewelers, Woodwork, Stone Craft, Glass

and Ceramic.

Textile based handicrafts:

Hand printed textiles including hand knitted and crochet, block and screen printing,

batik, hand printing by pen and tie-dye are used in products ranging from bed-

covers to sheets, dress material to upholstery and tapestry. The famous

embroidered articles of silk and cotton often embellished with mirrors, shells,

beads, and metallic pieces are also found. Embroidery is done too on leather, felt

and velvet etc. This segment of the industry accounts for almost half a million

strong employment in addition to a large number of designers, block makers,

weavers and packers involved in the trade.

2.2 An Overview of the Handicraft Sector:

Nature and structure of the Industry: Handicraft sector in Bangladesh is comprises

with small manufacturing units and mostly located in rural areas, operated either

by the owner themselves or with the assistance of a small work force of 10-20


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people. Most enterprises use traditional techniques with or without the use of tools

or simple instruments. Total number of workforce associated with the industry

stands approximately over 3 millions of which over three quarters are employed in

textile, jute goods, wood, lather, cane and bamboo. These are followed by metal-

works and pottery. A rough estimate shows that exports occupy about 20% of the

total production. Key players in the sector involved in domestic supplies as well as

exporters are:

Non Government Organization (NGO) exporters of Handicrafts. (Eg. Arong) NGO supportive product house (Non exporters) Private manufacturers /exporters. (Eg. Various jute good manufacturers) Small private manufacturers (Non exporters, eg. Naksha, Rang, Nabarupa

etc.)

2.3 Flashback of Bangladeshs Handicraft industry

After 1970, Bangladeshs handicraft product was introduced in the market. And in

80s the product got market acceptance, and this became its growth period. In the

90s, the handicraft products of Bangladesh experienced a slow growth, and it is the

maturity period of the product. After 2000, the sales of product decreased because

of its old design and poor quality. Moreover, new competitors came with newly-

designed, innovative and quality product. As a result, Bangladeshs handicraft

product faced a period of decline. Figure-01: Shows Bangladeshs handicraft

product life cycle.


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Figure-01: Bangladeshs Handicraft product life cycle.

(Source: ECOTA fair trade forum)


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3.1 Current profile of some leading Handicraft manufacturers:

There are more than 1000 large scale Handicraft producers in Bangladesh, whereonly 300 are enlisted with Banglacraft (the association of handicraft manufacturers

and exporters). A large no of handicraft producer sells their good in local market

and a few numbers are involved in export.

Table-01: Showing some leading organizations current profile.

Organization-

HathayBunano

p.s.

Naksha Prabartana Arong Prokritee

Type GOs Private GOs GOs GOS

Start from 2005 1993 1986 1976 2001

Manpower 4000 500 5000 65000 2000

ProductHouse

38 2 - 653 20

Main product

Kids items

(Toys,

dresses)

All types o

textile

Handicrafts

All types of

handicrafts

All types

of

handicrafts

All types of

Handicrafts

(Specially

produce

Handmade paper)

Market Export Local 99% Local 96% Local 99% Export

Turn Over -7-8Mn.

Taka

100Mn.

Taka- 700Mn. Taka.


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Table-01: Current position of some leading handicraft manufacturers in

Bangladesh.

3.2 Product Composition and Production Base:

Although a large variety of products feature in the handicraft industry, the numbers

of products that dominate in the export sector are not many. These are Shari (Silk,

silk-cotton mixed, cotton, jute-cotton mixed, Jamdani, others), Three piece,

Punjabi, Fotua, Kids item, Lungi, Gamsa, Towel, Nokshi kanta, Bed cover, Pillow

case, Orna, Cotton made pebble, Jute products (College Bag, Shopping bag, Ladies

bag, Sandal, Show piece, Sika, Rope, etc), Feather goods, Handquilting/embroidery, Pottery, Cane Basketry etc. Others less conspicuous include

products made out of bamboo, wood, straw, grass, textile wall hangings and

various metals. The important thing about this segment of handicraft sector is that

these products are focused to international markets, based on importers

specifications. Handloom weaving is mainly done in areas which are traditionally

specialized in the crafts and as such the manufacturing base is not very wide

spread. As regards block, screen printed and vegetable dyed craft etc. the existing

supply has its limit.

3.3 SWOT analysis of Bangladeshs Handicraft:

Strength of our Handicrafts:

The following issues giving Handicraft business the stamina to compete with the

artificial machine made products and effort to take place in domestic and

international market-


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It provides large product variety and range as it is full of diversified culture. Industry is facilitated by diversified and supportive retail infrastructure

across the country.

Industry provides services to different market (Handicrafts, Textiles,Jewelry) because of diversified product range.

Naturally we are resourceful in craft raw materials. Industry needs low capital investment. Low barriers for new entry in market. Products are high value added, and handicrafts have various applications. It is the potential source of foreign revenue because of higher export. Industry provides potential sources of employment.

Impediments for Growth:

The following weaknesses are the main barriers for the Handicraft business

development and making business more and more competitive -

Narrow product range and lack of new and innovative designs suitable foroverseas markets; have been identified as main constraints for growth of

handicraft export from Bangladesh.

Industry is lacking with infrastructure and communication facilities. Lack of capabilities in producing large volume. Lack of updated information on changing tastes and preferences of overseas

buyers often restricts market access of potential products.

Lack of finance and non-introduction of effective technology are alsorecognized as major inadequacy for healthy growth of the sector.


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Absence of properly equipped design centre, a long cherished demand of thehandicraft exporting community, is also responsible for a great deal of the

drawbacks in production, design, innovation and adaptation and so on.

Lack of co-ordination between government bodies and private players. Inadequate information of current market trends. There is lack of skilled artesian. Industry is still confined to rural areas and small cities which creates a great

transport problem.

Low or no involvement of Technical person such as Textile Engineers,Fashion designers etc.

Opportunity:

The Handicraft business can be developed by ensuring proper use of the following

opportunities-

GSP in EU markets Emerging demand for handicrafts goods in developed countries such as

USA, UK, Japan, India, Canada, France, Germany, Italy etc.

Rising demand and usage of handicrafts products in fashion industry. Development of sectors like Retail that offers great requirements of

handicrafts products.

Developing of domestic and international tourism sector. E-commerce and Internet are emerged as promissory distribution channels to

market and sell the craft products.

Our cultural and jute good has got values in overseas market. People likes diversified designs and handmade items


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Cheap manpower available in our country. Potential source of foreign revenue.

Threats for our Handicrafts sector:

Our Handicraft business has the following threats which reducing our business and

causes of unemployment-

Hand-crafted products have to compete on price, design and adaptabilitywith modern machine made products, which make difficulties for our

traditional products to be competitive in international market.

Artificial automated product produced by competing countries, as Chineseembroidery machine products compete with our hand stitch.

Use of polyester, nylon, acrylic and other manmade elements in competingartificial products which reducing the product cost of artificial product.

Quality products produced by competing countries like India, Pakistan,China, South Africa, etc.

Competing countries are enjoying better Trade Terms sometimes. Competing countries are offering better technological support and R&D

facility in their countries.

3.4 Prospect for the future:

Although export of handicrafts from Bangladesh is yet to figure prominently, it is

true that potential for growth of the sector is immense. Studies/surveys conducted

by the EPB and BANGLACRAFT (An association of Handicraft producers and

exporters) and ECOTA (Fair trade Forum) provide strong evidence in support of

this. In the light of these finding, it appears that the main markets for our handicraft


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product are in gifts, house wares, home decoration, seasonal products, toys and

personal accessories. Scope for expansion of our market opportunities may be

viewed keeping in mind the following factors-

Preferential Tariffs and government support in cash:

Generalized System of Preferences (GSP) in European and American markets for

Bangladeshi handicrafts is an impetus for our exporters and it is making their

products competitive. Although implementation of the World Trade Organization

(WTO) agreements will gradually phase out such preferential treatment,

Bangladesh as a least developing country (LDC) will continue to enjoy the benefitsto tariff preference of sometime in future. Some products of handicrafts are

enjoying cash incentives on their export which is a great stimulus of encouraging

handicrafts export.

Overseas Market and its opportunities:

Organized effort in marketing Bangladeshi handicrafts overseas is, in fact, a matter

of recent past-although some of the products were able to find export destinations a

little time back. As mentioned earlier, not many products dominate in the export

oriented handicraft sector. And all though at present Bangladeshi handicrafts are

being exported to well over 50 countries of different continents, more than 70% of

the total merchandise is lifted by the European, American, Indian and Japanese

market. Table 02: Showing export values of different fiscal years excluding textile

handicrafts.


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Table 02: Handicraft Export of different FY.

(Source: EPB statistical report)

Fiscal Year (FY)Export In Million

US$

2002-2003 5.90

2003-2004 4.21

2004-2005 5.12

2005-2006 4.30

2006-2007 8.16

2007-2008 5.49

2008-2009 6.44

2009-2010 7.41 (Target)

This is a list of Handicrafts, excluding

textile handicraft goods.


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Figure-04: Country base export chart of handicraft goods on 3 FY indicating

specific market areas. [Which is based on following Handicraft goods- Coir

products, Cotton Bag, Jute footwear, Handicrafts, Jamdani sharee, Jute carpet, Jute

manufactures, Other textile goods, Silk fabrics, Toys, Wooden furniture.]

(Source: Bangladesh Export Statistics, EPB)

Studies suggested that handicraft export from Bangladesh can find bigger opening

in a number of product areas and at the same time consolidate existing export base

in some of the traditional product range. Traditional Bangladeshi products which

have made some dent in the export market have the potential for increasing their

market share significantly. These are traditional decorative textiles (muslin, nakshi


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kantha, jamdani), block printed, vegetable dyed textiles, artificial flowers, woven

jute products, cane basketry, pottery, small leather goods (wallets, purse, belts),

etc. Appropriate adaptation of some of the Bangladeshi handicrafts can also be

expected to command increased share in the target markets. Figure-04: Showing

country based export of three different FY.

The chart is created with the major exporting countries of Bangladesh, it showing a

growing market opportunity for handicraft goods in Japan, The Netherlands,

Belgium, Canada, Italy, France, UK, Germany, and in our Local market also. But

at the same time we have to provide effort to increase export in India and other

decrementing large markets. If our government patronizes this marketing process

by arranging some international trade fair on only Handicrafts as like DITF then

we should be able to capture a large market beside our large competitor India,

Pakistan and China.


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4.1 Recommendations

In accordance of the discussion with the craft-peoples, some craft-exporters andBANGLACRAFT the following suggestions has made to make a way for the

development of Handicrafts business in Bangladesh-

Setting up of design development centre is urgently needed for producingnew product and product diversification. Craftsmen are needed to be trained

for better performance, innovation and technology to be provided for overall

development of the sector in a design development institute.

Set up handicraft industrial park/ handicraft village/clusters of producerslinked with lead exporters to ensure sustainability

Enhance capacity of the exporters for getting market information. Develop fund for identifying new markets and new products. Access to finance should be made easy. Facilitate exporter participation in trade fairs, designing catalogues and

preparing for exhibition.

Continued and focused attention has to be given to handicrafts for up-gradation of skill, creation of better work environment and development of

cluster for specific crafts with common service and improvement of

infrastructures and market development.

Quality raw materials to be ensured for product diversification. Branding Bangladesh is very essential at this moment because some of the

buyers sell our quality products in their brand which is preventing our

market growth.


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Our Prime Minister Sheikh Hasina has told that, she will try to Make EveryHome a Industry. By considering handicraft she can really elaborate it like,

Every home will be a handicraft industry, because it is the only industry

which can flourish at this tough time of gas and energy crisis. PMs strong

campaign for saving environment from climate change may promote the

hand made goods like handicrafts globally. An integrated branding and

promotion of Bangladeshi Handicrafts can be great tool of poverty

alleviation also.

Focus will be on capacity building of the SMEs to support all companies tocomply with the international product oriented code of conduct.

Integrating and redefining of handicraft industry is possible by separatingHandicrafts from the Textile Sector. It will help to create a new branch of

national trade as a unique business beside textile business, thats why at first

EPB need to take steps by separating the handicraft exports from textile

exports.

Arrangement of International Handicraft Fair to attract more buyers and thusreducing difficulties in entering to overseas market for our Traditional and

Non-Traditional Handmade goods.

Without a doubt, the global market for handicrafts and hand-made goods isexpanding. When customers are faced with two products of similar price,

quality and design, they will invariably select hand-made goods in changed

world with environment consciousness. The cost of production of hand-

made items is smaller in Bangladesh whilst it is possible to make

competitively priced handicrafts in Bangladesh, it is important to understand

that pricing is one of the key factors for


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4.2 Conclusion

In our country the handicrafts are mainly regulated by non-technical persons who

possess very little technical knowledge and there is no involvement of textile

engineers (thus product development and quality product is quite impossible). The

workers are mainly un-skilled women and children. We can develop this sector as

a wide earning sector to contribute to our national economy by involving Textile

Experts in this sector and by developing manpower skill. Finally it should behelpful to introduce our tradition or culture to the globe. Efforts are underway

through close collaboration of public and private sectors toward product

promotion, diversification and export marketing. However, there is still the need

for intensification of efforts at the levels of production and marketing as well as

design innovation and adaptation. Our exporters of handicrafts should bear in mind

that while creation of export market is a challenging task, maintenance of the

market is a more challenging one dependent on regular supplies, quality assurance,

and last but not the least fulfillments of the consumer test and preferences.


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Bibliography

1. Mondol, Mr. Abdur Razzak, (2003 Export of Bangladesh handicrafts present performance and future prospects Souvenir, Jatio Karuponno

Prodorshoni-2003.

2. Morshed, Samantha, (2009) Textile handicrafts need boost articlepublished in newspaper, The daily Star, Tuesday, March 03

3. Morshed, Samantha, (2009) Taking Jobs to Bangladeshs poor, BBCNews, Thursday, April-30

4. Arefeen, Prof. H.K.S., Salam, Shah Abdus, Sultana, Sayeeda, (2007)Handicraft Market Chain in Bangladesh, Chapter-02, Bangladesh

Handicraft Product Life Cycle, page-26, Published by ECOTA Fair Trade

Limited, Dhaka.

5. Statistical Report, (2004-2005, 2005-2006, 2006-2007), Export promotionBureau, Bangladesh.

6. www.ecotaftf.org7. www.rang-bd.com8. www.prokritee.com9. www.prabartana.org10.http://mdshossain.wordpress.com/2009/03/17/swot-analysis-of-aarong/11.http://www.articlesbase.com/art-articles/indian-handicrafts-industry-swot-

analysis-327228.html

12.http://www.brac-aarong.com/

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