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1. INTRODUCTION

The tremendous success of readymade garment exports from Bangladesh over the last two decades has surpassed the most optimistic expectations. Today the apparel export sector is a multi-billion-dollar manufacturing and export industry in the country. The overall impact of the readymade garment exports is certainly one of the most significant social and economic developments in contemporary Bangladesh. With over one and a half million women workers employed in semi-skilled and skilled jobs producing clothing for exports, the development of the apparel export industry has had far-reaching placations for the society and economy of Bangladesh

1.1 Objectives

My main objective to do this assignment is:

To over-come the RMG challenges of the 21st century.

To develop our garments sector.

To acquire reputation of Bangladesh garments sector

Improvements and progress is the main watch-wards.

To being introduce with modern technology.

And finally, we want to know through this assignment how to communicate, send

massages and behave with buyers.

1.2 Methodology

At first I wait for the class to understand or make a clear idea about the Report . After finishing the class I went to the factory along with my two friends for

collecting data. I was entered in the different departments of that factory. Where each people

show there sincerity to help me on various matter. Then I asked them various types of project related questions and right down the

data from their giving information’s. Then I went to the central library of SMUCT for collecting more and more details

and I have taken to help of internet. I computerized my assignment & I was asleep whole night. For the approval of

the assignment I went to the sir and accept his suggestions and advices with full respect and honor.

Now I am really happy and proud.

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1.3 Scope

To complete my report I found couple of opportunities to visit different factories as well as taking information from those factories. But I worked based on only one factory because of it really time consuming to go different factories, taking interviews.

1.4 Limitations

To complete my report sometimes I need to work with lots of limitation also like:

Scarcity of business developments related books in the library. Factory representatives taken risk to give the consumption, costing, price and P.O

sheet because it was not permitted from the company. I understand that far distance between practical and theoretical. I could not collect data from garments freely because maximum are not interested

to show their lacking also. Authority doesn’t allow maximum people at a time because of workers lose

concentration.

1.5.Analysis Technique & Report Writing:

At first, I went to different garments company and collect information from the personnel. In preparing this report, I approached according to the following procedure:

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2. RESEARCH WORK ON GROWTH AND APPAREL INDUSTRY

2.1. Overview of Bangladesh Garment Industry.

The Readymade Garments Industry

The ready-made garment (RMG) industry of Bangladesh started in the late 1970s and became a

prominent player in the economy within a short Period of time. The industry has contributed to

export earnings, foreign exchange earnings, employment creation, poverty alleviation and the

empowerment of women. The export-quota system and the availability of cheap labor are the

two main reasons behind the success of the industry. Shirts, T-shirts, trousers, sweaters and

jackets are the main products manufactured and exported by the industry. Bangladesh exports its

RMG products mainly to the United States of America and the European Union. The Ready

Made Garments (RMG) sector plays a pivotal role in the economy of Bangladesh. This sector

accounts for approximately 76% of the total export earnings and nearly 10% of GDP.

Like other 3rd world countries Bangladesh is a developing country. Her economic development

depends firstly on Agriculture and secondly on Industry. Although Bangladesh is not developed

in industry, it has been enriched in Garment industries in the recent past years. For Bangladesh,

the readymade garment export industry has been the proverbial goose that lays the golden eggs

for over fifteen years now. Traditionally, the jute industry dominated the industrial sector of the

country until the 1970s. Since the early 1980s, the RMG industry has emerged as an important

player in the economy of the country. In the field of Industrialization garment industry is a

promising step. It is making significant contribution in the field of our export income and in the

economical development of our country. At present the government of our country earns billions

of dollars by exporting ready-made garments products to other countries. We have not achieved

this success over night; we have some elements that help us to achieve this success. At present

we are competing with our neighboring country; India and China. Though we are earning a

handsome amount of profit each year from this sector, the ready-made garment sector is

suffering with a lot of problems. We should solve these negative situations by ensuring proper

steps.

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History:

Once upon a time the cloth of Bangladesh achieved worldwide fame. Maslin and Jamdani cloth

of our country were used as the luxurious garments of the royal figures in Europe and other

countries. The British rulers in India didn’t develop our cloth industries at all. Rather they

destroyed them and imported cloths from England. After the emergence of Bangladesh radical

change has come to our garment sector. Garment industries started working from the 10's of the

late century.

Clothing and textiles have been enormously important throughout human history—so have their

materials, production tools and techniques, cultural influences, and social significance.

Textiles, defined as felt or spun fibers made into yarn and subsequently netted, looped, knit or

woven to make fabrics, appeared in the Middle East during the late stone age. From ancient

times to the present day, methods of textile production have continually evolved, and the choices

of textiles available have influenced how people carried their possessions, clothed themselves,

and decorated their surroundings.

Sources available for the study of the history of clothing and textiles include material remains

discovered via archaeology; representation of textiles and their manufacture in art; and

documents concerning the manufacture, acquisition, use, and trade of fabrics, tools, and finished

garments. Scholarship of textile history, especially its earlier stages, is part of material culture

studies.

An Overview of the Bangladesh Ready-Made Garment Industry:

Agriculture, as the case in India, has been the backbone of economy and chief source of income

for the people of Bangladesh, the country made of villages. Government wants to decrease

poverty by getting highest productivity from agriculture and achieve self-reliance in food

production. Apart from agriculture, the country is much concerned about the growth of export

division. Bangladesh have accelerated and changed her exports substantially from time to time.

After Bangladesh came into being, jute and tea were the most export-oriented industries. But

with the continual perils of flood, failing jute fiber prices and a considerable decline in world

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demand, the role of the jute sector to the country's economy has deteriorated (Spinanger, 1986).

After that, focus has been shifted to the function of production sector, especially in garment

industry.

The garment industry of Bangladesh has been the key export division and a main source of

foreign exchange for the last 25 years. At present, the country generates about $5 billion worth of

products each year by exporting garment. The industry provides employment to about 3 million

workers of whom 90% are women. Two non-market elements have performed a vital function in

confirming the garment industry's continual success; these elements are (a) quotas under Multi-

Fiber Arrangement1 (MFA) in the North American market and (b) special market entry to

European markets. The whole procedure is strongly related with the trend of relocation of

production.

The RMG industry is the only multi-billion-dollar manufacturing and export industry in

Bangladesh. Whereas the industry contributed only 0.001 per cent to the country’s total export

earnings in 1976, its share increased to about approximate 80 percent of those earnings in 2010.

Bangladesh exported garments worth the equivalent of $12348 Million in 2010, which was about

3.00 percent of the global total value ($276 billion) of garment exports. The country’s RMG

industry grew by more than 15 percent per annum on average during the last 15 years. The

foreign exchange earnings and employment generation of the RMG sector have been increasing

at double-digit rates from year to year. Some important issues related to the RMG industry of

Bangladesh

The first ready-made garment factories in Bangladesh aimed at the export market were opened in

the late 1970s by investors from other Asian countries whose exports had been restrained by

quotas imposed by importing nations. By the mid-1980s, the ready-made garment industry had

become a strong export earner. Garment exports brought receipts of only US$3 million in FY

1981, but by 1984 exports had risen to US$32 million, and the following year revenue soared to

US$116 million. For FY 1985 and FY 1986, ready-made garments were the second biggest

foreign exchange earner for Bangladesh after jute.

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The surge in Bangladeshi exports eventually caused a reaction among some industrial nations.

Canada, the European Economic Community, and the United States expressed concern that

inexpensive Bangladeshi garments were flooding their markets. In 1985, after a series of notices

as called for by multilateral agreements, the United States--which was the destination of about 25

percent of Bangladesh's garment exports--began imposing quotas on Bangladeshi garments, one

category at a time.

Bangladeshi manufacturers, working with the government, organized with remarkable speed and

efficiency to adapt to changing conditions. They policed themselves to stay within quotas,

allocating production quotas according to equitable criteria, and began diversifying their

production into categories where there were not yet quotas: for example, cotton trousers,

knitwear, dresses, and gloves. After a period of adjustment, during which some of the least well-

established firms closed and workers were laid off, the industry began stabilizing, and growth

continued at a more moderate pace. Exports in FY 1986 rose another 14 percent, to US$131

million, and prospects were good for continued growth at about that rate.

2.1.1Displacement of Production in the Garment Industry

The global economy is now controlled by the transfer of production where firms of developed

countries swing their attention to developing countries. The new representation is centred on a

core-periphery system of production, with a comparatively small centre of permanent employees

dealing with finance, research and development, technological institution and modernisation and

a periphery containing dependent elements of production procedure. Reducing costs and

increasing output are the main causes for this disposition. They have discovered that the simplest

way to undercharge is to move production to a country where labour charge and production costs

are lower. Since developing nations provide areas that do not impose costs like environmental

degeneration, this practice protects the developed countries against the issues of environment and

law. The transfers of production to Third World has helped the expansion of economy of these

nations and also speed up the economy of the developed nations.

Garment industry is controlled by the transfer of production. The globalisation of garment

production started earlier and has expanded more than that of any other factory. The companies

have transferred their blue-collar production activities from high-wage areas to low-cost

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manufacturing regions in industrialising countries. The enhancement of communication system

and networking has played a key role in this development. Export-oriented manufacturing has

brought some good returns to the industrialising nations of Asia and Latin America since the

1960s. The first relocation of garment manufacturing took place from North America and

Western Europe to Japan in the 1950s and the early 1960s. But during 1965 and 1983, Japan

changed its attention to more lucrative products like cars, stereos and computers and therefore,

400,000 workers were dismissed by Japanese textile and clothing industry. In impact, the second

stock transfer of garment manufacturing was from Japan to the Asian Tigers - South Korea,

Taiwan, Hong Kong and Singapore in 1970s. But the tendency of transfer of manufacturing did

not remain there. The rise in labor charge and activeness of trade unions were in proportion to

the enhancement in economies of the Asian Tigers. The industry witnessed a third transfer of

manufacturing from 1980s to 1990s; from the Asian Tigers to other developing countries -

Philippines, Malaysia, Thailand, Indonesia and China in particular. The 1990s have been led by

the final group of exporters including Bangladesh, Srilanka, Pakistan and Vietnam. But China

was leader in the current of the relocation as in less than ten years (after 1980s) China emerged

from nowhere to become the world's major manufacturer and exporter of clothing.

Bangladesh Garment Sector and Global Chain

The cause of this transfer can be clarified by the salary structure in the garment industry, all over the world. Apparel labor charge per hour (wages and fringe benefits, US$) in USA is 10.12 but it is only 0.30 in Bangladesh. This difference accelerated the world apparel exports from $3 billion in 1965, with developing nations making up just 14 percent of the total, to $119 billion in 1991, with developing nations contributing 59 percent. In 1991 the number of workers in the ready-made garment industry of Bangladesh was 582,000 and it grew up to 1,404,000 in 1998. In USA, however, 1991-figure showed 1,106.0 thousand workers in the apparel sector and in 1998 it turned down to 765. 8 thousand.

The presented information reveals that the tendency of low labor charges is the key reason for the transfer of garment manufacturing in Bangladesh. The practice initiated in late 1970s when the Asian Tiger nations were in quest of tactics to avoid the export quotas of Western countries. The garment units of Bangladesh are mainly relying on the 'tiger' nations for raw materials. Mediators in Asian Tiger nations build an intermediary between the textile units in their home countries, where the spinning and weaving go on, and the Bangladeshi units where the cloth is cut, sewn, ironed and packed into cartons for export. The same representatives of tiger nations discover the market for Bangladesh in several nations of the North. Large retail trading companies placed in the United States and Western Europe give most orders for Bangladeshi garment products. Companies like Marks and Spencers (UK) and C&A (the Netherlands) control

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capital funds, in proportion to which the capital of Bangladeshi owners is patience. Shirts manufactured in Bangladesh are sold in developed nations for five to ten times their imported price.

Collaboration of a native private garment industry, Desh Company, with a Korean company, Daewoo is an important instance of international garment chain that works as one of the grounds of the expansion of garment industry in Bangladesh. Daewoo Corporation of South Korea, as part of its global policies, took interest in Bangladesh when the Chairman, Kim Woo-Choong, offered an aspiring joint venture to the Government of Bangladesh, which included the growth and process of tyre, leather goods, and cement and garment factories. The Desh-Daewoo alliance was decisive in terms of getting into the global apparel markets at significant juncture, when import reforming was going on in this market following the signing of MFA in 1974. Daewoo, a South Korean leading exporter of garments, was in search of opportunities in nations, which had hardly used their quotas. Due to the quota restriction for Korea after MFA, the export of Daewoo became limited. Bangladesh as an LDC got the chance to export without any constraint and for this cause Daewoo was concerned with the use of Bangladesh for their market. The purpose behind this need was that Bangladesh would rely on Daewoo for importing raw materials and at the same time Daewoo would get the market in Bangladesh. When the Chairman of Daewoo displayed interest in Bangladesh, the country's President put him in touch with chairman of Desh Company, an ex-civil servant who was seeking more entrepreneurial pursuits.

To fulfil this wish, Daewoo signed a collaboration contract with Desh Garment for five years. The contract also incorporated the fields of technical training, purchase of machinery and fabric, plant establishment and marketing in return for a specific marketing commission on all exports by Desh during the contract phase. Daewoo also imparted an exhaustive practical training of Desh employees in the working atmosphere of a multinational company. Daewoo keenly helped Desh in buying machinery and fabrics. Some technicians of Daewoo arrived Bangladesh to establish the plant for Desh. The end result of the association of Desh-Daewoo was important. In the first six years of its business, i.e. 1980/81-86/87, Desh export value increased at an annual average rate of 90%, reaching more than $5 million in 1986/87.

It is claimed that the Desh-Daewoo alliance is a significant element for the growth and achievement of Bangladesh's entire garment export industry. After getting linked with Daewoo's brand names and marketing network, overseas buyers went on with buying garments from the corporation heedless of their origin. Out of the opening trainees most left Desh Company at several times to erect their own competing garment companies, worked as a way of moving knowledge all through the whole garment sector.

It is essential to identify the outcomes of the process of moving production from high pay to low pay nations for both developing and developed nations. It is a bare fact that most of the Third World nations are now on the way to industrialization. In this procedure, workers are working under unfavorable working environment - minimal wages, unhealthy place of work, and lack of security, no job guarantee, forced labor etc.

The route of globalization is full of ups and downs for the developing nations. Relocations of comparatively mobile, blue-collar production from industrialized to developing nations, in some

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circumstances, can have troublesome effects on social life if - in the absence of efficient planning and talks between international organizations and the government and/or organizations of the host nation - the transferred action encourages urban-bound relocation and its span of stay is short. Another negative result is that the rise in employment and/or income is not expected to be satisfactorily large and extensive to lessen inequality. In connection with the negative results of relocation of manufacturing on employment in developed countries, we realize that in comparatively blue-collar industries, the growing imports from developing nations lead to unavoidable losses in employment. It is held that development of trade with the South was a significant reason of the deindustrialization of employment in the North over past few decades.

After all employees who are constantly working under unfavourable circumstances have to bear the brunt. Work is under-control across the Bangladesh garment sector. Appalling working atmosphere has been brought to light in the Bangladesh garment industry.

A research reveals that 90 percent of the garment employees went through illness or disease during the month before the interviews. Headache, anaemia, fever, chest, stomach, eye and ear pain, cough and cold, diarrhoea, dysentery, urinary tract infection and reproductive health problems were more common diseases. The garment factories gave bonus of different diseases to the employees for working. With a view to finding out a link between these diseases and industrial threats, health status of employees has been examined before and after coming in the garment work. At the end of examination, it was come out that about 75 percent of the garment workforce had sound health before they entered the garment factory. The reasons of health declines were industrial threats, unfavourable working environment, and want of staff facilities, inflexible terms and conditions of garment employment, workplace pressure, and low wages. Different work-related threats and their influence on health forced employees to leave the job after few months of joining the factory; the average length of service was only 4 years.

The garment sector is disreputable for fires, which are said to have claimed over 200 lives in the past two years, though exact figures are tough to find. A shocking instance of absence of workplace safety was the fire in November 2000, in which almost 50 workers lost their lives in Narsingdi as exist doors were closed.

From the above analysis of working atmosphere of garment sector, we can state that the working environment of most of the Third World nations, particularly Bangladesh remind us of earlier development of garment industries in the First World nations. The state of employment in many (not necessarily) textiles and clothing units in the developing nations take us back to those set up in the nineteenth century in Europe and North America. The mistreatment of garment employees in the birth period of the development of US garment factories reviewed above is more or less same as it seen now in the Bangladesh garment industry. Can we state that garment employees of the Third World nations living in the 21st century? Is it a return of the Sweatshop?

In a way, the Western companies are guilty of pitiable working atmosphere in the garment sector. The developed nations want to make more profit and therefore, force the developing nations to cut down the manufacturing cost. In order to survive in the competition, most of the developing nations select immoral practices. By introducing inflexible terms and conditions in the business, the global economy has left few alternatives for the developing nations.

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2.1.2Readymade Garments Industry and its Growth

The RMG industry can then cut and stitch the finished product into apparel, which is then marketed. In 1978 the RMG industry was established in Bangladesh with nine enterprises and has grown at a blistering pace since, as indicated in Chart 1. This phenomenal growth is due largely to the simple level of technology required in the industry. The machinery is relatively inexpensive and easily available. In addition, garment producers can operate in smaller premises than those required by most of the processes in the textile industry. On top of this, Bangladesh has an abundant supply of cheap labor consisting mostly of women for whom this is one of the most suitable forms of employment.

These factors, as well as incentives such as liberal trade policies, low tariffs on imported machinery, and bonded warehouse facilities, which allow the importation of raw materials to be processed for export have done much to facilitate the growth of the garment industry. However, probably the most important factor in this growth is the benefit of reserved markets that Bangladesh enjoys under the Multi Fiber Arrangements, or MFA.

The Textile exporting nations in the world fall under the trading conditions determined by the MFA, which is included in the General Agreement for Tariff and Taxation, or GATT.

According to the MFA, developed nations are required to guarantee the import of a certain amount of their textile needs from developing nations. For example, the United States may have assigned the production of a certain amount of textiles to Bangladesh. This would mean that countries such as Bangladesh are assured a market for a specified number of yards of textiles each year. This agreement served to limit the dominance of the textile industries in the more developed world by limiting their share of the global market.

In addition, Bangladesh's garment exporters enjoy the privilege of quota-free entry into the European Union, or EU, whereas their major competitors, such as China, India, Indonesia, Pakistan, Sri Lanka, and Thailand, are subjected to the restrictions of an assigned quota. As a result Bangladesh is able to export everything that it produces, while its more developed competitors are limited to specific amounts assigned through quotas.

2.1.3.The Current Position of the Textile Industry in Bangladesh

Today, the textile industry of Bangladesh can be divided into the three main categories: the public sector, handloom sector, and the organized private sector. Each of these sectors has its advantages and disadvantages. Currently, the organized private sector dominates, and is also expanding at the fastest rate.Public Sector

The public sector is that portion of the industry controlled by organizations that are part of the government. The factories in the public sector enjoy certain privileges such as government

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funding. However, in Bangladesh, factories in the public sector are not well supervised. There are frequent changes in officers, and many of these officials do not have a personal interest in the factory for which they are responsible. In addition, the equipment in this sector is not well maintained, as much of the money allocated for this purpose is not spent as planned, but is wasted through corruption and poor accounting.

2.1.4. The Textile Industry of Bangladesh

Textiles have been an extremely important part of Bangladesh's economy for a very long time for a number of reasons. The textile industry is concerned with meeting the demand for clothing, which is a basic necessity of life. It is an industry that is more labor intensive than any other in Bangladesh, and thus plays a critical role in providing employment for people. Currently, the textile industry accounts for 45% of all industrial employment in the country and contributes 5% of the total national income.

However, although the industry is one of the largest in Bangladesh and is still expanding, it faces serious problems, principally because the country does not produce enough of the raw materials necessary, unfavorable trade policies, and inadequate incentives for expansion. As a result, Bangladesh's textile industry relies heavily on imports, and the country does not earn as much foreign exchange from its textile industry as it should. History of the Textile Industry in Bangladesh

Traditionally, artisans working in small groups, in what are often referred to as cottage industries, produced most of the textile in the sub-continent. There were many such artisans in the area that was to become Bangladesh. In fact, from prehistoric times until the Industrial Revolution in the eighteenth century, East Bengal was self-sufficient in textiles. Its people produced Muslin, Jamdani, and various cotton and silk fabrics. These were all well regarded even beyond the region as they were manufactured by very skilled craftsmen.

The material produced by the artisans of Bengal started facing vigorous competition beginning in the eighteenth century after the growth of mechanized textile mills in the English Midlands. This eventually led to a great decline in the number of Bengali workers skilled enough to produce such high quality fabrics. According to popularly held beliefs, as the region's spinners and weavers meant competition for their emerging textile industry, the British imperialists responded by trying to force the artisans to stop production. They were said to have sometimes used methods as harsh as cutting off the thumbs of the craftsmen so they would never be able to spin or weave again.

Not only were huge amounts of fabric produced in Bengal, the area was also a prime producer of the indigo plant, from which the indigo dye was extracted. This natural dye was widely used before the advent of chemical dyes in the nineteenth century. In fact, the rich blue color provided by the dye is still sometimes used for dyeing denim. Bengali dye masters had special recipes for producing the desired colors, just as chefs have recipes for achieving desired flavors. However, as was the case with the traditional handloom fabrics, indigo dye production also gradually declined.

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The problems of the indigo industry were principally a result of two factors. First, because indigo was a cash crop, the British administrators in this part of the empire forced farmers to grow the indigo plant in order to increase the administrators' profits. Unfortunately, the indigo plant is nitrogen depleting and thus exhausted the soil very quickly. The farmers received little real income from the crop since the British kept most of the profits, and in times of economic hardship, such as when the indigo price fell, they were unable to survive by eating their produce, unlike farmers who grew staples such as rice or wheat.

Another reason for indigo's gradual disappearance as a dye stuff was the unpredictable nature of the plant. Sometimes one farmer would have a good harvest, while his neighbor would not be able to produce anything. The combination of poor yields and the unpredictability of the crop gradually led farmers to cease growing the plant and moving on to other, more profitable crops.

The fabric produced and dyed in British factories flooded the Indian markets. In time, its importation became one of the points of contention in the growing Independence Movement of the Sub-Continent. As separation from Great Britain was becoming a foreseeable reality and local production again profitable, the textile industry was reorganized as new methods of production were adopted. Water, a necessity for the chemical processes involved in processing the modern dyes now used, was abundant in East Bengal. This contributed to the establishment of mechanized textile factories in the area.

However, after 1947 and the partition of East and West Pakistan from India, most of the capital and resources of Pakistan came under the control of West Pakistanis. The textile industry thus stagnated in East Pakistan as momentum for development shifted from the eastern part of the country to the west. The west also grew more cotton than the east, which was used as a plea for developing the industry in the west instead of in the east. The majority of all industries in the east were also owned by West Pakistani industrialists.

When Bangladesh gained its independence from Pakistan in 1971, the new government nationalized the textile industry, as it did with many other businesses in which West Pakistanis had been the principal owners. Although there were some Bangladeshi industrialists, they did not form a large or politically powerful group and thus had to surrender control of their factories to the government as well. All of the country's textile factories were then nationalized and organized under the Bangladesh Textile Mills Corporation, or BTMC.

The industry remained under the control of the BTMC until 1982-83. Bureaucratic obstacles combined with other problems such as low productivity in the labor force, lack of planning, indiscipline, lack of accountability, and poor machine maintenance and operation resulted in a lack of profits.

The government thus gradually denationalized the production of textiles. Factories were privatized, beginning with the dyeing and weaving units. Since that time, much of the industry has been privatized through auctions and other means.

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The textile industry has been the catalyst for industrialization in numerous countries. For example, in England, the Industrial Revolution with the new development in coal and steel led to the establishment of a mass textile industry, which catalyzed the industrialization process in the eighteenth century. Similarly textiles played a major role in the industrialization of Japan, South Korea, Taiwan, Hong Kong, and Indonesia. The same has been true to a certain degree in this country. After privatization, the quality of the fabrics produced improved significantly, leading to a great increase in the demand for Bangladeshi textiles in both the international market, as well as the export oriented garment industry of Bangladesh. This launched the industry into a period of rapid growth that is continuing at present.

2.1.5.Collection of Data IN Different Sources:

An Overview Of The Bangladesh Textile Sector expansion of RMG activities and stimulated by the incentive package offered by the government, other related areas of textile sectors also achieved notable progress particularly since the mid-1990s. However, direct data on aggregate investment in this sector is not readily available. Nevertheless, a look into the growth of the index of production capacity of the textile sector, capacity expansion of the enterprises belonging to the Bangladesh Textile Mills Association (BTMA), a study of the available data on capacity expansion in weaving, dyeing and finishing facilities, an examination of import data of textile machinery, a study of data on opening and settlement of letters of credit of textile related imports, the import figures of cotton and yarn and pattern of the cash subsidy given to stimulate fabric production for export, can reveal the degree of overall progress made in the textile sector. We shall now examine these factors one by one in the following paragraphs:

Figure 2: Index of production capacity

a) Index of production capacity

An index comparing the production capacity in the year 2000 with that of the year 1996 (Figure 2) that the growth in production capacity was largest in the weaving sector during this period. The spinning and dyeing and finishing sectors also registered considerable growth. Compared to the base level of 1996, the weaving sector witnessed a 4.4 fold increase in its 3.3 fold during the

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same period. Even the lagging, dyeing and finishing sectors almost doubled its capacity during the same period.

b) Investment and capacity expansion in the textile sector

A study of the import data shows that imported machinery for production of yarn, fabric and knitted fabric machinery accounts for a good share of total imported machinery. Import of textile machinery marked a significant increase in the last decade. An investment of about US$ 0.5 billion came in the last five years in the textile sector (CPD 2000). Many new mills came into operation and some are in the construction stage. A number of mills, installed capacity, and production capacity marked phenomenal growth after the declaration of the Textile Policy in 1995. For example, installed capacity of yarn mills under BTMA increased from 1.5 million spindles in 1995-96 to more than 2.5 million spindles in 1999-2000. Production capacity in weaving increased from 200 million metres in 1996-97 to 800 million metres in 1999-2000. in the dying-finishing sub-sector, production capacity increased from 366 million metres to 680 million metres during the same period. The figures are shown in Table 4 and Table 5, respectively. Bangladesh imported textile machineries mostly from Japan and China in the 1990s. Details are given in Table 6. These machines are able to produce high quality products at a reasonable cost. As a result, the textile units established in recent years are found to be more efficient, and are able to produce export quality products.

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c) Growth in the import of raw materials

Bangladesh is not a cotton producing country. Almost the entire requirement of cotton is imported. However, yarn is produced in the country. Local production can hardly cope with the requirement of domestic fabric production. There is a large local requirement for yarn in the handloom industry as well as in local fabric production. Therefore both cotton and yarn are in the permanent list of importable items.

A study of the import statistics of cotton and yarn from FY 91 to FY 01 as indicated in Figure 3

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Reveal that import of cotton increased almost five-fold and that of yarn about four-fold over this period. This is indicative of a significant growth in this sector.

d) Cash incentive for the textile sectorA cash compensatory scheme is administered by the Bangladesh Bank where RMG, hosiery,and textile units that are either not covered or refrained from using the facilities provided under the bonded warehouse or duty draw back scheme are provided cash assistance of 25% of value of export of apparel. The cash incentive is a major fiscal support given by the

The steady increase in the aggregate amount of this assistance, as depicted in Figure 4, indicate that production of fabric and knit fabric that attracted the cash subsidy increased substantially over the past years.Cash subsidy, though a very significant incentive, is rendering heavy budgetary pressure on the Government. Also payment against the scheme was not very regular due to paucity ofGovernment funds and this created cash starvation for the industrial units, benefiting from the scheme. In the recent budget, the quantum of the incentive has been reduced to 15%.

d) Opening and Settlement of L/C in textile imports

Figures of L/C opening and their settlement in Jul-Jan 02 compared with those of Jul-Jan 01 indicate that the there was a 24.33% increase in import of machinery and 36.95% increase inL/C settlement as indicated in Table 7. Import of man-made fibre and yarn made of MMF also registered substantial increase.Back to back L/C, an indicator of imported materials used for the RMG, marked a decrease of 11.03% showing reduction in the dependence on imported raw materials.

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Table 7: Opening and Settlement of L/C in textile imports

e) Bank investment in textile project

In Bangladesh, the main industrial investment financing comes from the commercial banks. An analysis of the financing done by the five largest commercial banks of the country in textile projects from FY 96 to FY 00 show that their cumulative investment in this sector went up from slightly above Taka 1 billion in FY 96 to Taka 9 billion in FY 00. The cumulative number of projects financed by them increased from 61 to 231 during the same period. Thus the total financing of these five banks in the textile sector increased nine-fold in five years.

f) Trends in production and demand supply gap in the spinning and weaving sector

Because of the expansion in production capacity, actual production of fabric and yarn has significantly increased over the last two years. Not only overall production in the textile sector marked an increase, its capacity to support export-oriented knit and woven RMG has also increased. As a result, the percentage share of domestic yarn and fabric supporting RMG has increased. Nevertheless, the absolute gap between demand and supply kept increasing because of high growth of knit and woven RMG export until the late 1990s.RMG export increased at a very high rate during the 1990s. As a result, demand for fabric and yarn for export oriented RMG marked a significant increase. Demand for fabric for RMG increased from 563 million meters in FY 1991 to 2049 million meters in FY 2000. Similarly, demand for yarn for RMG increased from some 94 million kg in FY 1991 to 341 million kg inFY 2000 as indicate in Table 8.

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Table 8: Total fabric and yarn requirement in Woven and Knit Garments 1990-2000

Domestic demand for yarn and fabric grew steadily with an increase in population and per capita income. Total demand for fabric increased from 1969 million meters to 3895 million meters during FY 1994 to FY 2000. Demand grew at 9.5% whereas production of fabric grew at 12.6% rate. Despite an higher growth rate of production than that of demand, the absolute gap between demand and supply increased over time because of the low production base.Domestic production as a percentage of total demand remained steady at around 40% over this period. The situation is slightly better for yarn. The average annual growth rate of yarn production is more than 14%. As a result, import requirement grew only at 10%. Import dependence as a percentage of the total requirement also declined, but at a declining rate. The trend is demanded supply if fabrics and yarns are illustrated in Tables 9 and 10, respectively.

Table 9: Trends in demand-supply gap of fabrics

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Remained almost constant in recent years. At present (2000), local spinning mills supply 70% of yarn for knit fabrics and 20% yarn for the woven fabrics. Use of local fabrics by the woven RMG has also increased from about 5% in FY 1994 to about 20% in the current year (BTMA). Despite these facts, there is a huge demand-supply gap in yarn and fabric in the country.

Preparation of questionnaire & collection of data form relevant person & authority.

Name of the company: _____________________________________________

Address

Office: _____________________________________________

Factory: ______________________________________________

Telephone

Office: _______________________________________________

Factory: ______________________________________________

E-Mail: ______________________________________________

Contact Person: ______________________________________________

Designation: ______________________________________________

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Year of establishment

Of the company: _____________________________________________

Do you have any work-study department on your company?

Yes No

How did your company fix production target?

1. By using formula

2. By using pitch diagram

3. By guess work

4. From experience

5. Any other way

Do you have skill inventory (Record of workers efficiency)?

Yes No

Do you have Quality Circle in your production floor?

Yes No

Please tell something about the interaction between quality and productivity.

______________________________________________________________________________

______________________________________________________________________________

____________________________________________________________

What steps you has taken to Develop productivity?

______________________________________________________________________________

__________________________________________________________________

Do you think continuous training can Develop productivity?

Yes No

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Does your company have any training facilities for the workers and employee?

Yes No

Who design the lay out of production line?

_______________________________________________________________________

What is his or her educational background? Is he or she a trained person?

________________________________________________________________________

What is the machine lay out system that your company follows?

1. Bundle system

2. Unit production system

3. Hanger system

4. Any other

What are the reasons behind poor productivity?

______________________________________________________________________________

______________________________________________________________________________

____________________________________________________________

What are the tasks of your work-study department?

______________________________________________________________________________

__________________________________________________________________

Rate your factory productivity out of 100%

_______%

What are the problems you face in developing productivity?

1. Poor line lay out

2. Worker migration

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3. Shortage skilled operator

4. Absence of input on time

5. Lack of modern machinery

What is the rate of your worker turn over from production floor?

High Medium Low Very few

When is the date of payment workers salary and overtime?

________________________________________________________________________

How do you punish your workers/employee?

1. By salary reduction

2. By shouting

3. Other way

What are the steps you are planning to develop productivity?

______________________________________________________________________________

__________________________________________________________________

You can tick from the following:

1. We shall start training of helpers and workers.

2. We shall multi skill the existing operators

3. We shall purchase computer controlled machinery

4. We shall introduce full compliant

Does your factory is socially compliant?

Yes No

Is your production floor fully equipped with modern machinery?

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Yes No

If no please mention the reasons:

______________________________________________________________________________

__________________________________________________________________

Does the workstation is designed as per the workers requirement?

Yes No

Do you trained you train your supervisors?

Yes No

Do you train your manager?

Yes No

Have you implement the latest labor laws of the country?

Yes No

As a Bangladeshi garments manufacturing company, what are the steps should be taken to

increase productivity? (Please write in details)