Value Chain: KnitValue Chain: Knit Almost complete value chain Some of the factories fully vertically integrated : Spinning to

finished garment. Competitive wage, Easily trainable workforce, Expanding

supply side capacity, government supporting policy helped to gain competitive advantage.

Core strength is backward linkage. 95% knit fabric produced locally Net export is higher than woven. In FY 2006-07, Export share of knit and woven were 37.39%

and 38.25% respectively. Cumulative average growth of knitwear is 27%. Advantages of Bangladeshi Knitwear:

Self sufficient – 95% fabric and accessories collected Locally. Integrated Good capacity existsUnbeatable in priceCheap labor with high stitching capabilityGood reputation of Bangladeshi Knit apparels all over the world.

Value Chain : WovenValue Chain : WovenOnly a few weaving factories that offer quality product.So, majority of fabrics has to be imported – higher

purchasing cost, dependency on external supplier, pricing disadvantages, No GSP facilities for imported fabrics.

Can meet only 25% of fabric demand.More than 220 modern weaving mill need to be set up,

each with an annual capacity of 10 million yards.Annual Consumption of fabric: 3 billion yards.Consumption Increasing @ 20% per year

Distribution StructureDistribution StructureDirect Contact: Contact Directly to the

apparel producers regarding price, samples, delivery schedule etc – more dependency on manufactures regarding quality.

Production Agencies/Buying house: Take care of product development, purchase of fabrics and accessories, follow up production, conducting inspection, scheduling shipment date etc.

Satellite office: Has own QC dept. and other staffs to conduct the operations.

Advantages of RMG in Bangladesh: Low wages : The success of the Bangladeshi

apparel industry is mainly attributed to its low production costs, in particular its cheap labour.

The average monthly wage for a garment factory worker is about $43, whereas in China it's more than a $100.

"The closest to the Bangladeshi wage is in Cambodia, where garment workers get around $61 per month.

"That's almost 50% more than the Bangladeshi wages. So, the labour advantage for Bangladesh is quite huge."

Average Hourly Wages (including Fringe Benefits) in RMG Industry

COUNTRY HOURLY WAGE(US$) SINGAPORE 3.56 MEXICO 2.40 MALAYSIA 1.20 THAILAND 1.04 PHILLIPINES 0.78 INDIA 0.56 PAKISTAN 0.49 INDONESIA 0.43 VIETNAM 0.40 SRILANKA 0.39 CHINA 0.40 BANGLADESH 0.23

Western brands such as H&M, Wall Mart, Gap and Next buy their clothes from Bangladesh