Bangladesh plans to set up six new denim mills in 2yrs

Bangladesh with an investment of $100 million is planning to set up at least six new denim mills which will become operation in the next two years as presently local suppliers can meet only 40 percent of Bangladesh’s annual demand for denim fabrics and the rest is met through imports from China, India and Pakistan.

Currently, Bangladesh has 30 denim mills with a capacity to produce 435 million yards of fabrics a year, said Mostafiz Uddin, organizer of Bangladesh Denim Expo, who is also the managing director of Denim Expert Ltd.

The increasing demand for denim fabrics from garment makers has encouraged the investors to establish new factories here. Existing investment in the denim sector is more than $1 billion and every year more people are showing interest to invest in the sector, Mostafiz said.

He further added on the sidelines of the Bangladesh Denim show at International Convention City Bashundhara in Dhaka, the response they are getting from both the local millers and foreigners is huge. A total of 65 exhibitors from 12 countries are participating in the seventh edition of the two-day event.

However, he requested the investors not to make new investments in basic denim fabrics as they are already strong in basic denim products. Now what they need is very fine fabrics to produce very high-end denim products.

He also said that the prices of fabrics declined in Bangladesh due to the price war among the local fabrics producers. Six months ago, a yard of denim fabrics was sold in Bangladesh at $2.5, which came down to $2 now.

As a new hub for denim products, many foreign companies are now coming to open offices or factories in Bangladesh . Landes, a German denim accessories maker, is the latest on the list to start production in its new factory in Savar on November 1.

Manfred Slowik, chief operating officer of Landes, at his stall at the expo said that they opened the factory in Bangladesh as they think this is the hub for denim business and there are a lot of business prospects here. The company has already invested $500,000 in the new factory that has 30 employees. By the end of next year, the total workforce in their new plant will be 120 as they are going for new recruitments.

Landes has a target to annually produce 500 million pieces of leather patches—an accessory for making denim trousers—at its Savar plant, Slowik said. Such accessories will be supplied to the whole Asian region. All big brands like H&M, VF and Walmart are their customers.

Similarly, Nezahat Boni, senior accounts manager of Orta, a Turkish denim maker, said that her company now supplies three million metres of denim fabrics to Bangladesh every year, which was only 800 metres in 2011. They opened an office in Bangladesh in 2011 as they cannot ignore the importance of this country as a denim hub.

Md Mujibul Hoque, sales director for Bangladesh at China’s Prosperity Textile, said that his company opened an office in Dhaka last year. Hoque’s company sells four million yards of denim fabrics a year in Bangladesh and targets to increase the amount to 40 million yards.

With the higher demand for denim, Bangladesh has overtaken China to become the largest denim supplier to the European Union – a development that would give confidence to the country’s garment sector as it looks to hit $50 billion in exports by 2021.

In the January-June period of 2016, Bangladesh exported €567.97 million worth of denim products to the 28-nation bloc with a 21.18 percent market share. While in the last fiscal year, Bangladesh exported denim goods worth $2 billion.

Annually 2.1 billion pieces of denim are sold globally and by 2020, the global denim market will reach $64.1 billion, while Bangladesh’s denim export is forecasted to reach $7 billion by the end of 2021.

Bangladeshi entrepreneurs supply denim products to major global retailers, including Levi’s, Diesel, G-Star RAW, H&M, Uniqlo, Tesco, Wrangler, s.Oliver, Hugo Bos, Walmart, and Gap.