Bangladesh Textile Mills Association

1. Bangladesh Textile Mills Association(BTMA) Presents Opportunities in Bangladesh Textile Industry for Investment from Taiwan BTMA, Dhaka 22 November, 2004 B T M A Bangladesh Textile Mills Association

2. Distance Bangladesh to Taiwan 3,000 Km Only. WE ARE CLOSE TO YOU B T M A Bangladesh Textile Mills Association

3. Bangladesh Textile Mills Association Extends its thanks to H.E Dr. Chii Ming Yiin Vice Minister Ministry of Economic Affairs of Taiwan & The distinguished delegates for attending this briefing. B T M A Bangladesh Textile Mills Association

4. We plan to cover the following : • Location wise concentration of Textile Industry in Bangladesh • Size and growth of textile and RMG industries in Bangladesh. • Advantages for the Bangladesh textile industry. • Opportunities for co- operation between Bangladeshi & Taiwanese textile industries. B T M A Bangladesh Textile Mills Association

5. Location wise concentration of Textile Industry in Bangladesh B T M A Bangladesh Textile Mills Association

6. Concentration of Textile in 1983 8 3 4 B T M A Bangladesh Textile Mills Association

7. Concentration of Textile in 1994 54 5 9 B T M A Bangladesh Textile Mills Association

8. Concentration of Textile in 2004 637 7 41 B T M A Bangladesh Textile Mills Association

9. Comparative picture of Textile Mills 637 7 41 B T M A Bangladesh Textile Mills Association

10. Comparative picture of Textile Mills in (%) area basis 637 7 41 B T M A Bangladesh Textile Mills Association

11. Comparative picture of Textile Mills in (%) area basis 637 7 41 B T M A Bangladesh Textile Mills Association

12. Why in Dhaka Region ? • International Communication available • Easy for buyers to visit, inspect etc. • Trained technical manpower easily available • All financial institutions H.Q in Dhaka • Five to six hours travel time to Chittagong by road • ICD Kamalapur enables goods to arrive/export directly • Utilities such as gas, electricity, water availability better B T M A Bangladesh Textile Mills Association

13. SIZE AND GROWTH OFBANGLADESH TEXTILE INDUSTRY B T M A Bangladesh Textile Mills Association

14. Size and Membership of BTMA • Membership : 700 Mills • Spinning, Weaving, Dyeing and Finishing Mills. • Investment : Euro 2.50 billion. • Employment : 3 million people. B T M A Bangladesh Textile Mills Association

15. Developments in the Textile Industry since 1994 BTMA mills planned for export market in 1994, and since then the development has been as follows: Description 1994 2004 Spinning Capacity 1.4 million 4.2 million Export using local Fabric Negligible 46% of the export US$ 2.20 billion Value addition on Knit and woven 25% 75% Lead time 16 weeks 4 weeks B T M A Bangladesh Textile Mills Association

16. Demand Supply Position of Yarn up to 2007 Demand Supply Position of Fabrics up to 2007 B T M A Bangladesh Textile Mills Association

17. Market Segments Domestic : With a population of 135 million the market is already big and the consumption per capita is growing. Although the domestic production is growing, with increased demand, gap is widening. Fabric demand 2003, 1.50 billion meters expected growth 2010, 2.14 billion meters Most fabrics are now cotton based – enormous scope for synthetic and blended fabrics. B T M A Bangladesh Textile Mills Association

18. Growth of RMG Exports RMG Products by value (in Million US$) Year 93 - 94 98 - 99 2003 - 04 Knit Garments 264 1,035 2,148 Woven Garments 1,292 2,984 3,538 Export of RMG Products by volume (in mln. dozen) Year 93 - 94 98 - 99 2003 - 04 Knit Garments 129.78 439.98 1,099.20 Woven Garments 412.21 777.47 1,085.86 Most woven export are with imported fabric hence large opportunity for woven mills. B T M A Bangladesh Textile Mills Association

19. Growth of RMG Exports B T M A Bangladesh Textile Mills Association

20. ADVANTAGES OF THE BANGLADESH TEXTILE INDUSTRY B T M A Bangladesh Textile Mills Association

21. Transition from MFA to WTO • Under MFA, importing countries (i.e., developed countries) have quota and duty to protect their industry. With phasing of MFA their industry will become uncompetitive and open to competition from developing and LDC countries. As such there is apprehension that RMG industries in developed countries will close down, thus creating supply gap which will be filled by developing countries. Bangladesh is a strong contender for this. • A study by Gherzi Textil of Switzerland has shown that the global textile and clothing exports are expected to increase from $199 billion (2000) to $ 350 billion in 2006-07. Bangladesh has 2.6% (US $ 5bn) of global market share now with increased global export this volume will increase to US $ 10bn approx. B T M A Bangladesh Textile Mills Association

22. Potential of Textile Production • In Bangladesh fabric used for domestic and export market, 80% Cotton and 20% Synthetic. • Ratio between use of Cotton/Synthetic or Blended fabric varies as per demand globally. • In Bangladesh local production of Woven fabric is not substantial. • Therefore, a large potential for Cotton, Synthetic, Blended fabrics& MMF exists in Bangladesh for both domestic and export market. • Taiwan has big capacity for production of Synthetic, blended fabrics & MMF has advantages in fabric production. • Therefore, Taiwan can take advantage of the gaps available in Bangladesh by setting up Production facilities under 100% owned, or Joint Venture or relocation. B T M A Bangladesh Textile Mills Association

23. Market Access Advantages for Bangladesh In the EU under GSP Scheme and also under EBA agreement, Bangladesh textile products are quota free and duty free. This is a great advantage over other competitors, which will continue even after MFA. Export to EU under GSP facility: In the last few years the volume of export to EU under GSP (export using local fabric) has increased from EURO 399 mln to US$ 2,015 mln. B T M A Bangladesh Textile Mills Association

24. Market Access Advantages for Bangladesh (cont.) • Has recently obtained quota-free and duty-free access to Canada, Norway, Japan, New Zealand and Australia. • As an LDC, favorable market access to continue in the post-MFA era. • This facilities will continue until per capita income reaches to US $ 1000. B T M A Bangladesh Textile Mills Association

25. Taiwan Textile Industry • Taiwan has a well-developed textile industry. • Taiwan is one of the most developed manufacturers of Synthetic yarn, Fabric and Garments. • Taiwan has good image and presence in global textile markets. • With high economic growth Taiwanese per capita income is also increasing. • Now Taiwan is concentrating on high value added products. • Taiwan can keep her market of Textile products by using Bangladesh as a manufacturing base. • This would benefit both the countries. B T M A Bangladesh Textile Mills Association

26. BANGLADESH-TAIWANCO-OPERATION OPPORTUNITIES B T M A Bangladesh Textile Mills Association

27. Opportunities Bangladesh and Taiwan can co-operate in following areas : Synthetic Yarn and Syntheticfibre and fabric manufacturing. Retain Taiwanese global market for Garments by using high technology in production of Taiwanese yarn and fabrics in Bangladesh. Taking advantage of Taiwanese presence in the market place, promote and develop Bangladeshi products for high value and high fashion market. Taiwan can come up with their technical know how for capacity building. Taiwan can invest in 100% owned, or joint venture and relocation of Taiwanese textile industries in Bangladesh under present liberal investment package. B T M A Bangladesh Textile Mills Association

28. Unique Advantages of Bangladesh Textile Industry • Currently one of the top five RMG exporters in the world with annual exports of US$5.70 billion. • Apart from the major players, it is the only country with fairly big backward linkages. • It is by far the largest exporter of RMG amongst LDCs. • It has a large population, which has mastered the garment trade with high productivity and low cost. • Textile being the largest export item of the country, we are very focused on this sector. B T M A Bangladesh Textile Mills Association

29. Why Bangladesh? • Bangladesh also offers the following competitive advantages for such investment/ relocation. • Ready market : • * domestic market of 135 million peoples. • * US$ 5.700 bn. Present RMG export market. • * US$ 7.500 bn. RMGExport target within 2007. • * US$ 10.000 bn. RMG Export target within 2010. • Abundant skilled and easily trainable labour force at an extremely competitive rate. Monthly total wages of US$52.00. • Very competitive utilities charges for textiles industry- • Power: US$.033/KWH by captive generation. • Water: No cost - abundantly available from own deep tube well. B T M A Bangladesh Textile Mills Association

30. Why Bangladesh? (Cont.) • As textile and RMG are the largest export sectors and employers, the government support will continue. • Operating mills have necessary infrastructure (i.e., buildings and utilities) which can offer accelerated implementation of investment plan. • No restriction on repatriation of profit and capital. • Tax free import of machinery and raw materials for export. • Work permit for expatriates liberally given. B T M A Bangladesh Textile Mills Association

31. Contact Information BTMA would be most pleased to assist in any enquiries. Please contact us at- Bangladesh Textile Mills Association Unique Trade Centre (8th Floor) 8, Panthapath, Karwan Bazar Dhaka, Bangladesh Phone: 8802-8112361, 9143461 Fax: 8802-9125338 E-mail: btma@citechco.net, btma@dhaka.agni.com B T M A Bangladesh Textile Mills Association

32. THANK YOU FOR YOUR KIND ATTENTION B T M A Bangladesh Textile Mills Association