BGMEA seeks spl allocation in next budget to attract MMF investment

Staff Reporter :
The entrepreneurs of the country’s apparel sector have demanded a 10 per cent incentive on the export of garment items made from non-cotton fibres to encourage investment in man-made fibre (MMF).
Faruque Hassan, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), made the call in a letter sent to the finance minister on Sunday.
In the letter, the BGMEA chief said that Bangladesh can add at least US $2 billion in its export earnings annually by grabbing the growing global market of man-made fibre (MMF) textiles.
The special incentive will also help the sector to remain competitive in the global market and will help create employment and boost investment in the sector contributing to the overall economy of the country, he added.
Faruque Hassan further said that the share of MMF has been steadily increasing due to the inherent limitations of growth of cotton and other natural items.
“The demand for man-made fibre (MMF) textiles all over the world is on the rise with annual growth of 3 to 4 per cent as a substitute for cotton amid changes in global fashion trends,” he said.
“There’s huge opportunity. Market is there. If we can grab the opportunity, we can add additional exports worth US $2 billion at least,” he added.
BGMEA is working to find ways to earn US $100 billion by 2030 defying various challenges and achieving the target, products diversification, especially it is strategically very important to expand goods made from non-cotton fibre, he said.
“Besides, we have to follow double transformation (Rules of Origin) to get GSP Plus or Standard GSP facility in European countries after LDC graduation for which, our woven sector, especially the non-cotton apparel sector will fall into crisis. Overcoming the crisis, it is urgently needed to increase investment in backward
linkage industry for non-cotton sector,” he said. Currently, 403 out of the 430 spinning mills operating in the country produce cotton fibre.
So, investment and production in the MMF-based fibre industry is still low even though it has very high potential, the BGMEA president added.
The global market of the MMF-based garment industry is worth US $150 billion and Vietnam holds a 10 per cent share of the global MMF-based garment market while Bangladesh is still struggling to attain a 5 per cent share in this segment, he said in the letter.
Of the global garment market, some 75 per cent are MMF-based fibre and this market is growing by 3 to 4 per cent annually. On the other hand, the global market share of the cotton-based garment industry is growing at just 1 or 2 per cent annually.
As a result, Bangladeshi garment exporters have been losing the opportunity.
So, the government needs to give at least 10 per cent incentive on the export of MMF-based garments to attract more investment in this segment, the BGMEA president said.