Textile performance - Bangladesh outclasses Pakistan

If Pakistan has its name in the history, perhaps as the oldest or certainly one of the oldest home of cotton then Bangladesh has its name in the history as the producer of finest quality of cloth /fabric specially world fame product named Dhaka muslin (Dhaka Malmal)- prepared from perhaps the finest cotton yarn of over 250 Ne, samples of such fabric have been preserved for exhibition in the museums including Dhaka Museum and Albert Hall Museum, London.
Such finest yarn was probably made from the roughest and shortest fibre length cotton locally called Dessi Toola and botanically known as Gossypium Arboreum but now hardly 120 Ne yarn is spun from extra long staple cotton on sophisticated machines. The highly sophisticated cloth / fabric was reportedly prepared by highly talented craftswomen some 250 years ago. Although, the days of Dhaka muslin have gone yet Jamdani Saree prepared from very fine yarn and fine embroidery work by specialize workers is a real gift of Bangladesh.
When in 1947 Pakistan got independence, it consisted of two parts viz; one called East Pakistan (now Bangladesh) and the other West Pakistan (now called Pakistan). In 1971, the East Pakistan got independence and is now Bangladesh. In 1947-48 season, Pakistan being an agriculture country produced cotton crop of 1.16 million 170-Kg bales, all in West Pakistan which had only a couple of composite textile mills in Punjab including one Okara Textile Mills, Okara and Lyallpur cotton mills, Faisalabad while in East Pakistan where, almost no cotton was grown, had 16 composite textile mills; one of these was Dhakeshwari Cotton Mills, Narayanganj which was installed in 1908.
The reason for installing more spinning mills in East Pakistan may be its humid climate, which suits spinning process with lower percentage of yarn breakages in the absence of artificial humidification.
However, Dessi cotton (Gossypium Arboreim specie) which was grown and produced in limited volume of about ten thousand bales, on the Chittagong hill-tracks was called Comilla cotton and it was all exported mostly to Japan till independence. Later, Bangladesh Government established Cotton Development Board for the growing and development of staple cotton (Gossypium Hirsutum) but it could not get the desired results. In 40 years period (1971-2010), Bangladesh's total cotton production is equivalent of 2,045,440 bales, producing maximum of 115,200 bales of 170-Kg each in one season and the yearly average production works out to 51,136 bales (USDA figures). Main reason for poor cotton production may be more rains and unsuitable lands. At the time of its birth, Bangladesh had about 75 textile mills with spinning capacity of 858,000 spindles, 7,400 power-looms and 37,500 handlooms which were consuming about 225,000 bales of 170-Kg. Table 1 below gives present position of textile capacity and production.
Raw Cotton: Bangladesh' s own cotton crop is very limited to 50 - 70 thousand 170-Kg bales per season while its cotton consumption is high between 4.0-4.5 million 170-Kg bales.
Thus, Bangladesh has to import almost all its cotton requirements to feed its spinning industry. In 2008-09 season, Bangladesh reportedly imported 640,000 Metric Tons =3.765 million 170-Kg bales from different countries of which prominent import sources are Uzbekistan-52 %, India-12 %, US-6 %, Pakistan-7 % and Africa-6 %. Against this, Pakistan's total domestic consumption is estimated between 13.5 and 14.0 million 170-Kg bales in 2010-11 season of which about 80 % will be met from local production and balance 20 % from imported cotton.
Cotton Yarn: Bangladesh is estimated to have domestically produced 541,000 tons (2/3rd of total requirements) of cotton yarn in MY 2009-10 while total cotton yarn requirements are estimated around 800,000 Metric tons. The yarn shortfall of 259,000 Metric tons (1/3rd of total requirements) is met through imports from different sources of which prominent are India 72 %, China 6 %, Pakistan 5 % and Thailand 3 %.
In 2008-09, Pakistan domestically produced 2,862,411 Metric Tons of yarn (About 78 % of cotton and 22 % of Blended yarn) of which 2,336,165 Metric tons i.e. 81.61 % has been consumed locally (77.90 % by weaving and knitting sectors and towel and other textile products manufacturing sectors), 3.72 % by organized mill-sector and balance 106,416 Metric tons (18.38 %) has been exported.
Cotton Cloth / Fabrics: In 2009-10, Bangladesh's total domestic requirements of fabric is reported to be around 4.30 billion square meters of which 2.0 billion square meters (46.51 %) of fabric was produced domestically while balance 2.3 billion square meters was imported from different sources of which prominent are China 75 %, India 12 % and Pakistan 5 %.
Against this, in 2008-09, Pakistan produced 9.015 billion square meters (11.31 % mill sector and 88.59 % non-mill sector) of fabric of which 7.117 billion square meters (78.94 %) were used for local manufacturing of garment - apparel - other textile products and balance 1.898 billion square meters ( 21.06 %) were exported.
Exports of Ready made Garments; The Export Promotion Bureau of Bangladesh data showed that shipments in term of values of Ready Made Garments (RMG), in the January-December period in 2010 totaled US $14.846 billions against 11.892 billions last year. The EPB- Bangladesh said that the garment exports grew by 42 percent to $8 billions in the July-December period of the current Fiscal Year 2010-11. Shafiul Islam Mohiuddin - acting President of the Bangladesh Garment Manufacturers and Exporters Association reportedly said that the local factories are seeing huge demands from global importers and the simplified the EU-GSP regime, effective from 1st.
January, 2011 is set to bring more buyers to Bangladesh. Some recent positive developments such as China's policy of shifting from low-value garments to high-value garments providing ample opportunity for Bangladesh to fill-up the gap and the European Union's decision to abolish two-certificate system and go for only one certification of fabric to garments, would certainly increase the exports of Bangladesh in general and that of RMG in particular considerably. Therefore, there appear bright chances for Bangladesh to avail these opportunities and achieve the export target of US $20 billions through exports of garments and some textile products in FY 2010-11. It is to be mentioned that garment exports claim share of about 80 % of Bangladesh's total exports. It is worth-mentioning that US and European Union countries are main destinations for Bangladesh garment exports claiming some 80 % share. Against this, Pakistan's total exports in July-2009 to June 2010 period was US $19.29 billions while imports at US $34.710 billions.
In six month period July-December 2010, Pakistan earned US $10.976 billions through exports and share of total textiles goods is estimated around 48 % including 16 % of Knit and woven garments. For meeting its total requirements, Bangladesh imports about 100 raw cotton, about 33 % yarn and about 54 % cloth / fabric and exports Ready Made Garments almost five times that of Pakistan. Pakistan is short in raw cotton requirements by 20 % but is surplus in yarn and cloth by 20 % each. Of course, there is no export quota for Bangladesh in USA whereas exports of Pakistan's textile goods to USA are subject to quota.
There is no duty on the exports of Bangladesh textiles to the European Union countries but exports of Pakistan's textile goods to EU countries are charged by 10 % as duty. Bangladesh enjoys such export facilities because of its status as Least Developed Country (LDC). It is a fact that in making so wonder performance in RMG sector, factors such as the positive Government policies, Government's facilitation in making finance, power and utilities available at reasonable cost, availability of cheap labour, better entrepreneurship, management skill and professionalism, good reputation in performance of export contracts in letter and spirit and positive ideas and innovation from foreign merchants are playing their roles very efficiently.
Labour, power and financial charges are comparatively cheap in Bangladesh so their production cost works out lower than other countries. In textile sector including RMG, more than 80 % work force comprise of women workers who are paid low wages, averagely about BD Taka 3,000 per month which works out to US $0.22 per hour against 0.50 in India, 0.45 in Pakistan and 1.0 in China. Power rates are also lower in Bangladesh. Bangladesh has two system of power generation viz: one by private sector mostly using gas which costs US Cents 4.5 per KWH and the other public sector mostly using oil costing US Cents 7.56 per KWH. Cost of power in Pakistan is US Cents 6.72, India 9.33 and China 7.84 per KWH. Banks in Bangladesh lend money to industries at special interest rate between 9 and 11 % which is also lower than other competing countries.
Enough Foreign investment also helps Bangladesh in increasing its production in textile -RMG sector. Pakistan and Bangladesh are at almost equal population level between 160 and 180 million people. Per Capital Income (2010) is US $941 and that of Bangladesh is US $660. Pakistan's nominal GDP is US $164,792 millions and that of Bangladesh US $105,402 millions. Soon after its independence, Bangladesh currency BD Takka was valued at 50 % discount from Pak Rupee (Two Takka = One Pak Rupee) but by the end of 2010 BD Takka was valued at a premium of 25 % over Pak Rupee. One US Dollar = BD Takka 69 = Pak Rupee 86.
Local law and order situation and business conditions in Bangladesh are better than in Pakistan.
Actually, Bangladeshi people generally prefer to live a simple and natural life inclined to less expending and more saving. There is only one central Government in Bangladesh with one cabinet of reasonable size and no provinces whereas in Pakistan we have almost five provinces, a large number of ministers, Parliament members costing many times more than Bangladesh expenses.
Some more than a decade ago, this writer had written an article captioned "Textiles - a symbol of prosperity for Bangladesh" published in Pakistan's daily newspaper.
There is no doubt that textile has brought much prosperity to Bangladesh and in the next five years up to 2015, Bangladesh is expected to increase its exports to the level of 50 billions of which 40 billions would of textiles including garments.
At the start of 21st Century, there were ample hopes and enough opportunities of becoming the third largest country in world textiles but now Pakistan appears losing this position to Bangladesh.

==========================================================================================

Comparison of textile performance - Pakistan and Bangladesh

==========================================================================================

                                       Pakistan                 Bangladesh

             Production                11.5 mln bales           60,000 bales

Raw Cotton   Exports                   0.5 mln bales            nil

             Imports                   3.0 mln bales            4.0 mln bales

             Dom Requirements          14.0 mln bales           4.06 mln bales

             Production                2.232 mln Tons           0.541 mln tons

Cotton Yarn  Exports                   0.450 mln tons           --

             Imports                   --                       0.259 mln tons

             Dom.Requirements          1.782 mln tons           0.800 mln tons

             Production                9.015 Bln Sq. Meters     2.000 Bln Sq. Meters

Cloth/Fabric Exports                   1.898 Bln Sq. Meters     --

             Imports                   Nominal                  2.300 Bln Sq. Meters

             Dom. Requirements         7.117 Bln Sq. Meters     4.300 Bln Sq. Meters

Exports      Total                     19.29 Bln US Dlrs        19.0 Bln US Dls

             Textile incl. Garments    8.69                     Bln US Dlrs  15.0 Bln US Dls

             Share of textile (%age)   45 %                     80 %/

             Garments                  16 %                     78 %

==========================================================================================

============================================================================================================

Table No.1

============================================================================================================

Bangladesh Textile Capacity and production (2008-09)

============================================================================================================

Sl. No. Sub-Sector                            No. of Units  Installed Machine  Production           Manpower

                                                             Capacity          Capacity

                                                                              (In Million)

============================================================================================================

1       Textile Spinning                       341       7.20 ml. spld,       1600.00 ml. kg         400,000

2       Textile Weaving                        400       0.18 ml. rotor       1600.00 ml. mtr         80,000

3       Specialized Textile & Power loom     1,065     25,000 SL/SLL

4       Handloom (GF/F)                    148,342      23000 SL/SLL           400.00 ml. mtr         43,000

5       Knitting, Knit Dyeing                         498,000 Handloom         837.00 ml. mtr      1,020,000

        (GF):      (a) Export-                800,     12,000 Knit/Dy/M,     3,600.00 ml. mtr,       300,000

        Oriented   (b) Local Market          2000       5,000 Knit/M           500.00 ml. mtr         24,000

6       Dyeing & Finishing

        (FF):      (a) Semi-mechanized         180,                            120.00 ml. Mtr         10,000

        (b) Mechanized                         130        -                   1600.00 ml. Mt          23,000

7       Export Oriented RMG                  4,500        -                    475.00 ml. dozen    2 million

8       Others:                                           -                                          600,000

        GRAND TOTAL                                                                                4,500,000

============================================================================================================