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Bangladesh : Spinning industry shows strong growth on demand rise |
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2004-8-17
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Spinning industry of Bangladesh has been witnessing a robust growth over the past few years on increased domestic demand ahead of the expiry of apparel export quotas.
With the post-MFA (multi-fibre arrangement) era set to stage in from January 2005, the spinning sector recorded a whopping production growth of more than 22 percent last year.
According to Board of Investment (Bol) Survey, the local spinning mills produced 382 million kg of yarn in 2003 against 297 million kg in 2002.
The BoI conducted the survey during March-June this year, which showed that till June 2004 last 138 spinning mills were in regular production and nine on trial production. Besides, six mills were ready for production and five under implementation.
According to the survey, cotton yarn constitutes 81 percent of the total production. The mills also produce polyester, synthetic, acrylic, filament, woollen and blended yarn, and the increase in production is slowly reducing dependency on imported yarn.
According to Statistics Department of Bangladesh Bank, local knitwear manufacturers imported $270 million worth of yarn in 2003, which was $395 million in 1997.
In 2002 and 2001, the import figures were $283 million and $322 million.
The BoI survey also found that local entrepreneurs set up 96 percent of the mills and the rest were established in joint venture. Total investment in these spinning mills amounted to Tk 8,554 crore.
The mills employ 92,172 people, including 85 foreign experts and technicians, the survey added.
A total of 198 mills listed with BoI came under the extensive survey, of which BoI could not trace 10 units, 17 mills were found closed and 13 others were yet to implement their projects.
About 81.6 percent of the mills are located in Dhaka division and 11.4 percent in Chittagong division. The rest are in Khulna, Rajshahi, Sylhet and Barisal divisions.
The survey report informed success of a robust textile sector largely depends on an improved and reliable spinning sub-sector.
"If spinning sub-sector produces substandard/inferior yarn, its adverse effect persists right across the entire value chain."
"Availability of raw materials, transportation, port facilities and tariff rationalisation are the key challenges to the spinners," the survey said.
The government has been supporting the spinning mill owners providing lower tariff for machinery, spares and raw materials, cash incentives, reduced tax rate and low-cost funding, the BoI report mentioned. |
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