The country's apparel producers demanded 5.0 per cent cash incentive on exports, among others, to help sustain the ready-made garment (RMG) industry against the backdrop of various challenges.
They identified increased wages of workers, proposed energy tariff hike, falling global prices of apparel items, factory remediation cost, currency depreciation, and low labour productivity as some of the challenges.
The apparel makers also made a number of recommendations, including investment in new technologies for ensuring higher production, and designing five-yearlong energy pricing for RMG industry based on its affordability.
Their other suggestions included use of local coal resources for meeting growing energy need to keep the RMG sector competitive in terms of energy costing instead of raising dependency on imported gas.
The observations and the recommendations came at a conclave titled 'Sustainability of ready-made garment (RMG) sector in Bangladesh.' The Dhaka Chamber of Commerce and Industry (DCCI) organised the programme at its office in the city on Thursday.
Commerce Minister Tipu Munshi was present in it as the chief guest, while Dr Rubana Huq, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President, was the special guest.
Osama Taseer, the DCCI President, made the keynote presentation at the event, where representatives from RMG makers and buyers, among others, were present.
Expressing the same opinion with the RMG sector stakeholders, the minister said the proposed energy price hike will increase the cost of doing business in the sector, and so it needs some incentives for a certain period.
The RMG entrepreneurs are not getting fair prices from the buyers, although local factories are very compliant and produce high quality products.
He asked for increasing negotiation skill to get best prices from the buyers.
The minister, however, informed the conclave that FTA (Free Trade agreement) with Sri Lanka, Belarus and Czechoslovakia are in the final stage, and the government is thinking of signing FTA with Brazil also.
Terming the country's 176th position in the ease of doing business index 'horrible', the BGMEA president said the government should focus on reducing the cost of doing business for RMG sector's sustainability.
"We have green factories, but not green prices. This is not the era of completion, but the era of collaboration."
The era of collaboration has begun to make the RMG industry more sustainable, and the BGMEA will work hard to establish a positive image and branding of the industry in the international market.
The BGMEA chief also suggested proper follow up of the recommendations, placed by the DCCI at the programme.
The DCCI president said RMG sector shares US$460 million of total foreign direct investment (FDI) in Bangladesh. Being the second largest exporter after China it holds 6.5 per cent stake of the $446-billion world market.
"The sustainability and competitiveness of RMG industry may be hampered due to rising production cost, driven by wage hike, energy cost hike, compliance cost, and declining international market price."
The lowest price offering to Bangladeshi products reduces the profit margin of entrepreneurs.
The DCCI chief also recommended 5.0 per cent cash incentive for the next three years for all RMG exports to both traditional and non-traditional markets.
Underscoring the importance of skill development for improved productivity, he urged for designing a five-yearlong energy pricing policy for RMG industry.
Some 1,200 factories have been closed down over the last four years due to failure in maintaining compliance standards. Besides, the lowest price offering to Bangladeshi products puts the sustainability of RMG sector at stake.
He noted that since 2013, Bangladeshi apparel price decreased at 0.74 per cent rate every year on an average.
Roger Hubert, the H&M regional head for Bangladesh and Pakistan, said not only RMG industry in Bangladesh is in the process of transformation, but the global retail industry is going through the same process to meet the ends.
"We should stop blaming each other. If we (the buyers) want to survive, we need you (the garment makers)."
He also suggested reducing the 'trust gap' between the local apparel makers and the global buyers by working together.
Fazlul Hoque, the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) former president, said the local garment exporters have to improve their negotiation capability with the buyers regarding garment prices.
munni_fe@yahoo.com