Textiles The history of power driven modern textiles in Bengal dates back to the beginning of the twentieth century. Before 1947, modern textiles were only the composite textile mills having spinning and weaving facilities. Added later were activities like specialised textile weaving, knitting and hosiery, and dyeing-printing-finishing. During the partition of India in 1947, there were about 11 composite textile mills in East Pakistan with 1.1 million spindles and 2.7 thousand looms. Spindles grew to 3.2 millions in 1956 but declined to 0.8 million in 1972 as worn-out obsolete spindles went out of operation. In 1972 large-scale manufacturing units including textile mills were nationalised. After 1982, state owned spinning mills were gradually denationalised. By 1999, spindles installed were 2.4 million in the private sector as compared to 0.4 million in the public sector. According to the Statistics of 2011, there are 25 thousand spindles under 21 industries in public sectors; on the other hand, the number of spindles is more than 6 million spindles under 301 industries in the private sector.
About a decade ago, most spinning mills of Bangladesh had produced low-grade yarn. The capacity of those mills was enough to produce good quality combed yarn and polyester/cotton blended yarn for meeting the requirement of garment industry. The products of the spinning sub-sector are cotton yarn of different counts, polyester, synthetic yarn, woolen yarn and blended yarn mixed of cotton and polyester. But later on, the situation improved a lot later with the development of private textile mills specially the weaving sub-sectors like specialised textiles, handlooms, and knitting and hosiery. In 1999, yarn production of 112 million kg satisfied only 22% of total yarn requirement of the country. Presently (2011) yarn production rose to 1,340 million kg which met up 90% of internal demand and also capable to meet the demand of exportable garments industry. The growth of mill weaving loomage capacity was slow (2% annually) during 1947-56 but was faster (4.6% annually) during 1957-72. Like the spinning mills, the weaving mills with 6.8 thousand looms, which were in composite mills, were also nationalised in 1972. Loomage capacity was more or less the same until 1983 when privatisation of nationalised mills was undertaken. Loomage capacity reduced to 39 thousands in 1999 from 63 thousands in 1983 as the old obsolete looms went out of operation.
The number of government owned textile mills reduced to only 20 by 2011. Of which, 21 units of 17 mills were in operation. These mills produce 32/1 to 80/1 count yarns. Three new mills went into operation during this period. The number of looms and shuttles in all these mills are over one thousand and about half a million respectively.
The products of modern weaving are cotton fabrics used as sari, dhoti, lungi, blouse, shirting, drill, long cloth, poplin, saloo, grey markin, etc. These fabrics are woven in narrow strips and in addition, they cannot be used in the garments industry because of their low quality. The annual production of fabrics in 1999 was 25 million metres, which could meet up only 1% of the domestic demand. But the overall scenario of textile sector had started experiencing a revolutionary change in the beginning of 21st century. During the first decade of the present century the growth of textile industries in private sector was very high. In 2011, the textile sector could fulfill around 51% of the total exportable demand.
The setting up of specialised textile mills having 10 to 50 looms per unit begun in Bangladesh in mid 1970. In 1976, the country had eight thousand looms with an annual production capacity of 15.6 million metres of fabrics. By 1983, the number of looms increased to 11,500. The annual growth rate of this sector experienced a litle reduction during the 1983-1989 periods.
Fabrics produced in this sub-sector are mostly cotton, polyester and cotton-polyester blended types. Main products are nylon saris, household linens, curtains, shirting, suiting, nets, pocketing fabrics, velvet cloth and fabrics for draperies. 3000 knitting and hosiery factories catered to the domestic need in 1952. There was only 1,562 factories in 1976. Only after the 1980's, the products of this sub-sector gained access to export market. The annual growth of machine capacity satisfying domestic market was about 5.3% for the period 1976-83 and only 2.1% for the period 1983-99. In this period, 1,390 circular knitting machines were added to the capacity to satisfy the export demand. However, the situation on the knitting side looks better than in weaving. The main products of this sub-sector are vests, underwear, T-shirts, polo shirts, ladies undergarments, socks, mufflers and sweaters. But after then the scenario of textile industries in private sector gradually move forward.'
During 1956-76, modern dyeing facilities were limited to composite mills and traditional hand-dyeing facilities to handloom industry. Automatic and semi-automatic dyeing-printing-finishing facilities were set up in the private sector after 1976. The annual growth in the semi-automatic dyeing and finishing units was 17.4% during 1976-83 and only 1.9% during 1983-99. It was 6.3 and 7.7% for automatic dyeing and finishing units for the two periods respectively. The number of country's dyeing, printing and finishing factories increased to 310 in 2011. The total annual production capacity of these units enhanced to 2800 million metre. Apart from these composite units, existing knitting and weaving factories numbering 2800 have dyeing facility. Of which, two thousand factories meet up the domestic demand and the rest 800 meet up are fully export-oriented. The total production capacity of these factories per year is 4100 million metres. Manual dyeing still exists in the handloom sub-sector.
Bangladesh entered into export market of readymade garments (RMG) in 1977. Exports of RMG grew at a very fast rate during the last two decades. But this growth has not been supported by a growth of the backward linkage facilities. The RMG industry has to depend upon imports for 85% of fabrics and 40% of yarn required for this expanding export market. But the contribution of RMG sector in exporting was 51% due to expansion of textile industries. According to the statistics of 2011, local textile mills and factories now meet up 40% demand of stitched readymade or woven garments and over 90% demand of knitwears. All the mills, both public and private sectors, produce 1340 million kilograms of cotton yarn, which meet up 90% demand of yarn and fabric in the domestic market. The locally produced cotton yarn also meets up the major requirement of the export market.
However, the higher growth of textile has been occurred in the private sector. For example, there were 6 million spindles out of the country's total 6.1 million spindles were owned by private textile mills in 2011. There are 420 large textile mills in the country, which have over 25 thousand auto looms. These can produce 1400 million metres of fabric. The number of specialised textile mills in private sector is 1065 and these factories have 23 thousand auto looms. These factories produce 300 million metres of fabrics per year. The number of small handloom plants run in private sector is 148 thousand and these factories have about 498 thousand handlooms which can produce 870 million metre of fabrics per year.
As RMG became the leading export item and it occupies 77% share of the national export basket, the demand of both yarn and fabrics have raised remarkably during the last two decades. The private textile sector basically fulfilled the growing requirement. By 2011, the private textile sector totaling 1266 mills and factories built up its capacity to meet up 90% demand of garments in the domestic market beside the non-stop support to the export-oriented RMG sector. Most of these factories produce cotton yarn and woven fabrics. According to an account of Bangladesh Textiles Mills Association (BTMA), an apex body private textile mills and factory owners, there were 361 private cotton yarn production factories in the country in 2011. The number of textile fabrics production units was 682. The number of dyeing, printing and finishing units was 310, of which 130 are automatic and 180 are semiautomatic. The annual production capacity of these dyeing and printing factories is 2800 million metres of fabric.
Earlier in 1999, the textile sector of Bangladesh may be characterised by the following facts: there were 2.8 million spindles with an annual production capacity of 200 million kg of thread; the total number of looms were 3,900; 1,200 in private sector and 2,700 in public sector and the annual production capacity was 66.9 million metres of cloth. All the specialised textile mills were in the private sector and they had 40,500 looms producing annually 69 million metres of cloth. The number of body machines/circular machines in knitting and hosiery sector was 8,884, of which 5,753 operated for export market. There were 250 dyeing and finishing units - 175 semi-automatic and 75 automatic and the number of export oriented RMG manufacturing units was 2,650 having an annual production capacity of 1,8 billion pieces.
Textile sector is an important area for potential investments due to low wage ($40-70 dollar) per month, and relatively low cost of infrastructure required for setting up textile mills. In an international environment cost of capital and labour in Hong Kong, Korea, Singapore and Taiwan etc are rapidly increasing. The government policy also encourages private investment, especially foreign investment in the textile sector by allowing special facilities such as (a) tax holiday for five, seven, nine and twelve years for industries set up in the developed, less developed, least developed, and special economic zones respectively, (b) tax exemption on royalties, technical know-how and technical fees, (c) tax exemption on interest on foreign loans, (d) tax exemption on capital gains, (e) avoidance of double taxation, (f) exemption of income tax for foreign technicians for a period of up to 3 years; (g) remittance up to 50% of the salary of the foreigners employed in Bangladesh, (h) facilities for repatriation of invested capital, profits, and dividends abroad, and (i) provision for treating reinvestment of repatriable dividend as new foreign investment.
Bangladesh is a member of the World Trade Organisation (WTO) and its exports of RMG products are benefiting from the Most Favoured Nation status including the post-Uruguay Round tariff rates and reductions in them made by all major developed nations. Bangladesh is a favoured partner in the Generalised System of Preferences (GSP) of the European Union (EU). It is also a signatory to the Uruguay Round Agreement on Textiles and Clothing. It concluded bilateral Multifibre Agreement (MFA) on trade of textiles and clothing with Canada, EU and USA.
RMG contributed over 77% of the export income during the FY of 2009-10, when the country achieved growth rate 4.1% in exporting. The volume of total export was US$ 16200 million, of which US$ 12490 million was earned from only RMG. The export income from woven garments and knitwear in that year were US$ 6010 million US$ 6480 million respectively. Beside RMG, Bangladesh earns of US$ 350 million from Home Textile export, US$ 150 million from Terry Towel and US$ 90 million from the export of special woven cloth, which was directly related to the cotton yarn and fabrics production. The export income from RMG sector has further increased in 2010-11 fiscal. Till May 2011, Bangladesh earned US$ 20530 million from RMG export. The export of knitwear and woven cloth registered a growth of 46% and 39% respectively amounting to US$ 8440 million and US$ 7510 million. The growth of domestic textile export was 97%. [Shamsuddin Ahmad]