China is the global manufacturing capital, and when it comes to apparels, its manufacturing might is comparable to none. However, the outbreak of COVID-19 has brought the entire world into a standstill and claimed lives of tens and thousands of people across geographical locations, which could very well change the equations going forward, believe many.
It seems a lot of customers now want to move investments out of China, and Bangladesh definitely stands a good chance to get additional orders said a contact at Intimate Apparels. Intimate Apparels is a leading brassieres and lingerie manufacturer with facilities in Bangladesh, with a production capacity of 2.5 million pieces a month and over 3,200 workers and staff. The company is the preferred supplier to leading global brands including C&A, FTL, George, Hanes, H&M, Kappahl, Wonderbra, Next, Carrefour and JCPenney.
Another contact at Plummy Fashions Limited also agreed that multiple-shoring is a strong possibility post the pandemic. And if that happens, it might augur well for Bangladesh. After all, it is next only to China in terms of apparel manufacturing and exports globally.China losing out a part of its business is definitely an opportunity for Bangladesh, claimed CEO of a renowned sourcing brand (A &E) in Bangladesh. He believes Bangladesh is in for decent orders and good business from August onwards.A&E is one of the world’s foremost manufacturers of industrial sewing threads and has a very strong presence in Bangladesh.
Another contact observed he was not sure though who would benefit from the arising situation, but he wasof the opinion that Bangladesh would be among them.”As far as what I have got to know, the Japanese Government has taken a decision to move businesses out of China and set up their manufacturing concerns in countries like India, Bangladesh and Vietnam and make huge investments there. Starting its journey in 1980 with designing, manufacturing and production at the core, this contact represents one of the leading suppliers of multi product clothing to leading global brands.
Japan has earmarked 220 billion Yen to encourage companies to shift production away from China, and that many manufacturing destinations are cosying up to the idea of accommodating businesses moving out of China is getting evident by the day.
Recently, Indian Prime Minister Narendra Modi, while interacting with the Chief Ministers of different States, suggested that States should explore the possibility of attracting investments in view of the likelihood of many companies exiting from Chinese cities in the wake of the COVID-19 virus emerging from Wuhan.
Hong Kong-headquartered garment manufacturing multinational conglomerate Epic Group has already entered the Indian market and plans to set up its first manufacturing unit in Ranchi (in the State of Jharkhand) at a massive investment of US $ 20 million, and so is the South Korean powerhouse Youngone Corporation, which has signed an agreement to set up a unit at Kakatiya Mega Textile Park (KMTP) of Warangal district, in the State of Telangana. And now with the prospects of many other companies investing in India getting bright, the Government is leaving no stone unturned.
However, given Bangladesh’s capacities, manpower availability, lower wage, and above all, its manufacturing prowess and pro-business government, the country cannot be overlooked in terms of attracting new investments in apparel and textiles.
Even as other nations vie to attract new investments, Vietnam seems to be making a decent progress towards becoming a destination of companies wanting to reduce their dependence on China. It is already working hard on courting foreign companies, giving manufacturers access to ASEAN free trade area and preferential trade pacts with countries throughout Asia and the EU, which gives Vietnam a definite edge, feel many.
Also, being a part of China-plus-one strategy for long could further work in its favour. But some experts are of the opinion that there’s no alternative to China; however, they also do not rule out the theory that the new world order that would emerge once the pandemic is over could witness buyers lessening their dependence on China.
China, for past many years, had been able to maintain its stranglehold on the two major export destinations with 30 per cent market share in the USA, while Vietnam held 16 per cent and Bangladesh 7 per cent market share in 2019, whereas in the EU, China had a 15 per cent share followed by Bangladesh 10 per cent and Vietnam 2 per cent, in the same period.
The trade war of early 2019 with the USA, though, made some dents on China’s overall exports to the former after many American brands and retailers moved some business out of China to avoid being caught in the imbroglio, post COVID-19 whether it would be Bangladesh, Vietnamor India that would emerge as the new preferred destinations.
