Country can earn yearly $5b to
$ 6 b by exporting terry towel
Staff Correspondent: Terry towel export increased by 30.55 percent during the first six months from its target due to higher demand in the international market.
The government had set the terry towel export target amounting to US$20.71 million for the first six months (July to December) of the current fiscal year but the sector earned $ 30.55 million.
The government has set the export target of $43 million for the ongoing fiscal 2018-19, according to the latest data of Export promotion Bureau (EPB).
More investment and policy support can boost the terry towel production as well the export to consider the demand in the international market, said the industry insiders.
In the country, investment in towel production is US$1.2 billion and annual production capacity is 135 million kgs. The number of workers in different factories is about 65 thousand. All towel factories are working together to produce 100 percent export quality towels.
The top 5 countries for manufacturing and exporting home textile and terry towel products are China, Pakistan, India, Turkey and Bangladesh. Among them, Bangladesh is holding the in 5th position.
Top 10 importer countries of home textile and terry towel products are USA, Germany, United Kingdom, Japan, France, Australia, Spain, the Netherlands, Canada, Italy, etc.
Talking to the Daily Industry, Md. Mujibur Rahman, Secretary of Bangladesh Terry Towel Manufacturers and Exporters Association (BTTLMEA) said, “Exporting terry towel in abroad only 4 percent cash assistance is received on export price (FOB) and this cash aid is applicable to any one of the parties from yarn production to finish products.
For small and medium industries, the government is providing more than 4 percent of cash assistance but due to various types of conditions, most of our industries can’t be included in this facility. The price of cotton is increasing in the international market. That’s why; the price of yarn, our main raw material is also increasing. So the value of exported goods is decreasing, rather than rationally increase.”
“Gas is an important adherence in the production process of our products. Captive generators, boilers, dryers etc. are directed by gas in our industries. Some 6 percent of our production cost is spent for gas. Presently our industries are facing gas crisis”, he added.
Sources said, Bangladesh remains top of the list for sourcing towel markets expected to grow in importance in the next few years.
Traders said that there are currently 30 to 35 types of terry towel products being made in the country. Their average GSM is from 250 to 900 & 10 to 40 count yarn such as AC, RS carded, RS combed are used.
America is the biggest market of these products. Besides, products are being exported to all European Union countries, Canada, Australia and Japan. Among the EU countries are importing significant amount of terry towel from Bangladesh.
As per BTTLMEA, country’s 50 percent terry towels are exported to EU, 40 percent to the USA and the remaining 10 percent heads for other markets. Besides, Military, Navy and Air force are the domestic bulk buyers and modern elite hotels, spa resorts, hospitals and restaurants purchase a large quantity of terry towel products for the use of themselves from the local producers.
India, China and Pakistan provide the domestic demand of America, world’s largest towel importer, about 65 percent. But the market has been expanding for the last few years in Bangladesh. As the quality of the product is good, there are a large number of orders from Malaysia, Saudi Arabia and Japan coming in this country.
The growth has been prompted by a higher demand for Bangladeshi terry products abroad and the success of the country in exploring new markets.
Industry experts feel that if gas supply, lower price of raw materials, lower bank interest rates, incentives, developed transportation systems and competence of sea port are ensured to retain its competitiveness, the country can earn US$ 5 to US$ 6 billion from export of terry towel products within a couple of years.
Absence of research and development (R&D) in the sector is a very big issue. Bangladesh has a history of labor problems. Worker’s unrest is pointed out as another drawback.
China, Pakistan and India are main competitors for Bangladesh for exporting of terry towel. They have their own raw materials (cotton), machinery, color-chemistry, skilled craftsmen. At different levels in the textile sector, from the cotton production to the finished product, the government of Pakistan gives subsidies to their exporters.
The government of China is giving about 73 types of subsidies/incentives in their textile sector. The Indian government has recently announced a package of Rs 6,600 crore for their textile sector.