Historical Background of RMG Sector in Bangladesh:

Like other 3rd world countries Bangladesh is a developing country. Her economic development
depends firstly on agriculture and secondly on industry. Although Bangladesh is not developed
in industry, it has been enriched in Garment industries in the recent past years. In the field of
Industrialization garment industry is a promising step. It has given the opportunity of
employment to millions of unemployed, especially innumerable uneducated women of the
country. It is making significant contribution in the field of our export income.

The foundation of textile sector was first established in the 60th decade of 19th century. For the
first time, the industry exported shirts (Mercury shirt) to the European market in 1965-66, which
was produced from Karachi. In the latter, 9 exporting industries were available in 1977-78. The
three largest industries in that time were Riaz Garments, Jewel Garments and Paris Garments.
Among those, Riaz Garments was the most famous and oldest industry in that time.

Once the cloth of Bangladesh achieved worldwide fame specially muslim and jamdani cloth or
our country was used as the luxurious garments of the royal figures in Europe and other
countries. The British rulers in India did not develop our cloth industries at all. Rather they
destroyed them and imported cloths from England. Garment Industry Large-scale production of
readymade garments (RMG) in organized factories is a relatively new phenomenon in
Bangladesh. Until early sixties, individual tailors made garments as per specifications provided
by individual customers who supplied the fabrics. The domestic market for readymade garment,
excepting children wears and men's knit underwear (genji) was virtually non-existent in
Bangladesh until the sixties.

Since the late 1970s, the RMG industry started developing in Bangladesh primarily as an export-
oriented industry although; the domestic market for RMG has been increasing fast due to
increase in personal disposable income and change in life style. The sector rapidly attained high
importance in terms of employment, foreign exchange earnings and its contribution to GDP.

Most importantly, the growth of RMG sector produced a group of entrepreneurs who have
created a strong private sector. Of these entrepreneurs, a sizeable number is female. A woman
entrepreneur established one of the oldest export-oriented garment factories, the Baishakhi
Garment in 1977. Many women hold top executive positions in RMG industry.The hundred
percent export-oriented RMG industry experienced phenomenal growth during the last 15 or so
years. In 1978, there were only 9 export-oriented garment manufacturing units, which generated
export earnings of hardly one million dollar. Some of these units were very small and produced
garments for both domestic and export markets. Four such small and old units were Reaz
Garments, Paris Garments, Jewel Garments and Baishakhi Garments.

Reaz Garments, the pioneer, was established in 1960 as a small tailoring outfit, named Reaz
Store in DHAKA. It served only domestic markets for about 15 years. In 1973 it changed its
name to M/s Reaz Garments Ltd. and expanded its operations into export market by selling
10,000 pieces of men's shirts worth French Franc 13 million to a Paris-based firm in 1978. It was
the first direct exporter of garments from Bangladesh. Desh Garments Ltd, the first non-equity
joint-venture in the garment industry was established in 1979. Desh had technical and marketing
collaboration with Daewoo Corporation of South Korea. It was also the first hundred percent
export-oriented company. It had about 120 operators including 3 women trained in South Korea,
and with these trained workers it started its production in early 1980. Another South Korean
Firm, Youngones Corporation formed the first equity joint-venture garment factory with a
Bangladeshi firm, Trexim Ltd. in 1980. Bangladeshi partners contributed 51% of the equity of
the new firm, named Youngones Bangladesh. It exported its first consignment of padded and
non-padded jackets to Sweden in December 1980.

Trade Information

Membership and Employment

NUMBER OF GARMENT EMPLOYMENT IN MILLION

YEAR
FACTORIES WORKERS
1984-85 384 0.12
1985-86 594 0.20
1986-87 629 0.28
1987-88 685 0.31
1988-89 725 0.32
 1989-90 759 0.34
1990-91 834 0.40
1991-92 1163 0.58
1992-93 1537 0.80
1993-94 1839 0.83
1994-95 2182 1.20
1995-96 2353 1.29
1996-97 2503 1.30
1997-98 2726 1.50
1998-99 2963 1.50
1999-00 3200 1.60
2000-01 3480 1.80
2001-02 3618 1.80
2002-03 3760 2.00
2003-04 3957 2.00
2004-05 4107 2.00
2005-06 4220 2.20
2006-07 4490 2.40
2007-08 4743 2.80
2008-09 4925 3.50
2009-10 5063 3.60
2010-11 5150 3.60
2011-12 5400 4.00
2012-13 5876 4.00
2013-14 4222 4.00
2014-15 4296 4.00
2015-16 4328 4.00
2016-17 4482 4.00
Source : BGMEA.

Comparative Statement on Export of RMG an Total Export of Bangladesh

TOTAL EXPORT OF
EXPORT OF RMG % OF RMGS TO TOTAL
YEAR BANGLADESH
(IN MILLION US$) EXPORT
(IN MILLION US$)
1983-84 31.57 811.00 3.89
 1984-85 116.2 934.43 12.44
1985-86 131.48 819.21 16.05
1986-87 298.67 1076.61 27.74
1987-88 433.92 1231.2 35.24
1988-89 471.09 1291.56 36.47
1989-90 624.16 1923.70 32.45
1990-91 866.82 1717.55 50.47
1991-92 1182.57 1993.90 59.31
1992-93 1445.02 2382.89 60.64
1993-94 1555.79 2533.90 61.40
1994-95 2228.35 3472.56 64.17
1995-96 2547.13 3882.42 65.61
1996-97 3001.25 4418.28 67.93
1997-98 3781.94 5161.20 73.28
1998-99 4019.98 5312.86 75.67
1999-00 4349.41 5752.20 75.61
2000-01 4859.83 6467.30 75.14
2001-02 4583.75 5986.09 76.57
2002-03 4912.09 6548.44 75.01
2003-04 5686.09 7602.99 74.79
2004-05 6417.67 8654.52 74.15
2005-06 7900.80 10526.16 75.06
2006-07 9211.23 12177.86 75.64
2007-08 10699.80 14110.80 75.83
2008-09 12347.77 15565.19 79.33
2009-10 12496.72 16204.65 77.12
2010-11 17914.46 22924.38 78.15
2011-12 19089.73 24301.90 78.55
2012-13 21515.73 27027.36 79.61
2013-14 24491.88 30186.62 81.13
2014-15 25491.40 31208.94 81.68
2015-16 28094.16 34257.18 82.01
2016-17 28149.84 34655.92 81.23
Source: BGMEA

Value of Total Apparel Export

Fiscal Year Basis

TOTAL APPAREL EXPORT IN MN.US$
YEAR
WOVEN KNIT TOTAL
1992-1993 1240.48 204.54 1445.02
1993-1994 1291.65 264.14 1555.79
 1994-1995 1835.09 393.26 2228.35
1995-1996 1948.81 598.32 2547.13
1996-1997 2237.95 763.30 3001.25
1997-1998 2844.43 937.51 3781.94
1998-1999 2984.96 1035.02 4019.98
1999-2000 3081.19 1268.22 4349.41
2000-2001 3364.32 1495.51 4859.83
2001-2002 3124.82 1458.93 4583.75
2002-2003 3258.27 1653.82 4912.09
2003-2004 3538.07 2148.02 5686.09
2004-2005 3598.20 2819.47 6417.67
2005-2006 4083.82 3816.98 7900.80
2006-2007 4657.63 4553.60 9211.23

2007-2008 5167.28 5532.52 10699.80

2008-2009 5918.51 6429.26 12347.77

2009-2010 6013.43 6483.29 12496.72

2010-2011 8432.40 9482.06 17914.46

2011-2012 9603.34 9486.39 19089.73

2012-2013 11039.85 10475.88 21515.73

2013-2014 12442.07 12049.81 24491.88

2014-2015 13064.61 12426.79 25491.40

2015-2016 14738.74 13355.42 28094.16

2016-2017 14392.59 13757.25 28149.84

Data Source Export Promotion Bureau Compiled by BGMEA

Value of Total Apparel Export

TOTAL APPAREL EXPORT IN MN.US$

YEAR WOVEN KNIT TOTAL
1994 1544.89 341.53 1886.42
1995 1976.40 512.18 2488.58
1996 1942.37 686.27 2628.64
1997 2621.33 810.49 3431.82
 1998 2871.06 976.29 3847.35
1999 2987.73 1169.90 4157.63
2000 3376.49 1448.22 4824.71
2001 3162.28 1432.72 4595.00
2002 3076.28 1573.40 4649.68
2003 3398.84 1850.36 5249.20
2004 3686.78 2532.62 6219.40
2005 3689.60 3210.48 6900.08
2006 4544.83 4388.67 8933.50
2007 4608.40 4741.93 9350.33
2008 5655.50 6223.42 11878.92
2009 5695.88 6194.61 11890.49
2010 7067.34 7787.26 14854.60
2011 9252.80 9961.67 19214.47
2012 10117.43 9670.71 19788.14
2013 12052.30 11448.68 23500.98
2014 12421.26 12162.70 24583.96
2015 13805.44 12797.26 26602.70
2016 14931.33 13736.95 28668.29

Data Source Export Promotion Bureau Compiled by BGMEA

Main Apparel Items Exported From Bangladesh

(VALUE IN MN. US$)

YEAR SHIRTS TROUSERS JACKETS T-SHIRT SWEATER
1993-1994 805.34 80.56 126.85 225.9 .
1994-1995 791.20 101.23 146.83 232.24 .
1995-1996 807.66 112.02 171.73 366.36 70.41
1996-1997 759.57 230.98 309.21 391.21 196.6
1997-1998 961.13 333.28 467.19 388.5 296.29
1998-1999 1043.11 394.85 393.44 471.88 271.7
1999-2000 1021.17 484.06 439.77 563.58 325.07
2000-2001 1073.59 656.33 573.74 597.42 476.87
2001-2002 871.21 636.61 412.34 546.28 517.83
2002-2003 1019.87 643.66 464.51 642.62 578.37
2003-2004 1116.57 1334.85 364.77 1062.1 616.31
2004-2005 1053.34 1667.72 430.28 1349.71 893.12
2005-2006 1056.69 2165.25 389.52 1781.51 1044.01
 2006-2007 943.44 2201.32 1005.06 2208.9 1248.09
2007-2008 915.6 2512.74 1181.52 2765.56 1474.09
2008-2009 1000.16 3007.29 1299.74 3065.86 1858.62
2009-2010 993.41 3035.35 1350.43 3145.52 1795.39
2010-2011 1566.42 4164.16 1887.50 4696.57 2488.19
2011-2012 1733.54 4686.39 2231.16 4713.11 2340.34
2012-2013 1972.89 5185.48 2634.28 5143.22 2620.73
2013-2014 2173.73 5690.78 2973.16 5863.81 2932.94
2014-2015 2271.43 5697.83 3183.17 6064.13 2829.16
2015-2016 2317.09 6319.00 3774.08 6118.53 3182.47
2016-2017 2108.38 6026.69 3546.88 5861.98 3361.53

Bangladeshs RMG Export to World 2014 to 2016

Million US$ Woven Knit Total

EU Countries 2014 2015 2016 2014 2015 2016 2014 2015 2016
Austria 23.04 22.34 26.73 30.85 27.19 29.16 53.90 49.53 55.89
Belgium 344.68 344.81 421.01 444.12 412.99 432.72 788.79 757.80 853.73
Bulgaria 0.10 0.09 0.35 0.41 0.77 1.63 0.52 0.86 1.98
Denmark 166.04 212.31 236.16 473.58 398.43 450.28 639.61 610.74 686.44
Finland 8.88 6.59 5.66 27.34 21.41 23.16 36.22 28.00 28.82
France 584.82 649.63 737.19 974.81 985.61 1059.33 1559.63 1635.24 1796.52
Germany 1803.42 1839.02 2288.24 2563.38 2525.05 2832.85 4366.79 4364.06 5121.09
Greece 5.51 5.26 6.76 16.25 18.11 24.31 21.76 23.37 31.07
Italy 477.33 472.92 475.76 760.15 771.33 836.75 1237.49 1244.25 1312.51
Ireland 79.63 77.19 74.08 147.46 121.81 115.44 227.09 198.99 189.52
Netherlands 285.40 291.39 331.71 370.87 342.10 382.74 656.26 633.49 714.45
Portugal 10.26 12.04 19.30 31.17 32.44 39.77 41.43 44.49 59.07
Romania 3.77 4.44 4.10 6.39 7.25 7.41 10.17 11.68 11.51
Spain 689.44 768.71 853.99 866.63 958.49 1059.65 1556.07 1727.20 1913.64
Sweden 123.58 141.92 168.53 259.41 274.02 291.41 382.99 415.94 459.94
U.K. 1294.46 1629.25 1755.52 1372.30 1604.91 1684.36 2666.76 3234.16 3439.88
Cyprus 0.28 0.43 0.50 1.84 1.82 1.47 2.12 2.25 1.97
Czech Republic 75.27 153.57 378.24 44.79 53.38 78.55 120.07 206.94 456.79
Estonia 0.40 0.24 0.17 0.76 0.83 1.00 1.16 1.07 1.17
Hungary 0.66 0.45 0.34 7.97 3.94 3.23 8.63 4.38 3.57
Latvia 1.36 0.98 0.13 3.06 2.60 1.35 4.43 3.58 1.47
Lithuania 0.03 0.26 0.04 0.89 0.89 0.88 0.93 1.15 0.92
Malta 1.08 3.42 1.78 1.30 4.80 3.00 2.38 8.22 4.78
Poland 206.64 228.47 249.52 302.34 348.66 411.23 508.99 577.13 660.75
Slovakia 29.11 30.61 34.14 36.79 45.63 43.42 65.91 76.24 77.56
Slovenia 9.72 8.92 14.27 24.20 19.03 32.25 33.92 27.95 46.52
Croatia 5.33 4.90 5.70 10.92 9.06 9.62 16.25 13.96 15.31
Sub-Total (EU) 6230.26 6910.14 8089.91 8779.99 8992.53 9856.96 15010.25 15902.68 17946.87
EU % of World 50.16 50.05 54.18 72.19 70.27 71.76 61.06 59.78 62.60
Growth % 10.01 10.91 17.07 7.85 2.42 9.61 8.74 5.95 12.85
USA 3803.62 4233.65 4051.28 1204.43 1425.26 1317.37 5008.04 5658.91 5368.65
% of USA 30.62 30.67 27.13 9.90 11.14 9.59 20.37 21.27 18.73
Growth % -6.96 11.31 -4.31 -0.45 18.33 -7.57 -5.47 13.00 -5.13
Canada 525.80 569.91 558.45 403.34 403.88 406.86 929.15 973.79 965.31
% of Canada 4.23 4.13 3.74 3.32 3.16 2.96 3.78 3.66 3.37
Growth % -3.64 8.39 -2.01 -11.23 0.13 0.74 -7.09 4.80 -0.87

Non-Traditional Markets
Australia 156.61 216.66 225.30 302.34 389.54 377.07 458.95 606.20 602.37
Brazil 76.05 79.68 40.53 104.02 82.69 45.52 180.07 162.37 86.05
Chile 11.92 15.67 23.55 21.06 22.18 29.30 32.97 37.84 52.85
China 147.73 174.69 221.63 120.04 130.80 172.07 267.77 305.48 393.70
India 79.87 81.85 101.68 21.74 27.16 38.68 101.61 109.01 140.35
Japan 339.24 363.37 385.07 252.51 317.32 411.98 591.76 680.69 797.06
Korea Rep. 85.02 95.36 101.89 59.45 72.94 74.55 144.48 168.29 176.44
Mexico 49.00 60.07 60.26 71.56 84.69 74.37 120.56 144.75 134.63
Russia 78.35 92.29 134.85 137.54 124.31 168.44 215.89 216.60 303.29
South Africa 27.34 40.48 32.22 23.66 33.11 27.28 51.00 73.59 59.50
Turkey 361.77 349.27 367.80 148.48 124.41 108.92 510.25 473.69 476.72
Other Countries 448.67 522.35 536.91 512.54 566.46 627.58 961.22 1088.81 1164.49
Sub-Total (Non-Trad.) 1861.58 2091.73 2231.68 1774.94 1975.59 2155.77 3636.52 4067.32 4387.45
% of Non-Traditional 14.99 15.15 14.95 14.59 15.44 15.69
Current Situation of RMG Sector in Bangladesh:

Quota system was a great blessing for establishing our garments industry. We were strongly
benefited by using that. As a result we can see a matured garments industry today. But while
quota system was approaching to an end in 2004, theres so many got upset about the RMG
sector of Bangladesh. Though in the latter it cant be affected here as the experts were seemed.
We conquered the post quota challenges and made that a successful story.

In RMG sector of Bangladesh, there are more than 5000 garment factories (private statistics) at
the current time, employing more than 12 lack labours, where 85% of the labour force is women.
But, according to BGMEA the number of garment factories in Bangladesh around 4000. Now,
RMG industry is the countries largest export earner with the value of over $24.49bn of exports in
the last financial year. Its a great news for us that, Bangladesh is clearly ahead from other South
Asian suppliers in terms of capacity of the ready made garments industry.

Though, there are various types of garments are manufactured in Bangladesh, but all the ready
made garments are classified into two broad categories, where one is woven products and
another one is knitted products. Woven products includes Shirts, Pants and Trousers. On the
other hand, knitted product includes T-Shirts, Polo Shirts, Undergarments, Socks, Stockings and
Sweaters. Woven garments still dominates the export earnings of the country.From BGMEA
website its seen that, Day by day knitted items production is increasing in considerable rate and
now about 40% export earnings has achieved from knitted products.