2. 1 Bangladesh Textile Mills Association (BTMA) Presents Opportunities in Bangladesh Textile Industry for Investment from Taiwan BTMA, Dhaka 22 November, 2004

3. 2 Distance Bangladesh to Taiwan 3,000 Km Only. WE ARE CLOSE TO YOU

4. 3 Bangladesh Textile Mills Association Extends its thanks to H.E Dr. Chii Ming Yiin Vice Minister Ministry of Economic Affairs of Taiwan & The distinguished delegates for attending this briefing.

5. 4 We plan to cover the following : 1.Location wise concentration of Textile Industry in Bangladesh 2.Size and growth of textile and RMG industries in Bangladesh. 3.Advantages for the Bangladesh textile industry. 4.Opportunities for co- operation between Bangladeshi & Taiwanese textile industries.

6. 5 Location wise concentration of Textile Industry in Bangladesh

7. 6 Concentration of Textile in 1983 8 4 3

8. 7 Concentration of Textile in 1994 54 9 5

9. 8 Concentration of Textile in 2004 41 637 7

10. 9 41 7 Comparative picture of Textile Mills

11. 10 637 41 7 Comparative picture of Textile Mills in (%) area basis

12. 11 637 41 7 Comparative picture of Textile Mills in (%) area basis

13. 12 Why in Dhaka Region ? -I-International Communication available - Easy for buyers to visit, inspect etc. -T-Trained technical manpower easily available - All financial institutions H.Q in Dhaka -F-Five to six hours travel time to Chittagong by road -I-ICD Kamalapur enables goods to arrive/export directly -U-Utilities such as gas, electricity, water availability better

14. 13 SIZE AND GROWTH OF BANGLADESH TEXTILE INDUSTRY

15. 14 Size and Membership of BTMA Membership : 700 Mills Spinning, Weaving, Dyeing and Finishing Mills. Investment : Euro 2.50 billion. Employment : 3 million people.

16. 15 Developments in the Textile Industry since 1994 BTMA mills planned for export market in 1994, and since then the development has been as follows: 4 weeks 16 weeksLead time 75% 25%Value addition on Knit and woven 46% of the export US$ 2.20 billion NegligibleExport using local Fabric 4.2 million1.4 millionSpinning Capacity 20041994Description

17. 16 Demand Supply Position of Yarn up to 2007 Total Demand of Yarn Existing production of YarnGAP of Yarn ItemDomesticExportDomesticExportDomesticExport Knit - 459 Million Kgs.- 200 Million Kgs. - 259 Million Kgs. Woven 270 Million Kgs. 130 Million Kgs. 90 Million Kgs. 60 Million Kgs. 180 Million Kgs. 70 Million Kgs. Total Demand of Fabric Existing production of FabricGAP of Fabric ItemDomesticExportDomesticExportDomesticExport Knit - 2271 Million mtrs - 990 Million mtrs. - 1281 Million mtrs. Woven 1606 Million mtrs. 717 Million mtrs. 1100 Million mtrs 330 Million mtrs. 506 Million mtrs. 387 Million mtrs. Demand Supply Position of Fabrics up to 2007

18. 17 Market Segments Domestic : With a population of 135 million the market is already big and the consumption per capita is growing. Although the domestic production is growing, with increased demand, gap is widening. Fabric demand 2003, 1.50 billion meters expected growth 2010, 2.14 billion meters Most fabrics are now cotton based – enormous scope for synthetic and blended fabrics.

19. 18 Growth of RMG Exports RMG Products by value (in Million US$) 3,5382,9841,292 Woven Garments 2,1481,035264 Knit Garments 2003 - 0498 - 9993 - 94 Year Export of RMG Products by volume (in mln. dozen) 1,085.86777.47412.21 Woven Garments 1,099.20439.98129.78 Knit Garments 2003 - 0498 - 9993 - 94 Year Most woven export are with imported fabric hence large opportunity for woven mills.

20. 19 Growth of RMG Exports

21. 20 ADVANTAGES OF THE BANGLADESH TEXTILE INDUSTRY

22. 21 Transition from MFA to WTO Under MFA, importing countries (i.e., developed countries) have quota and duty to protect their industry. With phasing of MFA their industry will become uncompetitive and open to competition from developing and LDC countries. As such there is apprehension that RMG industries in developed countries will close down, thus creating supply gap which will be filled by developing countries. Bangladesh is a strong contender for this. A study by Gherzi Textil of Switzerland has shown that the global textile and clothing exports are expected to increase from $199 billion (2000) to $ 350 billion in 2006-07. Bangladesh has 2.6% (US $ 5bn) of global market share now with increased global export this volume will increase to US $ 10bn approx.

23. 22 Potential of Textile Production 1.In Bangladesh fabric used for domestic and export market, 80% Cotton and 20% Synthetic. 2.Ratio between use of Cotton/Synthetic or Blended fabric varies as per demand globally. 3.In Bangladesh local production of Woven fabric is not substantial. 4.Therefore, a large potential for Cotton, Synthetic, Blended fabrics & MMF exists in Bangladesh for both domestic and export market. 5.Taiwan has big capacity for production of Synthetic, blended fabrics & MMF has advantages in fabric production. 6.Therefore, Taiwan can take advantage of the gaps available in Bangladesh by setting up Production facilities under 100% owned, or Joint Venture or relocation.

24. 23 Market Access Advantages for Bangladesh In the EU under GSP Scheme and also under EBA agreement, Bangladesh textile products are quota free and duty free. This is a great advantage over other competitors, which will continue even after MFA. Export to EU under GSP facility: In the last few years the volume of export to EU under GSP (export using local fabric) has increased from EURO 399 mln to US$ 2,015 mln. YearValue in mln. EURO 1999574 20001,047 20011,319 20021,585 20032,015 US$

25. 24 Market Access Advantages for Bangladesh (cont.) Has recently obtained quota-free and duty- free access to Canada, Norway, Japan, New Zealand and Australia. As an LDC, favorable market access to continue in the post-MFA era. This facilities will continue until per capita income reaches to US $ 1000.

26. 25 Taiwan Textile Industry Taiwan has a well-developed textile industry. Taiwan is one of the most developed manufacturers of Synthetic yarn, Fabric and Garments. Taiwan has good image and presence in global textile markets. With high economic growth Taiwanese per capita income is also increasing. Now Taiwan is concentrating on high value added products. Taiwan can keep her market of Textile products by using Bangladesh as a manufacturing base. This would benefit both the countries.

27. 26 BANGLADESH-TAIWAN CO-OPERATION OPPORTUNITIES

28. 27 Opportunities Bangladesh and Taiwan can co-operate in following areas : 1.Synthetic Yarn and Synthetic fibre and fabric manufacturing. 2.Retain Taiwanese global market for Garments by using high technology in production of Taiwanese yarn and fabrics in Bangladesh. 3.Taking advantage of Taiwanese presence in the market place, promote and develop Bangladeshi products for high value and high fashion market. 4.Taiwan can come up with their technical know how for capacity building. 5.Taiwan can invest in 100% owned, or joint venture and relocation of Taiwanese textile industries in Bangladesh under present liberal investment package.

29. 28 Unique Advantages of Bangladesh Textile Industry Currently one of the top five RMG exporters in the world with annual exports of US$5.70 billion. Apart from the major players, it is the only country with fairly big backward linkages. It is by far the largest exporter of RMG amongst LDCs. It has a large population, which has mastered the garment trade with high productivity and low cost. Textile being the largest export item of the country, we are very focused on this sector.

30. 29 Why Bangladesh? Bangladesh also offers the following competitive advantages for such investment/ relocation. Ready market : * domestic market of 135 million peoples. * US$ 5.700 bn. Present RMG export market. * US$ 7.500 bn. RMG Export target within 2007. * US$ 10.000 bn. RMG Export target within 2010. Abundant skilled and easily trainable labour force at an extremely competitive rate. Monthly total wages of US$52.00. Very competitive utilities charges for textiles industry- –Power: US$.033/KWH by captive generation. –Water: No cost - abundantly available from own deep tube well.

31. 30 Why Bangladesh? (Cont.) As textile and RMG are the largest export sectors and employers, the government support will continue. Operating mills have necessary infrastructure (i.e., buildings and utilities) which can offer accelerated implementation of investment plan. No restriction on repatriation of profit and capital. Tax free import of machinery and raw materials for export. Work permit for expatriates liberally given.

32. 31 Contact Information BTMA would be most pleased to assist in any enquiries. Please contact us at- Bangladesh Textile Mills Association Unique Trade Centre (8 th Floor) 8, Panthapath, Karwan Bazar Dhaka, Bangladesh Phone: 8802-8112361, 9143461 Fax: 8802-9125338 E-mail: btma@citechco.net, btma@dhaka.agni.com

33. 32 THANK YOU FOR YOUR KIND ATTENTION