BANGLADESH TEXTILE MILL ASSOCIATION Mission of BTMA (I) to develop the Textile Sector to increase the production of cloth of acceptable quality at reasonable prices to meet the increasing clothing needs of growing population. (ii) To enhance the contribution of Textile sector in national economic development, creation of employment opportunities and export earnings. (iii) To help modernize the textile sector through new investment, balancing, modernization, replacement and expansion (BMRE) and various other technical and technological improvement. (iv) To create healthy investment climates for attracting both local and foreign capital in the expansion of modern textile sector while preserving the unique role of handlooms. (v) To encourage human resource development through continuous education, training, research, skill and management development, MIS and computerization for improving efficiency and effectiveness of the Textile Sector as the prime mover of industrialization in Bangladesh. Vision of BTMA BTMC is now mostly engaged in meeting the domestic demand of yarn as far as possible. In order to increase the productivity and improve the quality to cater the demand of the country and to enter the export market which is a very competitive one. In 2005, post MFA, Bangladesh will have no pota facilities for RMG and thus she is certainly to face razor-edge competition from the other countries. Therefore to protect the competition, a considerable opportunities to setting-up Backward -Linkage in the BTMA’s mills, along with BMRE scheme of existing machinery and infrastructures with joint-venture (local /foreign) and private entrepreneurs. All the efforts will continue to ensure new society of textile sector .With view of all possible co-operations to be given to fulfill the target set for textile sectors as per prevailing under Govt. rules and regulations. As per section 22(2) of the Bangladesh Industrial Enterprises (Nationalization) Order,1972, the Corporation to furnish to the Government a statement of accounts in the form of Annual Report of its affairs for every financial year. Other than that BTMC publish monthly MIS report regularly. Function of BTMA The broad functions of Bangladesh Textile Mills Corporation (BTMC) are as under: a. the general direction and administration of the affairs and the business of the Corporation and its enterprises are vested in the Board of Directors appointed by the Government. b. To help co-ordination with the Govt. in preparing National plans and policies for commercial operation of its existing enterprises. c. To identify, initiate, prepare portfolio of new development project including BMRE in consultation and with the approval of the Govt. and take measures to implement the same. d. To identify and initiate feasibility studies for setting-up new projects with the approval of the Government. e. To prepare and implement annual development programme for development projects. f. To process cases of revised ADP should any shortfall of resource estimate is communicated by the Govt. to the Corporation. g. To identify, initiate and process of foreign aided development projects in consultation with and approval of the Govt. h. To monitor implementation of development activities as included in the ADP for the sector and to report achievement, shortfall, problems, revision and policy issue requirements, if any, to the Government Agencies. I. To conduct perforce evaluation of development projects for the purpose of revision, amendment and to help drawing up of future programming. j. To undertake specified study on a subject as may be required by the Govt. for the purpose of national perspective needs. k. To implement the Govt. policies in respect of procurement, production, distribution, pricing, labor and management, etc. in the textile sector. l. To set physical and financial targets and objectives for the enterprises. m. To monitor performance of the enterprises, effective and efficient use of resources, identify problem areas of the enterprises and to render assistance and guidance to the enterprises. n. To take measures for improving work methods, product quality, yield, minimize wastages and costs. o. To introduce and maintain management information system in order to provide the Corporation and the Government with adequate, accurate and timely information for decision making. p. To fulfill statutory and legal obligations in respect of the enterprises. q. To develop and train human resources both in field and factories with a view to catering requirement of skilled personnel. r. To set policy and procedure for procurement of machinery, spares & raw materials – both imported & local for enterprises. s. To procure machinery, spares and bulk items, as required by the enterprises which cannot be otherwise procured by the enterprises for technical difficulties such as foreign exchange allocation, credit line up, obtaining licenses and opening of L.C., etc. t. To set procedure for sale of products, by-products and other items of the enterprises. u. To maintain stable price of items produced by the enterprises through constant market monitoring system, devising distribution policy as necessary for the benefit of general consumers. v. To set procedure, monitor international market and assist enterprises in exporting their products. w. To develop measures on social welfare including community services to workers/employees. x. To supervise, monitor and control affairs of enterprise. y. To explore possibilities and set up joint venture projects in the textile sector. Mills under BTMA at a glance Sl.No. Name of the Mills Location Sponsor Year of Estt. Product Installed capacity Spindles Loom (1) Running mills under Service Charge System. 1. (a) Sunderban Tex-1 (b) Sunderban Tex-2 Satkhira BTMC BTMC 1980 1995 Yarn Yarn 24960 14400 2. (a) Bengal Textile-1 (b) Bengal Textile-2 Jessore P.O.-27 BTMC 1962 1985 Yarn Yarn 17296 25088 3. (a) Amin Textiles-1 (b) Amin Textiles-2 Chittagong P.O.-27 BTMC 1961 1986 Yarn Yarn 18400 25088 4. Dost Textile Mills Feni P.O.-27 1961 Yarn 20000 5. Rajshahi Textile Mills Rajshahi BTMC 1975 Yarn 25056 6. Rangamati Textile Rangamati BTMC 1977 Yarn 18576 7. R.R.Textile Mills Chittagong P.O.-27 1963 Yarn 31400 8. Dinajpur Textile Dinajpur BTMC 1975 Yarn 29376 9. Darwani Textile Nilphamari BTMC 1977 Yarn 25056 10. Valika Woolen Mills Chittagong P.O.-27 1963 Wool/ Woolen Cloth 3200 40 11 National Cotton Mills Chittagong P.O.-27 BTMC 1939 1976 Yarn 11880 192 12. Kurigram Textile Kurigram BTMC 1984 Yarn 12528 13. (a) Tangail Cotton-1 (b) Tangail Cotton-2 Tangail P.O.-27 BTMC 1961 1978 Yarn Yarn 13656 12500 14. Quaderia Textile Gazipur P.O.-27 1962 Yarn 16824 15. Magura Textile Mills Magura BTMC 1981 Yarn 25056 Sub-Total: 370340 232 (II) Under process for operation 16. Ahmed Bhwany Tex. Dhaka P.O.-27 1954 Yarn 33116 312 17. Chittaranjan Cotton Mills Narayangonj P.O.-27 1929 Yarn 19804 395 18. Sylhet Textile Mills Sylhet BTMC 1978 Yarn 25056 (III) Mills enlisted for establishing Textile Palli: 19. Khulna Textile Khulna P.O.-27 1931 Yarn 12,448 97 (IV) Mills sold-out but not yet handed over: 20. Satrang Textile Gazipur P.O.-27 1961 Yarn 12400 21. Kokil Textile Mills Brahmanbaria P.O.-27 1961 Yarn 17728 Sub:Total: 120552 804 Total(I+II+III+IV) = 21 4,90,892 1036 Commonly Used Abbreviated Words Used In Textiles Area RMG Ready Made Garment ISO International Organization for Standardization ANSI American National Standards Institute CIF Cost, insurance and freight CITA Committee for the Implementation of Textile Agreements CM Cut and Make COP Cost of Production EIN Exporter Identification Number ANSI American National Standards Institute EXW Ex-works EU European Union FDI Foreign Direct Investment FOB Free on Board FTA Free Trade Agreement GATT General Agreement on Tariffs and Trade GDP Gross Domestic Product GSP Generalized System of Preferences ILO International Labor Organization JICA Japan International Cooperation Agency L/C Letter of Credit LDCs Least Developed Countries MFA Multi-Fiber Arrangement MOU Memorandum of Understanding P.S.I. Pre-shipment Inspection WTO World Trade Organization COC Code of Conduct EPZ Export Processing Zone BTMA Bangladesh Textile Mills Association BGMEA Bangladesh Garment Manufacturers and exporters Association BKMEA Bangladesh Knitwear Manufacturers and exporters Association EPB Export Promotion Bureau GTZ German Technical Cooperation CAD Computer Aided Design CAM Computer Aided Manufacturing ERP Enterprise Resource Planning MRP Material Requirement Planning POS Point of Sales CAP Corrective Action Plan AQL Acceptable Quality Level CSR Corporate Social Responsibility ETI Ethical Trading Initiative BSCI Business Social Compliance Initiative WRAP Worldwide Responsible Apparel Production DC Distribution Centre QC Quality Control QA Quality Assurance FRI Final Random Inspection IPC In- process check PPC Pre production check IPC Initial production check Du-Pro During production check MIL STD Military Standard DIN Deutches institut fur Normung BS British Standard AATCC American Association for Textile Chemists and Colorists ITS Intertek Testing Service BV Bureau Veritas LG Letter of Guarantee ETA Estimated Time of Arrival ETD Estimated Time of Departure SOP Standard Operating Procedure P.O. Purchase Order PSS Product Specification Sheet Overview of Textile Industry as respect of Bangladesh Country Profile Official name: Peoples Republic of Bangladesh Area : 144000 sq km Population : 150 million Language : Bengali, English Geographical Location: Asia Time : GMT + 6 hours Main Industries: Textiles, jute, Leather, Frozen, Foods, Agriculture, etc. GNI per Capita: US $ 470 (2006) : US $ 620 (2008) History of Apparel Industry in Bangladesh There were only 9 export oriented garment manufacturing industry in 1978, earned only 1 million dollar. Some of them were very small, produced RMG for local market as well. Four such small and pioneer garments were Reaz garments, Paris garments, Jewel garments and Boishakhi garments. Reaz garments established in 1960, as a small tailoring outfit, named Reaz store in Dhaka. Served only domestic market of its initial 15 years. In 1973, it changed its name to Reaz Garments Ltd and started to export by selling 10 000 pieces of shirt to franch, valued 13 million franc in 1978.That was the first direct export of apparel. Desh Garments Ltd., first joint venture in Bangladesh, Technical and marketing collaboration with S. Korean Daewoo Corporation, established in 1979.First 100% export oriented company. In 1980, Youngone (49%) and Trexim (51% equity) formed a company named younone Bangladesh exported first consignment of padded and non padded jackets to Sweden in dec 1980.It had trained 120 operators including 3 women in S. Korea Went to the production in 1980. Reasons of Growth External Reasons:  GATT Approved multi fiber agreement (MFA)Quota,  As a LDC, get preferential access in EU.  GSP Internal Reasons:  5% cash incentives  No import duty  Bonded warehouse facilities  Back to back L/C  Concessionary rates of interests  FDI of Joint venture facilities  Concessionary duty on imported machinery  EPZ facilities Textile Production Mainly Two Sub-sector: a. Woven:  Horizontally Integrated  65% woven fabric imported  Requires comparatively higher investment. b. Knit:  Vertically Integrated  Almost self-reliant - 95% Collected Locally.  Annual Increment of Consumption of fabric: 20% Value Chain: • Michael Porter in 1985 introduced in his book ‘The Competitive Advantage: Creating and sustaining Superior performance’ the concept of the Value Chain. • Michael Porter suggested that the organization is split into ‘primary activities’ and ‘support activities’. • Primary activities: Operation, Logistics, marketing, Service, • Support Activities: Procurement, Technology development, Human resource mgt, Infrastructure. Value Chain: Knit • Almost complete value chain • Some of the factories fully vertically integrated: Spinning to finished garment. • Competitive wage, easily trainable workforce, Expanding supply side capacity, government supporting policy helped to gain competitive advantage. • Core strength is backward linkage. • 90%-95% knit fabric produced locally • Net export is higher than woven. • In FY 2006-07, Export share of knit and woven were 37.39% and 38.25% respectively. • Cumulative average growth of knitwear is 27%. Advantages of Bangladeshi Knitwear: 1. Self sufficient 90%– 95% fabric and accessories collected locally. 2. Integrated 3. Good capacity exists 4. Unbeatable in price 5. Cheap labor with high stitching capability 6. Good reputation of Bangladeshi Knit apparels all over the world. Value Chain: Woven • Only a few weaving factories that offer quality product. • So, majority of fabrics has to be imported – higher purchasing cost, dependency on external supplier, pricing disadvantages. • Can meet only 15% of fabric demand. • More than 220 modern weaving mill need to be set up, each with an annual capacity of 10 million meters. • Annual Consumption of fabric: 3 billion yards. Backward Linkage • Supporting Industry • Spinning, weaving/knitting, dyeing, finishing Industries. • In addition to these, Interlining, labels, buttons, sewing threads, packing and packaging materials, zippers, draw strings all are backward linked industries. • 70% of accessories collected locally. • Share of BB L/C in total export dropped from 68.33% in FY 1995 to 45.1% in the first eight months of FY 2001. • Total investment in backward linkage is US$ 2B. SWOT Analysis Strength: • Competitive price advantage due to cheap labor and Governmental Assistance • Skilled Human Resource • Duty and Quota free access and GSP in EU • Integrated Supply Chain, Specially in Knitwear • International Image of a reliable supplier of basic Products. SWOT Analysis Weakness • Weak Structure, in particular production efficiency, product development, marketing skill, customer service, controlling, planning, management skill, technical know how • Producing mainly basic products, • Heavily depend on importing woven fabrics, low value addition • Poor image of adapting international and Corporate social standards • Political, Social and worker unrest. Threats: • Risk of loosing competitive advantages-development steps required. • Poor political and investment climate leading declined interest of importers • Poor capital formation • Risk of loosing know-how transfer, staff qualification, • Totally depend on others for raw materials as Bangladesh produce neither natural fiber nor MMF. • Increased international competition • Woven sector requires huge investment • Single market concentration. Distribution Structure • Contact directly to the apparel producers regarding price, samples, and delivery schedule etc – more dependency on manufactures regarding quality. • Production Agencies/Buying house: Take care of product development, purchase of fabrics and accessories, follow up production, conducting inspection, scheduling shipment date etc. • Satellite office: Has own QC dept. and other staffs to conduct the operations. Problem of textile When we survey some textile mils we saw some problem. I think that, it is a great problem for our textile sector.  Child labour.  Wages discrimination..  Gender discrimination.  Women facilities. I am trying to describe these problems below. Child labour Most of the textile mills in our country use child as a labor. As a result they are losing there student life. And descries percentage of literacy. When buyers give an order that time buyer question them “Have you any child labour in your mill?” If buyers visit mill and get child worker that time buyer brigading with mercendiser. Wages discrimination Most of the garments owner can’t pay salary, over time and bonus in schedule time. By this result worker losses their responsibility. That time production fall in loss. Gender discrimination If any garment has gender discrimination, there create a noisy environment. By the result woman worker losses their responsibility That time production fall in loss. Women facilities If garment industry does not remain in convenient place and good caretaking for women’s children. So the women worker can not work attentively. By the result production fall in loss.