GTZ PROGRESS

During May 22 to June 05 2010, a BGMEA Scoping Mission, compromising of 11 members from BGMEA and one member from GTZ visited Brazil, Chile and Mexico.This visit was part of a joint initiative of BGMEA and GTZ to diversify the RMG market beyond USA and Europe where currently 94% of country’s readymade garments (RMG) are exported. This overdependence on USA and Europe markets amidst a global recession has made the RMG sector to think about diversification of its export market to new and potential markets like Japan, Hong Kong, Australia and to emerging markets like Brazil, Chile, Mexico and South Africa. The German government has partially supported this initiative through GTZ as a part of its ongoing technical cooperation. Needless to say, the scoping mission is one of the most significant activities of Trade Promotion to expand the market of Bangladeshi garments to newer horizons.

Opportunity: BGMEA team members are expecting an export market worth US $ 500 million within the next two years. The market size of Latin American country Brazil, Mexico and Chile is highly prospective. It provides huge chances for RMG factory owners who are interested to explore nontraditional markets and increase the number of buyers. Bangladesh is the second largest Clothing provider to the world by Volume (source WTO). The product line of Bangladeshi manufacturers matches with the consumer’s preferences in the Latin American market. Most promising products are sweaters followed by outer wear (i. e. jackets made of fleece) and T-shirts. Woven products also have bright prospects and prices are quite attractive. Except for Chile, the most challenging part for Mexico and Brazil is tariff that is 30% and 35% respectively. Special initiative should be taken to reduce this tariff to make these countries favor for Bangladesh.

Brazil: Brazil is the most attractive apparel market for reasons of demographics and demand. ”Brazil’s clothing market is growing at more than 7 per cent annually and is estimated at US$767.07 million in 2009 worth of clothing import from the all over the world. The country is young, with more than 60 percent of population below the age of 29, and its consumers spend US$402 annually on apparels — six times more than the average Chinese consumer.(source Ms. Hana Ben-Shabat, a partner with A.T. Kearney).

Chile: Total RMG import of Chile from the world is US$ 1074.83 million in 2009 (source ICT Trade Map).The retail structure is strong. Chile is considered the clothing hub for the neighboring countries. According to the retail ranking, major retail chains of Latin America are located in Chile. Chile has an 8 per cent tariff on apparel import, but it has pledged to reduce it to 6 percent.

Mexico: Total RMG import of Mexico from the world is US$ 1947.85 million in 2009 (source ICT Trade Map). The major competitor China is losing its market share so immediate high speed is necessary to capture that particular market share. The Business culture practice in Mexico is much different than other Latin American Market .On-the ground findings implies a local sales intermediary or a trade body from Bangladesh may be needed to enter in that particular country.

Top 10 Retailers from Latin America

Scoping Mission 2010 to Brazil, Chile and Mexico: The scoping mission team got tremendous response from the buyers as they had very limited knowledge about Bangladesh’s RMG industry. The mission team clutched the attention of representatives from about 30 popular national and international apparel brands from Brazil, Chile and Mexico. Inquiries were centered on topics such prices; lead time and sample making and delivery. BGMEA is expecting a good number of buyers to participate at the Bangladesh Apparel and Textile Exposition BATEXPO in November 2010 from these three countries to build up business linkages. Buyers from the visited Latin American countries are scheduled for visit in July 2010.

During the scoping mission the delegation met government representatives, high officials from chambers, readymade garments buyers, retail chain outlet owners, traders and importers and members of the press.