Bangladesh
Anastasia Tucker Fasm 420
Fall 2017
Table of Contents Country Overview
4
Pest Analysis
6
Swot Analysis
8
State of Apparel Industry
12
Trade Agreements
14
Transportation
15
Suppliers
17
Lead Time
18
Conducting Business
19
Conclusion
21
Sources
22
Country Overview Location:South
Asia
Government:Parliamentary President:Abdul
Republic
Hamid (March 2013)
Demographics:Bengali
%98
Other Ethnic 1.1%
Cutural Factors:Age
and Position is
highly respected
Education Level:
10 years
72.8% over 15 can read
Gender Breakdown:95
men to 100 women
Median Age:26.3 Export Volume:
Woven Apparel ($3.8B) Knit Ap-
Religion: Muslim (89.1%) Hindu (10%) Other (.9%) Currency: Banglashi Taka
parel ($1.4B) Miscellaneous Textile Articles ($206M)
Headgear ($174M) Footwear ($105M)
National Holidays: Independence Day Bangali New Year Buddha’s Birthday Night of Destiny Vicotry Day Christmas Day
Country History and Current Events Bangladesh is a poverty stricken country located in south Asia. In 1971, Bangladesh came into existence after being part of East Pakistan. After 15 years under military rule, democracy was restored in Bangladesh in 1990. Recently, Bangladesh has had countless political attacks. Islamist extremism is on the
rise. The country also has been vulnerable to flooding and cyclones.
Recently Bangladesh has been in the news for being the safe spot for Rohingya refugees. The Rohingya people are from Myanmar and they have been severely persecuted. They have fled their country and many have found safety in Bangladesh. The country has built one of the biggest refugee camps in the world, housing 800,000 people.
Economic Overview Bangladesh is one of the most densely populated and poorest countries in the world. The main industries in Bangladesh is agriculture and garments. 75% of the civilian labor forces directly or indirectly engaged in agriculture.
The agriculture industry is vulnerable to natural disasters
such as flooding and cyclones. Within manufacturing, the textile and garment industry is the most dynamic and fastest growing sector. Unemployment is estimated at 18.5%. The Industrial production growth rate is at 8.4%.
The Government Budget Deficit is equal to 4.7% of the country’s
GDP ($221.4B ). Inflation has an increase 6.12%. The current Bangladeshi Take is equal to .012 USD.
Pest Political
Economic
During 2016, Bangladesh was
Bangladesh is a developing
the home of violent attacks
country with a population over
against secular bloggers,
157 million, where the econ-
academics, gay rights
omy is constantly expanding.
activists, foreigners, and
It has grown roughly 6% per
members of religious
year since 1996, even with the
minorities. As the Awami
challenges of political
Laugue (AL) government’s
instability, poor
political rivalry with the
infrastructure, corruption,
Bangladesh National Party
the 2008-09 global financial
(BNP) reaches new heights, so
crisis and recession. Garment
has its repression. The
exports are the backbone of
government’s reaction to
Bangladesh’s industrial
rising extremism, include
sector, accounting for more
arresting and prosecution of
than 80% of total exports and
several suspects with process
have made more than $25 bil-
or transparency. This is
lion in 2015. The sectors is
enraging the groups further.
growing despite strikes and
With how the government is
factory accidents that killed
reacting to these groups and
more than 1,000 people. The
attacks, the situation will
garment sector is the
not get better. The government
largest sustained economic
continues to not enforce labor
growth which totaled 8% of GDP
or environmental laws.
in 2015.
Analysis Socio
Technological
Bangladesh has inherited ex-
Farmers lack the machinery and
treme poverty and hunger. The
information systems to store
country has growing social and
their products postharvest or
economic disparities, with
to process them into high
cases of political and civil
value commodities such as
unrest.
fruit juice and jam. Lack of
40% of the popula-
tion of Bangladesh is estimat-
crop diversification,
ed to live below the national
deteriorating and declining
poverty line for the rest of
cultivable land as well as
their lives. While adults live
poor linkages to markets also
in poverty, the child mal-
play a crucial part. Overall,
nutrition rate is at 41% for
Bangladesh has a huge lack of
children under the age of 5.
machinery and technology. As a
The gender ratio is 95 men to
result, a lot of sale
100 women. More than a third
potential is lost.
of the population is under 15 years old. Half of the population is either under 15 or over 60 year old. Because of this statistic, the demographic dependency ratio is around 76.6% With so many young people, the population growth is going to continue well in the future. The country is constantly growing in population, but staying in poverty over all.
Swot Strengths -Cheap labor -Young workforce -Consistent growth in GDP -every year since 1996 -Pre-export financing institutions for assisting
Weaknesses -Dependence on imports for materials -Low productivity -Limited access to international trade information -Reliance on few ports for export -Poor regulations -Constant strikes due to -poor regulations -Low power and fuel supply
Analysis Threats -Higher producers like India and Pakistan -Environmental issues -Labor Standards -Intellectual Property -Rights -Political unrest -Rise of cost for raw materials
Opportunities - Reputation for quality - Trade Agreements - Regulation of Labor laws - Expand into higher end products
State Of Apparel Industry The Current State and the Future Outlook
Government Supports
The garment industry of
In the RMG industry demand for
Bangladesh has been the key
fabric significantly exceeds
export division and a main
local supply and so is currently
source of foreign exchange for
being met by imports. a
the last 25 years. At present,
government backed incentive: 15%
the coutry generates about $5
cash subsidy of the fabric cost to
billion worth of products each
exporters sourcing fabrics
year by exporting garment. The
locally. Additionally the
industry provides employment
government has created a highly
to about 3 million workers of
favorable policy framework for:
whom 90% are women. Bangladesh
Establishment of new textile/RMG
garment industry has generated
mill in the private sector, Joint
$28.67bn exports in the calendar
ventures with the existing
year 2016 which is 7.76% higher
textile/RMG mill, Acquisition of
than the previous calendar year.
public sector textile mills that
Labor Shortage The sector lacks 25% skilled labour while currently, it employs about 4.4 million people, of which 80% are women mostly from rural areas.
are being privatised, and Indirect investment through financial services and/or leasing
Key Apparel and Textile Exports to the U.S. - Non-Knit Men’s suits
- Non-Knit Men’s Shirts
- Knit T-Shirts
- Knit Women’s Suits
- Knit Sweaters
- Knit Men’s Suits
- Non-Knit Women’s suits
Apparel and Textile Exports Volume to the U.S. $6.14B
Key Apparel and Textile Exports - Non-Knit Men’s suits - 6103.10 - Knit T-Shirts - 6104.23.00 - Knit Sweaters - 6102.10.00 - Non-Knit Women’s suits - 6102.10.10
Trade Agreements TICFA
“On April 28, senior representatives of the governments of the United States and Bangladesh held the inaugural meeting of the United States-Bangladesh Forum on Trade and Investment (Forum), established pursuant to the Trade and Investment Cooperation Forum Agreement (TICFA) to identify obstacles to increasing bilateral trade and investment and how best to overcome these obstacles.
Both governments reaffirmed their commitment to
increase bilateral trade and investment as well as to address worker rights and worker safety issues in Bangladesh.
The Forum
discussed a number of trade and investment issues, including: 1) investment rules; 2) intellectual property protection; 3) tariffs on fire safety and prevention equipment; 4) fumigation requirements for cotton imports into Bangladesh and 5) regional economic development and cooperation in the South and Southeast Asia region.
The Forum also reviewed Bangladesh’s efforts to
date to address the worker rights and worker safety issues in the Generalized System of Preferences (GSP) Action Plan.” -USTR.gov
Transportation Ports
Shipping Companies CMA CGM
- Port of Chittagong
SAV: 6001 Chatham CenterDr. Savannag, GA
- Port of Chalna - Port of Khulna - Port of Mongla
Time and Price
Ban: 13th Floor, Land View C/C,28, Gulshan North C/A, Gulshan Circle-2,Dhaka-1212, Bangladesh, Gulshan Ave, Dhaka, Bangladesh
Cosco 4 Weeks on Water, 6-ish weeks fully LA:$1800 SAV:$3100
SAV: 101 S H Morgan Pkwy. Bloomingdale, GA Ban: uite C-4, (4th floor), Rupayan Golden Age, 99, Gulshan Ave, Dhaka 1212, Bangladesh
Maersk SAV: 235 Jimmy Deloach Pkwy, Savannah, Ga Ban: S Alam Center, 58, Agrabad Commercial Area, Chittagong 4100, Bangladesh
Main Suppliers Tunic Apparels
info@ananta-bd.com www.ananta.bd.com +880 2 9660159 Ananta Plaza, 13th Floor, 136, Elephant Road, Dhanmondi, Dhaka, Bangladesh, 1205 Brands: Kohl’s, Old Navy, Oshkosh Products: Cotton, Blue Denim
Ventura Leatherware Ltd +880 1752 977977 2nd Floor Half Portion West Uttar Nilphamari, Bangladesh
Brands: Michael Kors, Banana Republic Products: Leather goods and handbags
Shin Shin Apparels Ltd. +880 2 7788737 Plot No. R.S. 228, J.L. No. 73, Gorat, East Norshinghapur, Zirabo, Savar, Dhaka, Bangladesh, 1341 Brands: Primark, Zeep World Products: Readymade Garments
Lead Time of Production Causes of Delay Natural Disasters - Cyclones - Storm Surge - River Bank - Erosion - Earthquake - Drought - Salinity Intrusion - Fire - Tsunami
Holidays - Independence Day - Bangali New Year - Buddha’s birthday - Night of Destiny - Ramadan - National Mourning Day - Victory Day -Christmas Day
How to Conduct Business General Buisness Etiquette - Men greet each other with a handshake upon arriving and leaving - Men nod to a Bangladeshi women unless she extends her hand - Wait until your counterpart moves to a first name basis before you do -Business cards should have education on them - Study and comment on the business card and then place it into a business card holder Meetings - Meetings are where decisions are disseminated instead of being made - The snior president sets the agenda, content, and the pace of activities - Meetings usually last long - Communication is formal and follows a hierachy
Negotiations - Negotiations take long time -Trust must be built along with a personal relationship -Do not remove your suit jacket without permission, unless the senior ranking does - No will be used overtly, watch their non-verbal cues -In general, Bangladeshis expect concessions in both price and terms
Conclusion
Sourcing in Bangladesh can be risky. There are endless opportunities for political crashes. With the labor laws not being enforced, strikes are definitely a possibility. Natural disasters are also something to consider. Bangladesh have been investing in the garment industry and they have experience with it. They have some of the cheapest labor in the world. To overcome all of the risks of sourcing in Bangladesh, the company should give the country as much time as possible. They also need to vet the factories they choose very carefully. Make sure that the factory is safe and won’t have any chance of strikes or any kind of disaster.
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