– Export & Import operations in the Readymade Garments Industry in Bangladesh.A Case Study of Farkantex Ltd
Chapter-1 1.0: Introduction
The phenomenal growth of the garment industry in Bangladesh is widely known, due in no small part to the popular book by Easterly (2002) and an earlier paper by Rhee (1990). The industry now ranks among the largest garment exporters in the world. It accounts for 75 percent of the country’s export earnings and 25 percent of GDP and provides ample job opportunities for females. The garment industry started from scratch three decades ago. Since its exports were negligible in those days, the country was not subject to export restrictions under the Multi-Fiber Arrangement (MFA), which attracted the attention of Daewoo Corporation of South Korea, one of the rising garment manufacturers suffering severely from the quota system. The company planned to develop a production base in Bangladesh and teamed up with an indigenous new enterprise called Desh Ltd. in 1979. Desh sent 130 new employees to Daewoo’s factory in South Korea, where they participated in an eight-month intensive training course covering diverse topics from sewing skills to factory management and international marketing. By two years after the training, however, almost all the trainees had left Desh to start their own garment businesses (Rhee, 1990). Easterly (2002, pp.147-148) comments: “This explosion of garment companies started by ex-Desh workers brought Bangladesh its $2 billion in garment sales” in the late 1990s.By 2007/08, the industry was earning more than $10 billion. Like the Bangladesh of three decades ago, countries in Sub-Saharan Africa are now given favorable treatments to their garment industries, such as duty-free, quota-free access to the US market provided by the African Growth and Opportunity Act (AGOA).
What can be done for the garment producers in Africa to allow them to take full advantage of such a helpful situation? Existing studies of the Bangladeshi garment industry agree with Easterly (2002) and Rhee (1990) that a central role
The phenomenal growth of the garment industry in Bangladesh is widely known, due in no small part to the popular book by Easterly (2002) and an earlier paper by Rhee (1990). The industry now ranks among the largest garment exporters in the world. It accounts for 75 percent of the country’s export earnings and 25 percent of GDP and provides ample job opportunities for females. The garment industry started from scratch three decades ago. Since its exports were negligible in those days, the country was not subject to export restrictions under the Multi-Fiber Arrangement (MFA), which attracted the attention of Daewoo Corporation of South Korea, one of the rising garment manufacturers suffering severely from the quota system. The company planned to develop a production base in Bangladesh and teamed up with an indigenous new enterprise called Desh Ltd. in 1979. Desh sent 130 new employees to Daewoo’s factory in South Korea, where they participated in an eight-month intensive training course covering diverse topics from sewing skills to factory management and international marketing. By two years after the training, however, almost all the trainees had left Desh to start their own garment businesses (Rhee, 1990). Easterly (2002, pp.147-148) comments: “This explosion of garment companies started by ex-Desh workers brought Bangladesh its $2 billion in garment sales” in the late 1990s.By 2007/08, the industry was earning more than $10 billion. Like the Bangladesh of three decades ago, countries in Sub-Saharan Africa are now given favorable treatments to their garment industries, such as duty-free, quota-free access to the US market provided by the African Growth and Opportunity Act (AGOA).
What can be done for the garment producers in Africa to allow them to take full advantage of such a helpful situation? Existing studies of the Bangladeshi garment industry agree with Easterly (2002) and Rhee (1990) that a central role
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