The government is planning special support for specialised textile mills to ensure uninterrupted supply of raw materials to the country's readymade garment industry, and enhance its capacity as a backward linkage industry.
Sources said the Export Promotion Bureau (EPB) has suggested providing special support for the sector so that the country's readymade garment industry can get supply of raw materials at reasonable prices to boost exports.
"We've recommended special support for the specialised textile mills because the sector has been facing trouble. This sector needs support to stay competitive in the market in the face of liquidity crisis and high production costs," said an EPB official.
The specialised textile mills also supply one-third of woven fabric required for the export-oriented garment industries.
Apart from working as a backward linkage for apparel makers, the specialised textile sector also directly exports woven fabrics to different countries. The sector exported textile products worth $131 million in FY21 and $116 million in FY20.
Sources said the EPB sent the recommendations titled "Reasons behind a fall in exports of major products and recommendations to remove barriers" to the commerce ministry.
The EPB suggested providing the sector policy support and increasing cash incentives for other major forex earning sectors such as plastics, furniture, live and frozen fish, vegetables and fruits to help boost their exports.
Sources said the overall demand for woven fabrics manufactured by local specialised textile mills has declined because of imports of such fabrics under the bond facility. Cash crunch, rising prices of machinery and an obligation to set up factories on ground floors of buildings have put this industry in a tight corner, said the EPB.
Exports of woven garments fetched $14,496 million in FY21, which was 37% of the country's total export earnings. Raw materials meant for one-third or $4,832 million worth of woven garments come from the specialised textile sector, while the rest are imported from abroad.
The EPB sources said a large part of the specialised textile sector and the apparel accessories industry did not get any stimulus support provided by the government following the outbreak of Covid-19 in March, 2020.
The major portion of the government provided-stimulus funds amounting to Tk10,500 crore to pay salaries of workers in the export-oriented industries went to apparel factories.
Besides, the readymade garment sector received significant amounts of loans from the government's Tk 40,000 crore stimulus package for the pandemic-hit industries and service sector.
"It is unfortunate that the specialised textile sector did not get enough support from the stimulus packages although the sector plays a very significant role in supplying raw materials for the readymade garment industry," said a leader of the Bangladesh Specialised Textile Mills and Power Loom Industries Association.
He said a good number of specialised textile mills are becoming sick as they could not get government stimulus loans.
"Liquidity crisis has forced these mills to stop production. Moreover, the recent abnormal hike of yarn prices in the country's market has added to their woes," he added.
