An Assignment

On
Prospects and Challenges of Poultry Business in Bangladesh
Course name – SME management
Course code- MGT-306

Submitted to
Tahmina Khanam
Assistant Professor
Department of management
Faculty of Business Studies
University of Dhaka

Submitted by
Group No: A-5
Section: B; 20th Batch
Department of Management
University of Dhaka
 Group profile

Name ID Remarks
Md. Biplob Hossain 112
Tajul Islam 128
Md. Nasim Uddin 161
Anamul Haque 165
Mahamudur Rahman 207
Definition of SMEs
The amount of investment
Number of employed
SI Type of Industry (Replacement cost and value of fixed
workers
assets, excluding land and factory
buildings)
number of workers not
1. Cottage Industry Below 10 lakh
exceed 15
2. Micro Industry 10 lakh to 75 lakh 16 to 30
Small Manufacturing 75 lakh to 15 crore 31 to 120
3.
Industry Service 10 lakh to 2 crore 16 to 50
Medium Manufacturing 15 crore to 50 crore 121 to 300
4.
Industry Service 2 crore to 30 crore 51 to 120
Large Manufacturing More than 50 crore More than 300
5.
Industry Service More than 30 crore More than 120

Source: National Industrial policy (2016)

SME sectors available in Bangladesh

 History of Development of Knitwear of Bangladesh
Bangladesh is traditionally known for its Textile and Garments sector. But the textile sector was
initially import based however the country was famous for Muslin. After the liberation,
Bangladesh adopted policy for import substitution industrialization to replace imports focusing
on the textile and clothing sectors particularly RMG along with other potential sectors.

The ready-made garment (RMG) industry is a strategic sector for Bangladesh. In FY2013-
14, it provided 4.2 million direct jobs, 16 percent of GDP, and more than 75 percent of
foreign exchange earnings. Over the past two decades, starting from the early 1980s,
Bangladesh has built a strong reputation centered on price advantage via low-cost labor
and investment incentives; production capacity, and satisfactory quality levels, especially in
value and mid-market price point segments.

The RMG business in Bangladesh started in the late 70s with merely a casual & cursory effort.
The first consignment of knitwear export was made in 1973 while the first shipment of woven
was made in 1977. In 1981-82 the contribution of woven garments to total exports was about
1.10% whereas the agro-based the then economy received much of her foreign earnings from
Jute & Jute products famously known as the Golden Fiber. But with the passage of time from
agrarian to manufacturing transformation Bangladesh developed significantly in areas of poverty
alleviation, employment, women empowerment, industrial growth and economic diversification -
thanks solely to labor intensive RMG sector. Since MFA phase out in 2004 the growth of
Bangladesh knitwear has escalated rapidly as statistically supported export volume adduces
adequate proof to it despite its somewhat cluttered and shoddy start with absence of rudimentary
plans and evolutionary industrial mechanism. In fact, from fiscal year 2007-08 Bangladesh
knitwear continues to capture lion’s share in national exports (39.93% in FY 2013-14) what was
slightly 7.64% in the two decades back, thereby slanting the economy towards knit garments.

The export-oriented Knitwear industry is the top-leading exporting sector in Bangladesh in

terms of export. Its contribution in creating employment opportunities for female workers
without high educational background in the formal sector is exceptional! The industry has
a great contribution in poverty reduction by providing entry-level workers with a great
scale of employment opportunities and earnings higher than the national poverty line. Such
a dynamic development of the industry entails great diversity in efficiency, even in
comparison with the garment industry of other developing countries. The Knitwear
industry of Bangladesh has global competitiveness in terms of product quality & price
through industrial upgrading in terms of usage of latest machineries and vertical
integration and industrial agglomeration.
Export Trend of Bangladesh RMG Sector
The central history of this remarkable development could be attributed to entrepreneurial
expertise who aptly applied their gleaned knowledge to adopt technological modifications in the
mechanical and management principles to the overall factory supervision methods. Supported
with strong backward linkage and Generalized Systems of Preference (GSP) benefit, Bangladesh
has showed remarkable agility over time for a prosperous future eschewing the hiccups in areas
of overall management and infrastructures in this industry. At present, our apparel sector
continues adding fresh ideas and modules like business intelligence, state-of-the art technology,
modern management practices and production technique. These are indeed the manifestations of
our relentless efforts to the global standards what was once considered unparalleled to emulate
techno-based advance economies.
Bangladesh Exports by Major Products in FY 2013-14

Over the decades the growth of knitwear sector has been incessant rising over 20% at CAGR
base and continuously grabbing more portions in the export pie of Bangladesh. This recent
robust growth is partly achieved owing to preferential support from the European Commission’s
GSP & Relaxation of Rules of Origin (RoO) and the Duty Free Quota Free (DFQF) access
granted by Canada, Australia, Japan and members of European Free Trade Agreement (EFTA).
At present, Bangladesh gets Duty free market Access from 49 countries including European
Union. Along this BKMEA also taken market diversification and Expansion initiative to expand
the market share of Knitwear product of Bangladesh in new but potential markets across the
world contributed greatly for making it the most attractive sourcing hub.

Traditionally, the exports basket of Bangladesh has been leaning towards EU and the USA. So
far the EU is the largest destination for Bangladesh knitwear, worth of value $8.7 billion with
share of 72.03% exported in the year 2013-14 followed by the USA with $1.2 billion and a share
of 9.93%. The one-stage transformation requirement of RoO in 2011 boosted signs for market
penetration in the EU further; hence a growth of 46.63% in the FY 2010-11 over 2009-10 was
remarkably noticeable.
Knit vs. Woven
The difference between knit and woven, as the names imply, begins with the process of making
each fabric type. All kinds of fabric are made through either weaving or knitting processes.
Despite woven fabrics looking different from knitted fabrics, there are many who find it difficult
to differentiate between knitted and woven fabrics. Pullovers are knitted; we all know this, and
some T-shirts are knitted while others are woven. Most of the cotton fabrics used for making
shirts and trousers are woven. Even denim, the most versatile fabric of all times, is woven. This
article takes a closer look at the differences to enable readers to know the features of both
knitted, as well as woven fabrics.

What is Knitted Fabric?

The first and the foremost difference between knitted and woven fabric lies in the fact that
knitted fabric is manufactured using a single yarn with the help of needles that make interlocking
loops. When it comes to the qualities of the fabric, knitted fabric is stretchable and is ideal for
those who are thick set as it stretches and provides comfort to them.

There are insulated air pockets in knitted fabrics that ensure warmth to the wearer. However,
they are also porous and provide breathing of fabric. Knitted fabrics are fluffy, absorbent, also
lightweight making them the preference of many people. However, they tend to shrink more than
woven fabrics, which put such fabrics at a disadvantage as they cannot be frequently washed.
They also fade more than woven fabrics. When you are buying knitted fabric, you will see that
the edges have round blobs of glue or starch along the lengthwise edges. This is to prevent the
fabric from curling. Also, the fabric does not fray along the width or the cut edge.
Knit fabric

What is Woven Fabric?

When it comes to woven fabric, two or more yarns are interlaced through an ancient weaving art.
There the two yarns or threads that are called warp and weft in a loom. The loom converts the
threads into fabric. A distinguishing feature of woven fabrics is the lack of stretch. Woven fabric
is, generally, not stretchable though today some woven fabrics are made stretchable such as
denims. Some woven fabrics are given stretch ability by adding lycra in between.

Woven fabric can be single colored or multi colored depending upon the threads used, and it is
possible to make artistic designs or patterns in the fabric. In woven fabrics, there are intersecting
threads that are perpendicular to each other. They are made on a loom where yarns that run
straight along the length are called warp and the yarns that run across the width are called weft.
Most of the woven fabrics have a right side and a wrong side that is known as soon as you see
the fabric. When it comes to the edges of the woven fabric, the lengthwise edges are strong and
they do not move. However, the cut edge or the width of the fabric frays.
Weaving:
The method or process of interlacing two yarns of similar materials so that they cross each other
at right angles to produce woven fabric. The warp yarns, or ends, run lengthwise in the fabric,
and the filling threads (weft), or picks, run from side to side. Weaving can be done on a power or
hand loom or by several hand methods.

Knitting:
A method of constructing fabric by interlocking series of loops of one or more yarns. The two
major classes of knitting are warp knitting and weft knitting.
Difference between Weaving and Knitting

Topics Weaving Knitting

1.Definition The fabric forming The fabric forming
process by process by
interlacement of warp intermeshing of loops.
threads.
2.Elasticity Very less or no The fabric shows high
elasticity. amount of stretch and
elasticity due to loop
structure.
3.Dimentional Good dimensional Less dimensional
stability stability which causes stability.
less shrinkage.
4.Durability More durable Less durable than
woven Fabrics.
5.Moisture The fabric absorbs The knitted fabrics
absorption less moisture absorb more moisture
because of their loose
construction.
6.Slacking The fabric provides It creates problem
and low good stability due to after wearing for a
sensing intersecting of yarns at long time.
right angle.
7.Air Air is less permeable Air permeability is
permeability due to compact more due to
construction woven voluminous structure
fabric. of knitted fabric.
8.Crease woven fabrics are Knitted fabrics are
more inclined to more resistant to
crease .So ironing and crease. So it requires
iron retention are no ironing.
 better knitted fabric.

9.Production Production cost is Production cost is less

cost more due to warp due to modest
preparation and manufacturing
designing process process.
10.Yarn TPI of yarn is TPI of yarn is
comparatively higher comparatively lower
than knitting yarn. than woven fabric.

Strength and prospects of Knitwear Sector of

Bangladesh

Competitiveness of Bangladesh Apparel Sector:

The worldwide textile and clothing business are going through a major shift-- it is now more
modernized, more dimensional and more vibrant. Also the global value chain for clothing trade
integrates more rapidly than ever before!

Competitive wage rate together with easily trainable workforce, entrepreneurial skill, expanding
supply side capacity, and government policy support helped to translate the comparative
advantages into competitive advantages.

 Flexible functioning of the labor market is a positive factor for export competitiveness in
Bangladesh.
 On average, labor markets in Bangladesh respond to productivity improvements and
incentives and government interventions are comparatively minimal.
 This favorable endowment of labor and flexibility of the labor markets provide Bangladesh a
great competitive edge on specializing in labor-intensive products, especially in the
manufacturing sector.
 Bangladesh being the second largest apparel exporters is expected to play a major
role in the global apparel market.
 ith three decades of experiences, supply of enthusiastic labors, huge number of
entrepreneurs grown over the years, Bangladesh has established a structural
competitiveness in the apparel industry, which is likely to sustain for the years to
come as the economic structure of most developed countries has declined in last 5
decades since the LTA (long term agreement regarding international trade in cotton
textile) came into force in 1962, (Source: Discussion paper no 5, WTO).

 Knitwear is a self-sufficient sector in all respects; currently the sector is supplying

90% of the knit fabric requirements.
 Local yarn suppliers provide a large sum of yarn demand for the industry.
 Many garments have their own dyeing and finishing units.
  A separate dyeing and finishing industry also has grown up over the time to
support the sector.
 More than 200 composite factories;
 Bangladeshi Knitwear is almost unbeatable in price advantages in the. world
 Bangladesh provides not only a cheap labor force, which is unbeatable but they are
also peerless in stitching capability.
 Knitwear is exported to 153 countries of the world.
 Strong backward linkage facilities.
 Long experience of apparel business and a created value chain across the globe.
 More than 2000 knitwear factories.

Specific Advantages of Knitwear Sector of Bangladesh:

Comparative Advantages of Bangladesh Knitwear Industry:

The core strength of the Knitwear sector is its backward linkage. The entrepreneurs of the sector
not only increased their stitching capacity overtime but also invested in the allied industry to
augment the overall capacity of the sector with the same pace. As the earning from export
increased the development of the sector also increased in the same row. Now a days, The
Knitwear sector of Bangladesh has the unique structure as well as the competitive advantage not
only in terms of price but also the product quality. There are many other advantages of
Bangladesh Knitwear sector, such as:

 High quality diversified products.

 Duty-free and quota-free access to the markets of several developed and

developing countries, such as EU, Canada, Australian, Japan etc.

 Strong backward linkage industry in the knit sector & growing capacity in the
woven sector

 Socially and environmentally compliant factories

 Child labor free factories

 Environmentally compliant ISO, BSCIS, WRAP, OKETEX etc.

certified factories

 Vertically integrated

 Implementation of social compliance, fire safety mechanism in the factories.

  Productivity campaign to ensure the best quality products.

 Ensuring quality assessment process for the products-to-be-made.

 Linkage the factories with environmentally and chemical sustainability program.

 Adopting the Green factory mechanism for a sustainable industrial build-up.

 Application of CPM (Clean production mechanism) into the factory production

strategy.

 Structural adjustment policies of the factories according to the demand of ILO,

ACCORD, ALLIANCE & Other related international bodies.

 Most factories being inspected by Bangladesh University of Technology and

Engineering (BUET), thus ensuring structural safety for the importers of the
world.

The domestic value addition in this sector is about 75%, which is much higher than woven
products. The Knitwear sector’s value addition contribution in the GDP is about 10%. In the
export field, the knitwear industry of Bangladesh has managed to make a big name across the
world. BKMEA has taken different initiatives to promote the export growth of knitwear
products. BKMEA is working to incorporate the latest technology, which in turn will increase
the domestic value addition.

Table: Value Addition and Net Retention Rate of Bangladesh Knitwear Sector

Year 1994 2000 2008 2012 2013 2014

Value
50% 70% 75% 72% 75% 75%
Addition
Net Retention 40% 55% 61% 53% 50% 48%