Bangladesh's Position in the Eu Knitwear Market in the Post Mfa Period

BANGLADESH’S POSITION IN THE

EU KNITWEAR MARKET IN THE POST MFA PERIOD

Prepared for

Dr. Abu Yousuf Md. Abdullah

Course Instructor

International Business

Institute of Business Administration

University of Dhaka

Prepared by

Khairul Alam, Roll # 15

Bijon Islam, Roll # 51

Saifur Rahman, Roll # 71

IBA, Dhaka

FEB 18 , 2008

BANGLADESH’S POSITION IN THE EU KNITWEAR MARKET IN THE POST MFA PERIOD

1. INTRODUCTION

This report takes a look at the competitive position of Bangladesh in the European Union (EU) Knitwear market compared to the major players, and attempts to recommend actions to improve its present footing in the market and future prospects as well.

1.1 Origin

The report has been assigned to this group by Dr. Abu Yousuf Md. Abdullah, Course Instructor, as a partial requirement of the course International Business of the BBA program.

1.2 Objectives

The aim of the report is to:

 Analyze trade relationship of Bangladesh with the EU in the MFA and the Post MFA period

 Analyze the EU market for knitwear and identify the major players in that market

 Examine the level of competition between Bangladesh and other major players in that particular EU market and rank Bangladesh among the major players.

 Recommend steps that should be taken by Bangladesh to improve its standing in the knitwear market of EU.

1.3 Methodology

For this report, the group has collected both primary and secondary data to help in the analysis. These include:

 Interviews

• MS. Rubayat Jesmin

Economic Affairs Officer

Delegation of the European Commission to Bangladesh

• Mr. Rajeb Hashmi

Owner, Fair Knitting Pvt. Ltd.

• Background and Present Scenario Research from Secondary Sources ( Web Sites/ Newspaper Articles/Journals/ Books)

The analysis procedure includes observation and group discussion, expert opinion, extensive research, and use of analysis tools such as Porter’s Diamond and Competitor Analysis.

1.4 Limitations

This report is completely based on data provided in the secondary sources, and information revealed by others. The information provided is simply assumed to be correct, and no attempt has been made to verify it. Hence, the data reliability of data is not guaranteed.

2. RMG IN BANGLADSH: The Origin

2.1 Origin of RMG manufacture in Bangladesh & PLC theory of international trade

Large-scale manufacture of garments is a relatively new phenomenon in Bangladesh. Till the 1960s, only individual tailors sewed clothes for customers, who themselves provided the required fabrics. The local industry for ready-made garments (RMG) was almost non-existent then, except a handful producer of children wears and men’s knit undergarments (Hafiz G.A. Siddiqi, Banglapedia).

Since 1970 onwards, the RMG industry in Bangladesh started developing rapidly, and hundreds of factories opened up. A major reason behind the sudden boom in this industry is the fact that as the developed Western nations imposed the Multi Fiber Agreement (MFA) in the early 1960s, aimed at restricting cheap imports from the then developing countries, such as China and South Korea, Bangladesh was left out. This