Local and global investors in Bangladesh’s readymade garment sector saw strong prospects for growth and improvement in denim subsector, despite it grappling with significant challenges such as political instability, labour unrest and a deteriorating law and order situation.

Foreign investors have termed Bangladesh a prime investment destination regarding the garment sector due to its quality and pricing advantages, with businesses demonstrating resilience and adaptability in navigating market fluctuations while maintaining a global presence.

The global businesses in the RMG sector made these remarks while participating in the 17th edition Bangladesh Denim Expo, which began on Monday, and will end today, at the International Convention City, Bashundhara in the capital Dhaka.

They said that Bangladesh had evolved significantly and become irreplaceable in RMG manufacturing.

Local manufacturers, however, said that they faced challenges such as political turmoil and economic issues, which resulted in some orders being redirected.

Terming the shifting of orders a ‘short-term contingency plan’ for global buyers, they urged the government to prioritise establishing law and order over simply ensuring that factories operated smoothly as buyers remained uncertain about current and future orders.

Bossa, one of the largest premium quality denim fabric manufacturers in Turkey, had been doing business with Bangladeshi RMG factories for the past 15 years, achieving substantial year-on-year growth.

Bossa representative Yilmaz Demir said that business had got slower over the past two to three years, partly due to increased domestic fabric production in Bangladesh.

However, the company continues to supply to the Bangladeshi market and maintains a strong position compared with European competitors, he said.

Demir said that the current economic slowdown in Bangladesh was temporary and influenced by global factors, including post-pandemic inflation, economic crises and geopolitical conflicts involving Russia and Israel.

He predicted that future market conditions would be challenging, particularly with the potential impacts of the upcoming US elections.

Despite these uncertainties, Demir expressed hope that the business situation in Bangladesh would see an improvement in coming days.

Manish S Chauhan, co-founder of Noize Jeans, a Hong Kong-based multinational company, said that Bangladesh was viewed as an irreplaceable destination for business investment, particularly in the garment industry, against which no other country — such as India, Vietnam, Cambodia, Pakistan or Indonesia — could compare.

‘While China dominates the global market, its dynamics are not relevant to the context of Bangladesh’s competitive edge,’ he said.

Manish said that it was unlikely that other countries would significantly take market share from Bangladesh, as they might capture only a small portion — about 10 to 20 per cent.

‘Bangladesh’s robust infrastructure and factory scale provide it with unmatched capacity. Although Vietnam is a close competitor, its growth is limited by current global retail market challenges, such as inflation and economic suppression,’ he said.

Acknowledging the recent political unrest as a concern, Manish said that the growth rate might vary due to unforeseen events or challenges, but business from Bangladesh was expected to remain stable.

‘I have 20 years of experience in Bangladesh, including nine years managing two factories that produce garments and fabric, and I believe that while logistical challenges, such as transport time to ports, exist, they can be effectively managed with proper planning,’ he said.

While labour unrest is usually temporary and Bangladeshi workers are generally disciplined, occasional misinformation or external influences can still lead to agitation, Manish said.

‘To maintain stability, I now engage directly with my workers to understand their needs. This proactive approach helps mitigate labour issues effectively,’ he explained.

Manish expressed confidence in Bangladesh’s resilience and ongoing business viability.

Pacific Jeans managing director Sayed M Tanvir said that challenges such as political turmoil and economic issues were causing some orders to be redirected, primarily as a short-term contingency for customers rather than a sustainable long-term strategy.

‘Although some orders are still being sent to countries like Pakistan, Sri Lanka or Vietnam, this is not a viable approach for the future. However, the overall situation is improving, leading to a sense of stability, which is expected to be reflected in customers’ plans for the upcoming season,’ he said.

Tanvir said that in both denim mills and jeans manufacturing, increasing market share and adding value in higher and medium segments would enhance long-term exports.

‘I believed that the situation with lower orders was very situational — anything could change at any time. It was crucial for us to monitor whether these issues were being adequately addressed,’ he said.

Mostafiz Uddin, founder and chief executive officer of Bangladesh Denim Expo, said that foreign investors viewed Bangladesh as a preferred destination and had no objections to operating there; however, the investors were losing confidence due to the deteriorating law and order situation.

He said that global buyers had options and without stability and effective administration, it would be challenging for Bangladesh’s RMG sector to secure global orders.

Mostafiz said that it had become challenging for the business community to connect with government officials to address their concerns.

He urged the government to ensure effective engagement with businesses to address the ongoing challenges.

‘If these initiatives are implemented effectively, the business landscape could potentially grow from $50 billion to $100 billion or even $200 billion,’ Mostafiz mentioned.

In the two-day Bangladesh Denim Expo, 36 exhibitors from seven countries participated, including Bangladesh, India, Pakistan and China.