Global economy

Bangladesh has emerged as one of the largest denim exporters to Europe, United States

H&M, Walmart, Levi’s, Diesel, Wrangler, Boss and Gap are among its clients.

Bangladeshi denim products are dominating the global markets by beating its competitors in the European markets as well as in the United States by occupying a lion’s share of the proverbial denim pie.

As of now, Bangladesh is the largest exporter of denim products to Europe with a 27% market share topping China, the largest exporters of clothing products to both Europe and the US. With a 14.20% market share, Bangladesh now is also the third largest exporter of denim products in the US after Mexico and China.

According to Eurostat, statistics directorate of the European Commission, Bangladesh in 2017 exported denim products worth €1.30 billion – a 0.54% hike from 2016’s €1.29 billion. However, Bangladesh’s closest competitor Turkey has posted a 4.36% growth to $1.12 billion in the same period.

Bangladesh earned $507.92 million – a 9.55% growth – exporting denim products to the US markets in 2017, which was $463.61 million in 2016, according to data from the Office of Textiles and Apparel or Otexa in the US.

China earned $921.90 million with 1.41% negative growth, while second largest exporter Mexico registered 7.9% negative growth by earning $793.42 million. Meanwhile, Pakistan and Vietnam, the two closest competitors of Bangladesh, posted positive growths by over 13% earning $213.78 million and nearly 20% earning $207.28 million, respectively.

Bangladesh currently exports Blue Denim Trousers WG, Blue Denim Trousers MB, Blue Denim Skirts, Blue Denim Jackets, Blue Denim Suit Type Coats MB, Playsuits, and Sunsuits, among other products, to the international markets. The major global retailers to which Bangladeshi entrepreneurs also supply denim products include H&M, Uniqlo, Tesco, Walmart, Levi’s, Diesel, Wrangler, G-Star, s.Oliver, Hugo Boss, and Gap.

Rapid growth

New investments both in fabrics and garments manufacturing and increased capacity are playing major roles in establishing Bangladesh’s dominance in the US and EU markets. But manufacturers are also investing in research and development of high end products, helping them get a better price.

Meanwhile, improvement of the safety standard in the apparel industry has also drawn the attention of more global buyers. “Investment in denim fabrics and denim manufacturing has increased sharply. As a result, production capacity has increased too, pushing the export earnings up and taking the lead in the global markets,” Sayeed Ahmad Chowdhury, general manager of Square Denim, told the Dhaka Tribune.

He said manufacturers now are also taking less time to produce the products as they are sourcing the fabrics from local mills instead of importing. “As a result, buyers are placing more orders here.”

In the last two years, Square Denim has increased its production capacity from 1.5 million meters to three million. Considering the increasing demand, Sayeed said, they will be launching another unit soon.

Envoy Textiles Managing Director Abdus Salam Murshedy told the Dhaka Tribune: “Buyers always want quality fabrics when it comes to denim products. To manufacture quality fabrics, latest technology is must for any company. And we have already established that.”

Producing five million metres of denim fabric every month, Envoy Textiles is currently the Number 1 LEED Platinum certified Green Factory in the world.

Two years back, Bangladesh was highly dependent on imported denim fabrics. “Now, we can meet about 50% of the demand locally and are also exporting to some of the globally renowned buyers,” Murshedy said.

According to Bangladesh Textile Mill Association, Bangladesh currently has 31 denim fabrics manufacturing mills, which produce over 400.40 million metre fabrics every year.

Growth opportunity

According to market research and advisory firm Technavio, the global denim and jeans market is worth about $60 billion. However, the denim industry is expected to grow at a compound annual growth rate of over 6.5% by 2020.

Asia Pacific Countries is expected to be the fastest growing market for denim jeans, said Technavio data, and China is the fastest growing country in the region.

Since Bangladesh is now the largest exporter to the EU and holds a large share in US markets, there is an enormous opportunity to grow – especially in premium denim jeans market, which is expected to grow at a a compound annual growth rate of 12.23% by 2020 in the region.

“There is hardly any adult in the world whose wardrobe does not contain at least one pair of jeans. Moreover, jeans are now worn and loved by women and children across the world. So the prospect of Bangladesh’s denim export growing in the coming years is undoubtedly bright,” Denim Expert Limited Managing Director Mostafiz Uddin told the Dhaka Tribune.

“If Bangladesh can make its footing stronger in developing design and innovation, then the sky is the limit for our denim industry,” he said.

According to a study by Cotton Inc, 71% of people in Europe and Latin America enjoy wearing denim, followed by 70% in the US, 58% in China, and 57% in Japan.

Since customers are more cautious about environmental and health hazards issues, the denim products manufactured by a sustainable process are becoming more popular.

In a recent development, Bangladesh is also turning the apparel manufacturing process into an eco-friendly one by establishing green factories – a major advantage – which consume less water and other natural resources, said Abdus Salam Murshedy.

Besides, more apparel businesses are apparently shifting from China to Bangladesh as the workers’ wages in China have increased, and the country is also moving towards producing high value products instead of basic and mid-range ones.

Challenges and ways forward

Despite being a global market leader in denim products, there are also some challenges ahead for the Bangladeshi manufacturers.

According to people from the growing industry, price of fabrics and getting utility services – including gas and electricity – hindering new investment are some of them. Moving towards value added products is another issue that needs more attention.

“Production cost has gone up, but the manufacturers are forced to offer lower prices due to price cuts in the finished products by global retailers,” said Sayeed Ahmad Chowdhury.

Since most of the denim products are limited in basic items, the key to success in the global market is innovation in designs and washing, he said.

Mostafiz Uddin, also the founder and CEO of Bangladesh Denim Expo, added that the challenge for Bangladesh is too also adding further value to denim products through design development and innovation.

What the sector currently needs, all of them agreed, is more investment in research and innovation to meet the increasing global demand in latest and trending denim products.

To tap the growth opportunity and help with product diversification and value addition, Bangladesh government should prioritize denim products and provide all out support to the entrepreneurs, added former Bangladesh Garment Manufacturers and Exporters Association President Murshedy.

This article first appeared on Dhaka Tribune.

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The next Industrial Revolution is here – driven by the digitalization of manufacturing processes

Technologies such as Industry 4.0, IoT, robotics and Big Data analytics are transforming the manufacturing industry in a big way.

The manufacturing industry across the world is seeing major changes, driven by globalization and increasing consumer demand. As per a report by the World Economic Forum and Deloitte Touche Tohmatsu Ltd on the future of manufacturing, the ability to innovate at a quicker pace will be the major differentiating factor in the success of companies and countries.

This is substantiated by a PWC research which shows that across industries, the most innovative companies in the manufacturing sector grew 38% (2013 - 2016), about 11% year on year, while the least innovative manufacturers posted only a 10% growth over the same period.

Along with innovation in products, the transformation of manufacturing processes will also be essential for companies to remain competitive and maintain their profitability. This is where digital technologies can act as a potential game changer.

The digitalization of the manufacturing industry involves the integration of digital technologies in manufacturing processes across the value chain. Also referred to as Industry 4.0, digitalization is poised to reshape all aspects of the manufacturing industry and is being hailed as the next Industrial Revolution. Integral to Industry 4.0 is the ‘smart factory’, where devices are inter-connected, and processes are streamlined, thus ensuring greater productivity across the value chain, from design and development, to engineering and manufacturing and finally to service and logistics.

Internet of Things (IoT), robotics, artificial intelligence and Big Data analytics are some of the key technologies powering Industry 4.0. According to a report, Industry 4.0 will prompt manufacturers globally to invest $267 billion in technologies like IoT by 2020. Investments in digitalization can lead to excellent returns. Companies that have implemented digitalization solutions have almost halved their manufacturing cycle time through more efficient use of their production lines. With a single line now able to produce more than double the number of product variants as three lines in the conventional model, end to end digitalization has led to an almost 20% jump in productivity.

Digitalization and the Indian manufacturing industry

The Make in India program aims to increase the contribution of the manufacturing industry to the country’s GDP from 16% to 25% by 2022. India’s manufacturing sector could also potentially touch $1 trillion by 2025. However, to achieve these goals and for the industry to reach its potential, it must overcome the several internal and external obstacles that impede its growth. These include competition from other Asian countries, infrastructural deficiencies and lack of skilled manpower.

There is a common sentiment across big manufacturers that India lacks the eco-system for making sophisticated components. According to FICCI’s report on the readiness of Indian manufacturing to adopt advanced manufacturing trends, only 10% of companies have adopted new technologies for manufacturing, while 80% plan to adopt the same by 2020. This indicates a significant gap between the potential and the reality of India’s manufacturing industry.

The ‘Make in India’ vision of positioning India as a global manufacturing hub requires the industry to adopt innovative technologies. Digitalization can give the Indian industry an impetus to deliver products and services that match global standards, thereby getting access to global markets.

The policy, thus far, has received a favourable response as global tech giants have either set up or are in the process of setting up hi-tech manufacturing plants in India. Siemens, for instance, is helping companies in India gain a competitive advantage by integrating industry-specific software applications that optimise performance across the entire value chain.

The Digital Enterprise is Siemens’ solution portfolio for the digitalization of industries. It comprises of powerful software and future-proof automation solutions for industries and companies of all sizes. For the discrete industries, the Digital Enterprise Suite offers software and hardware solutions to seamlessly integrate and digitalize their entire value chain – including suppliers – from product design to service, all based on one data model. The result of this is a perfect digital copy of the value chain: the digital twin. This enables companies to perform simulation, testing, and optimization in a completely virtual environment.

The process industries benefit from Integrated Engineering to Integrated Operations by utilizing a continuous data model of the entire lifecycle of a plant that helps to increase flexibility and efficiency. Both offerings can be easily customized to meet the individual requirements of each sector and company, like specific simulation software for machines or entire plants.

Siemens has identified projects across industries and plans to upgrade these industries by connecting hardware, software and data. This seamless integration of state-of-the-art digital technologies to provide sustainable growth that benefits everyone is what Siemens calls ‘Ingenuity for Life’.

Case studies for technology-led changes

An example of the implementation of digitalization solutions from Siemens can be seen in the case of pharma major Cipla Ltd’s Kurkumbh factory.

Cipla needed a robust and flexible distributed control system to dispense and manage solvents for the manufacture of its APIs (active pharmaceutical ingredients used in many medicines). As part of the project, Siemens partnered with Cipla to install the DCS-SIMATIC PCS 7 control system and migrate from batch manufacturing to continuous manufacturing. By establishing the first ever flow Chemistry based API production system in India, Siemens has helped Cipla in significantly lowering floor space, time, wastage, energy and utility costs. This has also improved safety and product quality.

In yet another example, technology provided by Siemens helped a cement plant maximise its production capacity. Wonder Cement, a greenfield project set up by RK Marbles in Rajasthan, needed an automated system to improve productivity. Siemens’ solution called CEMAT used actual plant data to make precise predictions for quality parameters which were previously manually entered by operators. As a result, production efficiency was increased and operators were also freed up to work on other critical tasks. Additionally, emissions and energy consumption were lowered – a significant achievement for a typically energy intensive cement plant.

In the case of automobile major, Mahindra & Mahindra, Siemens’ involvement involved digitalizing the whole product development system. Siemens has partnered with the manufacturer to provide a holistic solution across the entire value chain, from design and planning to engineering and execution. This includes design and software solutions for Product Lifecycle Management, Siemens Technology for Powertrain (STP) and Integrated Automation. For Powertrain, the solutions include SINUMERIK, SINAMICS, SIMOTICS and SIMATIC controls and drives, besides CNC and PLC-controlled machines linked via the Profinet interface.

The above solutions helped the company puts its entire product lifecycle on a digital platform. This has led to multi-fold benefits – better time optimization, higher productivity, improved vehicle performance and quicker response to market requirements.

Siemens is using its global expertise to guide Indian industries through their digital transformation. With the right technologies in place, India can see a significant improvement in design and engineering, cutting product development time by as much as 30%. Besides, digital technologies driven by ‘Ingenuity for Life’ can help Indian manufacturers achieve energy efficiency and ensure variety and flexibility in their product offerings while maintaining quality.


The above examples of successful implementation of digitalization are just some of the examples of ‘Ingenuity for Life’ in action. To learn more about Siemens’ push to digitalize India’s manufacturing sector, see here.

This article was produced on behalf of Siemens by the marketing team and not by the editorial staff.