Bangladesh

Investment rises as Bangladesh conquers the world of denim

Bangladesh has conquered the global denim market by becoming the top supplier of the popular garment item to both the EU and US, with local investors continuing to pour in funds to capitalise on further growth in global markets.

Bangladesh has been the top denim exporter to the EU since 2017, with one out of three people in the continent donning denim pants produced in the country.

But given that worldwide demand is growing, businesses are looking to enhance their capacity in order to grab a bigger slice of the $64.5 billion global denim market. Local exporters currently supply denim products worth nearly $5 billion worldwide.

The global denim market is projected to rise to $76.1 billion by 2026, growing at a rate of 4.8 per cent annually, according to various estimates.

As such, local entrepreneurs have invested nearly Tk 25,000 crore in the denim segment of the primary textile sector, which already has 42 modern mills capable of supplying over 900 million metres of denim fabrics each year.

Around a decade ago, investment in the denim sector, which had around 12 mills, stood at Tk 8,000 crore. Yet, over the past few years, Bangladesh has overtaken China in denim supply to both the EU and US markets.

A local mill has invested Tk 1,500 crore to establish two denim mills at Habiganj, targeting to export denim worth $700 million over the next five years, according to data of the Bangladesh Textile Mills Association (BTMA).

Apart from the EU and US, the Indian, Japanese, Chinese, Latin American and Middle Eastern markets are emerging as rising export destinations for denim from Bangladesh.

Syed M Tanvir, managing director of the Chattogram-based Pacific Jeans Ltd, one of the largest suppliers of denim jeans in Asia, said they were aiming to increase denim production by more than 12 percent this year compared to 2023, when they produced 45 million pairs of denim jeans for export.

“The outlook for denim in 2024 is better than last year, so the export of denim items is expected to grow this year,” Tanvir told The Daily Star over the phone.

Demand for denim has been rising worldwide because of changes in fashion and because denim is more flexible and comfortable, he said.

Monsoor Ahmed, chief executive officer of the BTMA, said that fresh investment and re-investment in the sector was continuing as Bangladesh had already proven itself as a reliable source for denim fabrics.

Despite the fact that most mills were established over the past 10 years, they have had to increase their capacity due to demand from international clothing retailers and brands, he said.

He added that shorter lead times were a major contributing factor to the rise of the local denim industry as local millers can source fabrics on short notice.

Currently, investment in the denim sector amounts to more than Tk 25,000 crore, according to the BTMA CEO.

Bangladesh exported denim goods worth $885 million to the EU in the January-September period of 2023, said Mohiuddin Rubel, director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), citing data from Eurostat.

In 2022, earnings from denim shipments to the EU stood at $1.56 billion. In 2021, it amounted to $1.18 billion. Even during the Covid-19-affected year of 2020, denim exports from Bangladesh to the EU stood at $1.02 billion.

Similarly, denim exports from Bangladesh to the US also surged.

In the January-October period last year, Bangladesh exported denim worth $556.08 million to the US. In 2022, it amounted to $943.70 million while it was $798.42 million in 2021 and $561.29 million in 2020, said Rubel, also additional managing director of Denim Expert.

BGMEA President Faruque Hassan said the use of denim increased manifold worldwide, which has driven local production and export.

For instance, denim is also used in knitwear items now, he added.

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