An analysis of the Export

Performance of Bangladesh:
A Study Based on the Export
Processing Zones
Submitted By:
Samia Ibrahim

Submitted to:
Dr.Syed Manzur Quader

Date of Submission: 16th April, 2015

Letter of Transmittal

April 16th 2015

Dr. Manzur Kader
Assistant Professor
Chittagong Independent University

Subject: Submission of Term Paper on An analysis of the Export Performance of

Bangladesh: A Study Based on the Export Processing Zones
Dear Sir,
This is a great pleasure for me to submit my term paper on An analysis of the
Export Performance of Bangladesh as a requirement for our completion of MBA 510
course. This has been a great source of learning and helped me a lot to achieve
practical knowledge.
I have put my best effort in making this paper and tried to make this report
informative, practical, and relevant. I hope and believe that this report will satisfy
your requirements and expectations.
However, I would like to express my sincere gratitude to you for your kind guidance,
cooperation and suggestions in preparing this paper which will definitely help me in
future endeavors. It would be my immense pleasure if you find this report
informative.
I shall be happy to provide any further query and clarification regarding this report.
Yours Sincerely,
Samia Ibrahim

Acknowledgement
First of all I am grateful to Almighty ALLAH.

I would like to thank our honorable faculty member Dr. Manzur Quader for being so
kind, cooperative, and supportive the entire time. I am grateful to him for his
valuable suggestions and time that he has spent in guiding me. The past few
months have been a wonderful experience for me, full of challenges and
satisfaction. This has obviously been a great source of learning for me. Without his
support it would not have been possible for me to complete our paper on time.

Executive Summary
The Export Processing Zones of Bangladesh has been playing a important role in the
economy of the Bangladesh. After the Establishment in the year 1983 the EPZs has
contributed effectively in attracting foreign investments and export performance.
This study intends to explore the export performance of Bangladesh and the impact
of EPZs on the export sector. It attempts to examine the performance of RMG export
of Bangladesh. This study focuses on Total Investments in EPZS, Total exports,
Contribution in national export, Export diversification, Destination of the products.
The datas were being collected from various official websites.

Table of Contents
1.0 Introduction.......................................................................................................... 1
1.1 Purpose of study:.............................................................................................. 2
2.0 Literature Review................................................................................................. 2
3.0 Research Methodology......................................................................................... 3
3.1 Research Design:.............................................................................................. 3
3.2 Data Sources:.................................................................................................... 4
3.3 Limitations........................................................................................................ 4
4.0 Findings and Analysis........................................................................................... 4
4.1 Export processing zones of Bangladesh:...........................................................4
4.2 Mode of Investments in EPZs:...........................................................................5
4.3 RMG sector of Bangladesh:............................................................................... 6
4.4 Total Investment in EPZS:..................................................................................7
4.5 Contribution of EPZs in National Export:...........................................................8
4.6 Export Diversification...................................................................................... 10
4.7 Export Earning By Different Sector:................................................................13
4.8 Major Exported Products:................................................................................14
4.9 Cumulative Performance of Export Processing Zones:....................................14
4.10 Total Export Earnings of EPZs........................................................................15
4.11 Destination of the Products...........................................................................17
4.12 Contribution of RMG Sector in National Export:............................................20
4.13 Value of Total Apparel Export:.......................................................................22
4.14 Growth of Major exported Products of RMG sector:.......................................23
4.15 Major Destinations of RMG Export.................................................................25
5.0 Conclusion:......................................................................................................... 27

References............................................................................................................. 28

1.0 Introduction
Since Independence Bangladesh has made remarkable economic progress. After
1971 export promotion became a major concern for Bangladesh because export is a
tool which can boost up the economic progress of a country. In order to make this
tool work a number of steps have been taken over the years to attract foreign direct
investments and facilitate industrialization process of Bangladesh. But adequate
inflow of FDI was needed to promote exports. In order to provide similar treatment
to domestic and foreign investors the Foreign Private Investment Act (1980) was
enacted. In order to attract FDI it was required to develop infrastructure and other
structural reforms. Since the country wide development of infrastructure would be
expensive and implementation of economic and structural reforms would require
time, establishment of EPZs was viewed as an important strategic tool for
expediting the process of industrialization in the country (Mondal 2003).
In 1980 government enacted the BEPZA Act which later instituted the government
organ Bangladesh Export processing zone Authority and now responsible for
creating and operating the Export Processing Zones of Bangladesh. Since the
establishment of EPZs Bangladesh has achieved phenomenal export success
through them. The Country started the EPZ program in 1983 with the creation of
Chittagong EPZ. Encouraged by the tremendous success of Chittagong EPZ
government has established seven more zones.
These eight EPZs are now making a critical contribution to Bangladeshs economic
growth by inviting investments in manufacturing, infrastructure and power supply
sector. These EPZs have been key to the rapid rise of exports over the last 20 years.
Since the establishment of EPZs the average growth of export has been 23% and
by 2010 export has reached USD 2.9b by 2010.
The Effectiveness of EPZs are under threat because of lack of power supply, limited
gas connections, frequent hikes in power tariffs and higher operating costs etc. If
these problems are not tackled effectively then the growth of exports through EPZs
will be hindered.

1.1 Purpose of study:

In this paper we have outlined some objectives which mainly focus on the export
performance of Bangladesh
The objectives of the study are:
a. To analyze the export performance of Bangladesh Export Processing zones.
b. To analyze export diversification
c. To Analyze export performance of RMG sector of Bangladesh
1

2.0 Literature Review

An Export processing zone is a trade policy instrument which can be used to attract
foreign direct investment (FDI) to a host country. EPZ is a Special economic Zone
where the government provides facilities and incentives to attract foreign investors.
EPZ can be defined as An industrial estate that specializes in manufacturing for
export. It offers firms free trade conditions and a liberal regulatory environment.
(World Bank, 1992: 7).
The aim of EPZs is to promote non-traditional manufacturing exports from the host
country because of increased multinational company inward investment. The
investments should lead to production, exports and employment from EPZs. There
are also hoped to be important demonstration effects, which should help to develop
domestic industrys international competitiveness (Furby, 2005).
A backward linkage is one of the indirect effects from the EPZs. These will occur
when EPZs Companies buy inputs from companies in the host country (Furby,
2005). These effects help the host country to produce their own raw materials,
design their machinery and gain critical tactics to achieve higher output. EPZs
Company output can be sold on the domestic market (Tantri, 2011).
If the host country government allows the sale of EPZs company products on the
domestic markets, this can act as a forward linkage. The sale of EPZ production in
the domestic market produces more competition which promotes efficiency. Local
firms are forced to make higher quality products and meet stricter delivery routines
to be competitive with MNC (James, 2009).
The idea of EPZs developed from the older concepts of industrial parks and free
trade areas that appeared in the late 1950s and early 1960s (Madani, 1999). Export
processing originally meant that the zone sold its products on international markets
but over the time host country governments have softened the rules and
regulations. So that now some proportion of EPZ products are allowed to be sold in
host country domestic market (ILO, 2008).
EPZs have been shown to be one of the vital instruments in developing a countrys
economy over the last few decades (OECD, 2007; ILO, 2011; UNCTAD, 2009;
WEPZA, 2012; World Bank, year).When Bangladesh experienced severe economic
problems after independence, EPZs played an important role in response to
employment, exports and investment; particularly after 1990 (OECD, 2007, BEPZA,
2008-09).
EPZs are an important attraction for potential investors, who require that the host
country have a well-organized policy mechanism, with good incentives, such as taxfree status and strong security (Kenkesu, 2003a). The infrastructures, training
education and university, these each element stimulate EPZs acts very smoothly
and that brings EPZs success (Madani, 1999). EPZs require good transport links,
2

which includes easy access to roads, railways, air and seaports (Tantri, 2011).
Without proper road access, railway, air and seaport these zones cannot be
lucrative for foreign investors (Magnus, et al 2000).

3.0 Research Methodology

3.1 Research Design:
This research paper is a compilation of research works undertaken by various
researchers. The data used in this study are compiled from various sources which
includes journals, previous studies and websites. The data have been extracted,
systemized, investigated and interpreted in this paper with proper reasoning,
clarification and explanation.

3.2 Data Sources:

All the relevant data regarding the study were collected from the following sources:

The Board of Investment (BOI)

Bangladesh Export processing Zones Authority (BEPZA)

The Ministry of Commerce (MOC) of Bangladesh

Bangladesh Bureau of Statistics

Bangladesh Export Statistics

Bangladesh Export Promotion Bureau

3.3 Limitations

Lack of time was a limitation.

Limited availability and access to data was also a limitation.
Personal barriers such as inability to understand certain terms created some
problems.

4.0 Findings and Analysis

4.1 Export processing zones of Bangladesh:
EPZs are economic areas where various goods can be manufactured, imported and even
reshipped with reduced duties and minimal intervention by customs officials. EPZs were
established in Bangladesh after 1980 in order to attract foreign direct and capital investments.
3

Since then EPZs have played an important role in the economy by increasing investments,
exports and creating employment opportunities.
EPZs have now become an essential part of the countrys economy. Government has established
eight EPZs to attract potential investors. In 1983 the first EPZ of the country was established in
Chittagong. Later the success of this EPZ inspired government to set up the second one in Dhaka
in 1993 and by 2005 there were eight EPZs all together.

Figure 1: EPZs of Bangladesh

Name of EPZ
Chittagong EPZ
Dhaka EPZ
Mongla EPZ
Comilla EPZ
Ishwardi EPZ
Uttara EPZ
Adamjee EPZ
Kamaphuli EPZ

Year of establishment
Location
1983
Halishohor,Chittagong
1993
Ashullia,Dhaka
1999
Mongla,Bagerhat
2000
Comilla Town
2001
Pabna
2001
Nilphamari
2006
Siddirgonj,Narayangonj
2006
Potenga, Chiitagong
Table 1: EPZs of Bangladesh

4.2 Mode of Investments in EPZs:

Depending on the source of investment Industries in the Bangladesh EPZ fall into
three categories:
Types A: 100% foreign investment, including investment made by the
Bangladeshis living in the abroad.
Type B: Joint venture from the foreign investor and the Bangladeshi
entrepreneur living in the country.
Type C: 100% investment made by the Bangladeshi entrepreneurs living in
the country.

Type A
Type B
Type C

Figure 2: Type of Industries in EPZs

4.3 RMG sector of Bangladesh:

Bangladesh is the second largest exporter of readymade garment products trailing
China according to the McKinsey report (2011). In recent years RMG sector has
emerged as the biggest source of Countrys foreign currency. Since the
establishment of RMG industry in 1970 the growth of export level was steady but
after 1990s it has experienced exponential growth and grew by more than 15
percent per annum on an average. Now the RMG sector of Bangladesh has become
a top global exporter.
Today RMG has become the largest export industry of our country and the foreign
exchange earnings have been increasing at double-digit rates from year to year. Its
a multi- billion dollar manufacturing industry and contributes 75% of total export.
Flexible labor market laws, availability of raw materials, price competitiveness are
some of the reasons behind the success of RMG sector. But poor infrastructure,
political instability, poor transportations system etc are slowing down the growth of
this potential industry.

4.4 Total Investment in EPZS:

Foreign Direct Investment has increased in the EPZs during the last few years
despite worldwide recession. The actual investment in EPZs grew by 41% according
to official statistics. Till now the total investment in EPZs are 3057.11 million.

Year

Investment
(US$m)

Year

Investment
(US$m)

1994-1995
1995-1996
1996-1997
1997-1998
1998-1999
1999-2000

35.93
30.58
53.90
68.83
71.61
34.98

2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010

118.52
112.89
152.37
302.19
148.03
221.99

2000-2001
2001-2002

48.41
55.61

2010-2011
2011-2012

313.23
339.26

2002-2003
2003-2004

102.63

2012-2013

328.53

Total

115.04

2013-2014
617.52
Total
Table 2: Total Investment
Source: Bangladesh Export Processing Zones

402.58
2439.59

3500
3000
2500
2000
1500
1000
500
0

Figure 3: Total Investment in EPZs

Figure 3 above shows the total investment of EPZs from 1994 to 2014. We can see
an upward trend in the investment volume over the years. The total investment in
BEPZAs has grown very fast after 1994. After 2000 the trend went sharply upward.
Over the years, the EPZs have seen a positive growth in investment. The rising
investments are the result of increasing number of export processing zones. BEPZA
has been attracting more and more investors in the Individual EPZs.

4.5 Contribution of EPZs in National Export:

In April- June 2012 Bangladesh total exports were $5669mn, of which BEPZs
contributed $921mn (Bangladesh Bank, 2012). According to BEPZA, in the total
export earning of the country, the share of EPZs increased from 16.51% in 20002001 to a spectacular rate of 17.37% in 2013-14.

Year

Total export of
Bangladesh
(m US$)

Total export of EPZ

(m US$)

% of BEPZA
contribution (m
US$)

200001
200102
200203
200304
200405
200405
200607
200708
200809
200910
201011
201112
201213
201314

6467

1068

16.51

5986

1077

18.00

6548

1200

18.33

7603

1354

17.80

8654

1548

17.88

10587

1836

17.34

12178

2069

17.00

14113

2430

17.22

15800

2722

17.23

16200

2823

17.42

21456

3697

17.23

27475

3728

17.25

31524

3798

17.30

33587

3937

17.37

Table 3: BEPZAs contribution towards total national Export

Source: Bangladesh Bureau of Statistics
The EPZs have exported goods worth of US$ 33287 million up to June, 2014 and it
was US$ 18271 million till June 2010. During the last 4 years the export volume
increased to about US$ 15160 million.

40000
35000
30000
25000
20000
Total Export of Bangladesh (US$m)
15000

Total Export of EPZs (US$m)

Column7

10000
5000
0

Figure: 4:

BEPZAs contribution towards total national

Export

The Figure 3 shows that with the increase of export the contribution of EPZs to the
total national export is increasing every year. The export Performance of the EPZs is
much more impressive than that of the country as a whole because it shows that
the annual rate of growth of export earnings of the EPZs has been more than six
times higher than the total national export earnings of Bangladesh.

4.6 Export Diversification

Initially the export base was set on primary commodities like raw jute, tea, fish, agricultural
products etc. because the economy of Bangladesh is mostly agro-based. Before the establishment
of RMG sector, Jute and Jute products dominated the export sector by making up to 70 % of
exports in early 80s. But with the constant development of economy the focus has now shifted
on the manufacturing commodities.
The diversification of the countrys export started with the development of RMG
sector. 90% of EPZs exports are now represented by the RMG and textile cluster.
Other than these at present Bangladesh is exporting 27 manufactured commodity
products to almost 200 countries.
During 2007-08, Out of the total export earnings of US dollar 22934.23 million the
share of primary commodities stood at US dollar 1395.93 million and the
9

manufactured products at US dollar 21538.3 million.

Product Names
198219871992-

1997-

2002-

2007-

1983

1988

1993

1998

2003

2008

Agricultural

.713

3.865

7.016

14.528

19.094

39.137

Products
Raw Jute

133.84

96.933

109.81

80.534

74.326

107.76

Tea
Frozen Food

1
9.688
3.061

45.270
19.448

3
46.757
72.054

38.953
139.65

41.143
165.34

7
47.467
293.83

.399
.191
3.090
239.32

1
.066
.117
2.465
276.90

0
1.623
.092
7.502
309.12

6
.072
.154
4.597
493.03

Crude Fertilizer
Animal Casings
Others
Total

.201
.011
.678
148.19

.391
.118
1.686
177.71

Table 4: Export Volume of Primary Commodities (US$m)

Source: Bangladesh Export Statistics
Product Names

1982-83

1987-88

1992-

1997-98

2002-03

2007-08

16.182

45.378

58.456
1240.4
8

147.17
0
2843.3
27

147.90
6
3598.2
05

190.26
0
4912.0

31.57

433.92

193
Leather
RMG

Jute Goods
Chemical

179.25
7
1.06

249.00
6
3.231

319.69
2
11.680

302.41
5
26.527

292.37
0
55.005

281.42
5
74.176

5.95

11.656

30.833

11.975

36.806

10.927

.039

1.761

2.479

3.756

5.431

5.995

3.054

8.668

4.682

11.873

2.631

.042

.161

2.492

2.809

17.512

19.643

Products
Petroleum by
Products
Handicrafts
Paper & Allied
Products

Engineering
Products

10

Others
Total

.024

6.274

1.037

2.620

25.300

159.96
7
237.13 760.05 1671.8 3352.4 4181.1 5654.5
6
6
3
7
7
25

Table 5: Export Volume of Manufactured Commodities (US$m)

Source: Bangladesh Export Statistics
7000
5654.53

6000
5000
4181.17
4000
3000

0
1982-83

Primary

1671.83

2000
1000
237.14
148.19

3352.47

Manufactured

760.06
177.71

239.32

276.91

309.12

1987-88

1992-93

1997-98

2002-03

493.03

2007-08

Figure 5: Export Growth of Primary & Manufacturing Commodities

In figure 5 we can see a significant shift from the primary commodity centric export
to manufacture centric. Compared to the manufactured commodities the growth
rate of Primary commodities declined although the absolute quantity of export
increased over the years. The rate of growth was much lower than the
manufactured products. This happened due to dominance of the nontraditional
commodities against the traditional commodities. This structural shift in the export
sector is the result of the faster growth in the RMG sector of the country

4.7 Export Earning By Different Sector:

EPZ enterprises derives highest dividend in terms of their investment. During 20092010 fiscal, average export performance of enterprises stands around 1.84 times of
their actual investment.

PRODUCT

UNIT
11

INVESTMENT
(US$ m)

EXPORT
US$

GARMENTS
TEXTILE
TERRY TOWEL
KNIT & OTHER TEXTILE
GARMENTS ACCS.
CAPS
TENT
ELEC & ELECTRONICS
FOOTWARE & LEATHER
PLASTIC GOODS
PAPER PRODUCT
ROPE
MISCELLANEOUS
Gr. Total

58
28
16
25
32
6
5
16
12
14
2
2
23
264

343.461
305.245
39.886
124.268
142.008
42.421
23.869
54.359
57.830
22.052
0.837
6.134
36.524
1262.16

1016.64
476.18
57.83
213.41
201.65
112.42
59.67
52.18
54.94
15.88
0.94
5.64
12.78
2322.63

Table 6: Export Earning by Different Sector

Source: Board of Investment, Bangladesh
EPZs enterprises produce different products. The overall production has a huge
impact on economy of the country. Each & every sector contributes in the national
income by bringing a large amount of foreign currency in Bangladesh.

4.8 Major Exported Products:

Currently Bangladeshs major export items are garment products, leather, jute and
jute related products, frozen foods, chemical etc. In 2010-11 the export
performance of the country raised to US$ 22 million. The contribution of major
exportable commodities in export is shown below:
Woven Garments

0.21
1.05
1.59
2.78
3.24

11.22

Knitwear
Frozen Food
46.53

Jute Products
Leather
Chemical Products

5.13

Raw Jute

28.25

Tea
Other

Figure 6: Bangladesh Export by Major Products (2010-11)

Source: Export Promotion Bureau, Bangladesh
12

4.9 Cumulative Performance of Export Processing Zones:

The following table reveals that the total numbers of industries in EPZs rose up to
497, among them 329 are currently operating their business and 168 are under
implementation. Half of these are located in CEPZ and DEPZ. The cumulative
investment in EPZs is USD 2117.69 and export is USD 25434.89.

13

Industries
Export
Processing
Zones
Chittagong
EPZ
Dhaka EPZ
Comilla EPZ
Mongla EPZ
Uttara EPZ
Ishwardi EPZ
Adamjee EPZ
Karnaphuli
EPZ
Total

In
operati
on
(no.)

Under
Implementa
tion (no)

Investment
(US$ in m.)

Export
(US$ in m.)

161

15

858.48

13178.79

98
20
8
6
7
15

6
23
8
1
19
36

785.93
136.57
5.14
16.73
49.89
129.68

10969.99
563.95
74.52
9.08
41.35
353.25

14

60

135.29

243.96

329

168

2117.69

25434.89

Table-7: Zone-wise performance (up to June 2011)

Source: BEPZA
The collective investment in CEPZ and DEPZ is US$ 1644.41 million while the total
investment of all the eight EPZS is US$ 2117.69 million. This reflects that investors
are more interested in CEPZ & DEPZ because of greater facilities and infrastructure.

4.10 Total Export Earnings of EPZs

During the past 24 years, the total export of the EPZs has amounted to
US$18,914.74m. The
following table shows the export receipts by the EPZ enterprises since 1988-89.

14

Year
1988-89
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
Total

Export (US$ in
m.)
16
34
48
68
110
103
205
278
370
539
606
725
3102

Year
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
Total

Export (US$ in
m.)
883
867
929
1027
1180
1362
1516
1732
1900
2150
2801
3426
19773

Table 8: Year Wise Cumulative Export

Source: Bangladesh Export Processing Zone Authority
The export earnings were worth US$ 19773 million in last 12 years and per year it
was increasing. But this Figure was only US$ 3102 million in previous 12 years.
25000

20000

15000

10000

5000

Figure 7: Total Export of BEPZs

Figure 6 above shows the total export of EPZs from 1988 to 2012. We can see an
upward trend in the export volume over the years. The export expanded because
15

the success of the individual EPZs export Encourage the government to increase the
number of BEPZs. These two factors expanded the total export. When there was
only one EPZ the rate of increase in export was very slow, with the establishment of
more and more EPZS the volume rose sharply.

4.11 Destination of the Products

Bangladesh has achieved tremendous success in export sector by exporting goods
all over the world. This is the result of higher quality and lower price of the products.
It seems that Bangladesh has been doubling its exports every six years and
expanding its destinations.
The following table represents the regional export market share of Bangladesh

16

Destinations
European Union
American Region
Asian Region
Middle East
African Region
Oceania Region
East European Region
Other

Market Share
52.3%
33.3%
8.8%
2.5%
0.6%
0.3%
0.3%
1.8%

Table 9: Regional Export Market Share

Source: Bangladesh Export Processing Zone Authority
Bangladesh is dependent of export earnings from EU and USA. The EU and North
America have been important markets for Bangladesh and it is likely to remain so
for many years to come. Europe, Asia and America are very necessary for
Bangladesh. Because Europe and America together hold over 85 percent of the
country's exports market share, Asia holds about 8 percent of the share. The market
share of rest of the world is only 5.5 percent.
Australia, Norway, Japan, Canada, France, Italy, UK, Germany, Spain has also
become billion dollar export destinations of Bangladesh.
Bangladesh is now exporting to almost 200 countries. The following table will give
you an idea of Country-Wise export of commodities from Bangladesh.

17

Countries

Afghanist
an
Albania
Algeria
Andora
Angola
Anguilla
Argentina
Armenia
Australia
Austria
Azerbaija
n
Bahamas
Bahrain
Belarus
Belgium
Belize
Benin
Bhutan
Bolivia
Bosnia
Brazil
Brunei
Bulgaria
Burkino
Faso
Burundi
Cambodi
a
Cameroo
n
Canada
China

Froz
en
Food

Agri.

Chemic
al
Product
s

Leath
er

Ra
w
Jute

Jute
Good
s

217

3573

3
108
0
156
0
1555
0
2753
7809
34

1009
6173
18
3218
9
6768
315
12953
15120
129

28
30
8
4263
560
108
433
289
223
7442

28
4393
3984
15426
1039
968
1817
381
299
12666

914
887

92
348

718

639
9
1175

3320

2959
2926

1324
2306

303
11
2486
42

603

507
339
3171
334
113

1421

52
76
1153

204

26
641

20
921

1
204

35
363
43

373
9960
106

453

278

21
67

277
1545

298
3732

1769

213
59

3
23

2642
177

149

154

26

795

138
944

95

684
459

6
478
103
6
215

973
87
7255
45

298
18

1371

28

2413

4697

3166
537
1781

1
4

20122013

133

10
4
423
35

278

Other
s

84

305
1316

361

Wove
n
Garm
ents

3268

18
2423

475
1197

Knitwe
ar

16

109
6

3343
58
60

3083
2452

223
40
565

1738
7
66

Denmark

France

37

Germany

USA

UK

15

1
3

19

4
3

334

391

28

893

27

960

21

1024

33

1095

10

514

12

553

Table 10: Country-Wise export of commodities by broad description from

Bangladesh during the period July-June, 2012-2013 (Value in 000US$)

4.12 Contribution of RMG Sector in National Export:

The contribution of RMG sector in Bangladeshs total export can hardly be ignored.
The following table reveals the total export of RMG from the initial stage till 2014
and its contribution to the total national export.

18

YEAR

EXPORT OF
RMG
(IN MILLION
US$)

TOTAL EXPORT
OF BANGLADESH
(IN MILLION
US$)

% OF RMGS TO
TOTAL EXPORT

1983-84

31.57

811.00

3.89

1984-85

116.2

934.43

12.44

1985-86

131.48

819.21

16.05

1986-87

298.67

1076.61

27.74

1987-88

433.92

1231.2

35.24

1988-89

471.09

1291.56

36.47

1989-90

624.16

1923.70

32.45

1990-91

866.82

1717.55

50.47

1991-92

1182.57

1993.90

59.31

1992-93

1445.02

2382.89

60.64

1993-94

1555.79

2533.90

61.40

1994-95

2228.35

3472.56

64.17

1995-96

2547.13

3882.42

65.61

1996-97

3001.25

4418.28

67.93

1997-98

3781.94

5161.20

73.28

1998-99

4019.98

5312.86

75.67

1999-00

4349.41

5752.20

75.61

2000-01

4859.83

6467.30

75.14

2001-02

4583.75

5986.09

76.57

2002-03

4912.09

6548.44

75.01

2003-04

5686.09

7602.99

74.79

2004-05

6417.67

8654.52

74.15

2005-06

7900.80

10526.16

75.06

19

2006-07

9211.23

12177.86

75.64

2007-08

10699.80

14110.80

75.83

2008-09

12347.77

15565.19

79.33

2009-10

12496.72

16204.65

77.12

2010-11

17914.46

22924.38

78.15

2011-12

19089.69

24287.66

78.60

2012-13

21515.73

27027.36

79.61

2013-14

24491.88

30186.62

81.13

Table 11: Comparative Statement On Export Of Rmg And Total Export Of

Bangladesh

Data Source Export Promotion Bureau Compiled by BGMEA

The following graph can give clear view of growth in RMG export for the last 31
years.
35000
30000
25000
20000
15000

Export Of RMG(in Million US$)

Total Export Of Bangladesh(in Million US$)

10000
5000
0

Figure 8: Comparative Statement on Export of RMG and Total Export of

Bangladesh
The RMG sector enjoys a continuous growth from the beginning of the industry but
the initial level was tough. From this chart we can see that RMG export is the main
contributor in the countrys total export because both have increased almost at the
same pace. It can be viewed that in the total export earning of the country, the
share of RMG increased from 3.89 percent in 1983-1984 to a spectacular rate of
81.13 percent in 2013-14.

20

4.13 Value of Total Apparel Export:

The export oriented RMG industry of Bangladesh has witnessed remarkable growth
after 1990.
Year
1992-1993
1993-1994
1994-1995
1995-1996
1996-1997
1997-1998
1998-1999
1999-2000
2000-2001
2001-2002
2002-2003
Total

Export (US$ in
m.)
1445.02
1555.79
2228.35
2547.13
3001.25
3781.94
4019.98
4349.41
4859.83
4583.75
4912.09
41309.95

Year
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
2012-2013
2013-2014
Total

Export (US$ in
m.)
5686.09
6417.67
7900.80
9211.23
10699.80
12347.77
12496.72
17914.46
19089.69
21515.73
24491.88
147771.84

Table 12: Value of Total Apparel Export

Source: Bangladesh Export Promotion Bureau
The table shows that the export earnings of RMG sector were increasing per year.
From 1992 to 2003 the export earnings were worth US$ 41309 million. After 2003 it
experienced a rapid growth and the total earnings till 2014 were 147771.84.

21

25000
20000
15000
10000
5000
0

Figure 9: Value of Total Apparel Export

Figure 8 above shows the total export of RMG from 1992 to 2013. We can see an
upward trend in the export earnings over the years. The export rate has grown very
fast after 2000. After 2005 the trend went sharply upward. Over the years, the RMG
sector has seen a positive growth in export earnings. The rising trend is the result of
increasing number of export processing zones.

4.14 Growth of Major exported Products of RMG sector:

Bangladesh manufactures and exports two major kinds of garment products. They
are woven garment and knit garment in the form of shirts, trousers, t- shirts,
sweater, jacket etc. The following table represents the total export of Woven and
Knit Products since 1992 to 2014.

22

Year

WOVEN

KNIT

TOTAL

1992-1993

1240.48

204.54

1445.02

1993-1994

1291.65

264.14

1555.79

1994-1995

1835.09

393.26

2228.35

1995-1996

1948.81

598.32

2547.13

1996-1997

2237.95

763.30

3001.25

1997-1998

2844.43

937.51

3781.94

1998-1999

2984.96

1035.02

4019.98

1999-2000

3081.19

1268.22

4349.41

2000-2001

3364.32

1495.51

4859.83

2001-2002

3124.82

1458.93

4583.75

2002-2003

3258.27

1653.82

4912.09

2003-2004

3538.07

2148.02

5686.09

2004-2005

3598.20

2819.47

6417.67

2005-2006

4083.82

3816.98

7900.80

2006-2007

4657.63

4553.60

9211.23

2007-2008

5167.28

5532.52

10699.80

2008-2009

5918.51

6429.26

12347.77

2009-2010

6013.43

6483.29

12496.72

2010-2011

8432.40

9482.06

17914.46

2011-2012

9603.34

9486.35

19089.69

2012-2013

11039.85

10475.88

21515.73

2013-2014

12442.07

12049.81

24491.88

Table 13: Growth of Major Export Products

Source: Bangladesh Export Promotion Bureau

23

14000
12000
10000
8000
6000

Woven

4000

Knit

2000
0

Figure 10: Growth of Major Export Products

The share of the knit garment products in the export sector has been increasing
since 1990s but Woven garment products have always dominated the export
earnings of Bangladesh. In 2011 -2012 the knit garment exceeded woven garment
by a very short margin. But the trend again reverted in 2012-2013.

4.15 Major Destinations of RMG Export

Bangladesh Currently exports products worth of nearly 5 billion US$ per year to 200
countries. Woven garments are exported to 132 countries and Knit garments and
Knit garments are exported to 148 countries. The major buyer countries include
USA, Canada, UK, France, Netherlands, Spain and Belgium. In the US market
Bangladesh has secured the position of 6 th largest supplier.

24

Country
Germany
UK
USA
France
Spain
Italy
Canada
Netherland
Belgium
Denmark

2009-10
1282.77
725.74
891.61
692.00
384.55
379.04
283.86
528.57
155.79
178.24

2010-11
2022.05
990.98
1119.04
999.71
595.92
525.17
432.92
591.07
299.74
256.32

2011-2012
2039.97
1103.30
1013.95
855.18
660.73
571.46
401.82
325.28
320.46
318.72

2012-2013
2168.13
1259.84
1130.90
892.45
702.90
554.94
461.97
246.77
317.19
375.62

2013-2014
2573.70
1335.25
1197.85
964.27
856.28
731.91
445.10
385.48
440.63
450.71

Table 14: Country Wise Export of RMG products

Source: Export Promotion Bureau, Bangladesh, Complied by Research &
Development Cell
Wal-Mart, Target, GAP, Levis, K-Mart, Zara, Mark and Spencer, Tesco, Carrefour are
some of the Major buyers of our RMG products.
Regions
EU
USA
Others

Market Share
49.77
33.67
16.57

Table 15: Regional Export Market Share

Source: Export Promotion Bureau
European countries and USA are the biggest buyers of Bangladesh. They together
hold 83.44 percent of RMG export market share while other countries have only
16.57 percent of the total market share.

5.0 Conclusion:
Bangladesh has become a favorite destination for foreign investors because of
various reasons. Bangladesh has developed its economy by registering constant
economic growth, infratracture development and technological progress.
EPZs have played a vital role in the development of the country. The EPZs of
Bangladesh offer a sound investment environment for investors. Bangladesh is
committed to attract foreign investors and this is why the government is trying to
give more and more facilities and incentives in the economic zones. The
government is also planning to create new zones in the coming year to serve the
interests of the foreign investors and increase the export earnings of the country.
Bangladesh has shown a positive growth in exports despite the global financial
25

crisis. The EPZs have helped the country to achieve positive recovery during the
credit crisis in Euro Zone which is the main export destination.
Issues like poor infrastructure, shortage of power supply, political instability are
some of the obstacles that are creating problems for Bangladesh export industry.
But still the overall export performance of EPZs is satisfactory.
Bangladesh has got huge potential in respect of natural resources, skilled
manpower and investment friendly atmosphere. Government and local investors
should come forward to find new markets in order to expand the export industry.

26

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