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How Bangladesh Can Stop Losing 70 Cents for Every Garment Export

Bangladesh’s garment sector is hemorrhaging 70 cents for every piece of apparel it exports, a new study says.

The reason? Wasted material, according to researchers from the Bangladesh University of Textiles, who conducted their mapping study with the aim of creating a circular economy-led model that can turbocharge progress toward the United Nations’ 12th Sustainable Development Goal of responsible production and consumption.

Collecting data from the value streams of 17 textiles and apparel factories, most of them centered in the capital of Dhaka, the study found significant if varying amounts of waste and excess inventory in each node of the value chain. The spinning phase was the worst offender, yielding the most material loss at 63 percent. This was followed by wet-processing at 34 percent, apparel production at 20 percent and fabric manufacturing at 10 percent. Translated into monetary terms using current market prices, every 100 grams of wasted material cost manufacturers between $30 and $177.

Most of the overstock and wasted material is sold off cheaply at local, informal markets, resulting in a “significant loss of value addition” that could have been added through reuse or upcycling, the study said. On average, every item of clothing dispatched overseas embodies a value loss of 70 cents. “Although it is an approximate valuation based on primary data from this research and analysis, it contributes to the quantitative aspects of textiles and apparel production waste, a knowledge gap identified in the literature,” researchers said.

The “jhut” or “cutting waste” markets are themselves an example of the circular economy, since the waste is converted into a resource, reducing their negative environmental impact, the study said. Nevertheless, this route leads to a “significant opportunity loss of value addition” that could boost Bangladesh’s economy. Because the markets are underground—to protect domestic trade, local laws prohibit the sale of fabric or apparel produced and imported under a duty-free bonded-warehouse license—the occupational health and safety of the workers is “completely overlooked.”

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“Due to the high volume of materials waste generated in the different manufacturing stages of the textiles and apparel industry, a practical waste management strategy within the scope of the circular economy can be an effective solution to support SDG 12,” researchers said. “This would prevent increased landfill waste, promote natural resource efficiency, reduce energy consumption and environmental footprints, and also open new business opportunities.”

Factories should also employ strategies that curtail waste in the first place, beginning with the “informed selection” of raw-material volumes through savvier demand forecasting, the study said. The use of automated, CAD-supported cutting machines can minimize off-cuts, while sticking to eco-friendly materials can help foster the recyclability and reusability of the final products. But just as important is keeping tabs on where everything goes.

“The traceability of the production waste is essential and can be achieved through collaborations among manufacturers, buyers, government, consumers and practitioners to ensure optimum utilization for achieving sustainability through a circular economy,” researchers said. “Incentives for data sharing can be provided through legislation, emphasising also that the outcome will be for the economic benefit of the private companies in the textile business.”

One challenge, however, is that concepts such as reuse, recycling, reducing, upcycling, recovering and repairing are not clearly defined, especially for upstream textile waste, making them difficult to identify and implement within the scope of SDG 12. More data would be helpful: The 17 facilities participated only after repeated efforts at persuasion; most of the companies the researchers approached turned them away, citing privacy concerns. “At this moment, there is lots of secrecy surrounding this, and it requires transparent and viable solutions to make such a vast amount of materials waste into opportunities and to foster sustainability,” they said.

Closing Bangladesh’s waste circularity gap is the goal of the Circular Fashion Partnership, a project spearheaded by Global Fashion Agenda, in collaboration with the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Reverse Resources, and with the support of P4G, that seeks to capture Bangladesh’s post-industrial textile waste to create new apparel.

The initiative, which recently concluded its first year, brings together 43 textile and garment manufacturers, 20 leading apparel brands, including C&A, Bestseller, H&M, Primark and Target, and 17 recyclers, including Cyclo, Lenzing, Renewcell, Infinited Fiber Company and Recover. Since it launched in October 2020, the partnership has diverted 1,102 tons of textile waste, or one-fifth of Bangladesh’s total output. At the end of 2021, it was wrangling 220 tons a month.

“Bangladesh produces arguably the most recyclable textile waste of any apparel producing country,” Nin Castle, head of recycling and chief project offer at Reverse Resources, said at the initiative’s debut. “With the emergence of new and improved versions of existing recycling technologies, Bangladesh has a huge opportunity to scale its local recycling capacity and accordingly reduce its dependency on virgin raw materials. If a recycling industry is fostered now, it would enable the country to not only enjoy the obvious benefits of cost and carbon footprint reduction but also gain a massive competitive edge.”

Bangladesh is the world’s second-largest apparel exporting country after China (though it’s often neck and neck with Vietnam). Ready-made garments make up more than 80 percent of the country’s total exports and 16 percent of its gross domestic product. On Sunday, Faruque Hassan, president of the BGMEA, said Bangladesh is on track to export $50 billion in apparel this year.

“Last November and December, we exported nearly $4 billion worth of garments a month,” he said at an event in the port city of Chattogram, where a new direct shipping route to Italy’s Porto di Ravenna is poised to shave shipping times to Europe by more than two weeks, easing pandemic-induced logistics snarls. “We are hopeful we can touch the $50 billion mark this year.”