Footwear sector and FDI in Bangladesh

Exports may exceed a billion dollars by 2013 if power is ensured
image source - FG Shoes

Bangladesh could have a billion dollar footwear export sector by 2013 claim local shoe manufacturers on the basis of both the current growth in shipments and the increased production capacity in factories under construction. If the assessment is correct, in a three-year period the level of exports can increase five-fold from the $205 million worth of shoes that were exported in the last fiscal year that ended in June 2010. 

image source - FG Shoes

In the first four months of the current fiscal year there has been $98 million worth of exports, a 65 per cent increase from the same period last year. Taking this rate of growth into account, it is estimated that the current fiscal year’s footwear export is likely to cross $300 million. Japan and Germany are now the biggest markets for Bangladeshi footwear but US buyers are increasingly showing interest in sourcing from Bangladesh. The Export Processing Zones at present have 18 shoe and leather goods factories but there are at least seven large factories under construction, mostly owned by big manufacturers in the shoe world. The factories under construction include Korean company Youngone’s footwear complex which is said to be the largest in Asia. This year Youngone — which produces sportswear for Nike and other leading brands — estimates that it will export $56 million worth of footwear. However, when the new factory is completed next year the company expects to increase exports to at least $250 million by the end of 2013.
image source- FG shoes

Taiwanese shoe manufacturer Pau Chen, which employs about 4,00,000 workers in its factories in China and 50,000 in Vietnam, is also building a large manufacturing facility in Chittagong. Australian manufacturer Bonbon Shoe, a supplier to Hugo Boss, and Xen Chen and Genford of Taiwan, are also building footwear factories in Bangladesh. Apex- Adelchi also has a new factory that will soon start production. With an annual turnover of about $100 million, the Bangladesh-Italy joint venture is now the largest exporter of footwear. However, with a new joint venture factory, Blue Ocean Footwear, due to go into production by February 2011, Apex will get involved with a turnover of nearly $200 million of footwear export by 2013.
image source - FG Shoes

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