Prospects of backward linkage in RMG sector: A study on ARK IMPEX LTD

Abstract

The RMG part of Bangladesh is the biggest supporter of Gross domestic product around 81% in the 2015 financial year. This RMG industry has expanded in huge sum since 1978. The development of this division has leaded Bangladesh to wind up one of the center acquiring nations of the world by 2021. Be that as it may, this segment has constantly confronted a few issues to face its actual potential. The consistence issue of the RMG part was the principal, now step by step the quantity of dangers is expanding quickly. The hugest risk to this area is its regressive linkages. Despite the fact that the ventures forward linkage, the generation unit has made its ground appropriately yet the crude material creation of this part is route beneath to the aggregate request. The regressive linkage industry of Bangladesh in RMG segment is 5-8% to the aggregate request. Consequently, the crude materials like texture, trims and adornments are being foreign made from different nations. A colossal measure of crude materials is being sourced from outside market. To buy the crude materials 60-70% of item cost leave in abroad market and the benefit pick up from these generations arrange is less. Buying crude materials from different nations takes a considerable measure time. There is a great deal of components is considered when buying the crude materials. The principle issue is confronted is making protection of lead time gave by the purchaser. At the point when the crude materials are being obtained from the remote market the

9 | P a g e maker needs to ensure the planning of the crude materials landing in light of the fact that if the crude materials are not in-housed in time the generation and shipment of purchaser won't be on time. In this way, when the items are not conveyed on time the purchaser change the industrial facility of request or the nation. So, keeping up the lead time has turned out to be vital for contending in the worldwide market. Bangladesh RMG industry has numerous contenders and a considerable lot of the contender's state of in reverse linkages are more grounded than that of Bangladesh. In this way, to manage in the worldwide market. Bangladesh needs to build up its material part more and guarantee the crude materials emergency to be understood. On the off chance that the issue of crude material isn't comprehended Bangladesh will go into a predicament they are currently. Along these lines, to beat the issue Bangladesh should take activities to take care of the issue.