Bangladesh's garment industry, which built its $55 billion export business on cut-make-trim contracts for Western brands, must now develop and own its own labels, industry leaders told The Daily Star.

The call comes as the sector faces shrinking margins on contract manufacturing. Brands keep the bulk of retail value while factories absorb rising costs — energy, wages and compliance investments — leaving thin profits for makers.

"We have the capacity, the certifications and the skilled workforce," one factory executive said. "What we lack is the brand equity and the retail relationships. That is where the value sits."

The argument is economic rather than aspirational. Contract manufacturers earn a fraction of a garment's final retail price. Brand owners capture design premiums, marketing margins and channel control. For a sector that already produces to global compliance standards, moving up the value chain means capturing that spread.

The challenge is distribution. Bangladeshi firms have little presence in Western retail channels and weak consumer recognition. Building both requires sustained marketing spend that current margins make difficult.

Some makers have begun testing the approach in domestic and regional markets, where brand-building costs are lower and consumer familiarity easier to establish. Regional expansion through South Asian and Middle Eastern channels offers a middle path before tackling Western markets.

Industry bodies are expected to push for policy support — export incentives for branded goods, marketing assistance and retail channel access — to help firms make the transition.

The shift will not happen quickly. Brand equity takes years to build, and the near-term financial pressure on factories remains acute. But with contract margins under strain, the calculation for Bangladesh's garment makers is changing: the question is no longer whether to build brands, but how fast.