Textile today arranged a webinar titled ‘’New Context, New Leadership’ in the episode of TexTIMe presented by COATS on 01 August 2021.
- Syed Nurul Islam, Director, BTMA, Chairman & CEO of Well Group
- Abrar Hossain Sayem, Founder President, BAYLA & Director of Sayem Group
Tareq Amin, Founder and CEO of Textile Today moderated the webinar.
At the inception, the moderator briefly put an overview of the industry situation. He asked Syed Nurul Islam as to how he observes the present challenges.
He said “The Covid-19 hit the textile industry hard, consequently orders have been canceled, raw material and logistics prices have risen. The pandemic disrupted the entire supply chain which shook the textile industry as a whole. It will still take a year or more to know in which area of the supply chain was disrupted most. During the epidemic, consumer behavior has changed and global consumption has declined.”
|# Does BGMEA’s 50 Billion Export vision had a comprehensive plan?
Syed Nurul Islam: Yes. It had two plans to fulfill that vision –
We were progressing according to that but got hit by the pandemic and now we need to prepare ourselves according to post-pandemic challenges.
|# What should be the future investment strategy and industry alignment strategy?
Syed Nurul Islam: We have to move immediately towards manmade fiber to meet global market demand.
|# How BAYLA is working to contribute to improving management efficiency and management capability?
Abrar Hossain Sayem: We are working to ensure data-driven decision-making to improve management efficiency and capability to help the industry.
Before the impact of COVID, Industry was performing well. Industry has invested heavily in building green factories, lead-certifications, and mitigating safety concerns aligned with ACCORD and Alliance, Islam added. The vaccination can slow the effects of the epidemic. With 80% vaccination, we will be able to bring back the flow of the supply chain.
The only way to stop the lockdown is to get vaccinated. Although the garments and textile industries reopened after lockdown, the factories were not in full capacity. Many factories have reduced their capacity due to uncertainty in the supply chain. This is affecting the industry in a different way, Nurul Islam said in the webinar.
Buyers were shifting their orders from China, India, Pakistan, Turkey and the new fashion season was also coming. “Retail consumption may increase during summer 2022/2023 fashion season,” said Abrar Hossain Sayem. He observed that the RMG industry is largely a priority of Bangladesh. So if the industry does not come to its full capacity then Bangladesh may miss this opportunity.
Sayem said, “We count 5,000 garment industries in Bangladesh but most of them are small and medium industries which have not yet recovered from the pandemic”. So to seize the opportunity we need to increase the small quantity efficiency (minimum order of quantity), productivity, reduce lead time, and work in a decentralized culture of management.
In the webinar, Tareq Amin mentioned that few years back, Bangladesh’s garment industry had a vision of $50 billion exports by 2021, so why is the garment industry not yet capable of it.
Nurul Islam replied that the then Bangladesh RMG industry had two plans to fulfill that vision – one was of New Market Development/Access and another was of Product Diversification with 2-4 % government incentives.
The government also built power plants to increase the infrastructural capacity, but during the epidemic, many ongoing orders were canceled, factories were shut down and many. Before the epidemic, RMG industry entered into many new markets like Saudi Arabia, Japan, and India with diversified products and among them the most notable product was denim. But the garment industry in Bangladesh focused more on quantity rather than quality.
Nurul Islam said, “The economy has also shifted and the cost of logistics and raw materials have risen as supply chains have been disrupted. The garment industry would have been suffered severely without government incentives.”
Tareq Amin asked Nurul Islam which part of the supply chain was most disrupted that affected the industry. “It was the cost of logistics that mainly affects the other costs in the total supply chain,” Nurul Islam replied. In some cases, logistics costs were going to be almost half of the total cost. The cost of shipping from Shanghai to Chittagong port was $3,000 last year, now it costs $4,000. Even the United States was paying $30,000 shipping costs from Shanghai.
Also, most of the manufacturing hubs in Bangladesh are away from ports which increases lead time and cost. Nurul Islam said, “Even our infrastructure is not ready to handle the logistics volume of $100 billion export-import altogether”.
Sayem said, “If logistics costs are not reduced, the industry will have to find alternative ways to reduce costs”.
The industry needs to increase internal efficiency, lead time and maintain a balance of expenditure. Lead time can be reduced if factories can go for digitalization. Today 3D virtual prototypes are used to display samples.
Digitization can help management to make data-driven decisions. Digital platforms can help to find new marketplaces. China’s digital cross-border trade was totaled $ 3.2 trillion and 20 thousand of their suppliers were connected to digital platforms. Sayem found in a study that 65% of transactions would be made online after the epidemic.
Tareq Amin quoted that Textile Today also working on building digital connectivity for garments manufacturers.
“Digital platform is the fast-growing platform for finding marketplaces”, he complimented. Tareq Amin concluded the webinar asking the question to both guests as to how the garment industry can be prepared for the coming days.
Sayem said sustainability is becoming another factor that is growing among consumers. “Last year the WCF reported that out of 21,000 responses from 208 countries, 86% of consumers want to move towards sustainable products after the epidemic”.
Garments in Bangladesh should look forward to work on sustainable products with less environmental footprint. Investing in R&D is a must. Unilever last year invested $1 billion in R&D for market researchers. Efficiency alone is not enough, the industry needs to be further developed, he added.
Nurul Islam said, “Garments manufacturers were not considering the gap between consumer demand and manufactured products. Consumers worldwide prefer 70% man-made fiber and 30% natural fiber. But Bangladeshi garment manufacturers have focused on producing 70% natural fiber and 30% man-made fiber products.” Nurul Islam persuaded BTMA, BGMEA, BKMEA to increase the production capacity of man-made products.