The product basket of Bangladesh is narrow compared to China or Vietnam as the country is still limited to cotton-based products. So, we have an immense scope of product diversification in manmade fiber, which is unexplored in Bangladesh.
Bangladesh textile industry is now moving forward more dynamically with the 2nd and 3rd generation leaders. The new generation thinks and acts fast and the impact has been seen in the industry growth percentage.
This time Textile Today visited Pacific Jeans Ltd at Chattogram and met Director Syed M. Tanvir. From the open discussion, some recent issues of the textile and apparel industry, important parts of Pacific Jeans Ltd, his vision, growth plan of the company have been revealed for the readers.
Textile Today: In the recent time the Bangladesh textile industry has seen many changes but still the industry is growing steadily. Is Bangladesh in the right track, what do you say?
Tanvir: Annually Bangladesh textile and apparel industry is growing at a rate of 14% to 15%. Means we are on the right track. Achieving $50 billion by 2021 roadmap is a challenging hurdle for the textile industry. But when you set a target it has to be challenging or you can’t push yourself to the optimum.
And we are pushing our limits alongside dealing with challenges – from 6000 factories only around 3000 operating currently. We might not be able to achieve $50 billion target, but we’ll certainly get close to it.
Also, I want to acknowledge Accord and Alliance, they added value in our textile and apparel industry, as it helped us in getting a clean image and getting more orders.
And I’m really optimistic, as our growth prospect is good. At the same time, we have to focus on below three things for growth:
We all know how growth can be achieved depending on market analysis, but different owners take different strategies. Like adding value in existing products and increasing FOB, product diversification of the same customer, bring a new customer who is yet to come in Bangladesh or going into new markets.
Like is in the suit sector, 2-3 big brands of India source 10% of their products from Bangladesh, and surprisingly, Bangladesh’s capacity becomes occupied for the whole year. The suit, lingerie-these are value-added products. And there are lots of diversified products like these, we must explore these to not only achieve the export target, but becoming a substantial global entity in the textile and apparel sector.
Textile Today: Often millers say they do not get a fair price, in this regard, could setting a bottom price help them?
Tanvir: It’s a free market economy, the bottom price may sound good in theory, like a researcher can figure out the average per minute cost in Bangladesh scenario. But all the factories do not have the same efficiency, costs are different, also there are lots of other factors. So, setting the bottom price is not practical for many reasons.
But we can consider the labor cost – and other average standards – set a Standard Minute Value (SMV). And based on the minute cost, if one’s efficiency is good then SMV will be less. And when a factories efficiency is less, then it will be added with the SMV. And I think this method is more practical, rather than setting the bottom price.
Recently BGMEA President, Rubana Huq said the issue, and I agree with her. Set a base price or minimum benchmark, so, the customers can’t squeeze us unethically.
Keep in mind that all the factories have different and tough challenges. And bringing them in the same format – ignoring the multi-faced challenges – is an injustice. So-called outsider experts do not know the reality inside and our hardships.
Textile Today: We know Pacific Jeans is the largest denim products producers in Bangladesh, please share the journey of Pacific Jeans for the readers.
Tanvir: My father, Mir Nasir Uddin, started the business in 1984. At that time its name was NZN Fashion Wear – the first jeans manufacturing factory in Bangladesh. Now we have seven state-of-the-art production units.
We came under EPZ in 1994 and started as Pacific jeans and we have done all our expansion inside the EPZ. We have started Jeans in 2000, Universal Jeans in 2008, and NHT Fashion in 2014.
At present we have a workforce around 26000. Our yearly turnover is around US$ 400mn with 10-12% annual growth. Now our monthly capacity is 3.5 million pieces and we are mainly producing denim products. Recently we have started a knit factory also in Pacific Casuals factory.
Textile Today: Right now you are leading the company from the front line, please share something yourself.
Tanvir: I have done post graduate in Marketing from the University of Leeds, England and joined officially in the business in 2004. But before joining officially, I have been associated with the factory with my father. I used to work at the production floor with different teams. Also closely worked with different operational teams.
So, I have learned the whole process before I sat on the director chair and start giving decisions.
Working with them helped me in many ways. First, you will understand your worker’s mentality. Second, you will understand the value of your people and their work.
People like me – from the second generation – is doing better, they are passionate but needs to be more submissive and to understand the people who are working with us before we judge them.
Textile Today: How branding helps companies like Pacific Jeans?
Tanvir: First of all you have to make your products right. And in premium products, it does not matter how state-of-the-art branding you are doing if your products remain basic, then it does not make sense.
So, before branding we focus on product quality and at the same time, we visit international fairs regularly. Because, ultimately, the customer will see the product – its quality, consistency, everything – which is most vital.
For denim products, most respected and renowned fairs are Denim by PV, Kingpins, Unique Fabric Start, etc. where we exhibit and represent Bangladesh in all these fairs.
Denim is such a segment where you have a huge range of products. The same product becomes premium from basic, because of value-addition. This is where we make the difference from other factories. Usually, others factories average FOB is $6-$6.5, whereas Pacific Jeans average FOB is $12.
I think it is a big tool for branding and I feel, lots of big apparel group’s in Bangladesh do not understand this simple thing. It is like putting your company in the right place at the right time which will take your company closer to your expected customers and consumers.
So, when you participate, the visitors judge you as a market leader with other global companies. You can be best in Bangladesh but it will not give global exposure if you do not represent yourself to the platforms.
If one does premium branding with basic products that will be wasting of time and money. Your products and market placing, both needs to complement each other.
Textile Today: In which way Pacific Jeans is different from others?
Tanvir: Denim is such a segment where you have a huge range of products – if you go to Primark you will get $9 denim and in Diesel, you will get 400 euro denim. A basic five pocket denim someone is buying at $4 from a factory and this basic denim based on different fabric and wash becomes $15-$16 product.
The same product becomes premium from basic, because of value-addition. This is where we make the difference from other factories. Usually, other factories average FOB is $6-$6.5, whereas Pacific Jeans average FOB is $12. And we are producing in volume, not just a niche market. That is where we make the difference, we are the largest and maintaining premium.
Textile Today: Chattogram is Bangladesh’s Economic Capital and has the port facility. How much is the area of the textile business friendly?
Tanvir: In terms of infrastructure, Chattogram is more ready from anytime than before. As a region, Chattogram is resourceful and has a huge growth prospect. On top of, we the entrepreneurs just need some willingness and mindset to do something different.
On the other hand, the main challenge is the lack of skilled human resources in Chattogram. This is where we have a black hole. For building skilled manpower, proper training could be a good solution.
Mirsarai Economic Zone is a great opportunity for us here. And some other industrial and economic zones are also in the pipeline.
Textile Today: We can see Pacific Jeans is growing smoothly over time with a decent growth percentage. Please share the growth plan and focusing points of Pacific Jeans in the coming days.
Tanvir: In the last 35 years we have a conservative, yet sustainable growth. Means growing at 10-12% every year. As I said earlier, about knit and fabric projects we don’t have any immediate plan but we have a plan. In the future, we will go for product diversification. We have eyes on different value-added products.
If you see, the product basket of Bangladesh is still very narrow compared to China or Vietnam. We are still limited on cotton-based products – 7-8 basic types of products and we have an immense scope of product diversification in manmade fiber, which is unexplored in Bangladesh. Keeping this aspect in mind we are setting our growth plan.
Like cotton manmade fiber price does fluctuate based on petroleum price. As we do not produce cotton but we are heavily dependent on cotton, the same as, we can expand our market horizon by start producing manmade fiber.
And regarding its technology, it’s not an issue because technology is a commercial product. So, if we can bring out the right product, technology, and raw materials is not an issue.
We must realize, we are taking the same risk with cotton. So, why not manmade fiber? In this, I think Bangladeshi textile millers’ lack of experience is barring us divulge in manmade fiber. And someone needs to be the pioneer and others will follow.
The good thing is some of the leading companies are already doing it, like DBL, Habitus, Fakir, etc.