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‘Bangladesh RMG sector should go for price fixing policy’

Ashikur Rahman Tuhin, Managing Director of Mayc`s Garments Ltd and a Director of BGMEA (also Director of SEIP) is one of the successful pioneer of RMG industry.

Textile and apparel (T&A) industry is the biggest manufacturing industry in Bangladesh, Bangladesh RMG sector is playing a major role to convert the country into middle income from lower-middle one.

Bangladesh apparel industry is the second largest exporter of the world and more than 82 percent of national foreign currency earner. With continuous challenges, obstacles, and storms popping up every now and then, the industry always came on top and overcame these very successfully.

Ashikur Rahman Tuhin, MD, Mayc`s Garments Ltd.
Figure 1: Ashikur Rahman Tuhin, Managing Director, Mayc`s Garments Ltd. and a Director of BGMEA.

With a titanic 4.2 million people, including entrepreneurs, pioneers and dedicated persons working relentlessly to uplift this industry strongly and presenting as a role model to the world.

Ashikur Rahman Tuhin, Managing Director of Mayc`s Garments Ltd and a Director of BGMEA (also Director of SEIP) is one of the successful pioneer, who battled with challenges to fortify country’s RMG business. He has a vast knowledge of this industry.

Recently Ashikur Rahman Tuhin shared his experience with Textile Today on various issues including industry’s future, transformation, the necessity of branding, strategies, challenges etc. Here is a glimpse of the discussion for Textile Today readers.

Textile Today: What type of transformation of the industry do you see as a successful businessman?

Ashikur Rahman Tuhin: In the last 10 years, our RMG sector has changed significantly. We have now entered into the luxurious and safety stage from the normal stage. Luxurious is because of the world’s highest graded green factories are now in Bangladesh. Moreover, lots of other factories are in the pipeline and the green factories have been developed so much that Bangladesh has the most number of green factories in the world. That is why we can tell it a luxurious transformation.

In addition, the reason for telling it a safety transformation is, after Rana Plaza collapse, training held through Accord-Alliance, infrastructures have been reformed in a sustainable and eco-friendly way. Those who are given this goodwill certificates, they have said about this significant change. So, we can conclude that we have the most safest and luxurious RMG zone in the world.

Another big change is the product wise transformation. Generally, everyone knows that Bangladesh manufactures basic items. However, this mindset was in everyone, which is gradually changing. We are going now to make down-padding high product range. We are now producing a high valued jacket, world’s best lingerie items, full suit known as Italian suit, denim, jeans etc.

Textile Today: There are many green, compliance factories in Bangladesh now. Why are branding strategies needed to express ourselves to the world?

Ashikur Rahman Tuhin: As a BGMEA member, I think branding Bangladesh is needed at this moment. Since BGMEA new board has come to power, we are continuously working on this issue and over the last two years, we are attending regular international textile fairs than before. We recently attended a fair in Russia. As we think Russia could be the most perspective and alternative market.

Since America does not or will not give GSP, so that we should find alternate sources as entrepreneurs or manufacturers. To remain safe and boost the export growth, owners must focus on new markets and emerging markets such as China and Japan. More products up-gradation is a must for a better price. Last year we showed our own items in Paris fair. Individuals from the industry, BGMEA board, and others attended.

From our side, we organize Apparel Summit, Denim Show etc every year in Dhaka and Chittagong. The world’s entire textile community comes here and observes our best practices. Moreover.

Textile Today: As a Director of BGMEA, what is your role?

Ashikur Rahman Tuhin: Each of our directors has a specific zone of responsibility. We all work together as a whole team. I am working in RMG and Textile Industry Skills Council (RTISC) and Skills for Employment Investment Program (SEIP) under the finance ministry as a Director to improve skill in all level management. Moreover, as a team, we also do the work of backward linkage and we are working with the government. For example, before the Eid festival, we sat with the government about Dhaka-Chittagong traffic issue to avoid continuous pressure on the highway and keep the exporting safe as this highway is the lifeline to reach the seaport. Eid going people and export, both matters need to run simultaneously.

Textile Today: What type of challenges are you facing?

Ashikur Rahman Tuhin: This industry faced huge challenges and are still facing as I speak. But we’ve developed beyond our imagination. We started exporting with $12,000 in the decade of the eighties. Today we are 32 billion dollars industry. There are many differences between now and then. Now the work and workspace have been improved. Once upon a time, there was no uninterrupted power supply, now it has been reduced considerably. The government has started importing LNG to reduce gas crisis.

The price reduction is a big challenge. Now the market is open, the buyer can buy product from anywhere. The challenge is to increase the price from the buyer. For example, if at the halftime of dyeing production dyeing gas pressure is decreased or closed, the shade variation may come. This will damage products. Buyer will not bear this. If the government increases the cost of gas for importing of LNG, then the product manufacturing cost will be increased. Buyers will not want to give us this increased value. We book season-wise order 6 months prior. If any policy changes for any reason, even if material cost increases after the booking, we will not get the consideration from the buyer. In this case, we have to offer the price to the buyer by solving our own problems.

Again, if we remain in the hard-line about negotiation, then foreign buyers will move elsewhere due to the open market. Then it will become difficult. I hope that we start working on price sourcing and policy fixing roughly. In this case, there will be a price policy structure for 5 years by considering all aspects. Accordingly, the product price will be determined. Shortage of skilled manpower is another shortfall in our industry. Skilled people are not available at the level industry has grown.

RMG export of last ten years
Figure 2: Total Export earning in USD (in Million) of Bangladesh in the last ten years and the contribution of RMG in total export (in %). Source: Export Promotion Bureau, Compiled by BGMEA

Textile Today: How much work is being done by BGMEA about raising the price?

Ashikur Rahman Tuhin: As I said, buyers want to buy high-quality products from the good environment at low prices. However, the product cannot be manufactured at a lower price all the time. Many times the price of raw material fluctuates in the world market. We cannot manufacture a product in loss, also we have to be careful about buyers moving elsewhere too.

Lead-time is one of the main facts also. European buyers buy the same product from Bangladesh and Turkey; they can get less lead-time from Turkey obviously due to the geographical reasons. So that we have to work not only to increase the product value, besides we have to be careful, as the competitiveness does not lose. We are trying to make an effective policy.

Textile Today: Now what are the opportunities of the industry?

Ashikur Rahman Tuhin: Simply countless. We’ve lots of opportunities in this industry. I am very optimistic about this matter. We have now become more mature, the industry’s age is almost 38-40 years old. Vietnam, Cambodia, Ethiopia and other countries need to spend more time to reach this stage. Therefore, the opportunity is here. However, the main thing we need to support backup opportunities. In addition to, the government has to develop a good communication system along with the good environment. To manufacture a high-end product, skilled workers are needed. Then we will get the good quality product. The government has decided to bring scattered factories to one place and is building a lot of EPZ.

Hopefully, the problem will be solved very much if these factories will be shifted to EPZ fully. This industry can give potential profit to the country so quickly whereas the others can’t. RMG is no longer a private organization now, it is our national asset. We all need to work together to maintain this wealth.

Textile Today: Bangladesh is moving from LDC to DC. Already an announcement has come from the United Nations about this issue. What is the effect of the RMG sector in this case?

Ashikur Rahman Tuhin: This is the best part of Bangladesh, a matter of pride and it is possible only due to country’s leading RMG sector’s contribution. There is nothing to fear in it. We will not stay at the LDC level for the rest of our life. Changes will come with time, so we have to move forward. The main task of our termination is to work for GSP+ instead of GSP. Already we have started working on it. I hope the RMG sector will be stable in the future.

Textile Today: Tell us about your factory. 

Ashikur Rahman Tuhin: I have two factories, one is located in Mirpur, Dhaka and another green factory will be established in Hemayetpur, which is in full compliance with washing, garments etc sections. We are producing sportswear jersey along with knitting and proudly we have made Bangladesh Cricket Team’s jersey in the last cricket world cup. According to the buyer recommendations, we are providing entire facilities to the staffs and workers. In every week, we are providing training. High officials are sent to abroad to train up. To develop the R&D section, we spend a big amount of money. For sustainability, we use power saving lights and machinery, rainwater harvesting. We need an innovative and efficient approach to garment sourcing to meet the apparel industry target of cost, quality, and lead-time.

Textile Today: Do you have any plan to brand your own factory?

Ashikur Rahman Tuhin: No plans yet. We will think about this matter in the future. However, many thanks to the entrepreneurs and factory authorities, who are working on developing their own brand. There is no alternative to create a top-class brand if we want to be known in the world market.

Textile Today: What is your suggestion for upcoming new entrepreneurs?

Ashikur Rahman Tuhin: The Textile industry is perfectly expertise oriented. With full knowledge, understanding, and seeing, one should come here. This industry is not for everyone. RMG lovers from the bottom of the heart should engage here so that they can upgrade this industry well. Instead of small, big industries should be established. Building a small industry era has long been crossed. Because we are at such phase now where if we cannot build a factory exclusively, it would be difficult to sustain the business.

Now, it is tough to handle the business with 3/4 lines of garments.  Compliance, the good industry will get the order in future. Workers no longer want to work at 40 degrees temperature. If we provide a good environment, workers will be able to give us good quality production. Youth should have a fixed goal where they can unroll themselves. They have to be dynamic, motivated, explorer, unique thinker person.

Also read: Environmental sustainability in Bangladesh RMG industry

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

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