Mohammad Ali Khokon, President, Bangladesh Textile Mills Association (BTMA) is a versatile leader with unparallel experience of more than 3 decades with the sector and in the meantime, he leads many organizations.
Khokon is a self-made entrepreneur who engaged with the textile and apparel trade from 1987. He has been the head of five different companies and occupies the position of Managing Director & Director at Metro Spinning Ltd., Managing Director at Maksons Group, Managing Director at Maksons Knit & Rotor Spinning Ltd. and Managing Director at Maksons Properties & Development Ltd. (both are subsidiaries of Maksons Group) and Managing Director & Director at Maksons Spinning Mills Ltd.
Mohammad Ali Khokon highlighted the initiatives that BTMA taken or going to take considering the ongoing critical business situation. And how will BTMA members be benefited from those initiatives.
BTMA is continuously working during the COVID-19 period and has taken different initiatives to resolve the problems of the member mills. Undoubtedly initiatives taken by the Association have benefited the members and still for 2021 BTMA is in progress to come up with more endeavors to deal with the COVID-19 affected the critical business situation. Some of the initiatives during this pandemic and for 2021 by BTMA are mentioned below:
- Due to Covid-19, the export-oriented spinning, fabrics-weaving member mills of BTMA were facing problems regarding payment delay of the issued Back to Back L/C and at sight Back to Back L/C against the price of the exported yarn and fabric. About 190 million USD was pending on bank acceptance and at sight payment. BTMA worked on it and appealed to Bangladesh Bank to come up with a solution. Finally, BB issued a circular and that helped to decrease the pending amount. The industry cycle remains active based on payments. Few commercial banks are still not giving priority to this matter. BTMA is trying to have a meeting with BB in this regard and getting a positive result.
- BTMA approached Ministries and Bangladesh Bank to relax down the Internal Credit Risk Rating System (ICRRS) condition illustrated in BRPD circular 8 to avail the 30,000 crores working capital loan facility easily. Later, Bangladesh Bank issued another circular correcting the ICRRS condition which is much appreciated.
- BTMA has requested the Minister and Secretary of the Ministry of Shipping requesting that shipping agents and private inland container depot demurrage charges should not be levied for the unloading time (except FEE-Time) of the imported goods. And also to waive the full store rent by CTG Tariff Port to transfer the private inland container to Depo and the delivery of goods container. Port has accepted the request considering the damage.
- Regarding the stimulus packages, which could not be availed by the majority of the textile mills because of the stringent regulations. BTMA has initiated different requests to Bangladesh Bank for easing the provisions of the circulars. In response to that, BB has amended few circulars. According to the need of industries, the time was extended earlier.
- National Board of Revenue and Bond Comissionarate are two important organizations for BTMA Member Mills and frequent interactions happen with these two institutions. Few cumbersome policies were creating obstacles to the business. BTMA organized meetings to discuss important policy reforms which can result in positive economic growth. Cost of Doing Business and Ease of Doing Business were the priorities of the meetings. But DEDO which plays a major role in bond operations showed noncooperation behavior to BTMA. If like the present time, effective authority is not allocated in the future, the situation will not improve and many works will be on hold.
- Regarding Alternative Cash Assistance, BTMA requested Government to change the procedure for the textile industry and this should be given on FOB value instead of existing. We think that no increase but to give the cash assistance on actual FOB value can help the textile business community. As the rate of cash assistance is minimum for high value-added products than low value-added products. To encourage high value-added products cash assistance policy needs to be modified.
- In 1998 for raw yarn to fabric and from finished fabric to readymade garments the wastage was determined 7% and 9% which is 16% in total. With the advancement of technology and changing of fashion designs the demand of High value-added garments increased. At present, from raw yarn to fabric and from finished fabric to apparel items the amount of wastage is 35%-40%. The VAT and Tax is imposed on yarn considering the previous wastage ratio which is resulting in a financial loss to the Member mills. A meeting was organized with the Ministry of Commerce and they have assured to look into this matter seriously.
- On behalf of BTMA Member mills, BTMA requested the Ministry of Commerce (MoC) to raise of tariff value of imported fabric and also appealed to set a new unit of fabric in meter instead of kilogram. The local fabric production costs are higher than the imported ones when compared to. MoC has suggested BTMA contact with Bangladesh Tariff Commission (BTC) and according to their suggestions the changes will happen. BTC analyzed the whole matter and prepared a report and submitted it to MoC for further proceedings.
BTMA hopes that the next Budget will consider the suggestions of BTMA and will relax the duty, taxation, VAT accordingly. If the next budget considers the recommendations of BTMA then the position of the textile industry will be stronger.