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Garment buying house: Silent artist of the strongest economy contribution in RMG Bangladesh

Readymade Garments (RMG) is considered to be the strongest economic contributor of Bangladesh with a contribution of 34 billion USD in 2019-20 FY. The major portion of this export volume is furnished/serviced by a large group of educated workforces from the last 4 decades with their knowledge of business techniques by creating a smooth bridge between the manufacturer and the customers worldwide.

This particular business identity is recognized as Buying House/Liaison Office in Bangladesh. The common forum of the agencies is introduced itself as BGBA in 2018 and get recognition from the government of Bangladesh.

RMG-Bangladesh-garment-buying-house
Figure: Buying Houses/Liaison office has become an integral part of the apparel business in Bangladesh. 

If we look back at the reason behind the necessity of forming this service-providing business agency, we will find it interesting. Back in 1978 when the first export of RMG started with the hand of Reazuddin of Reaz Garments Ltd, most of our legendary leaders Nurul Qadar Desh Garments started to set upgraded manufacturing units with a vision to make Bangladesh proud.

When a new industry is starting up in a country right after independence, we can assume how difficult it was to develop a sustainable infrastructure to make this business grow.

So, at that time our visionary entrepreneurs of RMG were quite busy with developing the system, making sustainable business policy in collaboration with the government. At that time when customers from different countries know about Bangladesh, they have started to place orders to get the benefit of low labor costs.

There was a lack of services created which was hampering the harmony of synchronization between the buyer and the manufacturer as the owner of the factories was not able to concentrate 100% on the buyer requirement. They were so busy with other necessary things. At that time requirement of a bird’s eye view was required from the buyers’ side and 3rd Party Services evolved to satisfy buyers’ requirements at the desired level.

So many audits and inspection companies were established to ensure buyer guidelines are followed till product dispatch. Slowly the necessity of services of design synchronization, fitting price, developing samples, etc. emerged as well. The concept of Buying Agencies and liaison offices started to grow up in the country.

Though it was a bit late as a group, BGBA has started its operations in 2002 but officially BGBA was established in 2006. BGBA got the license from the ministry in 2006 and now it’s a big family of 1200 members.

Bridge between the customer and the producer 

BGBA started its journey in 2002 But passing very hardship due to non-cooperation from the govt for that BGBA went to higher court a number of times to get it to recognize. Finally, by the Higher court instruction got from ministry and get the commercial license on 2006. The first president of BGBA was Quaium Raza Chawdhari.

Currently, we have a strong committee under the guidance of Kazi Iftekhar Hossain, (current and 2nd president) of BGBA and an Executive Committee was formed to make this association successful and sustainable.

After so many ups and downs in this industry today, the Buying Houses/Liaison office has become an integral part of the business. The main bridge between the buyer and manufacturer was maintained by these houses/agencies.

The trust level of buyers is depending on how well the agencies performed. On the other hand, the right price of the product is also determined by this agency to some extent.

The major tasks of BGBA include strengthen social supervision, fight against unfair quality and deals, safeguard the buying houses and industry’s interest by formulating its regulations and administering RMG industry behavior, research and analyze the RMG industry development and market trends in Bangladesh and abroad and many others.

The contribution of these service-providing agencies was not that much focused and many of us probably do not know how the hardworking contribution of these buying houses are behind the backbone of the RMG Sector. It is a silent warrior behind the economic war we are facing every day.

So, the government must recognize the contribution and facilitate this association in an affordable manner.

Many of us might think it is an easy job to set up a buying house and doing business in this competitive world. But the bitter truth is if you have money, you can make a manufacturing hub and operate it with a skilled workforce, but without skills and knowing the business ins and outs you cannot sustain your business as a buying house.

So, it is an urge to BGBA, BGMEA, BKMEA and to the government that we should introduce knowledge-based education to develop business skills with a handful of knowledge and make it mandatory to grow a sustainable business in the future. A couple of suggestions like –

  1. Entrepreneurs must ensure that they have related field knowledge or have some background before entering into business. However, the associations like BGBA can initiate a certificate course program for the new entrepreneur.
  2. Financial risk distribution among BGMEA and BGBA. Nowadays only BGMEA stakeholders are carrying most of the risk on their shoulders which indirectly impacts the business process. BGBA members must have some risk-taking part so that they can also act responsively.
  3. Like BGMEA, BGBA should also arise an approach for the bond facility to import Raw Material only and to open related back-to-back. This will help the BGBA members to support their buyers from their end in many cases where MOQ is the issue. By transferring bonds BGBA members can also pay the subcontract bill which will help the small and medium enterprises to be alive in the business.

I would like to express my gratitude to the owners of the buying houses as I have seen their effort with their knowledge, hardworking and skills in catering this industry for so long. I wish everyone a successful year ahead with the celebration of 50 Years of independence of Bangladesh.

I am sure if an association can create impact which was formed in 2002 with the knowledge available then, now standing at 2021 where we have so many talented people from the various sector is not something difficult to make this industry enrich again with the help of today’s technology, education and talents. I expect much from this generation as we have many untold stories to grow this industry and make Bangladesh proud and we want a refund from the generations.

I would like to show my respect to our visionary leader and Prime Minister to recognize the BGBA’s contribution to the economy and make us proud members to be part of Bangladesh’s economy. And last but not least salute to the current all members of BGMEA and BGBA to take the pain for so long and ensuring the industry growth.

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

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