Sparrow Group is one of the pioneers in garments manufacturing in Bangladesh. The journey started in 1984 with Sparrow Apparels Limited with only 200 people. The Group now has multiple manufacturing units with over 11,000 people and the revenue reaching 150+ million US dollars. The founder of the Sparrow is one of eminent educationist, intellectual and organizer of the liberation war and independence of Bangladesh Professor Dr. Mazharul Islam, Ex-Vice Chancellor Rajshahi University and First DG of Bangla Academy.
With the efficient and visionary leadership of Shovon Islam (Shawn), Managing Director, Sparrow Group of Industries, the company has seen a very rapid but planned and sustainable growth in terms of revenue and product mixes. Recently Textile Today had a discussion with Shovon Islam. Here is a glimpse of the discussion for our readers.
Textile Today: What inspired you to join in the RMG sector and how did you prepare yourself to run a big business?
Shovon Islam: I did my undergrad and masters in computer science from the University of Texas at Austin, USA. Then I did my MBA from Stanford University, California. After that, I joined Hewlett Packard (HP) and worked there for 20 years and also worked for Microsoft as Software Architect and Chief Technology Officer.
While I was in the United States, my father Dr. Mazharul Islam passed away in 2005. I took over my family business because my father wanted his people to be taken care of and the business to thrive. At that time Sparrow Group of Industries turnover was about only $20 million with 2500 to 3000 employees.
My father had a very colorful career. He was the Vice-Chancellor of Rajshahi University and the first Director of Bangla Academy after the independence. He was the founder of Bangla Academy. He started this business just for providing employment for his people after his retirement from Rajshahi University.
Right now, we have 11000 employees and our Bangladesh turnover has crossed $160 million last year. Soon it will be US$200 million this year. This transformation was possible due to growth along with producing high end diversified readymade garments (RMG) products for high-end buyers.
Textile Today: Currently a lot of the apparel manufacturers are investing in automation rather than investing in manpower to increase their capacity. Whereas it is the efficient manpower which will give the ultimate return. Kindly share your motto behind investing in workers of Sparrow Group of Industries.
Shovon Islam: We are one of the first groups in Bangladesh to sign the International Labor Organization’s Better Work. We have a very vibrant and active Workers Participatory committee that is fully elected by direct voting of workers. We also have a safety committee and participating in many employee training programs such as HER Project, PACE, Mother at Work, and Sudhokho. All of these initiatives are giving an excellent return because you have to invest in your workers. If you don’t invest in your workers you will not get much output and involvement from the workers.
Apparel manufacturers are talking about product diversification and making high-end/high-fashion products. How can you do this if your RMG workers are not efficient enough and well trained and you are not able to retain them? In our case, we have heavily invested in our workers to make high-end complicated fashion products. When the workers are motivated, empowered and supportive then you can really grow this without a doubt.
As part of the investment in workers, we have found that women workers get tired and get sick because they’re low in folic acid. If you provide them one folic acid tablet in a week, then their energy levels go up. So, I worked with GlaxoSmithKline and Care Bangladesh and invited one of our buyer’s Marks and Spencer (M&S) – together we started this folic acid program.
We also provided regular checkups and simultaneously provided them with very low-cost sanitary napkins. All these things combined reduced workers’ absenteeism, their health started improving and their energy levels started rising with better work efficiency.
Textile Today: Currently many big garment manufacturing factories are facing challenges due to lack of orders, what is the order situation in your factory now?
Shovon Islam: In Sparrow Group of Industries, the order situation was not very good for the last three months. But at present, the order situation is normal again. The main reason is that there is an overall decline in fashion product sales all over the world. Be it in Europe or in America. Also, the buying patterns of consumers have also changed significantly. Consumers buy high-end garments as well as buying fast fashion and not the basics which used to be the case earlier. The US-China trade war has put economies in uncertainties as well as Brexit. Consumers are not buying that frequently like before. As an effect, the brands and apparel retailers making cautious buying, this is driving down apparel prices for a manufacturer.
Another very vital cause is apparel manufacturing is not cheap anymore in Bangladesh due to recent workers’ wage hike and a hike in gas prices. The Bank Interest and Bank charges are very high in Bangladesh and Chittagong port and Dhaka Airport inefficiencies are a major inhibitor for speed which is a must in today’s garments manufacturing. As a result, the brands will go wherever the apparel manufacturing price is more favorable.
These are the reasons large numbers of basic garment shipments from Bangladesh evaporated. Orders are there – but they are in small quantities and high-end fashion product categories. Sadly, Bangladeshi factories are not equipped to handle small orders still today. It is one of the key reasons along with the long lead time that Bangladesh is getting less order. These orders are getting diverted to Vietnam, India and other countries. The large quantity shipments have moved to countries like Cambodia, Ethiopia and Kenya. It is becoming a challenge for Bangladesh to keep the large volume basic apparel manufacturing business.
In 2019 a lot of apparel manufacturing factories have shut due to lack of orders. Bank interest rate is still high, which is an impediment to investment. The govt. must come forward to offer new incentives to the RMG exporters and ensure ease of doing business and increase port capacities. The government has recently introduced only a 1% incentive where Indian manufacturers are getting 8% and Chinese manufacturers are getting 4.5% along with better currency exchange rates.
Textile Today: What is your opinion in regards to product diversification?
Shovon Islam: For many years Bangladeshi apparel manufacturers are stuck at producing basic garment products. We must catch the business that is moving out of China. There is a huge product basket in men, women and kidswear category. Women’s category is a very large opportunity for Bangladesh. But we are unable to take advantage of the women’s category. Sparrow Group started making high fashion womenswear four years ago as well as specialized in outerwear production. Now, we have become the largest supplier of women’s clothing and this is one of the reasons that we do not have any order shortage.
But the textile and apparel manufacturing industry in Bangladesh as a whole is in an acute order crisis due to not diversifying garment products. There is no alternative other than to concentrate on producing synthetic and diversified products. The global demands for synthetic fiber-based garment products are increasing due to fashion and business moving out of China. Bangladesh needs to get into a lot of high stretch and high-end synthetic fabrics that are expensive.
Textile Today: How global economic slowdown is affecting the textile and apparel industry?
Shovon Islam: I think in recent years the buying pattern of consumers has changed a lot, which is the main catalyst of slowing down of frequent buying rather than the global economic slowdown. People do not go to malls anymore. They buy based on Instagram and other social media, available fashion websites. Social celebrities influence consumers a lot.
That is impacting the global apparel market tremendously. Of course, there is a global economic slowdown. There are strong global uncertainties in Europe with Brexit. There are a lot of things going on in Spain. There are different issues like the Russian problem, the US-Iran crisis and the Australian bushfire. In America, there is an impeachment mishap of Trump. Altogether there is a little bit of uncertainty. And these are the perfect ingredients for brewing up storm globally.
Textile Today: What is your future plan and how do you want to contribute more to the sector?
Shovon Islam: My future plan is to stay focused and sustain this year. I have changed completely the way I manufacture garments with clusters and cells. I have eliminated manufacturing based on long lines and central finishing. I have completely converted all of my long lines into 11000 people that I employ in Bangladesh. All long lines have gone. I have gone into small component-assembly based manufacturing with cells to do small quantity high fashion orders. Overall, my complete focus is on increasing the efficiency of my workers and really going after more and more diversified value-added products.