Textile sector is contributing more than 12% in GDP and over 81% of the export earning comes from textiles and textile-related products. Bangladesh Textile Mills Association (BTMA) is the national trade organization representing yarn, fabric manufacturers, and textile product processors mills of the country under private sector. BTMA is working to promote and protect the trade, commerce and manufacturers of Bangladesh.
Mohammad Ali Khokon, the Vice President of BTMA and Managing Director of Maksons Group, is a self-made entrepreneur who engaged with textile and apparel trade from 1987. He has versatile experience of more than 3 decades with the sector and in the meantime, he leads many organizations. Recently Bangladesh Textile Today has taken an exclusive interview with him where he shared his experience with this sector, discussed about problems they are facing and advised some suggestion to the government for establishing a strong backward linkage supportive industry.
Textile Today: What is present condition of our spinning sector?
M.A Khokon: Our spinning sector has improved a lot. Now we are producing around 95% yarn for knit and 35-40% for woven and 100% yarn for terry towel. It is helping our RMG industry to reduce the dependency of yarn import and to save time in order to meet on-time delivery of goods. In our total export USD 28 Billion, Primary Textile Sector (PTS) contribution is around USD 16-17 Billion. We are getting only Cutting and Making (CM) benefit in our RMG business. Our PTS has a great contribution in this regards.
Textile Today: It is said that we are importing a huge amount of yarn from India. Does that mean we are depending on Indian market?
M.A Khokon: Now our local yarn is meeting up around 90-95% consumption for knit products. We are giving some benefits to our garments industry which is helping our RMG exporter to meet the shipment schedule of the buyer. For example, someone places 50 MT yarn order to us. Immediately we deliver some portion of yarn from our stock and they can start production. If something found bad quality in bulk delivery, we are replacing it on the same day once we notified. They give us acceptance when their goods are under production or ready for production. But if they import yarn, suppliers ship when full quantity is ready and cannot start production. Also, have to pay by 21 days from BL day. Sometimes they have to pay before receiving goods.
Textile Today: We produce mostly cotton and cotton blend yarn. Why can we not produce high value or fancy yarn?
M.A Khokon: Yes in Bangladesh, we are producing mainly cotton and cotton blend yarn. But nowadays we also producing some other high valued yarn i.e. Viscose (chemical and natural/cellulosic), polyester, 100% cotton Melange and Poly Blended Mélange, Injected Yarn, Modal Yarn etc. Now a day’s many spinning mills have diversified their product category to high-value products. Currently, 30% of yarn consumption is fancy yarn and we can meet some portion of local consumption which was 100% import dependency previously. In Maksons, we are producing Viscose, Melange, Modal, Slub yarn.
Textile Today: From Bangladesh, we are exporting many sweater items. Acrylic is mostly used for a sweater. There are only eight acrylic mills we have in Bangladesh. How we increase more acrylic spinning mill to meet local consumption?
M.A Khokon: Sweater Acrylic yarn is a petrochemical product. We are not competitive in acrylic yarn as raw materials is imported from China and cost of production is higher than China. Power cost is increasing which has a direct impact to the cost of production. Plant and machinery cost is also higher. Therefore, our production cost is higher than that of our competitors.
Textile Today: We are importing cotton from India. There is some saying in the local market that India is playing with us sometimes when cotton price fluctuating to the world market. What is your opinion in this regards?
M.A Khokon: India is our economic competitor. They adopting dumping, anti-dumping policy. When cotton demand is high then they increase price and when our yarn production is sufficient then they supply us yarn very low prices. Our government should impose an anti-dumping law to protect our local spinning industry. The government should take the counter policy to protect our textile industry.
Textile Today: What type of step government should take to attract more investment in our textile sector?
M.A Khokon: Government has taken initiatives to increase more investment in this sector and made economic zone in this regards. The government should announce special incentives for establishing new industry like as the beginning of the industry when the incentive was 25%, the gas cost was BDT 1.5/unit. It can decrease bank interest rate as well. If the government does not take such initiatives, may the target will not be achieved.
Textile Today: Government is importing LNG and announced for the gas price increase. How it will affect your business and how you will manage additional cost?
M.A Khokon: Government is planning to increase gas price but there is no clear declaration in this regards. Already gas price increased 157% up to now and if it continues, then survival of the industry will be very difficult. We heard if LNG added with our national grid line, the price will be doubled. If price hike like this, our manufacturing cost also will be higher. Approximately the cost will be increased 20 cents per kg. We have requested the government to make a plan for a price adjustment. Maybe it can be 5 years plan and government can declare we will increase the price at 10% or 20% in current year and next year some 20% and so on. Thus we also can adjust our manufacturing cost.
Textile Today: What initiatives government should take to solve the problems of this textile and apparel industry?
M.A Khokon: There is no concerned authority we can talk with for these issues. We are trying to reach high authority of the government from our organization. As a Vice President of BTMA, I am trying to talk with whom I meet, discuss in the talk shows on electronic media, requesting paper media to write on these issues. The government also was busy for the last couple of years to confront some national and international burning issue. Hope after the national election, the new government will concentrate on this issue.
The government should make a one-stop cell, where we can discuss our problems, suggestion etc. for the betterment of this sector. We are telling everywhere, everyone when we meet high authority of the concerned body or media. Yes, there is a ministry of textiles and jute but they are not playing an appropriate role. Other concerned government bodies also not discussing any important issue related to textile and apparel industry to them. For example, NBR or finance ministry can call the ministry of textiles before national budget declaration to discuss about tax and other issue and advise them to discuss with its stakeholder like BGMEA, BTMA etc. but there is no discussion like this. If such urgent issue discusses in a roundtable then there must be some solution come out to solve the problem of textile and apparel industry.
Textile Today: Currently we are graduating to developing country. Some of our facilities will be reconsidered in buyers importing country. How we overcome this upcoming challenges?
M.A Khokon: We have graduated to the developing country recently. If we can continue all the eligibility criteria scores, we will enjoy such benefit more 9 years, up to 2027. This is a huge span of time for us. We will enjoy all the facilities in the importing countries as now we are enjoying. So, the government should take initiatives to continue and prepare a plan to confront all the issues will come up post developing country status achievement.
Textile Today: In which aspect government should focus more on your smooth business operations?
M.A Khokon: Government should improve infrastructure. We need huge time to send or receive goods to our port city Chattogram. No country in the world has such poor infrastructure. We are requesting the government to make an alternative road to reach Chattogram, which will save our cost and time.
The government should also develop infrastructure that connected with other cities. It will help develop industry in the rural area and our manufacturing cost will also be less than now. In the remote area, land price is lower and living cost is also less than Dhaka city.
Textile Today: What are Maksons initiatives for sustainable business?
M.A Khokon: We have many initiatives to make our business sustainable. We have increased our productivity by adjusting some additional technology with current machinery. Our productivity is now increased around 10% with almost same overhead cost. For power saving, we have also used some modern machinery and techniques for less power consumption.
We have a capacity of 1,200,000 gallons reserved water for fire safety. Also, we have rainwater harvesting facilities.
Textile Today: What Makson is practicing for human capital transformation?
M.A Khokon: We are providing training facilities continuously to our workers, stuff and top officials. We are arranging inside and outside training. This year we are sending our high officials to Singapore and previously we have sent in Thailand, USA, China etc. countries.
We are spending a huge amount of money for our research and developments. We are hiring a consultant from the expert organization, BUTEX etc. We are participating in renowned seminars, workshops to learn about current technologies, trends and skill developments. Currently, we went Germany for producing special types of yarn by using similar technology for all in one.
To motivate our workers, we are providing all common benefits like attendance bonus etc. We are providing accommodation facilities for 100% of our workers fully free of cost. We have rented a house outside of our factory premises. During Ramadan, we are providing iftar and dinner for those who are on shifting duties. We are providing extra full salary bonus who worked with us at least 2 years. We have special bonus scheme for stuff and high officials. We have also celebrated family day once a year.