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Investment in technology to bring more profits than green factory

As of today, Bangladesh has 150 green garments factories, highest in the world, required huge investment to make the achievement. In return, these green factory owners are not getting an extra penny from the brands and retailers, also the outcome they are getting for the eco-friendly structure is very low compared to the investment they have made.

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Figure 1: Textile and apparel leaders were present at a round-table discussion on ‘Road to Recovery’ organized by BAYLA at the Westin Hotel in Dhaka on 26 October.

Entrepreneurs should think before investing, go for research to dig out the profitable scopes that will give a sustainable return not just fame or pride to expose to the buyers. They have to find out the best possible way out to ensure profits.

Sector leaders said these at a roundtable discussion on ‘Road to Recovery’ organized by Bangladesh Apparel Youth Leaders Association (BAYLA) at the Westin Hotel in the capital on 26 October.

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Figure 2: Abrar H Sayem, President, BAYLA; Director of Sayem Group & Managing Director, Merchant Bay.

Faruque Hassan, President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA); Mohammad Hatem, Executive President, Bangladesh Knitwear Manufacturers & Exporters Association (BKMEA); Mohammad Ali Khokon, President of Bangladesh Textile Mills Association (BTMA); Rafez Alam Chowdhury, Advisor & Ex-President, Bangladesh Garments Accessories & Packaging Manufacturers & Exporters Association (BGAPMEA); Dr. Engr. Mohammad Kamruzzaman, Managing Director of Hohenstein Laboratories Bangladesh Ltd; MD Sharif Zahir, Managing Director, Ananta Group and S M Rashidul Islam, General Secretary, Economic Reporters Forum were present as guests in the roundtable discussion.

Faruque-Hassan-BGMEA-Md-Ali-Khokon-BTMA
Figure 3: Faruque Hassan, President, BGMEA and Md Ali Khokon, President, BTMA graced the program.

BAYLA has launched a research program titled ‘Road to Recovery’ and to accomplish the research they have already organized a few focus group discussions. Today’s roundtable discussion was one of the final gathering of information, recommendations from the top leaders of the textile, apparel and accessories associations.

Abrar H Sayem, President of BAYLA, also the Director of Sayem Group & Managing Director of Merchant Bay said, “BAYLA will publish a whitepaper on how to develop and grow the RMG industry as well as boost exports during or after the Covid-19 pandemic.”

Dr. Engr. Mohammad Kamruzzaman said, “We see some global media always publish misleading and negative news about Bangladesh’s textile and apparel sector. The positive story is missing there though there are so many positive stories in our textile and apparel industry.”

Engr-Mohammad-Kamruzzaman-Hohenstein-Bangladesh-MD-Sharif-Zahir-Ananta-Group-MD-Hatem
Figure 4: (From left) Engr, Mohammad Kamruzzaman, Managing Director, Hohenstein Laboratories Bangladesh; MD Sharif Zahir, Managing Director, Ananta Group; MD Hatem, Executive President, BKMEA.

Production cost is increasing day by day, however, buyers are not offering higher prices. And it is normal that they would not want to increase product price, rather they would want to get same product at less price. Apparel manufacturers have to minimize their costs to ensure profits, opined Kamruzzaman.

How the manufacturers can reduce cost–regarding this– Kamruzzaman highlighted the necessity of training for the mid-level employees and adoption of modern technology.

“Technology can save our cost and to run the technology mid-level employee needs to take part in relevant training program. They also need the mindset to adopt new technology,” he expressed.

“If we can no go for product diversification following the customer demands, our road to recovery will be harsh,” Dr. Engr. Mohammad Kamruzzaman added.

“Apparel entrepreneurs should invest more in technology that will give them a return. Investing in the green factory is not bringing any better return as the buyers offer us less price. Still they think Bangladesh means a market of cheap products,” said MD Sharif Zahir.

We are top in green factory all over the world, but brands and retailers do not offer us the top prices. For a same kind of product, they offer more price to Sri Lanka than Bangladesh. We have responsibility to our planet to keep it sustainable for our next generation. Adopting various sustainable technologies we can make this happen, he added.

Mohammad Hatem said that Bangladesh should focus on creating an effective business-friendly environment and improving the ease of doing business in the country.

“The ease of doing business is essential to reduce the cost of business as global trade is getting more competitive,” Mohammad Hatem added.

Port congestion is a big challenge for apparel exporters. Covid-19 has made the situation even worse. He urged to customs authority to look after the issue very responsibly as any importer or exporter does not face any unwanted harassment.

To boost the apparel industry textile, apparel and accessories all bodies have to work together. Need strong unification among the relevant associations, opined Rafez Alam Chowdhury.

Accessories are very much important to make any kind of clothing. Backward linkage is giving great support regarding meeting the demand for accessories. More than 90 percent of accessories and packaging items are being made in Bangladesh. It is helping to reduce the lead time of apparel exporters. However, the accessories sector is suffering from so many problems owing to not having proper policy support from the government.

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During the COVID pandemic, the sector also deserved a stimulus package as they suffered like others, but no stimulus package was declared for them.

“We are paying more than 32 percent corporate tax whereas apparel millers pay only 12 percent, and green factory pays 10 percent,” said Rafez Alam Chowdhury.

Mohammad Ali Khokon called for ending the unhealthy competition among the local suppliers. Unhealthy competition has been affecting the pricing of the garment items. It hampers suppliers to get better prices from global retailers and brands.

The demand for man-made fibre garment items has been increasing worldwide, so the local garment suppliers need to grab this opportunity of man-made garment business worldwide, said Faruque Hassan.

Hassan said BGMEA has been making a study on the recovery road-map to aid the local suppliers building strengths to grab the opportunity of the market.

Talking about the proposed Generalized System of Preferences (GSP) of the European Union (EU) he said, it will help the continuation of the duty facility to the European markets even after the graduation of the country from the Least Developed Country (LDC) to a developing one in 2026.

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