The Textile and Apparel (T&A) industry of Bangladesh has been undergoing profitability crisis in the reality of downward prices from fast fashion brands and increasing the cost of materials and manufacturing. ‘Value chain up gradation’ has become a demand of time not only to grow further but even to survive sustainably. While more control and influence on the market is a way to upgrade in the value chain after production. Developing own designing and product development capacity is another way to upgrade in the value chain in the pre-production stages.
While Bangladesh is well known for its skills and capacities ineffective production, there are companies who are also setting examples in upgrading in the value chain as well. Fakhruddin Textile Mills Ltd. (FTML), a sister concern of Urmi Group is one such company who has set a remarkable example in product development, diversification, and a design studio.
Though Bangladesh has sat in the second position next to China, it has not much control in the global business. Bangladesh has passed almost more than three eras in T&A industry, so there is no more time for doodling and manufacturers should go through more diversification, innovation, production & process innovation, new concepts ideas and designs to sustain and grow further in the business.
Asif Ashraf, Managing Director of Fakhruddin Textile Mills Ltd. (FTML), a sister concern of Urmi Group, is dynamically working on many new trends and concepts of pre-production activities. He shared his experience, thought and views on FTML’s newly launched ‘Design Studio’ and diversified synthetic products with Textile Today team. Urmi Group has been one of the dominant players in the synthetic garments production in BD. Here is the striking part of the discussion revealed for the readers.
Textile Today: Urmi Group started its’ journey in T&A industry in the early 80’s and have seen many ups and downs of the industry. Now the T&A industry is in a huge transformation, so how do you relate this time phase of the industry?
Asif Ashraf: This is true that industry has gone through many ups and downs over the years and we are also the sufferer, so far it’s a part of the business that you have to face. This is one of the challenges of the business and we tackle this nicely, also we have expanded in last 15 to 20 years. Our Compound Annual Growth Rate (CAGR) is about 14% in the last 10 years. What we have done is we tried to catch the available up-market but in the true sense BD is not availed the real up-market. We have high product quality, high production, cost-effectiveness but still many renowned buyers don’t accept the “Made in Bangladesh” tag just because unfortunately we have a problem in country branding. Though we all the industry trying to come out from this damnation and Urmi group always tries to brand the country and work with the renowned buyers by producing better product and concept.
Textile Today: As we know FTML made its own design studio with many design expertise, could you please tell us how you got this value-adding concept?
Asif Ashraf: This concept mainly comes from the value added aspect and another thing is that now many buyers and retailer brands are shutting down their own design studio to reduce the cost and they want support from us in this regard. Fortunately, we build a design team with many experts and the leader of the design team is from abroad. We launched it in the middle of 2017. Our main strategy is to show our caliber in designing and product development to attract the potential buyers and I think it’s a kind of company branding and marketing. Hence, there will be more business opportunities with these buyers.
Textile Today: How many investments you needed and currently what type of challenges you are facing?
Asif Ashraf: Infrastructure investment is not very high to launch a design studio but we have many regular basis costs that we have to maintain. The main component of cost is hiring the designers, the second one is buying the latest fashion trending product from abroad, where innovation could be driven. This is a kind of recurring cost and monthly it is $1.5-2k. Thirdly, we have cost for producing fabrics to make the samples. In addition, we source the best quality fabric from many countries for the sample. The main challenge right now we are facing is reached to the right market. What we are hoping is in near future customer will come to our design studio, choose the design, do necessary audition-alteration and finally place the order here. We are working on it, already we have dedicated a part of our sample section to produce samples for a design studio. This month our target is to develop about 110 samples and we have already produced fabrics for 25 samples. We also have to invest here for raw materials to produce fabric. From the beginning, we have already spent about BDT 1.5 Corer and monthly it is about BDT 1.5 million.
Textile Today: If anyone wants to establish such design studio, what he has to consider?
Asif Ashraf: Definitely a design studio will add value to your industry but you have to know enough your customers, their buying pattern, their thinking etc. then you can approach to design studio rightly. Alternatively, if you have such business plan that you want to catch the real up-market then you can think of design studio. More importantly, it is not very easy to cherish a design studio because it will not give you direct revenue. You should have passion and patience to set up such a successful design studio. Urmi Group always tries to be the head of the market by innovative idea generation and activities and this design studio gives us such an unparalleled place in the market.
Textile Today: 25% turnover of Urmi Group comes from synthetic garments export, 100% polyester and polyester-elastane blended garments you produce where other factories produce about 90% of cotton-based products. Could you please share the FTML strategy, challenges and business model so that others could get help if they want to come up to this business?
Asif Ashraf: We came to this polyester business because we wanted to do something better and different from others. But there is a thing that Chinese polyester fabric production industries must get some hidden subsidy from their government because they export polyester fabrics and garments in considerably less price than ours and that makes them a difference between China and Bangladesh in polyester business. It is true that their efficiency level is higher than us. Here our government should give support and subsidies to the industries to import the raw materials and export the products. Being first and second, China and Bangladesh business difference is more or less 30% that means about $100 billion. There are many contenders of us to grab that $100 billion market like India, Myanmar, Ethiopia, Vietnam etc. Bangladesh has to do something extraordinary and the polyester market as emerging one. There are huge consumption of active wears all over the world and our target should catch that up-market.
Textile Today: What should be the strategy of Bangladesh T&A industry for product diversification and product positioning to sustain in the business robustly?
Asif Ashraf: Bangladesh is working on product diversification concept but bit slowly and we are clearly lagging behind in product positioning. Key success factor to adopt effective design studio and product development is a mindset and willingness to take the risk. Because here you have to work with the high-end product if you want to sustain this business. Naturally, your production will be decreased and many other challenges will arise, but you have to be patient. Over early, we had a very good buyer of polyester but we lost that buyer just not to cater their order. Sometimes we deliver the order by airfreight but we lost that customer because they need right goods at right time. So, if you decide to produce the diversified product you must have to be prepared mentally to handle any situation.