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Line of technology adoption for achieving USD 50 billion export target by 2021

While the technology providing companies were emphasizing on the necessity of importing more sophisticated high end technologies for achieving USD 50 billion export targets by 2021 by Bangladesh RMG sector, other stakeholders partially agreed on that but put forward other important issues to be addressed side by side. The debate was getting 360 degree coverage by resourceful contributions from eminent panelists of the seminar organized during Bangladesh Denim Expo 2016 on 25th April 2016 in Dhaka.

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The background:

BGMEA has set the ambitious target of exporting USD 50 billion by 2021 which their Senior Vice President Faruque Hassan termed as challenging but not impossible. And their major buying counterpart H&M’s Regional Head for Bangladesh and Pakistan, Roger Hubert mentioned that H&M would like to do their part for making it happens. That means they are ready to increase their portion of import at the same ratio as it required reaching $50 billion. But Roger put a big ‘but’ on the possibility of reaching there by the country especially in a situation where she is quickly eradicating her underground water reserve. Roger scared that in a situation where water level is going  down up to 2.5 meters per year in many regions it is urgent to conserve water alongside other resources.

Beside Roger, Mohan Seneviratne one of the other panelists who is Program Manager of Partnership of Cleaner Textiles program of International Finance Corporation emphasized on importance of conserving the use of water and gas. He informed some of the savings goal they have achieved through their Cleaner Production activities in 102 dyeing finishing factories and emphasized that it is possible if right approach is taken.

The dilemma of reducing resource consumption but at the same time to increasing export to achieve the ambitious target mentioned above was tried to be solved by the keynote speaker Jordi Juani, Division Director, Jeanologia. He thought the approach should be focusing on producing right products at higher value end and simultaneously investing to conserving resource usage. He urged for 360 degree improvement of the sector by developing new resource efficient processes, increasing technical skills of the personnel working in the factories, focusing Human and other Resource Management and also by improving working conditions and doing things focusing sustainability. But he concluded that all the above improvements will only be possible if high end sophisticated technology is adopted by the industry. His conclusion certainly emerged questions among the panel members to identify what would be the right approach to address technology adoption.

Technology should reduce cost of production, increase versatility and must be sustainable:

02Representative from BGMEA in the panel, Mohammad Nasir, Vice President (Finance) of the current board of the trade body informed that their cost of production is increasing by 8-10 percent every year while they are under continuous pressure of price reduction by the buyers. He added that technologies must help reducing the production cost by increasing efficiency. Mr. Nasir informed that many Bangladeshi factories already have installed low liquor ratio machinery, energy efficient equipment and many factories has moved to semi-automatic to automatic in many aspects. He ensured that his member factories will continue adopting technologies which will help them achieving further competitiveness, Product and process diversity and sustainability. In this process he urged government’s support in proper policy making.

Another representative from BGMEA, Syed M. Tanvir, Director of BGMEA and Pacific Jeans Ltd. was more elaborate in explaining the approach to adopt technology. He explained any technology must be examined by three filters. These are value addition, cost reduction and sustainability. New technology must add quality to the process and to the product; it should provide versatility and broaden the capability in terms of product and process diversification. Technology must be cost effective. And at the end day technology has be environmentally sustainable. He further emphasized that achievement of $50 billion export by 2021 would require rigorous market and product diversification and technology would be key for achieving that capability.

Total control and holistic approach is urged, resource efficiency investments must be incentivized:

Sophisticated technologies brought on expensive foreign currency would bring no benefit if it is not studied and used in a holistic approach. To make sure best use of technology one must have total control on it’s all aspects. Knowledge is the key for that. Soren Robenhagen, Commercial Counsellor, Embassy of Denmark to Bangladesh was describing the issue as mentioned above. He also stretched on the importance of removing other hindrance like high cost of capital. He wondered how resource efficient investment could require 9% or more interest while development agencies like JICA is providing loan on 0.1% interest rate. He urged for more incentives to the factories for such investments from Government and buying brands.

Change the mindset- cooperate each other; share knowledge, experience and ideas:

Roger Hubert, Regional Head for Bangladesh and Pakistan for H&M’s regional trading company Plus Trading Far East Ltd. was emphasizing on finding out the innovative ways to reduce cost, to reduce resources consumption and to become more efficient. He elaborated that such ways will only work if all counter parts of the sector co-operate each other. Sharing of positive achievements is the key.

Collaborations accelerate the process of development he added. At one point he mentioned about ‘open costing’ strategy under the scope of co-operation and sharing. But that got protest from participating factories side as Md. Mostafiz Uddin, Managing Director, Denim Expert Ltd. protested and said we manufacturers don’t like open costing policy but we fully agree on ideas and knowledge sharing issue. He declared that he and many other factory owners are always open and they keep no secrete in ideas, knowledge and experience sharing. Roger from H&M further stretched that technology is the key to survive at this age and he added that if power shortage issue is resolved $50 billion export by 2021 will be possible.

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