Mohammad Ali Khokon was re-elected unopposed as the Bangladesh Textile Mills Association (BTMA) President for the terms of 2021-2022 and 2022-2023 at the recently held 37th Annual General Meeting of the association. With 35 years of unparalleled experience in the textile business, Mohammad Ali Khokon is a visionary name in Bangladesh’s spinning industry. He has been the head of five different companies and occupies the position of Managing Director at Maksons Group.
Recently in an in-depth conversation with Textile Today, he opened up some paramount issues including long-term business sustainability, capacity building in raw materials, work force, machinery, etc.
Textile Today: How the COVID-19 pandemic affected Bangladesh’s spinning and backward linkage industries?
Mohammad Ali Khokon: I would say, the COVID-19 pandemic impact left a positive note on the spinning industry of Bangladesh. Let me explain how. Before global buyers use to source fabric and yarn from abroad –namely China, India and Pakistan – sadly, they did not have confidence in our capacity. However, the pandemic disrupted the global supply chain.
In addition, on-time delivery of cotton, yarn, fabric, etc. failed from these destinations as well as from others. In this scenario, our spinners supported and supplied the necessary high-quality yarn, fabric and broken the negative mindset of apparel buyers that we are more than capable of supplying quality products on time.
Besides, Bangladesh’s knitwear export grew as most people stayed home and avoided outside activity and wore knitwear products at home. The woven sector had a sharp decline. Nevertheless, for both knit and woven garments, fabric mills and we spinners contributed significantly to help our garment makers to achieve the quality and lead time Commitments.
As I said earlier that the supply of yarn and fabric was disrupted apparel manufacturers turned to local spinners – though the brands were a bit skeptical – and the local backward industry did an excellent job in terms of supplying quality products on time. Proving our worth to global brands.
Textile Today: As you said, the pandemic gave the primary textile sector a positive vibe, how long it is going to sustain.
Mohammad Ali Khokon: We think that this positive trend will continue in the end if there is not any major global disaster. Textile and apparel is a global industry and it is dependent on international demand and supply.
If the market stays on current force or picks up like before shortly, Bangladesh’s readymade garment (RMG) has a good prospect.
Without any doubt. Companies who shifted their yarn and fabric sourcing to Bangladesh, I am confident that due to our quality and delivery Commitments they will remain with us also in the end.
Textile Today: Though Bangladesh is the second largest cotton importer, what influence BTMA has over the cotton price market.
Mohammad Ali Khokon: Although for the last couple of years, in terms of the cotton importing country, Bangladesh is occupying 2nd or 3rd position. However, in terms of influence over cotton pricing, Bangladesh or as the leading association, BTMA has no influence whatsoever. As the cotton price is dependent upon the supply chain scenario and most importantly, international cotton associations from the US, EU, and various global political variables.
It is a multi-layer global market with mainly the US and European associations controlling the cotton supply chain.
Additionally, Global politics plays a mammoth role in determining cotton sourcing and pricing. For example, sourcing from some big cotton-producing countries is not allowed due to issues like child labor, forced labor and other global issues.
We do not want to at odds with our buyers, as from their part sustainable cotton souring is a big issue for them. Political and trade relationship with the US, EU and cotton generating countries plays a critical role in determining cotton price.
Meaning when brands say that I cannot use a particular country’s cotton or other raw materials, then I am bound to abide by that. Meaning then we have to look for other sources that are not that cheap due to available market condition, carrying cost, etc. Which leads to various constraints like price hikes.
Yes, BTMA is indeed an influential association, but as I said earlier, we have very little control over global cotton pricing. And we are abided by their laws and rules.
Still, as one of the top cotton customers, Bangladesh’s position becomes strong due to our huge consumption. Day by day, we are being able to increase our voice in the supply chain. Now they accept our complaints about quality, weight issues. Which were nonexistent in the past.
Textile Today: Recently yarn prices have severely been disrupting our apparel sector. And how can RMG makers get the right yarn price?
Mohammad Ali Khokon: Since last year, the cotton price has been unstable at its best. For example, last year cotton price was so low that the yarn price also came down to $2.40.
Whereas at present, after adding all the costs, local spinners are producing yarn, around $3.75 and spinners have to add 0.15 cents as profit to survive in the business.
We are an integrated part of the textile and apparel industry. Spinners do not think as an excluded entity and we do not burden our RMG manufacturers with overpricing.
We are not like a local business association that can play with the price. This is a global business and international aspects affect the yarn price. We always try to provide the best price for our RMG makers.
I always tell that we the spinners and the garment makers are like brothers and we look forward to work hand in hand and grow together.
Textile Today: How do you see the overall T&A industry and how Primary Textile Sector (PTS) can contribute more here?
Mohammad Ali Khokon: In the last 5 years, a lot of spinning mills have suffered a lot. Numerous mills lost capital, moved out of exports, and have been manufacturing for local markets.
Despite being the 2nd largest apparel exporting country, we still import 6 billion meters of fabric from abroad. A huge setback for us. It urgently needs to focus on increasing the ackward linkage sector’s capacity to make our RMG industry more self-reliant.
If you see the woven products export trend, it is been suffering for some years. Due to some obstacles, the woven sector is not flourishing.
And Bangladesh is still importing 40 to 50% of woven raw materials. We have urged the govt. strongly to remove these barriers. We can touch the $60 to $70 billion export mark if we can make the woven sector self-sufficient.
If we analyze the whole scenario comprehensively, we will see that a severe lack of ease of doing business is killing our prospects. Hurting our image to brands and as I said earlier, giving foreign buyers a negative mindset over our capabilities.
Bangladesh is one of the top emerging economies of Asia, but in terms of ease of doing business rank in 168. Bangladesh is behind some poorest African nations. There is no doubt that the govt. must give urgent emphasis to ease it before attaining the Developing Country (DC) status in 2027.
However, I see a very good prospect. Moreover, our primary textile sector is well poised to help increasing garment exports and help to increase foreign currency retention.
Textile Today: What initiatives BTMA has taken for small spinners to sustain them in the business?
Mohammad Ali Khokon: One of the main challenges is unethical competition is offering/agreeing lower prices to buyers to grab orders from another local factory. Which is killing our business.
Textile entrepreneurs must come out of this self-destruction practice to save the business. As a textile leader, I have been voicing and raising awareness on this issue. Convincing them not to destroy the business. Yes, it is a difficult decision, but we must stop it at once to stay afloat.
Small or big companies must be aware of the overall business ecosystem. Today business is very tough and tight; all entrepreneurs have to have the right skill and knowledge to operate the business.
Textile Today: How the recent lockdown affecting the textile industry?
Mohammad Ali Khokon: Amid an increase in COVID-19 positive patients, we kept the textile factories open. Because in the factory premises workers are forced to wear masks, which they will not follow in their homes.
Besides the fact, that if we let the massive number of workers traveling to go to their villages it would increase to infections. Whereas as most factories have 70 to 80% accommodation or workers live very nearby. Not to mention, as Bangladesh’s textile and apparel industry has the most LEED-certified factories in the world; factories have doctors and medical officers on the premises all the time for a checkup.
Also, in the 1st COVID wave in 2020, we were 100% strict with health safety guidelines given by the WHO and the govt. Measures like social distancing, mask-wearing, hand sanitization, disinfecting the work floors, etc. were strictly maintained.
As a result, we have not witnessed any surge in COVID-19 cases from keeping textile factories open.
Textile Today: In our long journey in textile and apparel, we still have a gap in terms of highly skilled work force. How can we overcome this?
Mohammad Ali Khokon: I will not say there is a huge skill gap in mid-skilled workers. As our mid-range, workers are even solving various mechanical problems of machines and other technical problems.
Nevertheless, in terms of producing high-end skilled people, we still lag. Which is an area that needs long-term planning and holistic efforts.
Textile Today: As you said, general mechanical problems are solved by factory people shows our capacity in dealing with highly sophisticated machinery. However, in terms of locally manufacturing machinery or spare parts, Bangladesh is still at a premature level. What can we do about it? This capacity will give us self-dependence.
Mohammad Ali Khokon: There are some highly sophisticated and sensitive machinery parts, which the manufacturing company will not let us use from a 3rd, party source due to their sophisticated level and their inclusion will affect in performance.
But there are some less sophisticated spare parts like Servo motors which factories acquiring from local sources. We always try our best to acquire parts from local sources as much as we can.
As Bangladesh is locally producing some general spare parts. In the end, we will also witness that we have gained self-sufficiency in building machinery-manufacturing capacity.
Textile Today: In terms of building quality engineers, there is no alternative other than giving quality education. Share with us about the (National Institute of Textile Engineering and Research) NITER’s plan regarding building quality textile engineers.
Mohammad Ali Khokon: We are happy to say that none of the NITER graduated engineers are jobless. Shows the university’s quality education level.
We have included most of the necessary fields in the curriculum. Subjects like spinning, weaving, textile, yarn manufacturing, wet processing, dyeing, finishing, IP engineering, IT, business, etc. to ensure we can provide necessary manpower for the textile and RMG industry.
On top of it, 3rd and 4th-year students get various skill training to enhance their practical skills.
In addition, BTMA is focusing on providing R&D-related skills – like price comparison with other apparel manufacturing countries, high-end apparel product developments, manmade fiber-based product development, etc. – for the students.
We ensure that final-year students get proper factory internships. When students come to my factory, I try to ensure that they work 8 hours to get proper practical training to prepare themselves. Moreover, students get quality education in less cost compared to other universities.