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Bangladesh has potential to be a winning market in the future

British multinational company Coats – with its more than 250 years of heritage in the industrial thread business – is constantly evaluating new and innovative value-adding products, services and software solutions to the apparel and footwear industries.

Rajiv Sharma_CEO_Coats Group
Figure: Rajiv Sharma, CEO, Coats Group plc.

Rajiv Sharma has been serving as Chief Executive Officer (CEO) of Coats Group plc since 2017. Rajiv Sharma has more than 30 years of experience in leading complex global businesses in multiple industries.

Recently in an interview with Textile Today, Rajiv Sharma opened up regarding various aspects of Coats philosophy, market strategy and other critical facets.

Textile Today: Coats is known to have a heritage of over 250 years as a company. Can you provide some key figures around Coats’ presence in Bangladesh and does Coats have new strategic projects planned for this region?

Rajiv Sharma: Coats has unrivalled global footprint – in some 50 countries with a workforce of over 17,000 people across six continents – allowing us to meet our customers’ sourcing needs consistently and quickly across multiple locations. We have been pioneers, creating value adding products and solutions that meet our customers’ changing needs.

Bangladesh is one of the most vital markets for the global textile and apparel industry, growing to be the second largest apparel exporting country in the world. Coats has been in Bangladesh since 1990 – we have 32 years of operational experience in the country. Our two factories – one in Chattogram and the other one in Gazipur – have been built with a state-of-the-art machines, systems and processes. And threads produced in Bangladesh go into garments that are sold all over the world.

We invest ahead of demand in Bangladesh. This means our existing capacity can cater next 3-5 years of demand. If required, Coats factories in Bangladesh have space to add more machines.

Textile Today: The textile industry is ever changing. What do you foresee for 2023 in terms of trends and challenges?

Rajiv Sharma:  Some parts of the textile industry are facing challenges. 2023 will be defined by two major factors. One is macroeconomics, and the other is geo-politics. These two factors will go a long way to determine consumer sentiment and demand.

In terms of fashion trends, we are seeing more and more home-centric lifestyle clothing that’s fuelling demand for comfort and athleisure garments and footwear. Outdoor, athleisure and casual clothing will continue to win in the near term. Formal clothing has been declining since covid hit the world in March 2020. Sourcing destinations that cater to these winning categories will see more growth.

Digitalisation (from software powered product development to metaverse experiences) is continuing to gain momentum. Technology emerged as one of the key drivers reshaping the fashion world. Young consumers are demanding fashion companies to be purpose-driven, to support social initiatives and reduce their environmental footprint so sustainability therefore has become a ‘must-have’ for companies.

Textile Today: Where do you see Bangladesh in the nearshoring preference and China dependency reduction strategy of global brands? Major export destinations of Bangladesh are going through difficult times.

Rajiv Sharma: Bangladesh is a very competitive apparel sourcing market but must move up the value chain by offering services that include garment designing, inventory management, sustainability and innovation for the major brands. It also should continue to invest in end-to-end garment supply chain by having more fabric mills in-country. The current challenges for Bangladesh are short-term.

Bangladesh is strategically located between India and China with a combined population of 2.7 billion people. Over time, it will be better for Bangladesh to also start catering to the Asian consumer. While profits from Asian consumers are not as high as the Western consumers, it will provide the necessary balance to reduce volatility of demand.

Some global brands are reducing their dependence on China. Bangladesh is going to be one of the winners. Some business has already been shifted and more will come. I think the Bangladesh apparel industry needs to be ready more business and a different kind of garments in the future. For this it needs to focus on quality, sustainability, connectivity, ports, custom clearance, and other service efficiencies. These are paramount to attract more orders and increase the apparel export from $43 billion to $80 billion.

Textile Today: Coats is strengthening its presence in the footwear industry with its latest acquisitions of Texon and Rhenoflex. Is this a new priority for the business?

Rajiv Sharma: These acquisitions increase Coats’ presence in the highly attractive and fast-growing athleisure footwear market. Coats has had a very strong presence in the footwear thread market for many years. The two new acquisitions will allow us to move into adjacencies with structural components. These structural components allow us to be more innovative and sustainable. The combined footwear business will better meet customer needs and expectations in a fast-changing world.

In the last few years and especially since the pandemic, we have seen the footwear market grow faster than the apparel. This allows Coats to grow in a growing footwear market and be more value adding for our customers.

Textile Today: How is Coats contributing to accelerate sustainability? What could help drive the industry forward?

Rajiv Sharma: The good thing about Coats is that sustainability has been in our DNA for the last 250 years. This is a key reason for Coats to be a market leader for so long.

In 2018, Coats set a series of goals that have become the foundation of our approach to sustainability. We focused on ambitious targets set under five priority areas: water, energy, effluent & emissions, social and materials.

Some examples of our commitments include Coats reducing water intensity by 40% since 2018. We have 30% of our global energy coming from renewable sources and 83% of our employees work in sites that are certified as “Great Place to Work”.

By 2030, all products will be made completely independently of new oil-extraction materials such as polyester and nylon – which is a massive transition. Another commitment of Coats is that by 2030, 70% of our global energy consumption will come from renewables.

We also made the commitment to becoming fully Net Zero by 2050. We have developed a roadmap to get there and will log our progress against a series of milestones and open source our work to help other companies who face similar challenges.

The textile industry needs to come together and collaborate more on Sustainability.  We cannot meet our long terms goals without the active support of our customers and suppliers.

Textile Today: Among emerging sustainability trends, we see nature positivity. How is Coats getting involved in this movement?

Rajiv Sharma: Cutting the use of new oil-extraction-based products is one of the most effective ways we can reduce our carbon footprint and a current focus of our efforts to become more nature-positive. We have already successfully launched a series of eco-friendly products, with great reception from our leading global customers. We launched EcoVerde, our first 100% recycled polyester thread, in December 2018, and it currently accounts for almost 10% of our sales.

But we want to go much further, partly by transitioning more of our recycled materials and partly by innovating new solutions, such as bio-materials that can substitute for the materials we currently use. EcoRegen, for example is a 100% lyocell thread that more closely matches the material of the garments and allows them to be recycled without needing to remove the stitching. On the other hand, EcoCycle is one of the first water dissolvable threads of its kind, designed to dissolve when washed at high temperatures.

Textile Today: Single-use consumer packaging is also an important topic. Does Coats have any initiatives to solve this problem?

Rajiv Sharma: Packaging is an issue throughout the textile supply chain. We currently use almost 8 million kg of plastic a year for thread supports – the cones at the centre of rolls of thread – and that’s just one kind of packaging. Although we are not a consumer-facing company, we also have to address the amount of waste we create as a result of packaging.

We are going to do so with three initiatives that we will be implementing in all of our manufacturing sites around the world. The first is to make as much of our packaging from recycled materials. The second initiative is to eliminate packaging altogether where possible, including most of the plastic bags and film we currently use. The third initiative is to work with our customers to implement a circular programme, in which we reuse what we can’t eliminate – in particular, all cardboard boxes and thread/yarn supports. This reuse program has the potential to reduce the volume of new cones we buy by 60%.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

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