BTMA is the national trade organization representing yarn, fabric manufacturers, and textile product processor mills of the country under private sector. It is working to promote and protect the trade, commerce, and manufacturers of Bangladesh. Including 425 yarn and 796 fabric-manufacturing mills, BTMA has a total of 1461 member mills. Recently Mohammad Ali Khokon has been elected as the President of BTMA uncontested for the next two-year term of 2019-2020 session.
He has a versatile experience of more than three decades with the sector and within that period of time, he steered many organizations. He is a self-made charismatic entrepreneur who has been engaged with the textile and apparel trade since 1987. He has been the head of five different companies and currently occupies the position of Managing Director & Director at Metro Spinning Ltd., Managing Director at Maksons Group, Managing Director at Maksons Knit & Rotor Spinning Ltd. and Managing Director at Maksons Properties & Development Ltd. (both are subsidiaries of Maksons Group) and Managing Director & Director at Maksons Spinning Mills Ltd.
Recently in a recent conversation with Textile Today, he opened up some paramount issues including cotton sourcing, the prospect of weaving and denim business, investments trend etc.
Textile Today: You are the new President of BTMA, what are your plans to make BTMA’s roles more effective for the textile industry?
Mohammad Ali Khokon: As the President of BTMA I have some plans regarding the textile industry. You know that the textile sector is contributing more than 12% in GDP and over 82% of the total export earnings come from the sector. BTMA is already assisting more in country’s total earning exports, the Primary Textile Sector (PTS) is contributing US$ 17bn in a total of US$ 29bn of textile and RMG sector. Around 90% yarn demand for knit RMG and 35-40% yarn demand for woven RMG are met by the PTS. Without this value addition, our apparel industry could not have come in this position.
Still, we have a lot of work to do in woven and knit sectors. Export-oriented woven garments manufacturers have 12 billion meter fabric demand each year, of them, we import 6 billion meters from China, almost 3 billion meters from India and rest of the 3 billion meters are being produced by the PTS sector. So in woven, there is still a 60% gap where we need to work on it. In this regard, we have a plan to do specialized task to move forward the woven sector fulfilling the demand gap of woven fabrics. We will urge the government to announce the weaving sector as a separate sector and to provide special incentives for the sector.
African countries can be a major source of cotton for raw materials in Bangladesh’s garment industry. The cotton that we import from India and China is not even original.
I am going to work with the weaving industry and denim as well. Denim has a great future in Bangladesh, we have more demand but we are supplying less right now. For the scarcity of own raw materials, technological inefficiency, and skilled manpower we are facing several challenges. I will strongly urge the Bangladesh government to take initiative in growing raw materials and efficient workforces. Above all, we need to set up a positive mindset to achieve US$ 50bn by 2021. Everyone should come up with helping hand for the development of Bangladesh.
Textile Today: Bangladesh is currently the second largest cotton importer in the world sourcing mostly from India. How do you see Bangladesh’s dependence on India for cotton sourcing? Should we go for diversification in cotton sourcing?
Mohammad Ali Khokon: Indian cotton quality is not good, it is not contamination free, short staple length and other quality parameters are not good. Then why are we importing cotton from India? It’s only because of short lead-time. On the other hand, if we want to import American cotton, it takes huge time to arrive in the factory, almost 3 to 4 months after opening LC. It takes 4 months if we import cotton from Brazil and it takes 6 weeks from Africa.
Cotton sourcing country for Bangladesh
Lead time after opening the LC
Thus, only for short lead-time, we are bound to order Indian contaminated cotton whereas American, Brazilian and African cotton is contamination free. I personally for my factory import only 20-25% cotton from India and we source rest of the cotton from other countries. On the other hand, freight charge in our port is higher than that of any of our rival countries. Ports should be used effectively so that we can get our main raw materials like cotton easily.
Textile Today: We know African countries produce high-quality cotton, how can Bangladesh spinning mills source cotton more from Africa?
Mohammad Ali Khokon: We already know that in Africa, there are three cotton zones: East Africa, West Africa, and Central Africa. These are well known for high-quality and long staple length. The productivity of Africa’s cotton is 10-12% higher than that of India’s cotton. If we want to source cotton from Africa, we need to make an order at least 3 months prior as they have limited cotton. So, there is no issue to buy more cotton from them as we cannot buy more even if we want to.
Textile Today: Could the investors of Bangladesh invest in Africa for cotton sourcing? How BTMA can a play role in this regard?
Mohammad Ali Khokon: African countries can be a major source of cotton for raw materials in Bangladesh’s garment industry. The cotton that we import from India and China is not even original. It is very difficult to get original cotton from these countries. African countries can be a good alternative for cotton import. Bangladesh’s garment industry mostly depends on imported cotton for raw materials. If Africa can produce more cotton, it will be really helpful for Bangladesh. Bangladeshi mills are sourcing cotton from countries like India, the United States, and Africa. Currently, Bangladesh sources around 20.88% of its total cotton demand from African countries. We are bargaining with our government, to give us policy support to import more cotton from Africa.
Textile Today: Sometimes Chinese and Indian yarn and fabrics are imported under bond licenses and illegally sold in the domestic market at low prices. Is it generating challenges for local manufacturers? How do you see the matter and does the BTMA take any initiative to overcome this situation?
Mohammad Ali Khokon: You are absolutely correct as we are already facing challenges regarding this. BTMA is going to take the initiative to overcome this situation. We will inform the matter to NBR then let us see what happens then. Last year we did not do any commercial import but the question is from where these fabrics have come to Bangladesh? If you go to the shopping malls, you will see a lot of Indian, Pakistani and Chinese fabrics. Some corrupted businessmen are making this type of offenses, they are importing garments illegally as they do not want to see Bangladesh on top. We need to be honest in our business, otherwise, the development of Bangladesh will come to a standstill.
LNG import will immensely affect the gas price in the country.
Textile Today: The government has taken the initiative to import Liquefied Natural Gas (LNG), how will LNG be cost-effective than Natural Gas? Or what will actually happen when captive power plants of textile mills run with LNG? Will it increase the expenditure of textile millers?
Mohammad Ali Khokon: Bangladesh will import LNG from Qatar, Oman, and Switzerland to add to the national gas grid. LNG import will immensely affect the gas price in the country. The move will increase the expenditure in the industry and commercial sectors as the cost of electricity generation will be increased. I think imported LNG will be three times more expensive than our locally extracted natural gas.
Textile Today: What will be the impact of the current agreement with India for using Mongla and Chattogram ports as transit points to access India’s northeastern states for trade? Will textile millers face any difficulties for it?
Mohammad Ali Khokon: I do not see any impact here for using Mongla and Chattogram ports as transit points to access India’s northeastern states for trade. Many countries are using others port for doing business. Bangladesh government is establishing another port at Payra for doing business smoothly. Therefore, there is no point in facing difficulties for textile owners as I think without proper arrangement and capacity improvement government is not allowing India to use these ports.
Textile Today: What are the prospects of the current trends of investment in the textile sector? Do you think the investment trend is going in a proper way? What are your suggestions for investors?
Mohammad Ali Khokon: I will say that the current trends of investment in the textile sector are going smoothly. And our government has made 100 economic zones for investors. If investors invest properly then our economy will boost. Also, for investment, political stability is very important and for the last 10 years, Bangladesh is in a stable political condition. After the election, if this government continues, nobody can stop the economic development.