As long as the customers are not giving better prices for their products, the demand to ensure sustainability and compliance will create a burden for the manufacturers.
Rubana Huq, Managing Director, Mohammadi Group
Mohammadi Group started operations in 1986 in garments industry with merely 52 workers; today its employees over 9,000. While the focus remains on garment manufacturing, the company has over the years diversified and excelled in various industries including Real Estate, Power Generation, Information Technology, Media and Entertainment. Mohammadi Group Achieved ‘Gold Supplier’ award from H&M for the Year 2013, 2014, 2015 and 2016.
Rubana Huq, Managing Director of Mohammadi Group, revealed her thought on automation, skilled manpower, sustainability, fair price and so on. The prominent women entrepreneur also suggested women entrepreneurs to come forward and take entrepreneurial positions. Here is the glimpse of the discussion for Textile Today readers.
Textile Today: As far as we know, the knitting process of Mohammadi Group is fully automated. How is automation helping your company in terms of production cost, labor cost, and lead-time? Do you think automation is a threat for garments workers?
Rubana Huq: Human resources actually are the best asset of Bangladesh. So, when we talk about automation, we also talk about some threats that come along with automation. As a group, we are not fully automated. We are semi-automated. Especially we have applied automation to our sweater sector. But automation is not the only thing that basically brought the industry forward. It is value-addition in terms of designing and also beating the seasonal challenge in sweater remains as the biggest challenge because we work for 8 months and we do not work for four months.
Labor is the biggest asset for Bangladesh. Therefore automation does pose some threat to our manufacturing sector. However, when we consider automation we also consider a reduction in labor cost and we also consider the factor of efficiency. Productivity is not something that Bangladesh is great at. The average productivity is less than 50 percent still. So when it comes to sweaters, for design capability and for the pace automation is required.
And as a group we are semi-automated, we are not fully automated. We have done a careful balancing. The point is a careful balance has to be carefully considered as well. Because in our woven sector when we have been trying to cut down on labor and when we have tried eliminating the helpers from the lines we have seen productivity with the automation but also these jobs have been lost. Not to a great extent but they have been lost. Now I hope that these labor would be able to go somewhere else and find some work. The point is that the lack of diversification in this sector still poses a great threat. Because unless we diversify into other sectors labor will face a challenge because it is the era of automation and automation will continue to grow. And yes it does help to reduce our production cost.
The point is that lack of diversification in this sector still poses a great threat. Because unless we diversify into other sectors labor will face challenge because it is the era of automation and automation will continue to grow.
Textile Today: You know that the scarcity of skilled manpower is a big problem for the industry. What do you think-Should we hire foreign employees or improve the skills of existing manpower to remove this problem?
Rubana Huq: Lack of skilled labor has always been a challenge for the industry because of a lack of skilled labor we have limited productivity and we are still struggling to achieve the optimum. Sri Lanka is way ahead of us. They have almost 80-85 % productivity. In terms of being competitive, we also need to improve our labor skills. But labor skills are not the only challenge. There is more. There is a mid-level management challenge that we face as well. Most of the times we cannot delegate much to our mid-level management because we have not been able to train them up as well. So most of the times, when there are some problems or disturbance in the factory its mostly coming from the challenges of mid-level management not being able to address the concerns of the workers properly. So, there comes the question of hiring experts from abroad. We have Indians, we have Sri Lankans we have other nationalities as well in the industry. This has to come down. Because it is a mature industry and we have reached a point where we really don’t need foreign supervision or direction to run our industry. In terms of compliance, in terms of management, in terms of productivity and you know the level of Bangladeshi product has also not gone up to a great extent. We are still at a very basic level. So, I think that we have that capability of managing our factories by ourselves. In case if we cannot then we should see consultants only in products which are value-added. Suppose, if it is a suit factory then we may need to hire consultants from abroad. But for basic products that we are very used to in this country, I see no reason behind employing experts in our soil and watch a huge foreign currency loss.
Textile Today: Maintaining sustainability is very important for the planet, people and profit. How do you maintain the sustainability issues on your garments factory? Do you have any sustainability management department?
Rubana Huq: Sustainability has been an issue which has been our production discourse lately quite a lot. What has been happening is that we have more conscious consumers abroad who worry about where the product is made. We have more conscious customers wondering about where the cotton is coming from. We have more consumers wondering clothes are washed. So, you know it’s a whole chain of sustainability. Sustainability is not anymore an option. It is a definitive choice. So, in order to be sustainable all of us have to grow up our sustainability department. For ourselves, we still let our HR & compliance people manage our sustainability. However, it’s a department that required a full pledged concentration.
The point is in order to be that sustainable we also require our products to secure better prices. You know, as long as our customers are not giving us better prices and as long as they keep on demanding our levels of sustainability and compliance to grow up I don’t think it is going to be a very fair deal. So, we need to put additional pressure on our customers just to make them aware that as long as they are putting enough pressures on us on improving our sustainability levels and compliance levels they also need to be critically aware of their own margins. Because we need to be paid the right and the fair price.
If you are talking about fair supply and if you referring to fair supply chain all the time you need to also conscious about fair sourcing practice as well. Therefore, sustainability has come into the industry in different forms. For instance, we now have a Higg Index. Higg is an index, which asks us to even mark our secondary & tertiary suppliers. Therefore, that is another challenge, which is coming up. We are happy to do that. We are happy to be sustainable. Because the earth has to be a sustainable place for the next generations to come. However, the point is who is paying the price for sustainability. Is it only the suppliers who need to pay the price for sustainability or buyers are also part of the challenge game?
Textile Today: Mohammadi Group mainly produces woven garments, lingerie garments, and sweater. Do you have any plan to increase your product range?
Rubana Huq: We have woven, we have laundry and we have sweaters in our group. As far as the expansion plans are concerned I sincerely believe that you know it’s the value-addition that we should be targeting and not just capacity extension of what we have. Because that is not going to bring any good results for any of us. In addition, whoever is in the industry I would also like to appeal to all of them to optimize their production lines and think about producing the next better product instead of just increasing lines. Because adding another 100 lines will only get me an order of another basic product which I am not interested in. So, for us the suppliers the keyword should be the fashion challenge, the lead time challenge and of course the product challenge. If we are able to somehow address these three areas, we should be set for the next two decades at least.
Textile Today: As a prominent women entrepreneur what is your suggestion for the new women entrepreneurs? How should they start, what types of challenges will they face and how should they overcome that?
Rubana Huq: Very unfortunately, we do not have enough female entrepreneurs in this sector. Maybe because there is a hick of access to capital is still very much no deal for anyone who seeks a loan in this sector. I do not think it’s just women not getting loans or not having access to loans that creating the barrier for women getting to the next level, I also think that it is the age-old mindset which stops women from going to the next level. If you talk about my challenge, I think I just fought back hard enough to be where I am today. However, I do not know where I am going to be the next 5 years. Because being a woman is something that conceptually we need to deal with. There is a male gage everywhere; there is a male mindset that we need to battle.
you are never a great CEO unless you are not missed in the office.
If you look at today’s board of BGMEA there is not even 1 single female director in the entire board. Strangely, the sector is filled with women. 80% percent of the manufacturing is done by women. We do not even have enough female trade union leaders in the sector. So the gender priority must come in. In terms of trade union leaders, in terms of workers getting promoted to supervisory levels and managerial positions and of course for more female entrepreneurs to be able to come there must be an incentive. There must be an incentive for female entrepreneurs to come into this sector. Because I believe it makes a difference being a woman in this sector. We have more empathy than men. So, when I work on a production floor, I automatically display a lot more empathy. I communicate a lot more than any of my male counterpart and I am absolutely confident about that. So my walking creates another level of confidence for my female workers. So for the betterment of the industry and for the smooth functioning between owners & labors I sincerely believe that female should come forward and take an entrepreneurial position to change the current scenario.
Textile Today: After the death of Mr. Anisul Huq do you find any management problems in your business?
Rubana Huq: We have been in this business for the last 20 years. We not only have garments, but we also have power plants, and we have full on a television channel. We have digital distribution, we have software, we have real estate and I am the group head. A group or a commercial entity is actually very much process based. And my late husband used to say that you are never a great CEO unless you are not missed in the office. The point is business goes on, life goes on and if you are in a leadership position your job is just to focus on the sustainability of the group and of the economy in general and just move on. Because life would not stop. Because somebody has left us, life still demands continuity. And I hope to experience no tremors in my journey because I haven’t for the last 20 years, anyway.