Bangladesh: The impact of buyers looking for new sourcing destinations may be felt in the next five years

Rendezvous

Bangladesh: The impact of buyers looking for new sourcing destinations may be felt in the next five years

Tell us about your journey from a TV presenter to the country's leading apparel exporter.

This is quite a coincidence. After finishing my education I was involved with the entertainment industry, where my hobby was gradually transforming into my profession. But that is not what I had wanted to pursue. I had tried to establish my own business twice, and failed miserably. Then, I tried to find a job outside of the entertainment sector, and a generous man, out of pity, offered me a marketing job in a garment factory. This was in 1984-85. I achieved some success in this professional work within a span of a year. However, I still wanted to be a businessman. And that is when I, alongwith some like-minded friends, tried a third time. We had no seed capital, so we convinced a big businessman about our concept, who agreed to a limited share in this new venture. We started in a 200 sqft room, with 50 people. With a lot of determination and hard work, I have had a successful journey from a TV personality to a businessman.

What, according to you are the prospects and challenges of Bangadesh's RMG industry?

Prospects and opportunities are numerous, the challenge is to make the most of these opportunities. The world is Bangladesh's market, that is the opportunity, the challenge is to move into the fashion segment of the market, from the current middle and low rung of the market that we occupy. This will not happen in the immediate future. Buyers however, cannot avoid us due to our capacity to deliver in price and variety. So it is a competitive edge for us. We capitalised on the opportunity of catering to a global market by building huge factories, entrepreneurial and business development skills. The Bangladesh garment industry developed here without an industrial base.However, many challenges have arisen since 2004 with free trade, and the very recent industrial accidents. The latter, specially, has attracted lot of negative publicity and sentiments against our RMG sector.It takes many years to create a market, and the Bangladesh industry has been around for just 30 years. Buyers may start looking for other markets to source from, as global consumer and trade union pressure may build. We may not see the consequences immediately, but maybe in the next five years, which is the time it will take international retailers to establish reliable contacts in other sourcing markets. This is a major challenge for us.The industry, to further develop its competitiveness and productivity, is adopting the latest technologies. We are also trying hard to overcome the negative perceptions that have been created over the last year and a half.So, while there are lots of opportunities, the industry will have to put in a lot of hard work and perseverance to ensure sustained growth.

How has a weak mid-level management hampered growth of this industry?

It is a known fact that we have a weak mid-level management, we do not have high end local executives as enjoyed by the banking, FMCG or pharmaceuticals industries here. So, we have to hire global expertise at global rates. The good news is that we have world class entrepreneurial capacity and the second generation that is now very active in the industry, is wooing young executives into this sector. It is an unfortunate reality that mid-level management in this industry has risen from operator level workforce, and so are weak in areas such as information technology, production knowledge, global marketing knowledge. Another blunder that we have made, even with the present generation of young talent is that while they are very sharp and proactive, we did not emphasise on the importance of English language knowledge.

What do you think about a combination of backward and forward linkages?

I believe no country is self-sufficient in backward or forward linkages. It is said that China is the largest exporter and importer of fabric. We are weak in forward linkages and depend on the buying houses who have this expertise. In the world fashion market, Europe has been leading the way for decades.In backward linkages, Bangladesh industry faces many challenges. We continue to remain jobworkers to leading retailers. We are setting up fashion houses, and R&D and design studios, but we still lack the infrastructure and knowledge to develop quick designs and quick supply.

What role do you expect the government to play to help in industry relocation?

The government's role is very important for this industry which has grown in an unplanned manner. There is no concerted effort to solve infrastructure problems. Now 500 factories require to relocate from Dhaka city but to develop the land will require around ten years - for requisition, selection of land, possession, etc, so it is wise to select and develop ten or more areas for faster relocation. It is true that the government has promised a lot of help to this industry, as employment generation and industrialisation are the government's priority. Industry also needs to work in tandem with the government, presenting their suggestions and ideas.

What is your perception of the Asian and SAARC markets?

The volume of cumulative exports of the SAARC countries is less than that of small countries like Malaysia and Singapore. Singapore's export is worth around US$ 80 billion and they export value added products. Malaysia with 26 million people exports more that the whole of South Asia which has ¼th of global population and 2.5% of global land.The reasons are many for South Asian countries not exporting to their full potential. There are barriers to development - if you want to travel to India it requires 15 days to get a visa. We need development of infrastructure and connectivity within South Asia. There is a ray of hope that by overriding barriers and solving infrastructure and connectivity issues we will be able to match Europe over the next 10-15 years.