Bangladesh textile and apparel industry is passing a good time and becoming more structured…
Bangladesh RMG industry, the second largest ready-made garment exporter in the world, has scrambled many challenges and still it is overcoming many tough situations. Now Bangladesh is a trustworthy name for the international buyers. Many skilled, dedicated persons and entrepreneurs are working hard to flourish the sector. They actually know the insights of the industry and their knowledge can help all other people related to the sector.
Md. Nasir Uddin CIP, Managing Director, Sadma Fashion Wear Ltd, is one of them, who has a vast knowledge of country’s textile industry. He is also playing an important role as Director of BGMEA. Recently Md. Nasir Uddin CIP shared his experiences and thoughts with Textile Today on several issues including his struggling story to reach today’s position, future aspects of RMG sector, different crisis and way of overcoming the challenges and role of dynamic young generations etc. Here we have presented illuminating part of the discussion between Md. Nasir and Textile Today.
Textile Today: You are a successful businessperson, could you please share us how was the journey of Sadma Fashion Wear Ltd.? What were the challenges and how did you overcome those challenges?
Md. Nasir Uddin: We started the business in 2002 with only 30 sewing machines, renting a space at HM Plaza in Uttara, which was a very small place around 7000 square feet. Since my home is in Gazipur and the maximum factories have been built in this zone, I had many opportunities to exchange views with a lot of management and entrepreneurs of different factories. Traders from different parts of the country came and installed industries here. If they can do it, why can’t I move ahead from staying here? From this thought, after completing graduation, I joined Sadma Fashion Wear Ltd. as a Director with 25% shares. Originally, Sadma Fashion Wear was started by four textile engineers, two men left later and one senior brother and I joined Sadma as young entrepreneurs. The company was small; so there were a problem with LC opening, banking, exporting and so on. The company fully relied on the local sub-contact. After understanding the responsibility, I found that there was a lot of unnecessary expenditure, which was possible to minimize.
I can remember, 18 thousand US$ was my first LC. Then 30 thousand, 90 thousand, 120 thousand US$ for basic T-shirt orders were received from German ‘Hoffmen’ buyer. Because of on-time delivery and good performance, buyer and bank were satisfied on us. Later we had no need to look back for order. The bank willingly gave me a limit of 3 crore BDT and advised to build a large-scale factory in Gazipur, out of the rented building and said, we will spread our hand of cooperation in full swing. After roughly one year, Sadma Fashion Wear shifted to its own factory in Gazipur and in 2004, one and a half million dollar products were exported. There were a lot of obstacles to run the factory. However, compliance issue, sustainability, green industry issue were not so much in hard line like now. No pressure from the buyer also, so Sadma Fashion Wear Ltd. was built following the country’s basic building code. Then the business expanded slowly.
Textile Today: As a Director of BGMEA, what are your key responsibilities and how much are you successful here?
Md. Nasir Uddin: BGMEA is the heartiest organization to all owner and workers. In any problem, the organization’s policymakers try their best to solve that. Each of us has divided responsibilities. As a Director, I cover new trade license, labor issue, market development, crisis management. Especially in Gazipur zone, I have to supervise all factories. The country’s garment industry has progressed a lot on the issue of political unrest index. Sometimes problems are raised with pay-bonuses during Eid and festive season, but we fix those quickly. The understanding between workers and owners has been much improved now than ever before. We can do close monitoring. Our garment industry has sporadically developed. Now that’s going to be the structural format. The industry is passing a good time for changing the formation. From that direction, I can say that we are 90% successful.
Textile Today: According to a recent MoU, BEZA will allot 500 acres land to BGMEA in Mirsharai Economic Zone to upsurge apparel export. What are the plans of BGMEA to utilize that land? To attract foreign investors in Mirsharai Economic Zone what could be done?
Md. Nasir Uddin: Not only Bangladesh, the largest model garments village among Asia will be built in Mirsarai Economic Zone. In this economic zone, additional facilities will be provided for the entrepreneurs. As a result, the whole scenario of Mirsarai will be changed. Employment will be created for millions of people. Besides, 60 garment factories are being transferred from Gazipur, Narayanganj, Savar and the capital. Long ago, Accord and Alliance provided the conditions to relocate these factories. Some of them are closed. Some of the factories are partially operational. These factories will be brought to Mirsarai. More than 500 factories including those will be set up in the village. The new economic zone will return to life in full swing.
In the Economic Zone, Sadma Fashion Wear Ltd. is going to make another factory on 10 acres of land. There will available full utility, facilities, central ETP, dormitory etc. That means Mirsharai is going to be an organized industrial park. Mirsarai village will be allocated among the entrepreneurs for 50 years in rural lease.
In the Economic Zone, Sadma Fashion Wear Ltd. is going to make another factory on 10 acres of land. There will available full utility, facilities, central ETP, dormitory etc. That means Mirsharai is going to be an organized industrial park. Mirsarai village will be allocated among the entrepreneurs for 50 years in the rural lease. At present, development work has started on 500 acres. But two thousand acres of expansion opportunities have been kept. Each plot has at least one acre. As its location is at just 60 kilometers west of Chittagong port, the factory will get lead time facilities in the export. The village has already become a center of an attractive investment.
The zone is expected to bring a foreign investment of about $1 billion and create employment opportunities for one lakh people. Already many investors are showing keen interest to build green factories. BEZA has been working to set up 100 economic zones by 2030, which will create jobs for one crore people and produce goods and services worth $40 billion. It has identified 74 locations across the country for setting up economic zones.
Textile Today: ‘Crisis Management’ is a part of your responsibilities. Gas and Electricity crisis is increasing day by day. How do you manage this crisis?
Md. Nasir Uddin: the Textile sector is fully depended on gas and electricity. The issue of gas-power crisis is very old for the industry. The entrepreneurs are backtracking due to the crisis of gas supply, one of the fundamental utilities for production. New industries are not expanding. The pace of investment has slowed down. If uninterrupted gas-power supply is not guaranteed, it will be difficult to achieve the export target of $ 50 billion by 2021 and moving further. Due to the gas crisis, the factory boiler is being run by diesel. It costs too much. Diesel based boiler unit costing is 46 Taka. On the contrary for gas run boiler maximum unit cost is three and a half Taka.
Although the production of electricity has been increased 4 to 5 times after 2002, the government is unable to supply the gas and electricity as per the demand. However the government is trying to cope with the situation; some of their initiatives have been quite appreciable. If they can import LNG at the fastest time, the gas crisis will be reduced to a great extent; affordable LNG can solve the shortage of around 50%-60% of the demand. However, the government should be more attentive towards solar & air power generation, a sustainable energy production by short investments.
Textile Today: Minimum wage is going to be increased. Most of the factory owners said that they will not be able to continue their factory if wage increases more than 30-40%. What do you think about it and how this crisis could be minimized?
Md. Nasir Uddin: As the cost of each item is increasing, the wage should be increased at the same rate. But it must be intolerable level. Increasing around 15-20% will not be so difficult. But if workers press the owner to increase the wage more than that rate, it will never be rewarding. Everyone has to understand the good and bad aspects. Buyer is not giving us more price. Still, America’s market is not duty-free for us. As long as the European market is open, we can keep competitiveness. In this situation, the demands from the workers should be raised in the organized, systematic and logical way.
Textile Today: What are the future challenges for the sector you see and how it could be overcome?
Md. Nasir Uddin: To survive in the growing garment industry, we have to give the highest priority in worker efficiency, energy efficiency, green and renewed energy for future challenges. There are so many active entrepreneurs who don’t get a bank loan but the defaulters get it easily. The authority needs to be careful about them. From coming out of traditional thinking, we will have to adapt and install material movement handling, automation, and modern machinery. Safety and sustainability concerns are another big challenge.
There are so many active entrepreneurs who don’t get bank loan but the defaulters get it easily. The authority needs to be careful about them. From coming out of traditional thinking, we will have to adopt and install material movement handling, automation and modern machineries. Safety and sustainability concerns are another big challenge.
Product price loss is a big challenge. Since last few years, the price has been decreased by 40 percent, profit margin stands at very tight. Power, gas, port, political stability, shortage of skilled manpower are our future challenges. Bangladesh exports 80% low value-added products like trousers, shirt, t-shirt, sweater etc. It has to increase high-value items like lingerie, swimwear, sports item, functional fabric, functional textile etc.
The decline of the population in Europe, the hub of our garment export, is a risk for us. Although the risk is very slow but steady. Consumption reduces if population decreases and our order flow supposed to decrease forcefully. Though the raw material cotton is being produced in very small quantity in our country, we rely on foreign countries regarding on this issue. We have no significant dyes, chemical manufacturing plant also. Those who have these in hands will dominate the market in future ultimately. We should emphasize to build high-quality chemical plants. Manpower is our biggest strength; we have to go ahead with this capital.
Textile Today: As a successful entrepreneur, what do you say to the new entrepreneurs? How can they be successful?
Md. Nasir Uddin: Youth will definitely shine if they proceed by fixing a target. They have to leave the conventional life and start thinking differently. Now, knowledge is open. Social media, Google, YouTube browsing are available for many solutions that were not available at our start-up. Earlier there was no word like ‘IE’ in the garment factory. Now it is a common one. Educated personnel is coming to the garment industry. Mid-level management is developing. We will go ahead as much as this level will be developed, our efficiency will be increased, and gaps won’t be created between workers and owners. Efficient entrepreneurs and engineers are always in demand. Young people should be attentive towards skill development.