To realize the huge possibilities in RMG, we need to improve the face of Bangladesh to the world
The RMG sector plays a pivotal role in the economy of Bangladesh, accounting for more than 83% of the country’s exports, and contributing approximately 13% to the GDP, with 4,000 factories employing some 4.4 million workers.
We have set ambitious targets to attain $50 billion in RMG exports by 2021, the 50th anniversary of our nation’s independence. In an environment of increasing labour, power, and raw material costs, with pressure being applied to purchase prices, this will not be an easy target to realize without extra business being developed, and an increase in the average purchase price paid for RMG products.
We in the RMG sector are blessed with a rich heritage in the making of quality products, however, the nation suffers as the underlying perception of Bangladesh in our key markets of Europe and the US is that of cheap resources, with low labour costs that can produce high-volume, low price, commodity items.
The first step in marketing Bangladesh and the RMG sector is to change this perception through the development of elevated products that can command a higher price ticket.
Education and gaining an understanding in dealing with this kind of the market is critical, as is the method of approaching the business as a whole. High fashion brands do not operate in the same way as mass market high street brands. Their demand for quality is generally higher -- they consider higher priced fabrics, and trim items. And their order quantities, whilst attractive, are not at the level of the mass market brands.
For this, managers and product developers need to consider a broader scope of partners - whether it be fabric suppliers or trim suppliers - and need to adopt a more qualitative approach, where price, although important, should not be the first consideration, but the right quality for the customer.
This requires the necessary personnel acquainting themselves fully with both the target market and the target customer.
The development of higher end products will necessitate a sea change in the way we approach the RMG business - from government and concerned bodies through to management and training of workers at the factory level.
Firstly, we need to promote Bangladesh as a desirable source that not only follows the highest international levels of safety, environmental, and ethical standards, but also as a resource with integrity, capable of both understanding the customers’ needs, and supporting them with the necessary R&D facilities and value-added services.
To achieve this, we will need increased investment in R&D in the sector, increased investment in the education of the younger generations entering the design or product development arenas, increased development of our human resources, and increased promotion of the capabilities available within the country to the international community.
Secondly, there needs to be a concerted effort to improve investment in technology and infrastructure. Increasing factory efficiency and adopting practices that allow for the manufacture of smaller production runs without significantly increasing costs is an area that needs to be explored in depth, and the necessary investment support to be available.
This, coupled with improved infrastructure and a concerted efforts to reduce lead-times, will greatly enhance the appeal of Bangladesh to higher end labels.
Thirdly, alongside advances in technology and R&D, there is a need to train the necessary workforce to manufacture these upgraded products. It may be necessary for certain RMG factories to invest in and develop standalone production lines that offer increased flexibility, can handle smaller quantities, and can produce goods to the highest standards possible.
One advantage that we have is that we are fortunate enough to have a huge workforce within the country - a workforce that can adapt and develop the necessary skill sets.
“First impressions never lie,” as the old saying goes, so one area that needs rapid improvement is the face of Bangladesh that visitors see upon arrival.
We have all heard tales from our international partners about problems gaining entry visas, long waiting times for baggage, problems with traffic to and from the airport, and when making their way around the country.
We have to remember that international visitors are not accustomed to spending hours in traffic in order to travel a few kilometres. All of the above combined does not leave a favourable impression upon our visitors, so we need to investigate ways in reducing bureaucracy in gaining entry into the country, and investment in the infrastructure of our road network, which will benefit all road users and greatly improve the movement of goods around the country.
As we approach the 50th anniversary of our independence, it is hoped that we all make a concerted effort to develop Bangladesh through taking advance of the country’s expertise, and the huge possibilities that are there in the RMG sector.
Mostafiz Uddin is the founder and CEO of Bangladesh Apparel Exchange (BAE) and Bangladesh Denim Expo. He is the managing director of Denim Expert Limited.