Faruque Hassan, managing director of Giant Group, is helming the Sammilita Parishad, a platform eyeing the leadership of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). In an interview with Dhaka Tribune's Mehedi Hasan, he talked about his key areas of focus, challenges the apparel sector is facing and other issues.
You are going to contest the next BGMEA election. What will be your main agenda and key areas of focus if you win the election?
It is a challenging time for the world, for Bangladesh and particularly for the RMG sector due to the prolonged COVID-19 pandemic.
My main agenda is to ensure financial support and backup from both the government and Bangladesh Bank to tackle the ongoing second and third wave, which is already hitting us badly.
We are facing order cancellations, buyers are holding off final shipment of spring/summer seasons, as well as reducing their bookings for the autumn/winter seasons, which we normally produce from April onwards.
All these are breaking the financial cycle that RMG factories follow.
In this type of situation, fiscal support from the government is a must to overcome the obstacles and stay afloat.
We will be working with them for restructuring or refinancing existing loans, fresh working capital loans at favourable interest rates and special loan programs for SME factories.
Our goal is to weather the storm and ensure non-closure of any factories. If we can survive another 6-12 months without witnessing any factories shutting down, we can recover and grow the business.
What are the challenges in the country’s apparel sector currently?
To name a few, first is ensuring financial relief for factories with support from the finance ministry and the central bank, with direct help from our Prime Minister.
Other challenges include a lack of better policy support from the ministries, particularly those related with bond and customs authorities to streamline services and audit, product diversification, complicated incentive system and its disbursement, complications with RSC/Alliance/Accord and so on.
In the election manifesto of the Sammilita Parishad, we have elaborated our plans on how to face the challenges ahead and take the industry to the next height in the coming years.
We have 81 plans which have been formulated through extensive research, experts’ opinions and considering industry insights and priorities.
I believe that by materializing the manifesto of the Sammilita Parishad, Bangladesh's apparel industry will be in safe hands and we can ensure sustainable growth.
How do you envision the next leadership of the BGMEA?
My vision of BGMEA is to ensure that it becomes an organization that prioritizes service delivery for its members, where its members can receive them without any hassle.
The BGMEA should work as a united force for all RMG manufacturers of Bangladesh, irrespective of their size.
I want the BGMEA to stand by its members at moments of crisis, as well as celebrations.
During this challenging time, I want to make sure the BGMEA provides maximum support to its members so that nobody feels helpless.
A united BGMEA with transparency and trust of all can make a significant difference in the economic growth of Bangladesh.
Market diversification is very important for further RMG export growth. What will be your role in creating new export markets?
Not only market diversification, but product diversification is also key for our growth and sustainability.
We will be focusing on growing new product categories for increasing market share of Bangladeshi apparel exports, and take advantage of the new global trade environment.
Although Bangladesh is the second largest apparel exporter to the European Union, our position has dipped to third regarding apparel export to the United States.
This is due to strong demand of synthetic products in the US, the non-favourable duty structure for synthetic product categories in the US, and our manufacturing capabilities of synthetic products.
There is a higher duty on the export of man-made fiber to the USA: 27-33 % versus the 17% against cotton-based products from Bangladesh.
So, trade negotiations are needed to overcome the challenges in making policy changes with the US government through trade diplomacy from Bangladesh to get better duty rates for export synthetic-based RMG.
If this is made possible, then our market segment will grow exponentially in the USA from 20% up to 60%, solely on synthetic-based product exports.
This will add about $4-6 billion to our RMG export figures, which will be a milestone achievement for Bangladesh. We want to focus on this for our growth.
Focusing on new markets is also another key for further growth.
We have huge opportunities in South Asia, particularly in India and China.
There are a few barriers regarding duty structure for India, and some product specification and certification in China.
We want to make sure there are uniform regulations and ease of exporting to India and China, by doing trade diplomacy, which I have expertise on.
Additionally, South Africa has large potential as an export market for Bangladesh.
With new product categories as well as new markets, I believe that we can fulfill our target and dream of crossing the $50 billion mark in apparel export in the next 3-5 years.
How is the RMG business amid the pandemic?
One of the worst-hit industries amid the pandemic is the global retail sector, which consists of our apparel buyers.
There are cases of many bankruptcies, non-payment of shipped goods, store closures and tremendous fall in garments sales.
We are seeing a 30% fall in orders and as the situation is just improving, there are the second and third waves.
Why will BGMEA members vote for you?
I am absolutely certain that the members of the BGMEA will acknowledge my hard work, history of service and accomplishments over the last decade, thus giving their judgment in my favour.
I have never shied away from hard work and challenges, always gave my 200%.
I have also selected a great team composed of experienced BGMEA leaders - all veteran and successful manufacturers who were not involved in BGMEA leadership but are proven leaders nevertheless, as well as very highly-educated and experienced second generation apparel makers on my panel.
I am sure BGMEA members clearly see that and will vote for this well-balanced team.
How optimistic are you about winning the polls?
I am extremely optimistic about the Sammilitta Parisad, myself, and the panel that I have put together.
Bangladesh has received the final recommendation to graduate from the least developed country (LDC) category. What might be the next challenge for the apparel sector after graduation?
We have clearly identified all the tasks that we should immediately start in preparation for LDC graduation in our manifesto.
Among them, the key issue is GSP+ and making sure that we have a clear roadmap to receive its benefits.
We have to take utmost care so that graduation does not become a disruptive force in our development trajectory, particularly for the apparel sector.
A comprehensive plan will be in place within the next year. We will form a task force to put together the plan of action.