The RMG industry needs to plan long term
The importance of the RMG sector to Bangladesh is undeniable, accounting for 83% of export earnings, 12% of GDP, and employing some 4.4 million people, over 65% of whom are women.
The growth of the industry has been phenomenal, but now the industry should be analyzing ways that it can improve to ensure the long-term stability of the industry and the livelihoods of those who depend upon it.
The first issue that needs to be urgently addressed and is often cited as a key flaw in the business model of the Bangladesh apparel industry is the heavy reliance on the import of outside resources and the absence of backward linkage to the necessary resources within the apparel sector.
This not only includes textiles but extends to ancillary products and services. As an industry that is still heavily reliant on cotton but has little domestic raw cotton production to speak of, this is an area that will take time to change. Even with the development of the Bangladesh textile industry, as a country we will still need to import fibres and yarns for weaving, but this is not an area I wish to focus on.
Instead, if we consider the complementary products and services required by the RMG sector -- there is massive room for improvement as, sadly, the nation does not possess the necessary infrastructure to support the demands of this, the most vital of industries, to the country.
Let us take the example of dyestuffs and chemicals -- both fundamental requirements for the production of fabric and garments. We have a nascent dyestuff production industry in the country, but chemical production for the textile trade is nigh on non-existent. Development of these resources locally will, undeniably, require investment and the construction of the necessary facilities.
However, the appropriate investment and construction of these vital support industries will also not only reduce costs, increase efficiencies, and reduce lead-times, but also have the added benefit of creating a separate support economy for the Bangladesh RMG industry, offering alternative employment opportunities and creating a more independent apparel sector that can, instead of importing the required products, rely on domestic supply.
Bangladesh also falls short when one considers the domestic supply of machinery to the RMG industry. Whether it be at the base sewing machine level or through to the highly engineered machinery required for a weaving or laundry plant, Bangladesh possesses literally no production in these areas and, just as importantly, the necessary support operations for this vital product.
This leaves the industry wide open to reliance on imports of key elements required in the production process, not only meaning that we pay a premium for our imported machinery but also contributes to the inability of the industry to react.
I fully accept that development of these resources locally is not something that can be trifled with -- it will require massive investment, allocation of valuable land, and strict monitoring to ensure that any factories being constructed comply to the highest international standards, but once these support industries are in place, the benefits to the industry as a whole will be far-reaching.
I am also fully aware that the development of these complex support industries will take time, but there are areas that the industry can develop quickly that would yield fundamental benefits to all concerned.
The growth of the Bangladesh RMG industry can largely be attributed to the reliance on low-cost labour, producing mass volume basic items. Whilst this approach yielded significantly impressive results, the landscape of the global apparel industry has changed. Customers are now looking for product with integrity, produced as efficiently and as quickly as possible, in the most compliant, environmentally friendly method possible.
This change in the global apparel market and the way it is approached requires a change in mind-set from factory owners and top management down to the operator level. This is not a short-term situation; we need to embrace the long-term picture.
The industry is rife with international expertise across all facets of the apparel production process. Whilst I welcome the contribution that this international expertise brings to the industry, where are the benefits if the knowledge and expertise is not conveyed to our local talent, allowing them to develop their skill sets and help to the progress of the RMG sector as a whole?
As an industry we need to ensure that the imported expertise is being used, not only to advance the product that we produce, but to advance the local talent that are exposed to these sources of information.
Another area that the entire RMG sector needs to embrace is the development of personnel with the necessary technological skills pertinent to the RMG sector. Bangladesh is becoming recognized as an emergent nation in the IT and new technologies field, with a well-prepared generation of young-bloods competing globally.
However, for these younger generations, the textile industry is seen as the realm of older generations, and not an attractive sector in which to participate in. This line of thinking is not new -- examples can be found in the US, the UK, Italy, and Spain (to name a few). All formerly countries with a bountiful textile industry, and all examples of how a disenchanted younger generation deserted that industry, contributing to its decline.
This is something we should not allow to happen within the Bangladesh RMG sector. The industry is comparatively young when compared to other global economies but we, as industry leaders, need to improve its appeal to our talented younger generation.
The correct investment in the backward linkage involved with our RMG industry, combined with the nurturing of our own, home-grown product development and technological skills, will stand the Bangladesh RMG industry in good stead for the future and this, I believe, is what we should be focusing upon.
Mostafiz Uddin is the Managing Director of Denim Expert Limited. He is also the Founder and CEO of Bangladesh Denim Expo and Bangladesh Apparel Exchange (BAE). He can be reached at [email protected].