Let’s benefit from the booming RMG business

Two years ago, apparel order books were empty when Covid broke out, shutting down major global markets for Bangladesh. Two years later, the order books are full. Our Ready Made Garment (RMG) industry has come full circle after what is certain to one day look back on one of the most extraordinary periods in our history.

Nobody knows how the next few months or years will go. There is talk of global inflation leading to higher interest rates needed to curb rising prices. Higher interest rates often slow down the economy. Others believe inflationary pressures could ease on their own once global supply chains really get going and bottlenecks in key logistics hubs like China are eased.

The picture of uncertainty prevails, but we must be thankful that business is doing well in these volatile times. But what now? I think we have an opportunity that we shouldn’t let slip. Bangladesh needs to strike while the iron is hot and capitalize on good order books by making investments and changes that will serve us well for years to come.

Someone recently asked me how I think the next 12-18 months would go. That’s everyone’s guess. That being said, our business has been pretty robust since late last year and I don’t see why that should change any time soon. The reason I say this with some confidence is China, the world’s largest textile market, which has adopted a “zero Covid” strategy and has shut down entire cities due to low numbers of infections.

These issues are having a major impact on Bangladesh. Our own government has taken the pandemic lightly, balancing the need for public health safety with the need for a healthy economy. China continues on its Covid zero path showing no signs of disruption.

The upshot of all this is that China is becoming a serious sourcing hazard for all retailers, including the fashion industry. When people ask how I see things going in the near future, it’s hard not to see further decoupling between China and fashion brands and retailers, and more business for its closest competitors like Bangladesh.

So it is high time for our apparel suppliers to take action and turn this short-term opportunity into a long-term business strategy. The sun won’t shine on our industry forever, and there are steps we can take to capitalize on the healthy revenue streams we’re witnessing. We must not waste this opportunity.

Investments in important, business-critical areas are imperative for our industry in the next 12 to 18 months.

The first of these areas is the technological upgrading of our factories. Productivity rates remain low in our industry compared to those of our competitors. Better farm management, better layout, more modern machines – all of these can allow us to improve productivity and profit. You can also ensure that we continue to meet customer requirements and are more flexible in responding to order changes.

Another factor is the training of workers. Good people make a successful business. Attracting decent talent is always a big challenge, especially when the order books are full to the brim. Now is the time to invest in people and their education and build stronger connections with our colleges and universities.

The third point is of course sustainability. One thing I’ve witnessed over the past year is that now more than ever, our customers are doubling their demand for sustainability. We are seeing major fashion retailers streamlining their supply base and getting rid of suppliers that cannot meet their sustainable production criteria. Some of our factories risk being left behind in the new landscape if they don’t invest in technologies that save energy and water, for example.

The last area I think we need to focus on is advertising and marketing. I see so much interest in Bangladeshi products at the moment, there is such a big outpouring of goodwill towards our industry. Fashion brands have recognized during the pandemic that we can be counted on as a trusted sourcing partner and I now believe we are reaping the rewards.

Let’s not waste that goodwill and let’s all focus on the same key factors: Quality, Consistency and Sustainability. Some people believe that moving production from China to Bangladesh could be temporary. It’s up to us to make sure this is a lasting change, and for that we need to invest.

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).