Garment sector's growth drives economic boom

PUBLISHED : Monday, 26 March, 2012, 12:00am
UPDATED : Monday, 26 March, 2012, 12:00am


As a hub for export manufacturing, Bangladesh has obvious attractions for Hong Kong-based companies familiar with the principle and practices of outsourcing production.

A low-cost base, abundant skilled labour and the capacity for expansion present major advantages. But the various authorities also know that the competition of a global economy and demand for ever-higher quality standards mean they can take nothing for granted.

'Bangladesh is going through a tremendous boom, mainly thanks to its apparel industry, which is also propelling rapid growth in many affiliated sectors,' says Ranjan Mahtani, chief executive and principal owner of apparel supplier The Epic Group.

'Over the next two years, the expansion of infrastructure will be the major challenge the country faces. If infrastructure [keeps pace with] requirements and if the textile industry evolves, the country could easily multiply current exports five times by 2022.'

Epic's own presence in Bangladesh goes back almost 30 years and, in round terms, the group is increasing production capacity there by 20 per cent annually.

A state-of-the-art garment factory was opened in Dhaka in 2006, with space for an advanced wet-processing area, wrinkle-free technology and computerised embroidery machines.

A new denim-weaving plant has been commissioned and will help meet orders from Europe and the United States placed by many of the best-known brand names and chain stores.

'Our focus in Bangladesh has always been to set up units that could match the best units in China,' Mahtani says.

'We need to have a sophisticated operation, which doesn't just survive on price alone, and which can respond to soaring demand for quality apparel products.'

In part, this demand is attributable to duty-free access for Bangladeshi imports to the European Union under the generalised system of preferences (GSP) scheme. But it is also down to changing patterns of international sourcing and trade.

'Japan and China now aggressively source from Bangladesh, and we now see all big brands and labels manufacturing there,' Mahtani says. 'While the US and European markets have been the primary client base, we are now seeing tremendous growth to other markets, especially in Asia.'

Another Hong Kong-based company with strong links to Bangladesh has added a new facility, taking its total garment-related workforce to around 25,000.

'We have also expanded our Fashion City Complex, which will now have the largest denim dry and wet-process workforce in the country,' says Sanjeev Mahtani, managing director of The Must Organisation.

'They are trained to execute different processes like whiskering, hand sanding, distortion effects and creating other 'used' looks, which attract international buyers like Macy's, Levi's, Mango and Ann Taylor.'

He adds that innovation, not just cost competitiveness, is the key to rapid future development. In the garment sector, this will depend on new methods of fabrication and adapting to new trends in styling.