Cap maker sees snags in shift to Bangladesh

Two years ago, when Mainland Headwear chose Bangladesh as the location for its new factories, rather than China, its management may not have expected it would face so many hurdles.

Despite the well-known problems of flooding, power shortages and a lack of infrastructure in the country, its capital, Dhaka, has continued to attract leading fashion brands, with the likes of Nike and Victoria's Secret setting up production lines to take advantage of wages that are among the lowest in Asia.

But Mainland Headwear, which makes caps for Nike, Reebok and Wrangler, said there were quite a few hidden costs behind the cheap labour - even with wages just a tenth of those in China.

"When we first went there, the male workers would not take orders from a Chinese supervisor because she was a woman," said Maggie Gu, the company's chief operating officer. "Also, we had to be careful not to raise the salary of a worker from a lower social class higher than that of his higher-class peers, otherwise there would be a riot."

And while Bangladeshi workers were much less demanding than their Chinese counterparts - who Gu said might turn down a job if the factory had no air conditioning or there were not enough workers of the opposite sex - they also took much longer to pick up a skill.

"It may take three men in Bangladesh to do one man's job in China," Mainland Headwear's chief financial officer, Thomas Lai Man-sing, said. "Taking everything into account, the productivity rate there is probably just half of that in China."