Exporters eye brighter days as they hone skills

Bangladesh's manufacturers are upbeat about exports as companies are exploring opportunities in the overseas markets while international buyers have started considering the country as a key manufacturing hub.

“If we have patience and can explore opportunities we will be able to grow in all segments, not only in just garments,” said Ahsan Khan Chowdhury, chairman and CEO of Pran-RFL Group.

“We don't have enough raw materials. But I strongly believe Bangladesh will become a raw material processing hub and finished goods producer in the years to come, thanks to the competitive nature of the exporters and the government's favourable policies.”

Reaz Uddin Al-Mamoon, managing director of Epyllion Group, a leading garment exporter, said exports have been good in 2016 and the growth will continue its pace in the coming years.  

Despite a gloomy global economy, Bangladesh's exports increased 13 percent per year in the last decade, according to the World Bank.

However, 80 percent of its exports remained concentrated in garment, mostly low-value items.

Bangladesh needs to continue to grow its exports by improving the mix and quality of its apparel products, as well as diversify into new labour and skills intensive industries, such as footwear, light engineering and electronics, the WB said last month.

Mamoon of Epyllion Group said companies, which are relocating factories from China because of rising cost of production there, are also placing orders in Bangladesh.

Besides, because of the unrest in Turkey a lot of orders are being diverted to Bangladesh.

Mamoon also said the uncertainty that surfaced following the Holey Artisan attack in Dhaka has disappeared.

“Recently, a team from the European parliament has visited my factory, and we had fruitful discussion. They are positive about Bangladesh.”

He said a bright future awaits Bangladesh's garment sector. “But we have to have right infrastructure in place. If we can ensure that, we can grow a lot. We know the government is aware of the energy crisis. We hope we will be able to see a positive result.”

Mamoon, however, said the acute gas crisis is a serious problem for exporters.

“Factories are being forced to use diesel because of the gas crisis. As a result, the cost for fuel has gone up by three to four times. We can't remain competitive by using diesel,” said Mamoon.

He also said skilled human resources are going to be the key factor for the country to raise exports. “Our education system has to be linked to areas where we have growth prospects.”

Epyllion has been engaged in manufacturing and exporting knit apparel items since 1994. The company is renowned for its high quality products and efficient management. It exports to more than 10 countries, including Germany, the UK, the Netherlands, Sweden, France, the USA, Mexico and India.

Currently, it has seven factories which employ more than 15,000 workers. The company plans to open a new factory by 2018 which will create another 4,000 jobs. Its annual turnover is $200 million.

Another leading exporter, Md Saiful Islam, managing director of Picard Bangladesh, said the country needs to diversify its exports. He said, as per the government's Seventh Five-Year Plan, diversified products should be 30 percent of the total exports, instead of 18 percent at present.

He said leather products have huge prospects if those are environment-friendly. “We have our own raw materials, good craftsmanship and competitive advantage. So, the leather goods and footwear sector have a bright future,” he said.

Picard Bangladesh is one of the few companies which are trying to diversify Bangladesh's export basket. Picard is operating in an area where Bangladesh is not a major player.

Picard, a joint venture between Picard Lederwaren Gmbh Co & Kg and its Bangladesh counterpart, produces for brands such as Sportscraft, Saba, Oxford, JAG, David Jones and Lloyd.

A pioneer in producing consumer leather goods, Picard exports to around 20 countries, including Germany, Italy, Lithonia, Australia, Singapore and Japan.

Amrita Makin Islam, deputy managing director of Picard Bangladesh, said, as China moves away from the manufacturing of basic consumer goods, Bangladesh can attract a major portion of the orders.

Additionally, due to the scarcity of tanneries in competing manufacturing countries like China and Vietnam, Bangladesh has the unique advantage of being a major producer of leather, she said.

China-based manufacturers are looking to Bangladesh to relocate their factories, she added.

Picard currently produces 32,000 bags and 40,000 pieces of small leather goods per month. It employs 1,800 workers, according to the company's website.

Leather goods exporters also say they would be able to attract more global buyers as there are many Bangladeshi factories which are already compliant and more and more local producers are following suit.  

Pran-RFL Group is already the market leader in the processed food and plastic segments in Bangladesh and has now set its sights on becoming a global leader.

Chowdhury of Pran-RFL Group said exporters are already working to diversify products and export destinations.

“The food processing sector is doing well. Light engineering and plastic sectors have bright prospects. Our bicycle exports are also growing.”

Pran-RFL Group is exploring the African and Oceania markets. The company recently took part in a construction materials fair in Dubai where it received a good response.

“In the coming years, we will export kitchen sink and plastic doors,” said Chowdhury. 

The company's exports, which started off with puffed rice and chanachur several years ago, stood at $184 million last fiscal year.

The group's employee count is 84,000, which is considered the highest in Bangladesh.

According to the WB, Bangladesh can become an export powerhouse like its East Asian neighbours by improving its business competitiveness and trade regime, which will help firms compete globally.

With rising labour costs in East Asian countries, investors and buyers are now turning to South Asia, including Bangladesh. With more than two million youths entering the labour market every year, Bangladesh needs to act now to seize the opportunity and create more jobs, said the lender.

Epyllion Group and Picard Bangladesh won the prestigious HSBC Export Excellence Awards in 2015 while Pran-RFL won the accolade in 2012. The international bank will organise the sixth edition of the awards on Saturday.