Bangladesh needs to set a base price for garment items to ensure proper rates from international retailers and brands for all manufacturers and bring an end to unhealthy competition locally, said the new BGMEA president.
“Ensuring proper prices for garment items is my top priority,” said Rubana Huq in an interview with The Daily Star at her Banani residence in Dhaka on Friday.
Huq is the first female president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). She took charge for 2019-2021 yesterday, following her election victory on April 6.
She plans to set up a price negotiation cell at the BGMEA where factory owners will be trained on how to negotiate with buyers.
One of the major reasons for lower prices of garment items in Bangladesh is that much of the businesses are negotiated by buying houses.
She gave the example of Sri Lanka which has set the base price for export-oriented garment items. “If all of us remain united, buyers cannot go to other markets overnight.”
Huq targets to bring an end to the unhealthy competition in the market.
“Each one of us is undercutting the other. My target is to stop the undue and hostile undercutting because this never helps us. This is pulling the whole market down.”
According to Huq, one of the handicaps of the garment sector is overcapacity. Many factories have expanded to such an extent that they take orders only to keep their factories running.
Huq says she would assist small and medium enterprises as they are facing troubles even to pay workers' salaries every month. Some 1,500 small and medium-sized factories are facing such challenges.
“There are many buyers who do not buy in bulk quantity. Maybe, the SMEs can cater to them. We will counsel the SMEs.”
Another priority of Huq will be to address the image deficit so that nobody can raise questions about the garment sector of Bangladesh.
She says workers' skill has to be improved a lot as their efficiency level is 40 percent whereas it is always more than 70 percent for the workers in China and Sri Lanka.
She says she will explore the Brazilian, Indian and Chinese markets soon as there is good potential there.
The new BGMEA chief is aware of the challenges the fourth industrial revolution will pose to the garment industry. “The low-end manufacturing will suffer due to automation.”
“Many industrial machines are already eliminating the positions of helpers. There has already been a step towards semi-automation in the industry.”
Sweater companies have already installed jacquard machines that replaced manual operations of workers.
“We will have to train them to make them skilled. Innovations like 3D printing can create a lot of jobs in the era of automation. So, automation itself can be an opportunity for Bangladesh to create jobs.”
On the issue of the Accord, an inspection agency, she says it is actually in transition at the moment.
Huq says the BGMEA and the Accord will work mutually.
“I do not want the industry and the Accord to be involved in a legal battle.”
“I think enough remediation has been done or rather sufficient remediation has been done. If you go to the Accord website, you will see that more than 90 percent job has been done. If that is the case, then what is stopping us from 100 percent remediation? We have target to set up our own monitoring agency.”
“Rather, we can probably certify the Accord saying that 'you are very good and you have executed and fulfilled your duty with passion and integrity. You have done a huge favour, but it is time for you to move to the next country.”
Huq said consumption of garment items would go up globally, but not for the basic garment items. “So, we will have to get ready for more complicated and embellished styles and for more value-added items.”
She said the garment sector will continue to contribute because Bangladeshi entrepreneurs are very resilient.
She said T-shirts worth $5 billion were exported from Bangladesh last year, but it was less than $100 million for female jackets.
“Why are we lagging behind in some special items? We need factories with more targeted and more value addition, not just mass production.”
Huq said the garment sector is moving in the right direction. “There is a room for further improvement. Our export is increasing, but the question is whether we are adding enough value.”