Denim Expert: a champion in sustainability
Despite facing numerous work order cancellations and subsequent suspension of most exports due to the ongoing coronavirus pandemic, Denim Expert Ltd did not lay off any of its workers.
The 2,000 people employed by the Chattogram-based company did not face any salary reductions either, said Denim Expert Ltd Managing Director Mostafiz Uddin.
Even during the two-month "general holiday" that began on March 26, when all factories were closed as a part of the government's measures to curb the spread of the Covid-19, the entrepreneur managed to regularly pay his worker's salaries, festival bonuses and other allowances.
And considering that the garment sector is going through tough times, he urged international buyers to pay their local suppliers in a timely manner in order to help the industry survive the pandemic.
Denim Expert, a niche denim and jeans maker, was one of the major victims of work order cancellations but still, Mostafiz did not lose heart even after facing one of the biggest upsets in his career.
For extraordinary leadership in sustainability and inclusivity in the apparel supply chain, the World Economic Forum (WEF) recently made an honourable mention of Denim Expert in its "New Champion" award category.
A global advocate and renowned figure in apparel sustainability, Mostafiz aims to export $100 million-worth denim products in the next five years.
In an exclusive interview with The Daily Star, Mostafiz said it was still possible to achieve his $100 million export target with his current annual export receipts of $20 million as he has shifted away from traditional business models after experiencing the Covid-19 fallouts.
The visionary entrepreneur shared his experiences, views on traditional international business models and future plans for his business during the discussion.
Primarily, more partnerships would increase the tendency of shared responsibility, transparency and accountability towards the relationship between buyers and manufacturers for sustainability in business, Mostafiz said.
"Suppliers cannot do this alone, and so, help from the buyers is needed to build a good business model with trust and responsibility," he added.
For instance, when the pandemic was at its peak, buyers could have communicated with fabric suppliers suggesting to inform them of any delays in payment so that they could save themselves from losses.
However, international buyers did not communicate with their local suppliers and instead, cancelled work orders amounting to $3.18 billion citing the Covid-19 fallout.
"Bangladeshi suppliers fell in deep trouble as a result of such bad business behaviour by international retailers and brands," Mostafiz said.
In the traditional business model, sellers have to assume this risk alone while buyers are not responsible.
"Therefore, such a one-sided business model needs to be remoulded to ensure more sustainability for the industry," he added.
Although the economy has somewhat recovered since its reopening in June, Denim Expert is still trying to recover from the losses incurred due to order cancellations.
However, Swedish retail giant H&M has shown a fine example of what a good business partnership should be as it came forward to start sourcing products from Denim Expert during these tough times, said Mostafiz, who began his journey as a denim supplier to European customers in 2009.
Denim Expert differs from its peers in many ways.
For example, a few transgender and disabled people alongside human-trafficking victims are employed in the company's factory, which initially had just 700 workers in 2009.
Some of Mostafiz's buyers cancelled their orders altogether while others are making payments against previous work orders.
According to the managing director, there are two important lessons the pandemic has taught him.
First, he was not ready to face so many order cancellations from known buyers while the second is that he was not prepared for natural disasters like the Covid-19.
The future of Bangladesh's denim and garment business is very bright though, as buyers are returning with a lot of work orders since stores have reopened in the western world despite the threat of a potential second wave of infections.
However, competition in the denim goods sector is growing as Pakistan is also strong in this particular field of garments and has its own cotton, something Bangladesh lags behind in.
Regarding the price of garment items, Mostafiz said Bangladeshi apparel suppliers do not get premium prices from buyers due to the absence of good partnerships.
The relationship is restricted to that of just buyers and sellers, and as a result, the buyers do not worry about any disadvantage faced by sellers, he added.
Bangladesh is also a global champion in establishing green garment factories. Still, local suppliers do not get premium prices from buyers. This is not just because of weak negotiation skills, but also for the lack of partnerships.
Regarding the WEF award, the managing director said the company was awarded in the "Excellence in Sustainability" category.
"We are proud of our green factories in Bangladesh. We have a lot of achievements in sustainability globally," he said, adding that such awards would help build a positive image of Bangladesh, particularly the country's garment sector.