H&M purchase to double in five years
H&M, the Swedish retail giant for clothing, will double its annual outsourcing volume from Bangladesh to around $3 billion within the next five years.
The biggest outsourcing company for Bangladeshi garment items said they get products at competitive prices from the country.
Leaders of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) revealed the plan of H&M at a press conference at its office in Dhaka yesterday.
Karl-Johan Persson, chief executive officer of H&M, was present at the briefing.
Persson arrived in Dhaka yesterday on a two-day visit to discuss business strategies and to meet Prime Minister Sheikh Hasina.
“I am grateful to be here in Bangladesh. H&M has been doing business with Bangladesh for the last 30 years. We have a long-term commitment to Bangladesh,” he said in a brief speech.
More than 100 journalists from the local and international media attended the press briefing.
This is the second such visit by a chief executive of H&M. Earlier, the then CEO of the retail chain visited Bangladesh in 1999.
“We are increasing business in Bangladesh. We are discussing different challenges in garment business,” said Persson, who is leading a five-member team of senior officials from H&M.
The team will also visit several garment factories to oversee their production process.
Currently H&M purchases woven garments, knitwear items, home textile, under garments and trousers from nearly 250 factories in Bangladesh.
The company also outsources from China, Vietnam and Cambodia.
“I sell garment items worth around $2 million to H&M per month,” said Siddiqur Rahman, a vice-president of the BGMEA.
BGMEA President Shafiul Islam Mohiuddin said the leaders of the association visited the headquarters of the company last October.
H&M has a big contribution to the garment business in Bangladesh. “The H&M officials and BGMEA leaders discussed different opportunities and challenges for the growing garment business in the country,” Mohiuddin said.
He said the garment makers have made significant progress in safety and compliance issues at the factory levels as per the requirements of the international buyers.
The BGMEA is operating some hospitals and schools for the workers' children as part of their corporate social responsibility, he added.
“We have the opportunity to grab more market share. But, we have to think whether we have the capacity to grab that opportunity,” he said.
Jyrki Tervonen, chief financial officer of H&M, KG Fagerlin, global production manager, and David Savman, country manager for Bangladesh, accompanied the CEO at the briefing.
Founded in 1947, Hennes & Mauritz -- popularly known as H&M -- has around 2,600 stores across the world. H&M operates under five brands: H&M, COS, Monki, Weekday and Cheap Monday.
In November last year, McKinsey & Company, a global management consulting firm, said Bangladesh's apparel exports could triple to $42 billion by 2020.
McKinsey also said Bangladesh's high growth in the readymade garment sector would continue for a decade.
In 2011-2012, Bangladesh exported garments worth $19.09 billion.