Foreign firms target thriving garment
Merchants from Europe and Asia try to jump on the bandwagon of the garment industry in Bangladesh, which already secured its position as the second largest apparel exporter.
At Gapexpo-2013, the four-day exhibition on garments accessories, packaging and related machinery in Dhaka, they try to introduce automatic gears to Bangladeshi factories.
The Turkish businessmen, HÃ¼seyin Akar and Burak Uysal, were handing out their business cards to the crowd of the Bangladeshi garment experts passing by.
â€œAs the Bangladeshi market is picking up quickly, we want to contribute and try to sell our automatic sewing machines,â€ said HÃ¼seyin Akar to The Daily Star on Monday.
They expect their sales to increase in 20 percent after the exhibition. But the two men from New-tech Sewing Systems in Istanbul must make some efforts to achieve this goal on their first business trip to Dhaka.
As labour cost is low in Bangladesh, garment factories still produce with the very basic sewing machines that need a lot of manpower, Akar said.
In his country, a sewer earns around $1,000 per month. With personal costs in that height, investing in machines is much more profitable than in Bangladesh, where manpower is available at an explicit lower price.
â€œWe have to convince the factory owners that machines increase the product quality,â€ he said. But complex machines must be well maintained.
â€œThere is a need for technically well educated people,â€ said Akar.
The lack of technological knowledge is considered widely as a challenge in the Bangladeshi garment sector.
â€œPeople often don't know about technology,â€ said Abu Taleb Bhuiyan, the local CEO of another Turkish company -- Best Tex International.
The firm sells machines to produce jeans. Engineers from Turkey have been brought to install the full gear at the Gapexpo. The company has realised the need to show and explain its machines to the customers.
Japanese brand Juki wants to increase its sales of technically more complex gears, said Shamsul Alam, its CEO in Bangladesh.
Juki is also the market leader of industrial sewing machines in Bangladesh.
â€œOld factories are about to change their machines.â€ So Alam expects increasing sales from 10 percent to 15 percent per year.
The trend towards automation of technical processes brings also a further division of labour. So Juki presents, for example, an Automatic 1-needle Belt-Loop Attaching Machine, which is only used to attach belt-loops to trousers.
On the other hand, it offers an improved productivity and allows inexperienced operators to sew various types of belt-loops, as it is said on an advertisement at the fair.
Other machines on display at the fair are great time-savers. For example, the Monpura Group showed a device consisting of 15 sewing machines that stitch all the same ornament.
For a typical ornament on a kameez, this machine needs two hours -- much less than a sewer. As there are 15 machines working automatically at the same time, they produce 15 ornaments during this time.
Foreign businesses want to gain ground not only in the machinery sector, but also by selling fabrics to Bangladeshi garment factories.
Italian businessman Enzo Gravela has come with his Bulgarian associate partner Ivo Ivanov. Their fabrics are designed in Italy and produced in Bulgaria.
â€œA lot of our European customers get their clothes made in Bangladesh,â€ said Gravela. He expects that many of the factories will come up with fresh funds and start to invest. â€œWe want to be here early.â€
However, at the moment, the European fabric producers are facing a tough competition with the Chinese producers.
â€œWe are a bit more expensive than the Chinese,â€ the Italian said. So he is still about to find a market niche. â€œIt will be tough, but profitable,â€ he said.
In addition to finding local partners, new participants also face other challenges while starting business in Bangladesh.
As various sources complain, they have to bring not only good offers to sell, but also gifts or cash to the key players, to finally enter into a deal.
However, foreigners from more than ten countries crowd the show where a total of 350 companies are displaying their products at 560 booths. The fair at Bangabandhu International Conference Centre ends today.