Bangladesh must be in the premier league of a new apparel industry | The Daily Star
12:00 AM, September 28, 2020 / LAST MODIFIED: 12:51 AM, September 28, 2020

Bangladesh must be in the premier league of a new apparel industry

A new study by the International Labour Organisation (ILO) suggests that the impact of the coronavirus pandemic will be deep and long-lasting. The research argues that global garment supply chains will undergo profound changes as a result of the pandemic. They say the pandemic will speed up current trends which include an increased focus on technological advancement as well as greater supply chain agility. Their report also suggests that we could see a move towards a "two-tier supply chain," where large, cash-rich suppliers race ahead with the use of advanced technologies, while the "race-to-the-bottom" suppliers focus on cost-cutting simply in order to stay afloat. 

A key point made in the research is that global apparel supply chains will become polarised. The authors say there will likely be a deepening divide between large and professionalised and non-professionalised manufacturers, which will present the industry with two clearly defined diverging paths. On the one hand, some factories are likely to become professionalised and offer more technologically advanced production. As a result, these factories will be able to support increasing demands for transparency, flexibility and agility in production processes and enhanced social and environmental standards. This development will likely result in closer partnerships between some buyers and manufacturers and possibly in more balanced power dynamics. In other words, manufacturers like this will be better placed to negotiate with buyers.

On the other hand, stretched margins will drive some factories and buyers to focus on solely cost advantage at the expense of other considerations. We know about these kinds of suppliers. They are stuck in a race to the bottom which is almost impossible to escape.

Bangladesh, as the second largest garment manufacturing hub in the world, has a decision to make: which side of the fence is it going to be on? Will it be the professional, the leader, the high tech, high added value side? Or will it re-join the race to the bottom, forever fighting a battle against low wages and feeding off scraps from brands?

The ILO study does suggest that this "two-tier" industry will be seen within countries. So that means that within Bangladesh, we might have laggards and leaders.

While this may be the case, as a country, I believe we have to set out our stall now—our heads of industry have to work with the government to decide how they can ensure that we are all dining at the top table when it comes to apparel manufacture. By that I mean Bangladesh needs to prepare for the new normal by providing brands and retailers with a world class ready-made garment sector, producing high quality apparel in sustainable conditions—and paying a fair wage to workers.

I truly believe the decisions our industry takes now will define us for the next two decades. Over the past two decades we have become synonymous with low cost clothing, thousands of manufacturers producing the same staple items.

Thinking in terms of the ILO report above, we now have a chance to change that picture and reimagine our industry as a different animal entirely. Now is the time for our industry to double-down on its investment in technology and sustainability and for our government to ensure we have the right kind of graduates entering the sector—people who can lead us into a bold and bright future, the top-tier of apparel manufacturers globally.

Is this too much to ask? The ILO report makes clear, in tomorrow's apparel supply chains we will be seeing a survival of the fittest. There will certainly be an industry cull, and our RMG sector will probably be smaller moving forward. How much smaller, nobody knows at this stage.

But we sit amidst a period of great change and upheaval. Separate to Covid-19 is the steady unravelling of apparel and textile supply chains in China. The United States has just announced that it intends to ban the import of all cotton and apparel which has links with Xinjiang in North Western China due to concerns over forced and prison labour. It is impossible to overstate how huge this is, and it offers further evidence of the huge shifts we are seeing in the industry.

Brands and retailers are looking for new sourcing partners, as many fear huge fines if their shipments are stopped at the US ports because they are found to contain produce from the vast cotton fields of Xinjiang.

China has always been in the top tier of apparel manufacturer but there is a good chance that brands will be giving the country a wide berth beyond 2020.

Bangladesh should take heed of the ILO's findings about a two-tier industry and decide what type of apparel production hub it wants to be.

More than ever, it's time to think big.

 

Mostafiz Uddin is the Managing Director of Denim Expert Limited. He is also the Founder and CEO of Bangladesh Denim Expo and Bangladesh Apparel Exchange (BAE).

Email: mostafiz@denimexpert.com

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