Bangladesh RMG must be more resilient after Covid-19

The world might look a very different place 10 years from now. If the Covid-19 pandemic has taught us anything, it is that nothing can be taken for granted—in life or in business.

Bangladesh's RMG industry entered 2020 primed for further growth. Our main concern as an industry at that time was the unrest around the new minimum wage and workers' rights. While such issues can never be ignored and we must take them seriously, they look like nothing at all compared to the tsunami we as an industry have undergone these past 18 months.

I won't lie, the first year of the pandemic was extremely tough—as RMG factories and many of our major export markets were in lockdown. It was difficult to get raw materials. Brands and retailers were cancelling orders left, right and centre. And there was a general level of uncertainty and chaos in the air, the likes of which I have not experienced in more than two decades as a business owner.

It is only as we have gotten further into 2021 that our industry has begun to find some breathing space. Several things have been in our favour. The first is the global vaccine rollout, which has led to the opening up of major markets and the removal of lockdowns across the US and Europe. The second is the "bounce" we have seen as shoppers return to shops and make up for lost time in purchasing clothing. Many are calling this "revenge" spending. The last issue is that our rivals in Vietnam and China have had harsher lockdowns of their textile industries than Bangladesh. This, combined with the fact that Myanmar—another competitor—has had a military coup has led to brands and retailers placing more orders with us. In a world of uncertainty, Bangladesh is seen as a "safe bet" right now for fashion retailers. We cannot, however, rest on our laurels.

Throughout this past 18 months, Bangladesh's RMG industry has shown strength in adversity. The relative stability of our political environment coupled with our pragmatic management of the pandemic—allowing factories to remain largely open was a smart move by our industry leaders—means we are well placed to capitalise on future opportunities.

But we must use this time to build resilience in our RMG sector and not let our hard-won gains go to waste. To return to the point made at the beginning of this article, none of us can be sure of what is around the corner. A recession in 2022, which some forecasters are predicting, could quickly derail things.

So how can we build this resilience in the months ahead? How can we ensure we are prepared for the next crisis or to ride out any future recession?

I can think of three ways.

The first refers to the current situation we find ourselves in. We are picking up extra orders due to complications in the supply chains of some of our competitors. We need to make these orders stick and turn them into long-term business opportunities. We must see it as an important feather in our cap that buyers have turned to us in their hour of need, at a time when all retailers are struggling to secure product in the run up to the festive season.

All of us need to go above and beyond to illustrate that Bangladesh is a safe pair of hands—a true thoroughbred when it comes to textile and garment sourcing.

The second issue relates to logistics. One thing we have seen in the past few months is how a few small issues in terms of moving cargo about can soon mushroom into much larger ones. A problem in one part of the world can spread like a virus, and supply chains can quickly become unstuck.

More than ever, we need to invest in our logistics infrastructure—our roads, our ports, our rail network—to make moving product about slick and seamless. There is talk of a 10-fold increase in the global cost to move a container from one part of the world to another this past 12-months. Nobody can live with this kind of uncertainty long-term. China has been particularly hard hit, but these problems can strike anywhere.

All options must be on the table. I was delighted to see the major projects being undertaken by our government recently for upgrading airports, including the construction of a third terminal at the Hazrat Shahjalal International Airport. This will help to meet future demand of air cargo transportation and contribute to further economic growth in Bangladesh. More of this please.

Finally, we must continue to lead on sustainability in line with the demands of buyers. The presence of Bangladeshi representation at the 26th UN Climate Change Conference of the Parties (COP26) is critical for our industry. Our buyers, more than ever, are turning to us for solutions to their emission challenges. The environmental crisis will not be solved in the shiny stores of our buyers—for instance, the products in the stores need to be manufactured back in Bangladesh using renewable energy.

The solutions lie in resilient, future-proofed, garment supply chains.

We know what we need to do.

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).