Let’s build the RMG park of the future
A decade ago, global management consultant McKinsey published a report titled "Bangladesh's Ready-Made Garments Landscape: The Challenge of Growth." To prepare the report, McKinsey collaborated with the Bangladesh-German Chamber of Commerce and Industry and interviewed many leaders in our RMG industry. The landscape then was clearly different from what it is now, especially given the impact of the Covid-19 pandemic for the past 18 months. It was, therefore, interesting to read an update to this study, which was published earlier this year.
The conclusions drawn by McKinsey's 2021 report on Bangladesh's RMG industry are that it is faced with major challenges brought about by the Covid-19 pandemic as well as the shifts in global markets. McKinsey said the RMG sector in Bangladesh would need to innovate, upgrade, and diversify moving forward. This will require investing in flexibility, sustainability, worker welfare, and infrastructure. In short, there is still much work to be done.
The report lauded our greater capacity to produce garment products with synthetic fibres, and manufacture more complex products such as outerwear, tailored items and lingerie. It also praised our ability to provide new washes, prints, and laser finishes, while noting some increase in vertical integration of the supply chain, with the result being that more suppliers are now able to offer lead times below the standard 90 days.
But the overriding message is clear: we must go further.
In another 10 years' time, do we want to receive this same message? How can we turn our RMG industry into a leading, innovative, sustainable powerhouse in the world, with a heavy focus on R&D and rapid product turnaround? Perhaps it is time for us to start imagining the RMG industry of tomorrow in order to future-proof our most valuable export sector. Actually, let's go a step further: perhaps, it is time to start building that industry.
Underpinning such an industry, I believe, will need smart and sustainable business parks. It can be challenging to "retrofit" futuristic technologies into existing factories or locations. This is because so many changes have happened in terms of sustainability-related technology in the past two decades—sometimes, it is just easier to start from scratch.
The new sustainable business parks, which could be developed with public-private partnerships, would be characterised by a number of features.
Firstly, they would be developed sustainably from the ground up. Each business could follow the guidance of an environmentally-friendly site master plan, drawing heavily on the best international practices in such areas. All of the buildings would adhere to the highest international standards for green design and layout. In fact, many RMG factories in Bangladesh are already Leadership in Energy and Environmental Design-certified, but there are additional measures that can be taken with a specific garment-production focus.
There would be a major focus on the use of renewable energy, including solar and wind energy, in these parks. Solar power, in particular, is one sector of renewable energy where huge technological strides have been made in recent years. In addition to the wide scale adoption of cleaner production and water-saving technologies, a central rainwater harvesting system could be installed, which could be used by all tenants. Water is our most precious natural resource, and Bangladesh is a water-stressed country. We need to start preserving it.
The sustainable business park of the future would be vertically integrated. Vertical integration is the holy grail for any textile manufacturing hub—just ask China. It shortens supply chains, boosts economies of scale, allows a faster turnaround of products, and enables more export receipts to be retained in exporting countries. What's there not to like? We have to think more about how we can bring more stages of production under one roof in Bangladesh. If building a structure from scratch is the way to do that, then that is the road we need to take.
There are other arguments in favour of developing business parks of this nature from scratch. For a plethora of reasons, such parks provide a major boon for inward investment, particularly green finance.
Smart and sustainable business parks would include a sludge treatment facility, with further trials already underway for responsible disposal. These include tests using microalgae to break down sludge, as well as utilising sludge to fuel furnaces and as bricks with a bio-mat mask. The most sophisticated Common Effluent Treatment Plant (CETP) would provide treatment facilities for all tenants.
Finally, there are other aspects of sustainable business parks that could be considered. Could they incorporate a central design facility? What about a central research and development facility on site? The benefits of centralising such facilities—and making them available to all site park tenants—are major economies of scale.
Developing such futuristic parks would enable Bangladesh to think 20, even 30 years ahead—of a time when being fully sustainable will be the norm, rather than the exception to the rule. Our RMG factories are already incorporating many of the ideas and technologies discussed above. But are they all being developed from scratch, in one location, which would surely act as a magnet to an inward investment community that always has one eye on the future?
If we were to begin developing smart and sustainable business parks in Bangladesh, I have no doubt the green investors would sit up and take notice. Together, they could help us build the garment production hub of the future.
Mostafiz Uddin is the managing director of Denim Expert Limited, and the founder and CEO of Bangladesh Apparel Exchange (BAE) and Bangladesh Denim Expo.