Double our operational capacity by 2025
Founded in 1995 in Bangladesh, Asrotex Group specialises in manufacturing knitted garments. It is one of the leading vertically integrated knitwear manufacturers and exporters in Bangladesh. Fibre2Fashion spoke to Abrar Khan, Director of Asrotex Group, to understand the evolution and future prospects of the Bangladeshi knitwear sector, and Astorex Group’s future expansion plans.
How has the knitwear sector evolved in Bangladesh in the last 10 years? Going forward what factors will contribute to its growth?
Bangladesh’s garment manufacturing industry has shown a spectacular growth in last 10 years. RMG exports from Bangladesh have significantly grown twice more, from $14.6 billion in 2011 to $34 billion in 2019—a compound annual growth rate of 7 per cent.
A key strategy for the sector’s growth over the past decade has been to diversify customer markets and move to more complex products and value-added services. The RMG sector has made progress in broadening its customer portfolio to manage risk and adapt to changing demand patterns in the global fashion market. As a supply hub of the world, the Bangladesh garment industry is focusing on compliance and environmental sustainability. The count of green factories is continuously increasing and has already exceeded the number 100.
What kind of innovations in machinery are you interested to bring in?
We are extensively investing in digitalisation and robotic application in shopfloors. One of our key strategies is to automate the process, reduce human touch points so as to make the process error proof. We are also heavily investing in machinery which are energy efficient, IOT embedded, intelligent, highly flexible with market dynamics.
Apart from t-shirts and hosiery products, which are the emerging categories in knitted apparels? Which future trends will dominate knitwear?
The pandemic has resulted in various lifestyle changes and our day-to-day requirements which has brought a crucial change in the product range/trends. Due to lockdowns and restrictions in gatherings, consumers had fewer movements that made an impact on their choice of clothing. Hence, there has been a boom in demand of seamless and athleisurewear over fashion and semi-fashion products. Also, with the world adjusting to the aftereffects of the pandemic, there has been a sudden awareness about the process and functionality of the products and people are rapidly diverting towards organic, anti-bacterial finishing and clothing with smart functionalities.
How was Asrotex Group formed? What are the major milestones achieved by it since its inception years?
Founded in 1995, Asrotex Group is a vertically integrated business which slowly ventured into apparel and textile industry from printing and packaging. This unconventional journey from being a traditionally cut to sew unit to being a fully composite unit, has made Asrotex Group as one of country’s finest apparel and textile manufacturing company. The organisation mainly functions from Dhaka with its design office in Europe and four manufacturing units in Gazipur and Narayanganj industrial belts with the operational involvement of around 14,000 people. Asrotex group now is in a transformational journey. Asadul Islam, managing director of Asrotex Group, is making way for new generation employees to take lead towards developing the organisation’s competency to face upcoming disruption and creating opportunities from the challenges. Islam sees the potential of Asrotex Group achieving the milestone of $500 million turnover by 2025.
Where do you source your raw materials from?
Asrotex Group with its vertically integrated units in the Narayanganj and Gazipur Industrial belts has end to end solutions, from raw materials to finished goods. Currently, we are sourcing about 90 per cent of our yarns while the rest 10 per cent including synthetic and some special yarn is imported. Whereas for fabrics, our factories have in-house capacity 80-90 per cent of fabric requirement, and we are working on building the capacity for the rest 10-20 per cent to be produced from in-house capacity.
What are the 3 key government policies that have helped units like yours achieve size and scale?
Bangladesh government’s trade policies are incredibly favorable to textile and apparel Industry. In a bid to explore new export destinations, the Bangladesh government has taken the decision to increase cash incentives for export in non-traditional market. These policies include “duty-free import of inputs, bonded warehousing facilities, back-to-back LC, rapid custom clearance” and many more pragmatic steps which are worth mentioning.
What are the challenges faced by you despite government support to the industry?
Government must further improve road transport and deep port facilities. Bilateral trade policy should be further discussed to expedite exports in non-traditional market. High level branding initiatives are required to promote Bangladesh as a brand across the globe.
Which are your major markets in Bangladesh and abroad? What is the percentage of revenue contributed by each?
All products that we manufacture are for overseas market comprising about 60-70 per cent for the European market, 10 per cent for the North American market and another 20 per cent for non-traditional markets such as Australia, Japan, China, Korea, Latin America.
Which are your knitwear products? Which among them is the highest revenue generator?
We have 3 categories of products-basic, semi fashion and fashion. Fashion and semi fashion products generate the highest revenues giving 50 per cent and 20 per cent business respectively.
What changes has the pandemic brought in the way of doing business and consumer preferences?
Today´s situation was unthinkable for most of us, and we may have suddenly realised some of our vulnerabilities (both individual and as a society), and this will lead to some structural changes. Taking care of people and prioritising general wellbeing may become a requirement for doing business in the “next normal”. Consumers may continue to raise their awareness and desire for more health and safety in their everyday living. And, this will directly affect their buying habits. People may read labels more closely, scrutinise the ingredients of products, and be much more careful about what they put in and on their bodies.
When do you think textile businesses will be back to pre-Covid levels?
Order flow from brands is good. Most of the factories here are fully booked although situation is still very uncertain. Mass vaccination project is well in progress across the country, govt is giving special priority to workforce working in the textile industry. We are hoping for the best.
What is the manufacturing capacity of your products?
We have capacity of producing 60 million garments per year. Our vertical capacity supplies 30 metric tonnes of greige fabric, 60 metric finish fabric, 10 metric all over printing per day.
How big is your team of merchandisers? How many clients are they handling at present?
Our team consists of 100 most efficient and reliable merchandisers in the industry who proactively monitor an order, start to end. They play an important role in maintaining and accelerating the execution speed. Our team of merchandisers are handling over 25-30 clients like H&M, NKD, Inditex, Carrefour, Lidl and a few new clients will be on-boarded in the upcoming seasons.
What are some of the CSR activities you would have undertaken to support your employees and the public at large amidst the pandemic?
Asrotex Group has always been actively involved in various corporate social responsibility activities. During Covid-19 period, we have launched project Asrocare, through which we ensured required assistance to our employees and communities for a better and healthy life.
What are your future expansion plans?
Massive expansion projects are in progress. We will double our operational capacity by 2025 and this will add another $100 million in our total topline.
How strong is your focus on sustainability? Please elaborate.
As a leading apparel manufacturing company in the region, we understand our responsibility towards driving a more sustainable future for our organisation and our planet. Sustainability is beyond just a business imperative for us, it is a way to redesign the future of business. With a sharp focus on product stewardship, we have a long-term strategy that provides the roadmap to improve sustainability and business performance at the same time. Our value chain partners are aligned with our goals and continue to play an important role in achieving them together with us.
This year, we achieved significant milestones through product sustainability, resource efficiency, renewable energy consumption, responsible supply chain, circularity, and strategic collaboration with global and national organisations along with memberships on global platforms. We constantly work to regenerate, restore, and revitalise the ecosystems and communities we operate in.
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