Mr Islam, Your group is into the textile industry since 1964. Tell us which happenings come to your mind as major turning points for Bangladeshi textile and garment industry? What niche your group enjoys in this vital sector for the country’s economy?
The major turning points for Bangladeshi Textile and Garment Industry in my view are -Privatization of Spinning Mills in the late 1970s; Vision and proactiveness of our Country's Entrepreneurs, who started the RMG export business in 1978/1979 (it may be mentioned here that my Father, Md. Sirajul Islam was 50% owner of one of the first Garment Factories which exported RMG. So, he is indeed one of the Pioneers of Garments Industry of Bangladesh). Then, thirdly, focus of many Entrepreneurs on the RMG sector, which led to creation of many Garments Factories, which gave us the volume and also made the international garment buyers take notice of Bangladesh! Fourth is- abolishment of "quotas" from USA in the mid 80s. And last but not the least; the tremendous growth in the Spinning sector in the early and mid 90s, which supported the RMG sector hugely through ready availability of their raw material, i.e. yarns.
Our group enjoys a very qualitative niche. Bakul is the Pioneer in the raw cotton trading/indenting business in Bangladesh; our Company was the first to start the raw cotton business in 1964! Being the oldest raw cotton trader brings us a certain respect in the Industry. We are also one of the largest cotton traders, partnering with some of the top A1 cotton Merchants of the world, such as Cargill, Plexus, Olam, etc.
Our Group is also responsible for introducing Indian raw cotton into Bangladesh, in 19901/1991, through CCI, India.
It is interesting to know that! So, for current context, how would the Old-Hand narrate the scene in the cotton market across the poles?
In recent times, the cotton market went through some record breaking situations with crop failures across the Cotton growing Countries of the world, last season’s balance carry forward was the lowest in the history. All these and other issues have pushed Cotton prices to all-time high levels! Obviously, in the long-run such high prices were unsustainable and a time came when sales of Cotton and Yarns went down sharply. When this happened, slowly the Cotton prices have started to come down, but sales of Cotton and Yarns are still very low and slow. In turn, it led to high stocks of unsold Yarn in most Spinning Mills in Bangladesh.
As you mentioned Bangladeshi Ready Made Garment (RMG) got noticed by big ticket retailers. In addition, the sector has been doing well for two consecutive financial years. Can you help us assign the factors for this growth?
Increased capacity to export; Price-competitiveness; Experience and ability to produce better quality; Uninterrupted Supply; and Good volume of orders rejected by China or the order volume that China is not able to perform is being diverted in Bangladesh. These all, jointly, have helped the sector perform the best, and brought growth by leaps and bounds.
That’s good! Also, there was a trade-talk between Indian and Bangladeshi commerce ministers, on extending RMG items to be traded. Any resultants there from?
As such top officials of the two Countries spoke; hope there will be some outcome from the talks. But, we are yet to see any results.
Being member of Dhaka Chamber of Commerce and Industry, how would you comment on investment scenario in the sector?
There will be more investments in the RMG sector, though more will be on capacity increase of existing Garment Factories. In the Spinning and backward linkage industries, there may be heavy investments provided power/gas are available.
In the context of man-made fibres, what trends do you observe?
In man - made fibers, the consumption is rising gradually, but still far less than raw Cotton consumption.
Besides power and gas issues, as you rightly pointed previously, are there some more bottlenecks for the industry in Bangladesh?
Shortage of power and gas is definitely the area of concern. However, Textile sector in Bangladesh also confronts - high interest rates for Industrial/Commercial Financing, limited infrastructure and Political instability (though in recent times political stability exists).
Adding to challenges, in latest, it is believed there will be increased competition from the African subcontinent as the West is looking at it as new sourcing destination. What are your remarks?
Well, our best wishes to that wonderful continent, always! However, fact is that South East Asia and Asia hold much more competitive advantages at the moment and will remain that way for near future. At the moment, our part of the world (South-East Asia) should not worry about competition, but should rather focus on doing the jobs rightly and honestly (as we have been doing so far). This attitude will help us carry through successfully and there would be no turning back for us and for many of our future generations!
Many thanks for joining us on Face2Face talk, Mr Islam! We look forward to many such opportunities.
My pleasure and you are most welcome!
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.