That means investment environment in the sector is bright; is it?
Though the garment industry is looking very bright from an outlook, it has become highly saturated by now from the perspective of price and competition. We have some bottlenecks and hurdles that we have to pass through; particularly, the shortage of skilled workforce, inadequate liquidity for trade financing, power and gas supply shortage, etc. are the major pitfalls. Therefore, investment in the cutting and sewing industry is not so feasible at this moment; rather investments should be more competitive and inclusive in the form of composite industry including spinning, knitting, weaving and garmenting.
With this growth pattern, forecasted for next some years, how is Giant Group likely to grab a major chunk of market, then?
Giant Group is leading as one of the pioneers in Textiles and Readymade Garments with responsible and stable quality. She is well responsive about the compliance issues from the beginning. All the production units are firmly maintaining the social compliance issues. So we strictly follow local laws & standard labor laws to provide wages, overtimes and other benefits. Also, for the workers we provide good working condition as wide and open space in the factories, dining & canteen facilities, group insurance, free medical service, day care center, transport facilities to keep their moral high, etc.
As Giant Group believes in long term and sustainable business growth by keeping pace with the market dynamics and commitment towards maximizing the quality of products and cost effectiveness, we are laying more emphasis on building basic and primary structure in spinning, knitting, dyeing and finishing in textiles industries rather than the finished products only. Currently we are investing in our new projects like – Giant Textiles Ltd (GTL), Giant Business Tower, Expansion of Retail Chain shops, and expansion of agricultural production with modern technological know-how with joint collaboration of European countries like Denmark etc. which will help the Group's sustainable growth by ensuring the new market demand in the industries.
Besides benefits of duty free quota- as what you mentioned in your earlier comments, currently there exists South Asian Free Trade Area (SAFTA) agreement too. What are your comments on benefits of this agreement in context of trade with India?
It has been more than five years the SAFTA is enacted, but this is not apparently helpful for the regional trade. Bangladesh still has around USD 3 billion trade gap with India which is on a widening trend. During the FY2009-2010, Bangladesh’s import from India was USD 3.2 billion whereas Bangladesh’s export to India was only USD 304 million. The long sensitive list of India is a major reason behind such huge trade gap. Apart from that there are some non-tariff barriers like sluggish visa procedure, etc.
We are thankful to the Government of India for granting us a duty free quota for 8 million pieces of garments, which has recently been enhanced to 10 million pieces. But considering the capacity of Bangladesh’s garment industry this is a very meager amount. On top of it, the exports under duty free quota needs to pay some countervailing duties ranging from 8% to 12%. Out of that 4% Special Additional Duty is rebatable which we have requested the Indian Government to withdraw.
Besides, it is important to note that apparels are the main export items of Bangladesh; therefore India could allow duty free access to some of our commercially important apparel items. Because we import a huge amount of textile and textile articles like cotton, yarn, fabrics, accessories like buttons, hangers, dyes, chemicals and textile machinery. Moreover, the visa procedure of India should be made more trade friendly. The current procedure is time consuming and complicated and we hope the Government of India would take initiative to simplify this process for the businessmen on priority basis and issue multiple entry visa for the greater cause of improving the bilateral trade between these two countries.
Going forward to the clothing sector; your group also marks its prime presence in apparel retailing in Bangladesh. Please apprise us with the consumer buying traits and choices there in. Which category in apparel – hi-end lifestyle branded clothing or unbranded clothing, has more prospects in Bangladeshi customers?
Customers’ choices are ever changing with the changes in life-style in the society. Recently, consumer choice and buying habit is changing due to increase of per capita income in Bangladesh. With the increase of purchasing power in different segment of customers in the society, there will be a positive impact in hi-end apparel choice. So it seems overall demand for both the branded and unbranded clothing is increasing rapidly to keep pace with the modern life-style and cultural break through.
Thanks a lot for your time and insightful comments Mr Hassan; let us sum up the talk on your interpretation of ‘Sustainability’ in corporate terms!
Sustainability is now a greater term in the context of contemporary business. Business is no more limited within a concept of exchange of goods and service to make profit, but has been extended over non-business areas like social and environmental aspects. Over the last few decades our garment industry has shown remarkable progress in the area of social compliance. BGMEA has been playing a relentless role as vigilant guard on the rights and welfare issues of the workers. Individual entrepreneurs have been increasingly investing in promoting the working environment and workers welfare issues. We are very much enthusiastic noticing the growing concern on green concept among the entrepreneurs which is certainly a key to future business competitiveness. Above all, we are producing value added garments and we have a tremendous potential to move up to the high street fashion industry.
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