Interview with Mr Abdullah Al Mahmud (Mahin)

Thank you.

Hamid Fabrics Ltd. has an uncompromising attitude when it comes to quality. It boasts of a setup that includes top of the range machinery from renowned European brands, such as Bruckner and Kusters. European dyes and chemicals are used throughout the production process.

HFL is run by an experienced management team, which comprises of local and foreign expertise. Only a handful of mills in Bangladesh operate at this level, thereby making us one of the major players in continuous solid dyeing nationwide.

Bangladesh will continue to be a major player in the global textile and apparel industry. Last year total exports in the RMG sector accumulated to around $12.5 billion. This year we expect at least a 25% growth. The current trend in the industry indicates that major upper end brands are now turning to Bangladesh to fulfill their sourcing needs. Factories are now able to manufacture a wide spectrum of items, ranging from basics to highly fashionable.

Bangladesh has massive potential for growth. In my opinion, some of the major driving factors would be labor costs, steady GDP, government initiatives to establish new Export Processing Zones to facilitate exports of such products, and various infrastructural developments. The RMG industry is still growing and attracting new investments. There is room for more quality factories and mills to develop and flourish. Not only does this sector massively contribute to national exports, it also empowers females (90% of garment workers are women), thus bringing them out of the poverty trap.

(Contd)

The apparent gas crisis is, perhaps, due to lack of gas exploration in the last decade. If the government had taken such initiatives in the past decade or so, we probably would not have even heard about it now, as statistics also indicate that Bangladesh has sufficient gas reserves. Our operations, however, have remained uninterrupted so far.

Labor issues are scattered, in the sense that while some mills are affected, others are not. One should not generalize that the country is overwhelmed with labor issues. A growing economy will always have inherent labor issues, with increases in demand and costs of living. Most issues that have arisen or arise have been and are worked out and resolved. Once again, we have personally not experienced such issues in our facilities to date.

RoO has actually created more opportunities for Bangladesh, as more buyers are now coming here to explore the market. With the relaxed GSP regulations, the sector is experiencing an increase in demand. Currently, there may not be sufficient garment factories to fulfill such increased demand, so more investment is definitely needed.

Since 100% of the raw cotton is imported to produce export quality yarn, fabric prices are very much dependent on the price of raw cotton. More than 60% of fabrics still have to be imported from abroad, as local fabric mills cannot fulfill the existing demand. My personal opinion is that more mills need to be set up, especially to cater to the needs of the higher end fabric buyers. With the relaxed RoO companies also need to think out of the box, and engage in non-price competition, such as shorter lead times, higher quality and product diversification.

Yes they have. It has become more localized. Buyers prefer to have everything done locally to take advantage of shorter lead times. Textile mills and garment factories are now more able to cope with last minute changes in buyer requirements. The sector is slowly, but surely, being more proactive in the design and development process, by investing in local labs and design houses, and offering consultation and sampling services. Joint ventures have also been a popular trend in Bangladesh recently.

The major reason for floating an IPO would be to further expand our Group’s textile division. Due to huge demand from buyers for yarn dyed fabrics, as well as insufficient supply of the latter, we will be setting up a state-of-the-art yarn dye facility. Plans to invest in spinning, apparels and retail are also in the pipeline.

Strongly agree with this. Nation building and taking care of our biggest asset (human resource) is a duty of the businesses houses. We currently have different wellness programs within the organization. Healthcare and education are subsidized. Since the company is still at its growth stage, we are in the process of identifying certain core areas where there is a need that has not yet been met like education, healthcare and environmental preservation. The group plans to soon establish a charitable arm, and this foundation will be engaged in identifying areas in which we can contribute in a more organized and effective manner, thus creating public awareness of our efforts.

You are most welcome!

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