Sustainability is now a greater term in the context of contemporary business.
Beginning with garment manufacturing units in mid-eighties, today, the Giant Group has emerged as one of the biggest and thriving conglomerates in Bangladesh. Today, the activity of Giant Group is not only confined to garments and textile industries, but the operation has also stretched into trading businesses of consumer products of modern life style, holding company for developing green corporate building in Dhaka city, retail chain shops, media & communication, sourcing & marketing, joint venture project in agricultural product development and processing, health care, community development, etc.
From a very unmentionable start, through continuous struggle and commitment for quality, Mr Faruque Hassan, Managing Director of the Giant Group has transcended all storms and placed Giant Group in a well-established position.
Mr Faruque Hassan has an excellent business background and is highly reputed for his endeavors and dynamic leadership. His prominent personality in the business arena of the country is playing a pre-dominant role in establishing a solid industrial base in Bangladesh.
Mr Hassan started his career in business in 1984 after completing his Graduation and Masters in Management from Dhaka University. During his long, more than two decades career, he contributed a major and prime role to establish this organization, the Giant Group of Companies as an emerging business conglomerate in Bangladesh with eight big garment houses and textile plants.
Mr Hassan is closely associated with the garments movement in Bangladesh. He has been playing an important role in Bangladesh Garment Manufacturers and Exporters Association (BGMEA) for the last 12 years.
His tremendous contribution to the garments sector has made the industry elect him as BGMEA Director for two tenures and Vice President for two tenures. Over the period in BGMEA, he played an active role in introducing BGMEA web portal as an energetic director. Besides, he also played a leading role in developing the profile and UD software of BGMEA. He was triumphant as the coordinator of BATEXPO in 2001, 2002, 2003, 2009 and 2010. Apart from this, he also accomplished his responsibility competently as Chairman of Standing Committee on RDTI cell of BGMEA and as Co-Chairman of Trade Fair and BATEXPO Standing Committee.
Mr Hassan is currently associated with Dutch Bangla Chamber of Commerce and Industry as Senior Vice President; permanent member and former Director of France-Banglad
Mr Hassan, in just 25 years, with on set of 20 successful companies, feeding 5000 employees, Giant Group well goes with its name ‘Giant’. While, extending a warm welcome in Face2Face column, let me request you to share firstly about the driving spirit to this huge success and repute.
Thanks for your complement. The sweat and toil of the entrepreneurs and the dedication and determination of our workforce have brought the Giant Group to this position. With the business foresightedness and long term planning, Giant management has been able to maintain a sustainable growth over the ever changing dynamics of international trade.
So, what do the current dynamics say? The world textile industry in 2010 has experienced the most potent growth in 25 years. How will you remark on textile and garment industry faring everywhere, currently?
The growth in world textile and garment industry has been extraordinary in recent times. Bangladesh’s garment exports also had an impressive growth of 24.92% during the calendar year 2010, and during the July 2010-June 2011 period it grew by more than 42% compared to the same period of previous year. However, this growth does not indicate the real trend of the industry as it has been significantly fueled by a cost-push inflation of raw materials. The physical growth of trade in terms of volume would be much less than the volume growth. The cotton price spiral in the world market, inflation and wage hike were some of the reasons behind it. But, from a holistic view point the year 2010 showed a real come back from the global recession for the textile and apparel industry.
Bangladesh has been positioned the second largest clothing exporting in the world in 2010 by surpassing Turkey. The recent growth trend, the competitive scenario in the producers market, remarkable trade policy changes by major importing countries and the changing pattern of sourcing shift are making us confident to promote the industry further.
As you rightly said, in Bangladesh particularly, the exports chart of RMG industry shows increasing trend. Which factors will you assign behind this performance?
There are a number of factors behind the recent growth in Bangladesh’s RMG exports. First of all, the growth seen in terms of monetary value is not the real growth. If we consider volume wise, the growth will be almost half of the value growth. The recovery from the global recession was a major driving force. If we look at the export performance in 2009, it was affected by the global recession and the year posted a meager growth of 0.13%. So, the growth in 2010 compared to 2008 was 25%. However, the post-recession period has shown a change in the global apparel sourcing pattern. Particularly, with the loosing competitiveness of China, country like Bangladesh is preferred because of our 3 decades reputation, recent minimum wage increase and the increasing confidence of buyers on us. Therefore, the shift of sourcing to other countries than China has helped this growth. Part of the growth has also been contributed by BGMEA’s recent drive in exploring new markets. Besides, the relaxation of GSP rules of origin by EU, Norway, Switzerland and Japan, partial duty free access provided by China, South Korea, Malaysia, and the 8 million pieces duty free quota by India has also contributed to this growth.
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.