Sunday, April 6, 2008

Nailing the 'If' Factor

Being the biggest contributor to the country's foreign exchange- around 76 percent- and employing around 2.2 million people, 80 percent of them women, the importance of nurturing a sector as vibrant and thriving as the garments industry, cannot be emphasised enough. With export of Ready Made Garments (RMG) reaching 9.2 billion in 2007 and predictions of it rising to 12 billion or more in the next two years, it is obvious that the industry is growing at an exponential speed. Greater demand for our garments abroad indicates the improvement in quality of the products as well as greater customer confidence, which translates to further expansion of the industry, more employment, more consumers in the domestic market and a huge boost to the economy. However, there are many jolts and stumbles along the road to economic freedom and overcoming them will determine whether we can sustain the boom that is waiting to happen.

Aasha Mehreen Amin and Elita Karim
Photographs: ZAHEDUL I KHAN

It is like entering 'garment utopia'. Greenery adorns the tall shiny building; a gushing fountain greets the visitor as birds chirp away in the swaying, leafy trees. It is lunchtime and scores of young men and women walk towards an area where the food is being served while others stroll out for a quick meeting with their families living close by. Still others go to the child-care unit to nurse their children or just say hello to their kids.

Inside the building, everything is squeaky clean, the executive offices, glass walls, even the factory floors where state-of-the-art machinery add to the sophisticated process of making each garment. After lunch, we are taken on tour of the different units - dyeing, spinning, cutting, stitching and so on. Hundreds of workers wearing colourful masks can be seen feverishly operating the sewing machines, sorting, cutting fabric, sewing on various parts of the garment that will end up in some fancy store in downtown London or New York or some other trendy American or European city. The masks are to protect the workers against cloth dust and supervisors strictly enforce this practice. Health and safety of the workers are a major priority: the floors are clean and airy with proper emergency exits, fire extinguishers and warnings about wearing safety gear such as gum boots in the washing unit and metal gloves for the cutters. A fulltime doctor is on duty at the medical unit, which is again, clean and has two beds for workers who may fall ill while on the job.

The industry is growing at an exponential speed

This is a factory in Kaliakor, around 50 km from Dhaka, owned by Far East Knitting and Dyeing Industries Limited and gives a glimpse of what the future can be like for this industry. Many other factories that line the road next to this factory are as modern as this one, says the company's director, Mohammed Bin Quasem, an entrepreneur who is quite fanatical about bringing innovations to improve efficiency, productivity and quality. One of the biggest hurdles a garments factory owner has to cross is reducing lead time -- the turnaround time from receipt of an order to the delivery of a product as this is a key factor in staying competitive in a market where giants like China and India can deliver products to international markets far more quickly than Bangladesh which has the longest lead-time amongst its competitors. A short lead-time is crucial in a market that moves according to latest fashion trends, which keep changing all the time.

Far East's strategy has been to charter a plane from Germany that could load the goods on Saturday and deliver them in London on Sunday. “Our buyers were very happy and we were getting orders for a 100,000 extra pieces every week!” Quasem adds that by now Bangladesh's garments are well known internationally for their high quality in fabric, stitching etc. In the fast expanding knitwear industry, around 98 percent of the fabric is made in Bangladesh, says Quasem. Such developments in reducing the gap between demand and supply of raw material, particularly for woven fabrics, is important in reducing lead-time.

Mohammed Bin Quasem, Director, Far East Knitting and Dyeing
Industries Ltd

Quasem has also introduced metal detectors in the factory to make sure stray pins or needles do not get attached to the clothes being sent to exacting buyers like Mother Care which specialises in infant wear.

But it is not just good safety measures or even good quality garments that capture a market that is flooded with competitors. Buyers are more globally conscious, they want environmentally-friendly garments and products that are made through ethical means. Far East and Quality Assured Ltd., both of which Quasem is a director, are together the largest exporter of 'organic garments' that is clothes that are pure, with fibres that are not genetically modified and their manufacture does not involve the use of pesticide or reduction of the water table. The factories also have their own effluent treatment plant, which treats the wastewater from production so that it is less toxic before it is disposed off into the water bodies of the country.

A child care centre at the Far East factory in Kaliakor

The thorniest issue for foreign buyers has been work conditions and age limits of the workers. Customers want to be assured that the product they are buying has not been made with child labour and that the workers have not been exploited. All factories in Bangladesh have to comply with the labour law of 2006, which among other things prohibits child labour and also limits the hours of overtime to two hours. For Quasem and his fellow directors, all the factories they own must be far beyond merely compliance. At Far East and Quality Assured Ltd, the Human Resources Department makes sure that every worker is treated fairly in terms of salary, overtime and other benefits, that workers are not abused in any way and that all complaints from workers are addressed. A woman 'welfare officer' visits each floor regularly to hear out any complaints or problems any worker may have and tries to come up with a satisfactory solution. “Sometimes women workers are shy about telling their male supervisors that they are pregnant,” says Quasem “Here the woman worker can tell the welfare officer who then informs the supervisors so that extra consideration is given to the worker such as extra food, more bathroom breaks, saving her from any heavy work and so on.”

Bonuses for good performances are constantly given to workers with good performance. Those who have completed three years in the factory get an extra bonus apart from the holiday bonuses.

Quasem and his partners have decided to take it a step further with their upcoming Echotex Ltd which will employ all the ethical and environmental practices even more stringently with a winning formula: a great product, happy workers and an ethical, green factory will make a commercially sound enterprise which in turn will build a future.

Factories like Far East and Quality Assured Ltd may not be representative of the industry as a whole in terms of ethical practices (there are still many small factories with poor, claustrophobic, unsafe work environments) but they do show a definite change in the mindset of garment entrepreneurs. “Private entrepreneurs have started to believe in themselves, that they can strive for something better," says Quasem “and customers are gaining more confidence in our products and our capability of taking care of our people.”

But even optimists like Quasem and many of his fellow entrepreneurs admit that the 'silent revolution' that they are anticipating is dependent on several factors. One of them is developing a pool of highly skilled workers which are in high demand but low in supply. The head of the International Finance Corporation - SouthAsia Enterprise Development Facility (IFC-SEDF) Bangladesh, Nepal and Bhutan and the Deputy General Manager, Deepak Adhikary, believes that one of the major factors that need to be addressed is training, coaching and mentoring of the workers and staff. The absence of this is playing a major role in slowing down the progress of the RMG sector in Bangladesh.

In the present scenario, workers are mostly unskilled and uneducated. There are virtually no institutes to train workers so that they have better skills that also result in better paying jobs and greater efficiency.

Adhikary believes that we should have more institutes in the country, where students will receive practical training. Furthermore, he thinks that to reach the 20 billion dollar benchmark, the factory owners need to organise regular training workshops for the employees and the staff. "One has to know by doing," he says. "Lecturers and professors will come and lecture about the market and factories. However, an engineer is basically of no use if he or she has never seen a garment factory, leave alone the operation of the machinery. Therefore, practical knowledge and vocational training is extremely important for the workers."

State-of-the-art machinery like this one at Far East makes thread
and cloth and also dyes it.

According to him, many factory owners simply overlook the idea of training their employees. "One would have to spend a huge amount of money for training," he explains. "That is why a factory owner is usually satisfied with the fact that he has cheap labour. Then again, a worker sometimes leaves the factory after training, to join another one with better facilities. This is also another reason as to why factory owners do not give a second thought to training their employees and workers."

Infrastructure, power and good banking facilities are also areas where Bangladesh is lagging behind. Frequent load shedding and poor roads are major obstacles in reducing lead time. Big factories have their own power generators, many of which produce surplus power but there is no system of sharing this extra power. Political stability obviously is also an essential factor for expansion.

"Our competitive markets in India, Pakistan and China are enjoying less interest rate, that is 3%, less bank charges and a very strong infrastructure," says Anwar-ul-Alam Chowdhury (Parves), the President of BGMEA. "For instance, it takes trucks carrying goods at least 8-12 hours to move from Dhaka to Chittagong. We lose a greater deal of time delivering outside the country.”

The declaration of the minimum wage for garment workers has also been a contentious issue. In the wake of painful price hikes of essentials the TK 1662 minimum wage seems way to low to satisfy disgruntled workers.

The assembly point for workers at the factory.

"The workers should be given certain facilities," says the BGMEA President. "For instance, a ration card system, through which the garment workers can at least buy their essentials at a subsided price. Only the government can do this."

Unfortunately though, Chowdhury believes that successive governments have not been committed enough and that is why these changes will take a long time to come about. "Time and again, we have been asking the government to develop economic zones, which will bring down the living costs of the garment workers tremendously. These zones, or small cities, will have housing facilities, schooling, medical facilities and so on. But the government is not committed and are not serious about this idea. Their policies are still not industry based. This is why, it gets very difficult for us to build a production-driven economy."

Discrimination against female workers in the sector, in terms of wages, is hardly heard of now according to Nazma Akhter, president of the Sammolito Garments Sromik Federation and the General Secretary of Awaj Foundation, an NGO working for workers' rights. "There are seven grades in a garments factory, where a worker starts off working as a helper in the seventh grade with minimum wage of Tk 1662," the former garment worker explains. "As a worker gets promoted, he or she shifts to a higher grade and accordingly gets a higher salary. Since everything works according to these guidelines, there is hardly any scope of discrimination in terms of wages. However, many workers are not regularly paid their wages. For instance the other day, a worker called to say that she and the others in her factory had not been paid their wages for the last two months. This is a common problem that workers, male or female, face today."

Sexual harassment of female garment workers by male co-workers has been a long-standing menace. According to Nazma, female workers are now stronger and more confident than they used to be before and have formulated ways to tackle the harassers. Even though regulations within a factory are now very strict where harassment is concerned, this is still a major problem faced by female garment workers.

The effluent treatment plant at Far East

Despite the fact that a large number of female employees work in the garment sector, men still have the upper hand. As a result, it becomes very difficult for women to express their needs. "For instance, there are many factories who still do not have a provision for maternity leaves for female workers," says Nazma. "While some are probably not bothered, the other factories are simply not aware of the fact that the women need the maternity leaves. If the women are given the leave, they would probably be a paid leave for two months and the other two months would be non-paid. Sometimes, even the women themselves are not aware of the fact that it is their right to a four-month paid maternity leave as per the government policy. Some of them even come to us to ask how to apply for the leave."

"It is very important for the workers to interact with the management," she adds. "That would let both the parties to understand each other and solve the ever-rising problems. Workers need to be trained, educated and updated on a regular basis as well. This is the responsibility of the garment owners. This would also lead to a better level of productivity in the industry. The owners can fund these training programmes and the resources required for the programmes as well. Every year, a good amount goes to welfare, charity and advertisements. Even a small percentage of this amount can be spent on the workers for training and vocational education."

Deepak Adhikary emphasises on interaction and connection with the outside world as ways to expand the export market.

In a market that is driven by latest fashion trends that are constantly in transition, Bangladesh has to delve into design development in order to establish original, local brands. Several design institutes have emerged in the industry with foreign and local experts to teach students as well as internships at garment factories. There is therefore a possibility of a substantial pool of designers in the future.

The garments industry also suffers from a dearth of mid-level managers and training for such people is essential to modernising the industry.

Deepak Adhikary also emphasises on how to expand the export market, interaction and connection with the outside world is a natural process. Even remotely isolating oneself will result in huge losses. "Every extra penny that a country earns is due to the strength of the export market in that country," he explains. "Any amount of growth or any change that happens in the RMG sector revolves around the export market. Today, we are competing with export markets in countries like Cambodia, China and Vietnam, where the markets also emphasise on brands. Bangladesh has to aim for brands like Gucci and

Nazma Akhter, fighting for workers' rights

Prada, even though it does have a niche in places like Wall Mart."

"Cheap labour used to be a factor," he explains. "Not anymore. Along with cheap labour, the RMG sector here also needs to focus on reducing the lead-time, delivery, accommodating new designs and trends." To build a production driven and export-oriented economy for the RMG sector, one has to prepare for the series of battles that we will have to fight one after the other. "It is like foreseeing a possibility of an earthquake or a tsunami in Bangladesh," he explains. "Even if the natural calamity does not happen, we simply cannot put our forces down. We don't know when we will be gripped by something like this. Similarly, this sector has definitely survived a lot of turmoil like the post MFA, removal of sanction on China by the EU, labour unrest and so on. However, a lot of attention still needs to be given on social and environmental compliance along with productivity improvement along the supply chain."

Few in this industry or connected to it will disagree that the time is ripe for Bangladesh's garment industry to take full advantage of the goodwill it has earned in the international market over the last few decades. All the ingredients for a big bang are there: a huge supply of young, sincere, hardworking and easily trainable workforce, innovative, dynamic entrepreneurs and the ability to maintain high quality of product. A practical industry policy, greater infrastructural support from the government and opportunities for skills development can take our garments sector to unprecedented heights.

Smaller factories in the middle of the city continue to have cramped factory floors.

On the local front, an expansion of the industry in this scale will have a multiplier effect on the economy with a rise in ancillary industries as well as a huge increase in employment, purchasing power and thus a surge in demand for goods and services in our local markets. The idea of more and more people coming out of poverty is certainly an exciting one, which makes the 'silent revolution' theory all the more believable.

Copyright (R) 2008

Volume 7 Issue 14 | April 4, 2007 |


khalid_mbuddin said...

awesome informative,,really its greatly hampered occupational health, safety and environment(OHSE).

Freelance Environment Journalist

khalid_mbuddin said...

awesome informative,,really its greatly hampered occupational health, safety and environment(OHSE).

Freelance Environment Journalist