The second main activity of the Eurobang Fashion project was carried out in Dhaka from November 15th 2014 to November 18th 2014. It consisted of a meeting of IAF, HCIA and BKMEA management, an inauguration session, and three workshops.
During the meetings of IAF, HCIA and BKMEA management, the situation in the apparel industry in Bangladesh was discussed. The findings from this conversation are incorporated into the account of the inauguration session written below.
The inauguration session was held for BKMEA management and office staff, management of manufacturers, national press and several officers of the Inspired SME programme. Among the speakers was his excellency, Mr. Pierre Mayaudon, the EU Ambassador to Bangladesh, Mr. Aslam Sunny, Managing Director of the Crony Fashion Group and 1st Vice President of the BKMEA, Mr. Mansoor Ahmed, Managing Director Mother Color and 2nd Vice President of the BKMEA and Matthijs Crietee, deputy secretary of the International Apparel Federation (IAF).
The EU Ambassador set the tone for this meeting by clearly stating that obviously buyers from the EU and the US are crucial for the garment industry in Bangladesh but that vice versa, the Bangladeshi garment industry has also become of crucial importance to buying brands and retailers. Productivity and technical and organizational capabilities and labour conditions are obviously interlinked. So all parties involved have therefore a lot to gain by continuous improvement of the garment industry in Bangladesh.
The presentations made clear that improvement of the industry is best achieved through the process of graduation. This means that the industry needs to grow more knowledge based. It means it needs to move from an over reliance on low cost manufacturing for low end, standard goods to a more diversified product base with a wider range of technical capabilities. Competing solely on price, manufacturers cannot escape being played out against each other, creating continous downward pressure on margins. Improving productivity is necessary, and can help to compensate for some loss of margins, but it is not sufficient. More knowledge in the industry will help to forge longer term relationships with buyers. These help to create more effective ways of improving productivity, such as collaborating with buyers to improve margins at the retail end by producing more on actual demand. Actually, this not only requires a knowledge upgrade in the Bangledeshi apparel industry, but also an increased knowledge level at many buyers. Therefore, the second project activity in Bangladesh, to be held in the Spring 2015, will include a discussion session on collaborative planning with buyers and suppliers together.
In addition to changes from within the industry, the speakers made clear that there are many improvements in the infrastructure that need to be made. Improving infrastructure is crucial. Projects are underway to move factories out of Dhaka, to create toll roads and to create an MRT system in Dhaka, all to reduce the enormous traffic jams in Dhaka that cost so much of people’s time. Also, a new rail transport link from Dhaka to the main port of Chittagong will help to reduce transport time and costs. Also, the government is working on decreasing the amount of regulatory constraints for the industry.