Posh Garments was incorporated in 1984 in Dhaka, Bangladesh as a manufacturer and exporter of readymade garments. Today, the company has grown to become a fully compliant apparel manufacturer with 12 sewing lines manufacturing a wide range of apparel for men, women and children. It caters to high-street retailers and brands, cutting across geographical locations, especially in Europe. Posh Garments has a very flexible production platform and a highly skilled workforce, churning out millions of pieces of garments in different fabrications.
Apparel Resources (AR) caught up with Wasim Zakariah, the Director of Posh Garments and Chairman and Co-Chair of two Standing Committees on SDG and Sustainability in BGMEA, to know more about this apparel manufacturing entity, as it embarks on the next phase of its growth journey dwelling on manufacturing excellence, production flexibility, focus on non-traditional markets, with a renewed thrust on product and market diversification.
Here are the excerpts.
AR: Apparel exports from Bangladesh are somewhat fluctuating lately. During December ’22 and January ’23, garment shipments were at their peak but fell again in February and March (on an M-o-M basis). Going forward, how do you foresee things panning out?
Wasim Zakariah: Yes, you are right! In the last few months, I have seen, it has been difficult to procure new orders from brands/retailers in Europe. Sales are down and retailers continue to sit on high inventory still, new order placements are relatively less than the corresponding months of the last year.
As we know, the European economy just about managed to scrape out a meagre growth in the first three months of the year, barely gaining momentum even as inflation continues to hold back consumer spending still, which is impacting the fashion retail sector adversely.
Keeping in mind the existing market conditions, I would say things might continue to be challenging for garment makers in Bangladesh in the next couple of months.
| Product diversification is undoubtedly a good strategy for optimally exploiting the new opportunities on offer even as it might also help us to penetrate new markets and onboarding new customers to keep the growth momentum going. |
AR: Womenswear constitutes around 80 per cent of your total product offerings. Going forward, do you think it will suffice for your business needs or product diversification can be a good strategy for tapping more growth?
Wasim Zakariah: Product diversification is undoubtedly a good strategy for optimally exploiting the new opportunities on offer even as it might also help us to penetrate new markets and onboard new customers to keep the growth momentum going.
A decade or so ago, we only manufactured ladies’ tops and blouses but now we are not only manufacturing tops and blouses but skirts, dresses, slacks and outerwear overshirts for men and children as well.
Very recently we have shipped a few orders for overshirts and fleece jackets both for men and women for the US market. We plan to further expand our product range in the segment of swimwear, beachwear, lightweight jackets/overshirts and other value-added products.
AR: What roles are non-traditional, emerging retail markets expected to play in Posh Garments’ future growth, as you continue to cater to many of them already, like Brazil, Singapore, Iraq, etc? Also, how the earthquake in Turkey (around 20 per cent of your business comes from Turkey) might impact Posh Garments?
Wasim Zakariah: Focusing on non-traditional and emerging markets offers new growth opportunities by tapping a new customer base while also diversifying our product range. What’s more, we also get export incentives from the Government for catering to non-traditional markets, which is an added advantage.
As to the devastating earthquake in Turkey, it hadn’t impacted us that much as the current economic problem in Turkey has and the rising price of energy and commodities, consequent to the continuing war between Russia and Ukraine, which has adversely impacted our business for sure.
Buyers in Turkey are now placing fewer orders while also offering lesser prices, which has left us with little choice but to divert a certain percentage of production capacity to other buyers.
| Product diversification is undoubtedly a good strategy for optimally exploiting the new opportunities on offer even as it might also help us to penetrate new markets and onboarding new customers to keep the growth momentum going. Wasim Zakariah Director of Posh Garments |
AR: On the sustainability front, the European Union’s sustainability legislation has already been approved thereby making it mandatory for EU buyers to follow the parameters set by this law while also looking for suppliers that are compliant and environment-friendly. What’s your take on this new bill and how do you think this might affect Posh Garments since the majority of your orders come from Germany and other EU countries?
Wasim Zakariah: The EU sustainability legislation has a strong focus on human rights and environmental issues. Posh Garments is a socially compliant and environmental-friendly factory that has been manufacturing and exporting sustainable products to Europe. I don’t think it will have much of an impact on us. We have almost all the certification that is required including BSCI, SEDEX, SLCP, GRS, GOTS, European Flax, Oeko-Tex, and SVCOC. We have also recently joined the Better Work initiative and plan to publish our first Sustainability Report in July 2023.
Our certifications and our initiatives are very much in alignment with the EU’s sustainability legislation. However, there could be some challenges with second and third-tier suppliers for trims and accessories (both at home and overseas) that are yet to align with the EU legislation.
AR: The current trend of smaller MOQs, many feel, can pose fresh challenges for the garment makers here, many of whom are attuned to doing bulk orders. How flexible is your manufacturing set-up to cater to smaller quantities and whether price could be an issue towards catering to smaller MOQs?
Wasim Zakariah: We have a very flexible production platform and our production team also has the required skills and expertise to successfully manage smaller MOQs. But yes when it comes to the price points, it is a challenge while dealing with the big brands and retailers in small MOQs but not as much with the smaller players and boutiques.
AR: What role do you foresee technology and automation playing in Posh Garments’ growth? Also, can you share the future plans with our readers?
Wasim Zakariah: Technology and automation can play a critical role for us where the cost of investment can offset the high cost of manual labour, low productivity and consistent quality. As to the future growth plans, consolidation is our mantra to attain growth as we increase our efficiency, diversify product offerings, focus more on promoting our products, manufacture more value-added garments and export to non-traditional countries while also increasing the number of buyers.
| We have not yet been able to set up a design and development studio but we are looking for a company in India or Turkey or in China that has the expertise and can collaborate with us to develop new styles and designs. |
AR: On one hand, we are talking about expansion to achieve the US $ 100 billion apparel export target, while on the other, Bangladesh still continues to struggle in terms of required resources such as gas, electricity, fuel, etc. What is the way forward?
Wasim Zakariah: Yes, there are some issues still, which I feel, may take a little while to address, but irrespective of those, we need to keep promoting our RMG industry as the safest apparel manufacturing destination, both in the traditional and non-traditional markets, so as to procure more orders.
Simultaneously, we also have to focus on producing and exporting more value-added garments, increasing production capacities as well as efficiency.
