The Covid-19 pandemic, despite its devastating impacts, seems to have helped some sectors to grow and evolve. One such sector has been the readymade garment industry of Bangladesh, which despite many a challenge, got the right kind of support it has been looking for, from the global buyers, as it made the critical move towards going up the value chain.
The Managing Director of Smart Tech Private Limited, Shimul, speaking to Apparel Resources (AR), dwells on various such issues impacting the industry even as he highlighted how Smart Tech is upping its game in terms of offerings and services in the changing milieu to help the industry in its growth journey.
Started in 2007, Smart Tech is one of the leading importers and indenting companies in the country (Bangladesh), which has earned the unwavering trust of the industry players by providing world-class interventions (machines and solutions) from all the renowned machine makers from Europe and Asia (including from countries like Italy, Germany, Korea, China, etc.), to offer a range of garments and textile machineries (industrial sewing, special attachment, automatic machines apart from washing and dyeing machines) to help the garment makers improve productivity and efficiency.
Here are the excerpts from the interview.
AR: How has the pandemic impacted the industry here?
Shimul: The industry has been through many ups and downs because of the pandemic. Even though there has been a lot of struggle initially, things have improved somewhat lately.
Today, most of the factories are running successfully even if not at full capacity, which is not bad even if it has posed a few challenges for the garment makers who rather than concentrating on increasing profits, are in survival mode now.
Given the scenario, I would like to assume 2023 will be somewhat a challenging year for the industry.
However, there have been some positives too.
Before the pandemic, the industry as a whole was mostly into making basic garments as buyers concentrated more on basic product categories, where margins are wafer-thin leave alone the competition. Of late, many buyers are coming with queries for more fashionable and new product categories, which have opened up windows of opportunities for the industry.
But, those who are still into basics are finding things a little difficult as offer price in basics is very low to add to which buyers have also reduced the order quantities. But the kind of capacities that we have here, smaller runs are not feasible.
Hopefully, in the coming days, more and more garment makers will deal in value-added garments as buyers’ confidence in the industry increases further.
Also, in view of the existing ground realities when production cost is going up, there is an urgent need to rethink our production practices. Labour, even though not in short supply, is no longer cheap, so the industry has to look at ways to cut cost and increase efficiencies.
AR: What are some new product categories that you see are gaining in popularity?
Shimul: There are many like lingerie, jackets, outerwear, etc. Now that we have different machines for diverse product categories, we are also suggesting our clients to diversify their offerings as we can help and support them with the required interventions.
The inquiries that earlier used to go solely to countries like Vietnam, China and the likes are now coming to Bangladesh as well and so is the demand for machines that are required for such kind of products (like bonding machines for lingerie and jackets).
In general, automation is in great demand currently in view of increasing production cost. In many cases, people are also looking for sustainable interventions which can help them to reduce utility costs while also increase efficiencies so that they can offer a sharper CM to the buyers and make some profit too.
Be it knit, woven or denim, automation is the need of the hour now.
AR: How has the devaluation of Taka (compared to US dollars) and decreased foreign currency reserve impacted technology adoption?
Shimul: They have to some extent for sure. But most of the garment makers, who are into exports, are dealing in US dollars only, so many of them have foreign currency reserves in their accounts which is helping them. But yes if you need finance from banks, which is sort of unavoidable when you have a new project and have to buy new machines in substantial numbers, opening of LCs has become difficult for many banks as they do not have enough foreign reserves.
However, several steps have recently been taken by the Government and the central bank, which I feel, will help in improving the current situation.
AR: What are your sales projections for this year and how were things in 2022?
Shimul: In 2022, the first six months were very good from business perspective after which things have started to slow down because of a host of reasons including the market uncertainty and the economic slowdown in some of the major export destinations, which impacted the industry.
This uncertainty is continuing well into 2023, which has made it difficult to make any kind of projections so as to say. However, if things change going forward, which I am hopeful it would, business should be good once again.
AR: Any message for the industry?
Shimul: I would like to tell the industry that we have to think positively and work with enthusiasm even if the chips are down. What’s more, we have to project Bangladesh in the right light before the global audience even as we strive to attain maturity and superiority in manufacturing so that we are able to gain buyers’ confidence further so much so that they come here not for cheap labour but for quality and excellence.