Bangladesh has become a highly sought-after destination for apparel products and is now being hailed as the world’s factory. The country has experienced tremendous growth in the knitwear segment, making it an attractive option for buyers who are moving away from manufacturing fabrics and garments in China and turning towards countries such as India, Bangladesh, Cambodia and Vietnam. Bangladesh, in particular, has benefited greatly from this trend.
The current growth and projected expansion of the industry has led to significant investments in knitwear technology, infrastructure and expertise by manufacturers in Bangladesh. This has piqued the interest of global knitwear technology manufacturers, who are eager to participate in Bangladesh’s growth story.
Sensing this trend early on, STOLL – a Germany-based knitting technology leader – aims to tap the lucrative market with cutting-edge knitting technology, emphasising on quality and long-term investment. For STOLL, this also means staying ahead in cut-throat competition and the price sensitiveness of the country’s textile owners. Team Apparel Resources (AR) recently sat with Michael Händel, Vice President (Sales and Service), Business Unit, STOLL and discussed multi-pronged strategies of the company, technology advancements, competition in Bangladesh with other companies and the sales support to the customers in the country.
AR: STOLL was recently acquired by KARL MAYER. How has the merger added value for STOLL?
Michael: Post buying back its share from the Chinese investors, STOLL was approached by KARL MAYER to join their group which proved to be a positive move for us. This acquisition allowed us to operate in the market with a greater level of power and influence as part of a larger group.
Despite the change in ownership, our strategy has remained largely the same through the creation of central functions for communication, marketing, human resources and purchasing.
Overall, this acquisition has been a positive development for us. We now have access to significant financial resources without relying on external financing and we have a much wider market reach that helps us ward off competition more effectively.
AR: What efforts have been put in by STOLL and KARL MAYER to create new markets and improve share in your existing markets?
Michael: In order to capture a larger market share, we at times offer special prices to potential customers. While we may not have much leverage on prices, we ensure better services and maintenance. As a well-known company with 150 years of experience, we want to emphasise that it’s not just about pricing. We want to sell the whole package, which includes our experience, service, spare parts and software solutions. In a nutshell, our focus is on minimising the downtime and improving productivity.
Our goal is to convince customers that STOLL is a quality investment that will last for even 20 years! We want to be seen as partners, not just suppliers, and we ask customers about their needs to ensure they get the right machine for their productivity and sustainability goals.
We are also developing customised models for each customer, taking into consideration their specific pricing, payment and delivery needs. We offer support and act as close partners to our customers, rather than providing a one-size-fits-all solution.
| We are developing fine-gauge knitting solutions and we believe it will be successful in the Bangladesh market. It is an intelligent solution that would be good enough for even low-skilled workers. This will help reduce the need for skilled workers and make investing in this technology more attractive. |
AR: Internet of Things (IOT) is a buzzword today. Is STOLL currently working on implementing IOT in its machines and for what purpose?
Michael: At the time of acquisition, STOLL had already developed IOT-enabled software for our machines which include various software solutions such as PPS (Production Planning System). PPS is a highly advanced piece of technology that excels in identifying issues (such as deviation in the production target, machine idle time and downtime, faults in machines, defects and wastage of yarns etc.) accurately.
PPS allows the knitting unit to connect every machine in a factory, effortlessly generate a detailed report of all problems, compile it and transmit it to the service team, who in turn are well-equipped with precise instructions on how to address the issue in real-time. We can also establish a connection between our location and the knitting plant, allowing us to communicate the problem directly. Managers can also send messages to the machines to change settings or perform inspections. In addition, we provide prompt delivery of spare parts and arrange for on-site servicing by our team of experts.
Bangladesh’s textile factories have started using the system and it will become increasingly important as more people enter the market soon and the need to reduce production costs will exponentially grow for factories to stay competitive.
Apart from PPS, we have an additional software solution which allows for easy creation and simulation of shapes and samples in 3D. This enables quick design changes and feedback, reducing the need for physical samples and streamlining the production process. The software also allows for customisation of yarns and surface designs, providing customers with a better understanding of the final product. Customers can also experiment with different yarns and incorporate their own materials into the design. This allows them to see the effect of the yarn on the final product.
AR: Do you think the training of workers on technology eases pain for a factory owner at a time when wages are skyrocketing in the country?
Michael: Absolutely! Although we understand workers are an integral part of Bangladesh’s RMG industry, it’s time for factory owners to identify areas where redundant human jobs can be eliminated and handled by automated solutions. With increasing pressure on pricing, it is important to adopt efficient technologies and streamline production processes to remain competitive. And, for that to happen, training on technology equipment and software is the solution.
However, I believe the challenge lies in educating and training people and customers on how to effectively use these solutions in practice. While there may be a learning curve for some customers and staff, we are committed to providing training and support to our STOLL Bangladesh team to ensure successful implementation and increased productivity. For example, our software solution (PPS) is a system that requires initial training, but it can be easily installed and run thereafter!
| STOLL conducts workshops all over the world, including here in Bangladesh, and has its own training academy. STOLL also has plans to take the team of programmers to its institution, where it will provide them with comprehensive training. The company offers various options, including online training from Germany, training videos and interactive training sessions. With these options, STOLL boasts of having everything necessary to ensure effective training for its clients. |
AR: What’s your approach to support factories that need financial assistance to build the required technical know-how in their knitting division?
Michael: As a global business, we serve a wide range of clients and our approach to finance varies based on the countries we deal with. To accommodate the different requirements of each country, we have developed customised finance models and tools.
For high-risk countries like Bangladesh, we currently use LC selling. However, we maintain an open-minded approach and work with our customers to find mutually beneficial solutions. Recently, we discussed a 1000-machine project worth millions of dollars, and despite the ongoing financial challenges in Bangladesh, we are committed to finding a way to make it work. Our in-house finance department and service teams are flexible and eager to collaborate with the customer to overcome any obstacle.
| Glimpses about STOLL Bangladesh
STOLL Bangladesh is a sales and service unit that works in tandem with STOLL Germany. The local office manages around 45 employees and works closely with the CXOs on a daily basis. The area sales manager handles sales support for the Bangladesh market. As Bangladesh is a target market for us, the company believes it needs to perform well despite increasing competition and price discussions. It aims to act as partner rather than just supplier, helping customers choose the right machine for their needs and providing sustainability solutions. |
AR: What is the current revenue of STOLL in particular, out of the overall revenue that KARL MAYER group is earning? How much of that revenue is coming out of Bangladesh?
Michael: Over the past two years, we have faced numerous external factors that have impacted our business, including the Covid-19 pandemic and energy pricing. Despite these challenges, our overall performance has been commendable, with the group generating approximately US $ 120-130 million in revenue last year and the total revenue of KARL MAYER stood at approximately US $ 550 million.
Our budget for 2023 remains unchanged from that in 2022 due to the lingering effects of the pandemic, which have resulted in a cautious approach to make decisions in markets such as Bangladesh and Turkey. However, we anticipate growth in the Bangladeshi market this year, with a projected turnover of US $ 20-30 million. Our focus for sales remains primarily in south-east Asia, and Mainland China, where we expect to sell 75 per cent of our machines in terms of quantity. The remaining 25 per cent of sales will come from other parts of the world. Therefore, it is critical for us to maintain a strong presence in the Chinese and Bangladeshi markets to maximise our profits.
AR: STOLL has been at the forefront of technology developments. Share with us some interesting R&D projects that you may be coming up with in near future!
Michael: In June of this year, we will be participating in a major trade show ITMA in Milan, Italy where we plan to showcase some of our latest technological advancements. Our objective is to steer customers away from the lure of low-cost machines and to encourage them to invest in high-tech machines that offer maximum flexibility, support and intelligence while knitting. Sustainability is another key feature that we aim to highlight. Although Italy is a different market compared to Bangladesh, we believe it is essential to showcase the new levels of intelligent machinery.
When it comes to the Bangladesh market, we strive to focus on developing machines that cater to the specific needs of the field. We understand that customers require a machine that is both affordable and efficient, with high flexibility and productivity. Our challenge is to bring to the market customer-oriented machines that precisely fulfil these needs, using improved software and mechanical parts. With over 650 different machine settings, we ensure that our range caters to the varying needs of our customers across different markets.
We have the requisite knowledge and expertise to produce high-level machines in Germany, which we then adapt and price competitively for the Asian markets.
