A Swedish trading house, C Jahn AB has a unique model of operations in five countries in which it operates. “Simply go into a joint venture partnership with a local person,” says Roshan Withanage, Managing Director, CJ International who has previously worked with the Sri Lankan giant MAS Holdings. C Jahn AB which began as a home furnishings designing and sourcing company in 1940 in Sweden, with time grew to establish offices in Bangladesh, Pakistan, India, China and Hong Kong in partnership with local people. CJ International (CJI) – the Bangladeshi arm of C Jahn AB – is buying apparels worth US $ 50 million while the total buying of C Jahn AB is US $ 150 million.
10 years ago Roshan was aspiring to set up his own enterprise and incidentally during the same time C Jahn AB was looking for a Bangladeshi partner. Coincidence of needs brought the two parties together and hence began the Bangladeshi chapter for C Jahn. Now, CJI works for Swedish brands Gina Tricot and The Stadium, German brands like The New Yorker and Tom Tailor, US-based Esprit and few retailers like Alliance and Elvis. Among these, Gina Tricot with 150 stores across Europe represents 30 per cent of buying of CJI.
Backed with a multi-pronged plan for the coming fiscal, CJI looks at growing by at least 20 per cent, the thrust would be a vertically integrated unit with an investment of US $ 5 million. The new unit will be in addition to the existing design studio and Narayanganj-based 500 sewing machine capacity of the buying house.
The thrust is also on working with sustainable fibres. “Gina Tricot is looking at becoming 100 per cent sustainable by 2025,” informs Roshan. The buying house has successfully supported Gina Tricot’s endeavours till now and as a result, all the light knits sourced for the brand are made of organic cotton for the past five years. In order to add variety to the brand’s range, CJI is now looking at sourcing linen garments too. Continuing with the Pursuit, Roshan says, “If you look at H&M’s range, they are carrying light knit from Bangladesh in the lower priced range as well. The challenge is to find that product at the right price.” Meanwhile, the buying house has decided to go a step further and introduce linen blends like linen-Dominique cotton and other fibres like Tencel for knits as well as woven.
All the international units of the group run as independent organizations and cater to different product categories. For instance, while the China office handles value-added home textiles, the Indian operations source small volumes of printed blouses and basic home textiles, whereas Pakistan handles large volumes of basic products due to its GSP status.
60 per cent of products sourced by CJI are high-fashion sweaters (jacquard and novelty yarns) while the rest comprises of products such as light knits, denims, oxford shirts, T-shirts, caps, socks and home textiles. The buying house now plans to source blouses in chiffon and other woven fabrics as well.
Despite product quantities being smaller than what a Bangladeshi manufacturer expects but with an experience of around a decade, CJI has found factories that can deliver such small quantities. “It does imply higher FOBs. However, we have managed to build a source base of 15 factories,” informs Roshan. The names vary from RMM (where 50% is booked for CJI), JL Fashions (80%) and Fakir Fashions (10%). Understandable enough, being a Scandinavian organization the factories manufacturing for CJI have to adhere strictly to the CSR standards of CSCC and BSCI.
The critical bottlenecks of working in Bangladesh when compared to Sri Lanka are obviously untrained manpower, erratic electricity supply and poor road infrastructure. But all of these are overridden by the resilience of Bangladesh. “In any other country, Rana Plaza would have had a huge impact. Bangladesh, however, did not come to a standstill and it emerged even stronger,” avers Roshan.
The market continues to be tough for everyone since the buyer keeps dropping the FOB by 10 cents every year. Roshan, however, predicts that the situation is now going to change with China getting expensive. The shift of sourcing pattern can be seen as CJI has already made its first shipment to China for Jack & Jones. “I would say, by early next year the FOBs will start to look up,” concludes Roshan.
