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Will ‘automation’ lead Bangladesh garment industry to US $ 50 billion mark

by Apparel Resources

06-February-2018  |  8 mins read

Bangladesh Textile and Garment Industry
Image Courtesy: fuhsun.com

Rising cost of labour, fuel and sourcing of raw materials, coupled with some structural limitations within the country are challenging Bangladesh’s apparel manufacturers and exporters to deliver on their optimistic promise of turning it into a US $ 50 billion industry by 2021.

One factor the apparel industry is seriously considering as a strategy towards achieving the goal is Automation – which ensures standardisation of products; that is to ensure quality commitment to garment products and all the while optimising cost factors.

Apparel makers of Bangladesh feel that automation, and thereby global standardisation of product, will help Bangladesh retain the edge in the growingly competitive global industry and expand further. Alongside, the industry has also identified that it needs to be digitally overhauled for the purpose.

In the past few years, Bangladesh’s garment industry has seen a massive overhaul in upgrading the capital machinery. Automated machines, self-equipped with software-based handling system, have also been installed. In turn, it has given a boost to the product and slashed down labour costs. It is to be noted that the majority of automation overhaul has been undertaken by the knitwear industry. Bangladesh, which just a few years back, was only making sweaters on the hand-flat machines, today boasts of 16,000 computerised flat knitting machines by Japanese pioneer Shima Seiki. Further, Stoll – the German manufacturer of flat knitting machines and pattern preparation systems and software, deployed an approximately similar number of machines in the Bangladesh RMG industry… The sum total of which sounds quite invigorating.

Apparel makers are focusing on creating an impression of the industry that, according to them, is plagued by a reputation crisis following major industrial disasters. They want to introduce Bangladesh’s apparel industry as a state-of-the-art sophisticated cheap garment sourcing hub.

Faruque Hassan, Senior Vice President of BGMEA, told Apparel Resources that in the recent time apparel makers are bringing in more advanced machinery to follow the global standard of production. “Big investment is being made to mechanise the industry. This not only boosts productivity but also reduces the amount of labour needed to get the work done – thereby, reducing the labour cost,” he said.

According to Hassan, in regard to automation and producing globally standardised apparel products, Bangladesh “is way ahead than many other countries” which has come to “impress the buyers”. Global standardisation strategy in the form of automated machinery not only optimises cost but it also ensures product quality at its fullest.

According to data released by Bangladesh Bank, there have been massive investments in the capital machinery used in standardisation purpose – that especially kicked off in the last two years. Until the end of 2016-17 fiscal year that ended in June last year, the total amount of capital machinery imports stood at US $ 929 million, around 23 per cent more than what it was in the previous fiscal. It is estimated that after that, in the running fiscal year, there has been more investment. (But the figures are still unavailable at this point.)

Capital Machinery Imports by Bangladesh
Fresh LCs Opening Values in Million US Dollar
Year Garment
Machinery
Growth Textile
Machinery
Growth
2010-2011 423.15 3.83% 454.91 25.26%
2011-2012 342.91 -18.96% 402.41 -11.54%
2012-2013 423.15 23.40% 452.39 12.42%
2013-2014 556.84 31.59% 381.30 -15.71%
2014-2015 602.24 8.15% 601.99 57.88%
2015-2016 759.94 26.19% 760.67 26.36%
2016-2017 929.36 22.29% 816.57 7.35%

It is to be noted that the knitwear industry is almost an equal shareholder next to woven garments, the two of which make up Bangladesh’s total apparel export. Currently, the nearly US $ 30 billion industry stands as the country’s biggest export sector, occupying about 82 per cent of the total export volume.

Srinivas Reddy, former Country Director (Bangladesh), International Labour Organisation (ILO), recognises that there has been drastic automation in the factories in the recent times – the most of it being in the knitwear production industry. In a recent programme held in Dhaka, he said: “Now you have one worker operating on three machines. It cuts down on the manual labour of a worker.”

In the latest report prepared by Bangladesh Institute of Labour Studies in December 2017, it states that rising automation has pegged down the number of workers in Bangladesh’s garments industry. According to the report, the prevailing workforce came down to 3.6 million in Bangladesh’s apparel industry, which was 4.4 million back in 2013 and rising. It also says, one machine had replaced up to 10 workers in a knitting factory. Whereas, the man-machine ratio in the sewing line is also instrumental in bringing down the numbers.

Syed Sultan Uddin Ahmed, Executive Director of Bangladesh Institute of Labour Studies, says “Automation is mainly responsible for the dramatic reduction in workers.” However, the fall also attributes to the closure of nearly 400 small and medium factories, relocation of several factories and production of value-added items.

Fazlee Shamim Ehsan, Second Vice President of Bangladesh Knitwear Manufacturers and Exporters’ Association (BKMEA), told Apparel Resources that the investment in hardware automation has been going on for the last three years and that by now, about 60 per cent of the knitwear producing factories – of course with the biggest players included – are equipped with automated machinery.

In a further detailed study of Apparel Resources, it has been seen that the majority of the investment in hardware automation has been on the cutting and sewing segment. Manufacturers are turning towards investment in machinery because this ensures 100 percent in quality and cuts down radically on a crucial variable cost – labour cost. Now, in cutting segment, only 2 or 3 machine operators are needed in place of 12-13 workers doing the work manually. It also has excluded the human error factor.

According to industry insiders, fabric accounts for nearly 70 per cent of the total manufacturing cost in a factory. These new cutting machines can reduce up to 10 per cent of the fabric cost, giving huge savings to the manufacturers.

“A machine does not do errors. Unlike the manual method of the old days, it automatically inspects the defect in the fabric and always cuts along a straight line,” says Fazlee Shamim. “This saves a lot of fabric and improves the quality by ensuring accuracy in measurements during cutting. It also drives up the efficiency level and productivity by manifolds.”

With all these progressions taking place, Bangladesh is still lagging behind in its pledged US $ 50 billion export in four years by a big margin; considering that it has not touched the US $ 30 billion-mark in 2017. However, it has been univocally expressed that automation is the only way forward for Bangladeshi apparel makers to stay ahead in the global market and reach the set export target.