Fatullah Fashion Ltd, an export oriented apparel manufacturer, started making a fortune after setting up their business in the early 90s, posting consecutive growth in earnings for decades. The tables however turned in recent years as the inflow of overseas orders gradually dried up.
On the backdrop of a seismic shift in the global economy, rife with the aftershocks of pandemic and wars, many buyers are now unwilling to work with apparel sourcing industries stuck in the old ways.
Once a juggernaut, Fatullah Fashion Ltd is now struggling to survive. Technology adoption and innovation has now become the de facto seal of buyer satisfaction, and currently, there are no practical alternatives to this change in priority.
Fatullah Apparels, another export oriented apparel manufacturer which started its journey as an offshoot of Fatullah Fashion Ltd, started out in the late 90s. Instead of sticking to the old ways of doing things, they started focusing on cutting edge tech adoption and sustainability.
Their foresight paid off in the long run. As Fatullah Apparels’ business grew, they turned into a certified green factory. They are now overwhelmed with queries from interested buyers, and are receiving work orders exceeding their capacity.
The secret to Fatullah Apparels success is nothing but a gradual and sustainable improvement in their manufacturing process, consistent technology adoption, and securing technical knowhow from key competitors such as China.
With this game plan, Fatullah Apparels is among a few similar success stories that managed to gradually move away from low value item production, to mid-range, and then high value goods manufacturing, without sacrificing the environment and their workers’ wellbeing.
But this is not the case for all, as many ventures – both in and out of the apparel industry – are currently struggling to remain in business and having a lot of difficulties in their attempts to adopt new technology, and scale up the capacity of their workers.
Sharing his experience, Fatullah Fashion Ltd Managing Director Tariqul Islam Sabuj said, “I was doing well, and it gave a chance to grow my business. But the lack of proper planning, no adoption of technology, and failure to introduce new methods to improve quality have finally caught up to me.
“I should have gradually adopted modern technology during the formative years of my business, as it would have allowed me to move towards the production of high-value items. If I am able to secure investment from China or perhaps a joint venture, I will definitely rebound.”
Meanwhile, shedding a light on their success, Fatullah Apparels Chief Executive Officer (CEO) and Founder Fazlee Shamim Ehsan said, “The owner of Fatullah Fashion Ltd is my cousin. I got into the industry after following his encouragement, and promises of work orders.
“I started out as a knitwear manufacturer in 1998. From the beginning, I was suffering difficulties such as liquidity shortages, slow work order inflow, low skill workers and traditional technology.”
He continued, “Initially, I was not knowledgeable about technology and its adoption. I, however, was very curious about the future direction of this industry and technical knowhow. An expert from China taught me about the latest updates in the field.
“I adopted technology in small steps. For example, when the expert asked me to upgrade the cutting machinery technology with promises of increased productivity, I made the upgrade on a trial basis first. After the trial run, I found the tech effective and adopted it at a wider scale.”
Ehsan then pointed out, “The most interesting thing is that the expert gave skill training to my workers and provided technical support to keep the system running. I realised that there are no alternatives to technology adoption.
“It is important to acquire technical knowhow and practical experiences from people who have already succeeded, and now showing the path to others. China, the number one apparel exports and global manufacturing hub, could be the best choice for Bangladesh in this regard.”
China’s invaluable support
China offers lots of support not only to the apparel industry, but to nearly every manufacturing industry in the country. Bangladesh should utlise Chinese support and tech to improve domestic industries, and gradually move to manufacturing more value added products.
The Chinese support is quite evident in Bangladesh’s home appliance and electronics items, which helped create internationally recognised brands such as Walton, Vision, Vista and Symphony.
Tech adoption: What’s the necessity?
In FY23, 84.58 per cent or $46.99 billion of Bangladesh’s $55.55 billion export earnings came from the apparel sector. Of the total apparel exports, 83.4 per cent or $37.77 billion are from five basic items – T-shirts, sweaters, shirts and blouses, trousers and underwear.
So, to move towards value addition, there are no alternatives to modern technology and acquiring knowledge from Bangladesh’s trading partners such as China for scaling up workers’ skills and productivity.
Team Group Managing Director Abdullah Hil Rakib said, “China is leaving the low-end item market, and focusing on high-value, tech-based products. If we can adopt their tech, and chalk up a strategy based on China’s path, our manufacturing industry will definitely get a boost.
“China is developing different types of technology and offering those to us. We should integrate their technology, especially in terms of vertical integration. For best results, we should learn the technical know-how and support from their experts, and allow them to train workers’ skills.”
Rakib added, “China invests lots of funds on research and innovation, and we are unable to do so. So, we can collaborate with China to take lessons from them for research and development of products and marketing strategy.”
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan said, “China is the number one apparel exporter, Bangladesh is second. Apparently, China is our competitor, but in truth, they are our largest trading partner and good friend.
“They help our industry in many ways. They have far better technology and the knowhow to produce high-end products. It is crucial for Bangladesh to further develop the local manufacturing industry step-by-step by adopting tech and innovation from the friendly nation.”
According to central bank data, Bangladesh imported goods worth $19.34 billion from China in FY22, while Bangladesh exports to the country stood at only $677 million in FY23.
For strategic cooperation with China, Bangladesh needs more joint venture investments or foreign direct investment and partnerships in bilateral trade, he added.
According to Bangladesh Bank data, Bangladesh received $232 million as foreign direct investment in FY23, and $112 million of the figure went into the textile and clothing sectors.
“We have recently visited China and agreed to work in the field of training, marketing strategy, research and development. We also agreed to send our human resources to China in a bid to gain practical knowledge in different areas of manufacturing,” Faruque said.
Investors and industrialists in Bangladesh are also depending on more and more Chinese technology due to lower costs and customisation options, reducing the high focus on western tech.
‘Not in exchange for job cuts’
Speaking to The Business Post, former lead economist of World Bank Dhaka Office Zahid Hussain said, “There is no doubt that China has done tremendously well on technology use in manufacturing industries.
“They are diving into high-end product manufacturing and higher productivity. But this strategy did not cut human jobs, instead helped increase employment and wages. As a result, the country’s poverty rate declined and growth increased.”
He continued, “In adopting technology and technique, Bangladesh should focus on those which would not cut jobs and lower workers’ income. We should introduce technology and strategy that match our labour force and economy.
“However, it does not mean that our workers will remain unskilled. They should be trained in line with the demands of the technology. We do not want technology or growth without the wellbeing of workers or in exchange for workers' job cuts.”
Electronic, home appliance industry
Once fully dependent on imports, Bangladesh is now an exporter of electronic items such as televisions, refrigerators, washing machines, rice cookers, and blenders. The country covers domestic demands mostly from locally manufactured and assembled items.
Chinese partnership, technology and technical assistance played an important role in developing an electronic home appliance industry.
Walton Hi-Tech Industries Chief Marketing Officer Didarul Alam Khan said, “We are still not exporting a satisfactory number of electronics and home appliance products. We largely meet local demands.
“Chinese technology, production knowledge and skill training helped a lot in our journey to become leading manufacturers. We started assembling televisions first with their technology and support. Now we are the biggest manufacturer here.”
Walton even has an office in China, where the company is working on research and development, market strategy and other prospects, he added.
Kamal Kamruzzaman, director (marketing) of PRAN-RFL Group, said, “Chinese technology has made Bangladesh’s industrialisation easier and faster. It is cost effective and customisable to Bangladesh needs.
“We are manufacturing fridges, televisions, blenders, rice cookers and other home appliances. We produce doors, pipes and sanitary wares as well. China not only sells us the technology, but offers training on how to operate and maintain the machinery properly. This support helps us build expertise on Chinese tech.”
Future scope of cooperation
To face the challenges of Fourth Industrial Revolution (4IR), technological development and adoption are key strategies. Besides, the integration of robotics and artificial intelligence are already easing the process of doing business across the globe.
Pran-RFL’s Kamruzzaman said, “Bangladesh’s industry is growing steadily and the country is shifting to tech-based manufacturing. To compete with the others in facing the 4IR challenges, Bangladesh must fully utilise the available support from our trading partners such as china.
“Our focus in the coming days is on the use of AI and robotics, where technical support from our biggest trading partner China is a must," he added. In addition, Bangladesh has to move towards virtual trading, mostly by creating a solid infrastructure for digital commerce.”
Jason Li, board member and director of Public Affairs and Communications at Huawei South Asia, said, “In last 25 years, Huawei has played a pivotal role in developing Bangladesh’s telecommunications sector.
“We have been focused on bringing in ICT and telecommunication services and solutions, developing ICT talents, enabling the ecosystem for Digital Bangladesh, and standing beside the people.”
He added, “We facilitated the telco industry with 2G, 3G, 4G, and 5G technologies and solutions to bring together better values to the people and industry. We also have brought AI-based Huawei Cloud Computing solutions with Software as a Service, Platform as a Service, and Infrastructure as a Service modality in 2018.
“To help Bangladesh to reduce 22 per cent carbon emissions by 2030, Huawei has brought Smart Solar Power solutions for residential, commercial, and national grid projects and mobile tower power solutions.”
Jason then pointed out, “Huawei’s joint effort has made it possible to establish a nationwide fiber optic cable network and to connect telecom operators with fiber.
“Besides the ICT infrastructure development, we also have launched multiple ICT talent development programs namely, Huawei BUET ICT Academy, Seeds for the future, Women in Tech, ICT incubator, Digi Bus etc.”
There has never been a better time for Bangladesh to adopt the cutting edge technology to survive the shifting tides of the global economy.