Saturday, May 04, 2024
When Sammilito Parishad, a panel of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), secured a landslide victory on April 4, 2021 in the biennial election, the world was witnessing a death toll in the thousands every day due to the Covid-19 crisis.
When the apex body President Faruque Hassan and his board took charge on April 12, 2021, they could not celebrate the occasion as Bangladesh, especially the Dhaka city, turned into a hotspot of the pandemic.
Ten months after they took charge, the Russia-Ukraine war started and the global economy landed in hot water yet again, at a time when it was already in a tough situation due to the Covid impact.
Brands reduced orders, many filed for bankruptcy and some started to defer payment.
The world is still suffering from the effects of back-to-back global crises, but Bangladesh’s apparel sector has managed to retain growth. The top foreign currency earner industry had however posted negative export growth in several single months in the last three years.
In FY23, the apparel sector secured $46.99 billion in earnings with a 10.27 per cent year-on-year export growth, despite the skyrocketing challenges.
Speaking to The Business Post, BGMEA President Faruque Hassan said, “We achieved this feat thanks to our combined efforts. I am the managing director of Giant Group, but I went to my office only for a few days during the last three years.
“Our key focus was to overcome the ongoing challenges, and I feel proud that I have a group of people in my board who are also committed to serving the BGMEA, its members, as well as our country.”
He added, “Alongside my board members, Sammilito Parishad leaders are also helping me overcome the challenges. We proved that our panel has enough capacity to navigate through any obstacles.
“That is why a maximum number of BGMEA presidents are elected from the Sammilito Parishad panel.”
The success of Sammilito Parishad’s previous tenure will be put to the test in the upcoming biennial BGMEA Election for 2024-26 – scheduled to be held on March 9. Sammilita Parishad and Forum panel will contest in the polls.
Faruque panel nominated SM Mannan Kochi as a panel leader and president candidate for the upcoming tenure.
Apparel diplomacy
In the previous BGMEA polls, Faruque-led Sammilito Parishad bagged 24 directorship posts out of 35. After taking charge, his board felt that as Bangladesh will graduate from the LDC in 2026, the apparel sector is going to face many challenges.
To overcome these challenges, businesses should take steps to support the government.
As the Western nations occupy nearly 80 per cent of Bangladesh’s export basket, they too are concerned about the country’s RMG sector, so the BGMEA should utlise the diplomatic channel.
The Faruque-led BGMEA board took the Apparel Diplomacy initiative in a bid to engage better with customers, and global stakeholders including foreign governments, media and consumers, to create a strong bond.
The initiative also helped address misconceptions and biased perceptions about the country’s RMG industry.
As part of the diplomacy, the BGMEA held several meetings with diplomats, brands’ and buyers’ bosses, rights groups and stakeholders.
Besides, to showcase Bangladesh’s apparel sector’s progress across the world, Faruque-led BGMEA organised a week-long mega show “Made in Bangladesh Week 2022” in Dhaka, and “Bangladesh Apparel Summit 2023” in Melbourne.
Faruque pointed out, “These events are the first of their kind in Bangladesh, and Sammilito Parishad is committed to continue organising such programmes. The second edition of Made in Bangladesh Week will be held this year.
“Besides, we have been making continued efforts to explore new markets and opportunities. Our journey was not smooth. From day one, our priority was to pave the way for the industry to reach its full potential.”
He then said, “The industry has faced unprecedented challenges, especially by the Covid-19 pandemic and the Russia-Ukraine war. But the indomitable spirit and hard work of their entrepreneurs and workers have propelled the industry into becoming a global leader.
“I hope the new board of BGMEA will carry forward the initiatives along our vision, and will also bring new approaches and ideas to smoothen our journey forward. We believe that our collective efforts will propel the garment industry to new heights.”
Due to the relentless efforts of BGMEA leaders, and the indomitable spirit and hard work of RMG entrepreneurs and workers, Bangladesh surpassed China as the largest exporter, and gained the top position in terms of quantity in 2022.
But in value terms, Bangladesh is still in the 2nd position, and will take a few more years to be the largest exporter.
Currently, the country holds 22.64 per cent shares of total denim imported by the USA. On the other hand, the share of Bangladesh in the European Union’s total denim imports was 30.49 per cent last year.
Faruque said, “Though our RMG products are mainly destined for the US and EU, it is quite encouraging that over the past one and half decades, remarkable progress has been achieved in diversifying our exports to other regions around the world.”
“Made in Bangladesh” clothes are now retailed in around 167 countries, according to the BGMEA.
BGMEA initiatives, activities
BGMEA leaders have shown efforts toward ensuring easier access to finance.
As a result, the Bangladesh Bank created Export Facilitation Fund (EFF), value addition requirement for cash incentive lowered to 20 per cent, cash incentive allowed for export through FOC or CMT.
Meanwhile, the central bank introduced a long term financing facility, pre-shipment credit scheme and partial repayments of loans.
The Faruque-led committee also worked to ensure waiver of VAT against subcontract, allowing continuous bond facility among three factories instead of two factories, allowing export during the BIN Lock of exporters, and availing extension of bonding period for 100 per cent export-oriented bonded industry.
This committee also worked to enhance flexibility and reduce the cost of business.
As part of this initiative, the BGMEA worked to ensure the extension of the Import Registration Certificate (IRC) and Export Registration Certificate (ERC) to 5 years validity instead of 1 year, and the Export Promotion Bureau (EPB) registration or renewal to 5 years validity instead of 1 year for ease of doing business.
Considering the significance of fibre diversification to pursue Vision 2030, the BGMEA has undertaken a research project on the potential of fibre diversification, to develop a strategy for enhancing the country’s overall competitiveness and strength in non-cotton apparel.
It will use this information to develop a roadmap for manufacturers, investors, policymakers, development partners and other influencers, detailing approaches and ways to establish a strong presence in the non-cotton textile and apparel market, says the present BGMEA board.
The BGMEA also signed an agreement with the PricewaterhouseCoopers (PwC) to conduct a study on Bangladesh's RMG sector roadmap to recovery.
The objective of this study, expected to be unveiled in March 2024, is to develop a strategic roadmap, and an action plan for the industry, covering thematic areas including the development of an export target for 2032 with an interim target of 2025.
Faruque said, “We made considerable advancements in vertical integration including almost self-sufficiency in accessories, growing textile, dyeing, washing, printing, sequence, applique, embroidery, and other allied industries.
“The incremental capacity of local value addition gives more flexibility to the buyers, and enhances our competitive advantage as we can save lead time and cost.”
He then said, “Nevertheless, after the expiration of EBA, we will enrol in the GSP Plus programme, which requires a double transformation. This means yarn to fabric, and fabric to garment to be done in Bangladesh.
“So, local backward linkage will certainly have a significant advantage for the EU market.”
The association has also shared the “Sustainability Strategic Vision 2030 of BGMEA,” which identifies key ESG priorities to become a sustainable industry by 2030 and beyond.
It has been honoured with the 2021 USGBC Leadership Award for its exemplary leadership in developing Bangladesh as the home of the highest number of green garment factories in the world.
Changing the narrative through branding
The BGMEA incumbent board re-designed its logo to capture the association’s illustrious past of resilience and dynamism, and connect us to the future and possibilities.
All nine dots in the logo are a matrix of BGMEA values – inclusivity, transparency, infrastructure, innovation, circularity, branding, strengthening our global network, and protecting the environment.
In developing the logo, our priority was to preserve the spirit of BGMEA’s legacy and successive leadership. The logo’s original colour pallet remains unchanged, says the association.
Besides, for the very first time in Bangladesh, the BGMEA organised the “Made in Bangladesh Week” in November 2022 to showcase the impressive accomplishments of the RMG industry.
The association continues to strive to pursue excellence by organising the first-ever daylong Bangladesh Apparel Summit in Melbourne, the 37th World Fashion Convention, and for the first time, an Art Camp.
Under the Sammilito Parishad leader, BGMEA, in collaboration with the Ministry of Commerce, Government of Bangladesh and the EIF, and the World Trade Organization (WTO), implemented a project titled “Creating High-End Fashion Product Using Local Heritage Material.”
The objective of this project was to create fashion professionals and designers with the knowledge and skills necessary for developing high-end fashionable garments using heritage fabrics and materials.
