Ahammed Ali Babu
Director Blue Planet Knitwear Ltd
Our future plan is to work with at least 50 per cent of sustainable fabrics
With its expertise in spinning, knitting, printing and embroidery, Blue Planet Knitwear Ltd (BPKW) has a three-fold vision—to lead the knitting industry in Bangladesh; observe highest social, economic and environmental standards; and maintain a committed and satisfied clientele. In a chat with Fibre2Fashion, BPKW Director Ahammed Ali Babu talks about the Bangladesh garment industry, and sustainability and future plans at the company.
Bangladesh is today one of the world’s largest apparel exporters, with the readymade garment (RMG) sector accounting for 84 per cent of Bangladesh’s total exports. What factors have contributed to this fact?
This export growth has been made possible by ample supply of cheap labour, as Bangladesh has one of the lowest wage rates in the world.
Duty free access to its major markets.
Bangladesh as such is well positioned to diversify its exports and move up the value chain.
Transparency regarding factory and worker safety and value-chain responsibility steps helped restore Bangladesh’s attractiveness in the global apparel-sourcing market, leading to a decade of rapid growth.
The sector’s participation in new initiatives regarding climate change and circularity have advanced the sustainability agenda, for example through the Circular Fashion Partnership, a multi-stakeholder initiative aiming to scale up recycling of production waste.
Turning to compliance, factory and occupational safety, and transparency, the Bangladesh garment sector has shown enormous improvement.
Diversify customer countries and move to more complex products and value-added services. There is now greater capacity to produce garments made from synthetic fibres; manufacture more complex products such as outerwear, tailored items, and lingerie; and provide new washes, prints, and laser finishing.
Investment in R&D.
Finally, political stability.
At a time when Vietnam is not far behind and may have also overtaken Bangladesh last year, what steps is Bangladesh taking to manage risk from competing nations and adapt to changing demand patterns in the global fashion market?
Competition will be always there, and it is a driving force behind our growth. We are constantly coming up with:
New ideas and innovation through R&D (both in product and process).
Adopting technological integration in management and manufacturing process.
Setting up Design Studio; able to offer styles.
Grow capability to deliver product in shorter lead-time.
What have been the greatest effects of the COVID-19 pandemic on the Bangladesh garment industry, apart from closure of factories and retrenchment of workers? What challenges were seen in sourcing of raw materials, order fulfillment, inventories, etc?
During the pandemic, sales dropped significantly, which had a negative effect on cash flow and as a result, financial discipline was interfered.
Piled up inventory caused higher 'Cost of Inventory' during the pandemic though it was gradually released.
Since demand increased in the world market right after the first wave of COVID, we struggled to ensure supply against that demand.
Consequently, we had to refuse surplus orders which moved to the competing countries.
Raw materials prices have increased, but faced difficulties in negotiate it with buyers, as they were unwilling to increase selling price keeping the profit level as before.
How has been the recovery of the garment industry since last year? Has it bounced back to pre-COVID levels yet?
In the post-COVID situation, a number of small factories have shut down. It will be very difficult for them to bounce back in the coming years. For the rest, manufacturing sites are well managed and prepared for operation and orders are also being regular since demand is there. So, the whole industry is bouncing back to pre-COVID level. Only challenge remaining is higher raw material price, and its consequences in costing.
Bangladesh’s government might benefit from recalibrating its strategies to attract foreign investors. An FDI, often from a multinational corporation, brings global management and operational best practices, as well as R&D capability and funding. But Bangladesh’s RMG sector currently lags in FDI compared to its Asian peers. In Vietnam, for example, FDI-backed companies—from South Korea, Taiwan, Hong Kong, China, and elsewhere—account for around 70 percent of apparel exports.
What is the USP of Blue Planet that you believe gives you an edge when it comes to competition both from within and outside the country?
Our USP is quality with on-time delivery.
Where are your manufacturing facilities based at? Where do you source the raw materials from?
Our facilities are based at Mawna, in Gazipur, Bangladesh. We source raw materials mostly locally, and also from India and China.
What is the annual production of garments at your units? What percentage of the production is for the domestic market and what per cent is exported?
We have two garmenting units. One is for knitwear with annual production capacity of 25 million pieces, and another one is for lingerie which also has annual production capacity of 25 million pieces. Our production is 100 per cent exported.
Which are the major markets that you export to and which brands and retailers does this include?
Our major market is Europe. We supply to Inditex, Aldi, Espirit, Lidl, Slogy, Best Seller, LPP SPA, Camp David, Jbc, El-Corte, Gemo, Walmart, Primark, and Triumph.
Are you exploring to export to new markets?
Yes, we are exploring the US and Japan markets.
How sustainable are your manufacturing units? What steps have you taken across the value chain to ensure a smaller carbon footprint?
Blue Planet Group (BPG), our parent company, has a dedicated compliance team in every unit for ensuring different indicators of sustainability. Regular external and internal audits are conducted for assurance as well.
Steps to curb carbon footprint includes establishment of LEED certified green factory, enrollment to carbon neutralised programme, carbon offsetting programmes, establishment of Effluent Treatment Plant, reduction of energy and resource consumption, reuse of rainwater, recycling of waste and safe disposal of industrial waste.
How have revenues been in the last two years and what is the target set for the next two?
Currently, our annual revenue is $220 million, and within the next two years we target to achieve $350 million.
What are your future plans?
Our future plan is to work with at least 50 per cent of sustainable fabrics and to ensure zero discharge water in our dyeing unit. We are also working to make all the exhausted heat to convert into energy for reuse. Within one year, we will set up a solar plant through which we can save electricity by 70 per cent. We use rainwater in dyeing process, and plan to use it on a larger scale. In short, we would like to engage ourselves in making all our production processes environmentally friendly and also to introduce updated automation to reduce the labour cost.
Published on: 11/03/2022
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
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