Mohammad Ali Khokon
President Bangladesh Textile Manufacturers’ Association
We need more and more skilled labour
The Bangladesh Textile Mills Association (BTMA) is the national trade organisation representing yarn, fabric manufacturers and textile product processor mills of the country under private sector. BTMA President Mohammad Ali Khokon speaks to Fibre2Fashion about the outlook for 2022 from the perspective of the country’s yarn and fabric industry.
What are your key takeaways from the textile and apparel industry developments in 2021?
Bangladesh has come a long way since its inception and now it is considered as a miracle economy among the South Asian economies. The textiles and clothing industry is a mainstay of this economic success—84 per cent of the total export earnings comes from the textile & clothing sector where the contribution of primary textile sector is 64 per cent.
However, COVID-19 pandemic has put a heavy toll on the sector’s progress and RMG export earnings declined to $27.83 billion in FY 2019-20 from $34.13 billion in FY 2018-19. But the government’s timely stimulus packages, ensuring the utility facilities for the sector, and keeping the textile and clothing factories open during the lockdown have helped the textile and clothing industry combat the challenges and regain its export growth which can be seen from the current increased export growth trend.
Following the recent COP26 meeting and given the textile industry’s influential role in climate change, what major developments do you expect in 2022?
The 26th UN Climate Change Conference has set 4 goals namely—to secure global net zero emissions by mid-century and keep global temperature rise under 1.5 degrees Celsius, adapt to protect communities and natural habitats, mobilise finance, and work together to deliver. Among which the first and second goals are highly relatable to the apparel makers, and we are actively working towards achieving the said goals. The whole world is stressing over climate change and moving towards an eco-friendly lifestyle. The apparel makers have increasingly started getting orders of products which are organic, pollutant free, and require less or minimal use of dyes-chemicals. To meet up the demand and in line with the COP26 goals, the apparel producers of our country are leaning towards organic cotton and yarn. We have also ensured the use of Effluent Treatment Plant (ETP) to limit the harmful chemical flow into our rivers. Bangladesh Bank provides loans for ETP at a very low interest rate which has encouraged and helped our factory owners to set ETP. There are already a good number of green factories in the country. I hope in 2022, we will put more emphasis on green production and will be able develop more in this regard and the number of green factories will increase in the country.
Related to this, will we see brands increasingly start focusing on sourcing with sustainability/ethics as a factor?
The climate change has become major concern for the world and is a potential threat to human race. The alarming consequences of this has made the buyers more conscious and I think brands will focus more on sourcing with sustainability/ethics in the coming years.
Does 2022 seem to be as uncertain as 2021? Which factors would you rank as of topmost concern?
The virus that causes COVID-19 disease is changing over time and the newly detected variant called ‘Omicron’ has been marked as a ‘variant of concern’ by the World Health Organization (WHO). Our major export destinations lie in the Northern region of the world, where countries are taking necessary precautions and steps to combat this spread. Bangladesh is also taking necessary steps. We have faced the challenges till now and I hope in the coming year we will be able to keep going despite the multitude of uncertainties.
In the light of this scenario, my topmost concern will be to ensure the safety of the workers and maintain the growth of the sector so that our economy runs well.
By when do you expect the challenges of shipping industry to ease?
Shipping lines have also become victims of the pandemic causing major cargo congestion. Before COVID-19, the situation was different. Post lifting of lockdowns, people are buying more goods which have increased the demand leading to a shortage of containers. When the world started getting back to normal and opened the borders, demand for raw materials and other products surged which led to this crisis. Our shipping lines do not have the capacity to handle the extra load. Our government and the port authorities should make long term plans taking the pandemic scenario into consideration. The infrastructure of the ports should be upgraded as well.
Will we see greater technology adoptions in 2022 to solve transparency and traceability issues in the supply chain?
Transparency and traceability have become very important to the textile industry as consumers are becoming more socially and environmentally conscious day-by-day and technology plays a prime role here. The textile and clothing industries around the world are emphasising more on ensuring transparency through giving proper and exact information about the factories, fabric, and yarn sourcing. Technology has made a remarkable progress in the last few years and has made the task of traceability a lot easier than before. Though there are still some issues regarding forced labour auditing, maintaining particular standards of raw materials such as organic cotton, etc in some cases, the growing need for transparency and traceability in this sector will lead to a sustainable solution in the coming years. It is worth a mention here that the readymade garments industry of the country has made tremendous progress in ensuring safety, transparency and traceability which is praiseworthy.
Energy prices are currently a major concern across the world. How do you see them continuing and what business strategies can we expect to cope with them?
It is true that the recent energy price hike has become a matter of grave concern for us. We understand that sometimes it becomes difficult for our government to keep the energy price in control for some reasons. There was a time when the energy price was very encouraging for the entrepreneurs but the recent energy price hike by the government, especially at the time when the textile and clothing sector has just started recovering from the COVID-19 downswing, will not only increase the cost of doing business but also affect the competitiveness of the industry. However, we are doing our best to ensure efficient use of energy for a long time through initiating the use of co-generation, tri generation, solar panel, high tech generators. But we need government support to sustain our export growth.
How pressing could be the labour issues for the textile and apparel industry in 2022?
Our textile industry is free of any labour issues; we often feel the shortage of skilled labour force. As we are about to expand production, we need more and more skilled labour in the sector.
Do you expect any significant movement in textile and apparel supply chains in 2022 due to the geo-political scenario, particularly the US-China tension?
Surely the US-China trade war has opened new opportunity doors for Bangladesh textile and clothing industry, but the question lies in how effectively we can utilise it. Our RMG export is only concentrated on five basic items. We need to diversify and expand our capacity wisely otherwise we won’t be able to tap the opportunity. Textile sector has already started moving towards the plan and we hope that 2.5 million spindles will be added to the existing capacity of 13 million spindles which in turn will create employment opportunities for about 1 lakh people. The textile industry lags behind in the production of man-made fibre (MMF) and the global demand for MMF is increasing day-by-day. These investments are expected to meet the growing MMF demand of the international market. The investment will come in the form of 13 new textile units and expansion of 12 others. The US-China trade tension has encouraged the local entrepreneurs to invest in some value-added yarn and fabrics. I am informed that already 6-7 factories have been registered to set up units for MMF production, so we can reduce our MMF import dependency. More so, our spinning mills are constantly developing in line with the changing technology and buyers’ demand, and our spinning mills needs to do some minor changes to the existing technology for MMF production.
Do you expect any changes in the textile and apparel business model in the New Year?
Now in this trying time of COVID-19 and Least Developed Country (LDC) graduation nearby, the textile and clothing sector of Bangladesh is ought to go through many challenges and changes in the coming years. Since consumers are more environment conscious now, keeping the climate change and buyers demand in mind, I believe there will be significant changes in the textile and apparel business model such as: business will focus more on MMF production, eco-friendly production, reducing the cotton-based production dependency. Product diversification will be given more weightage to ensure competitiveness of the sector in the global market. Much importance will be given on bilateral, multilateral trade agreements contemplating the LDC graduation.
On the demand side, do you expect a significant pick-up beyond pent-up consumption in 2022, without government support?
After nearly two years of pandemic and economic downturn with reported decline in export earnings from the textile and clothing in FY 2019-20, the textile and clothing industry has started to rebound recently. The industry currently has good number of incoming orders which is expected to increase as the consumers are buying more after an expenditure halt.
Published on: 17/01/2022
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.
