Far East Knitting and Dyeing Industries LTD (FEKDIL) was established in 1994 as a small stitching unit and over the years the partners expanded into fabric and garment manufacturing too. 27 years down the line, FEKDIL is regarded as one of the top factories in Bangladesh with a focus on sustainable production and inputs. In an interview with Fibre2Fashion, Zayed Moyeen, Director of FEKDIL, throws light on the factors which are encouraging the growth of Bangladesh’s garment industry, the turnaround story of FEKDIL and plans going forward.
Where are your manufacturing units based? What kind of infrastructure do they have?
Our main knit composite factory (FEKDIL) is located in Shafipur, Gazipur which is about 40 km from the capital Dhaka. It has in house knitting, dyeing 17 tonnes a day, printing 80,000 pcs per day, washing plant, embroidery, fabric finishing and garmenting capacity of 110,000 pcs daily.
The spinning mill FESIL Ltd, is approximately 150 kms north east of Dhaka in Hobiganj, Sylhet. Its 25,000 spindles produce 16 tonnes of compact cotton yarn and an additional 4000 kgs of Vortex viscose daily and runs 40 per cent on solar power.
What is the size of the garment industry of Bangladesh?
With approximately 4,200 textile factories, Bangladesh ranks as the second largest exporter of garments in the world with an annual revenue of $36 billion until June 2020, accounting for almost 82 per cent of the nation's total export proceeds.
What factors are going to drive the growth of Bangladesh's garment industry going forward?
The garment sector has performed incredibly well in the past decade and managed to capitalise on the advantages we have as a country. With a 4 million strong workforce and increased demand for Bangladeshi apparels from foreign buyers, these are the two factors which we must continue to improve on, among others. We will at some point lose our competitive edge in terms of cheap labour--costs to factory owners are rising year on year, and we must ensure development of skilled workforce from worker to mid level managers and help them evolve as the industry does.
As cost of labour and factory overheads rise, it is becoming even more crucial to find different ways of remaining competitive and focusing on other areas such as positive brand buidling of the country and a move towards greener and environment friendly processes in production through next gen machines and sustainable practices in our production.
With the super competitive RMG market coupled with the global impact of the pandemic, the fight for prices is sharper than before and we must be wary as factory owners of how we can add value at a time like this and set ourselves apart from the rest, while trying to keep our margins intact. Sustainability and 'going green' may count for a lot more than what we think in the upcoming decade.
Where are the raw materials sourced from?
Import of cotton for FESIL is done from West Africa, Brazil, India. Import of yarns for FEKDIL is done from India.
What is your production capacity of garments?
110,000 pieces per day.
Does any percentage of your product mix go towards the domestic market within Bangladesh? How has the domestic market shaped up in the last couple of years?
No, we are export totally oriented only. The domestic demand for apparels has risen with the rapid expansion of the middle-class accounting for approximately 40 million people (22 per cent of population). This has led to several companies starting to set up their local brands and retailers in major cities and even exporting their own products to various countries. This again helps to add a positive outlook of the industry and "brand Bangladesh".
What is the story behind the formation of FEKDIL? Who are the promoters/ founders?
FEKDIL was established in 1994, by my father and two of his close friends/associates. In fact, they were bankers working together at BCCI in Hong Kong and decided they would move back home to Bangladesh and set up their own textile/garment factory. Starting out as a small garmenting unit, FEKDIL slowly expanded into fabric production and added capacity, and today 27 years later we are regarded as one of the leading knit composite exporters in the country with a workforce of 5500 and a daily garmenting capacity of 100,000 pieces per day. With investmnents and development in more efficient machines and practices, we steadily grew over the years and are proud of our reputation and relationships with our buyers and suppliers at home and abroad.
FEKDIL is also a listed company on the Dhaka Stock Exchange since 2014 with an annual turnover of $44 million (2020). Over the years, we have increased capacity in our garmenting and fabric units while also investing in printing and garment washing facilities further adding value to our capabilties. Most notably we have been able to set up our own yarn manufacturing unit (Far East Spinning Industries Ltd, a sister concern) which is a state-of-the-art LEED certified spinning mill functioning in the north of Bangladesh in Sylhet. It is the only mill in the country producing 100 per cent compact yarn only and run 40 per cent on solar power. In 2020, FEKDIL bought 20 per cent into FESIL.
My father, Asif Moyeen, is the majoirty shareholder and managing director of the company. The other two founders are Farha Lazina, chairman of FEKDIL and MB Quasem, director of FEKDIL.
By what % has the production decreased since Covid? When are you expecting to reach pre-Covid production levels?
It certainly did affect us in a year where we hoped to capitalise on some investments like the proposed yarn dyeing plant which we couldn't go ahead with, although we managed to implement the equity purchase of FESIL (22 per cent). The pandemic caught everyone totally off guard and from performing at full capacity, it quickly became all about surviving. The impact in the west, namely in the EU coutries led to full economic closures for them and instantly impacted our sales. As orders dropped and amidst cancellations, Bangladesh soon went into lockdown in Mar 2020. Factories were shut for almost 7 weeks and the financial toll for factory owners like us was significant as we continued to pay workers in full and with eid bonus despite sales coming to a stop--the expenses continued. Price of cotton also rose between 30-40 per cent during this time making it even tougher to hit target prices from our customers.
During this time, we were lucky that none of our key buyers cancelled any orders or went into liquidation themselves; on the contrary they moved to place orders with us as soon as the factory re-opened. We managed this challenging time by keeping production levels up and allowing some margins, helping us to cushion the blow of the pandemic to a certain extent.
Which are your major export and import markets?
FEKDIL: Exports mainly to UK, Spain, France, Germany & US, Korea, Japan, Singapore. Imports yarn from India and in special cases from China.
FESIL: Sale in local market of yarn. Imports raw cotton from West Africa, Brazil, US, India.
What was the turnaround year for the company? What is its growth story?
In the last 20 years, so much has changed in the RMG sector so rapidly that it is difficult to pinpoint any single year. Starting from where we started, it took a lot of hard work from everyone involved at the top all the way down to our employees in the garment lines to help us grow to this level. A few key years would have been 2005 when the GSP with EU was introduced to allow quota free textile trade. This was a good move given that our core clientele were EU based and prompted us to consolidate with those buyers and plan a long term strategy with them leading to key investments in value additions like printing, washing, embroidery. Ofcourse 2014 was an important year as we went public but in the years prior to that, my father was quite clear in his idea of increasing capacity and becoming more sustainably conscious. With the spotlight on climate change and being eco-friendly, we bought modern and more efficient machines in dyeing and fabric finishing and then decided to set up our own cotton spinning mill in 2018 with a focus on creating a sustainable green factory to further add value to our supply chain. Producing about 15,000 kgs of compact cotton yarn and 3 tonnes of viscose yarn daily along with the ability to do organic cotton and sustainable viscose for our customers like Zara, Mango and Lidl, accounts for nearly 50 per cent of FEKDIL's yarn requirement, which were previously buying from India or from other mills locally. This allows us to drop our lead time and sharpness in communication with the buyers for prospective orders. Now we can offer our clients a fully integrated one stop shop from raw cotton all the way to final packaged goods all under the Far East brand.
What are the main brands and retailers you are catering to?
Zara, Mango, Primark, Lidl, Hangten, Monoprix.
Any plans to expand your current capacities or introduce new products in the near future?
At the moment, we are in a comfortable position with our garmenting capacity which we expanded in late 2016. We still would consider doing the yarn dyeing plant at FEKDIL and we are also planning to set up our second spinning unit at FESIL doubling our yarn output.
In terms of new products, we are always in constant dialogue with our buyers about new yarns and fabrics namely those that are eco-friendly and sustainable. With the ability to spin our own organic cotton and sustainable viscose like Ecovero and Liva Eco, we offer the buyers a range of fabric blends to create for upcoming seasons. The focus on sustaainability and being conscious of our carbon footprint is what will drive innovation in new products, fabrics, and machinery.
Please share revenue details of the last fiscal and the target set for current fiscal?
Last year in 2020 we had a revenue of about $44 million. We hope to hit $50 million this year. (PC)
Published on: 31/05/2021
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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