From a small manufacturing unit, NZN Fashions Ltd., set up in 1984 with just 500 workers by Md. Nasir Uddin in the port city of Chittagong, Pacific Jeans Limited (PJL) has come a long, long way to become what it is currently – the leading denim jeans manufacturer in Bangladesh.
Today, Pacific runs six units namely – Pacific Jeans; Jeans 2000; Universal Jeans; NHT Fashion; Pacific Accessories and Pacific Casuals at the Chittagong Export Processing Zone (CEPZ); and Pacific Knitex at Sitakunda, Chittagong with a turnover of US $ 450 million and aspires to touch the billion dollar mark in next five years.
Despite the sudden loss of the Founder Chairman Md Nasir Uddin, which left the Bangladesh apparel industry in a state of shock not to mention the Pacific Jeans family, PJL continued to live up to the legacy left behind by the stalwart to work for the well-being of the 35,000 people-strong family of Pacific Jeans – building on his vision to grow and evolve.
What’s more, the Late Md Nasir Uddin developed a very strong corporate governance and succession plan to ensure the organisation he built with his heart and soul continues to thrive to realise some of his yet unfulfilled dreams.
Apparel Resources (AR) caught up with the dynamic Managing Director of Pacific Jeans, Syed Md Tanvir, at such a critical juncture for a no holds barred discussion on Pacific’s growth journey, how it managed to maintain its supremacy in the realm of denim jeans exports, importance of PD and innovations in denim, the current market dynamics and last but not the least how the company is positioning itself in the existing scenario to make the most of the opportunities.
Here are the excerpts…
Apparel Resources (AR): Bangladesh made a strong rebound in denim export in 2021 in US to wrest back the top position lost in 2019. What have been the principal catalysts in Bangladesh’s dominance in denim globally?
Syed Md Tanvir: The US represents the biggest consumer of denim worldwide and has the largest per capita users of jeans globally. First of all, the denim market in US is growing due to increasing disposable income, higher fashion consciousness and shift towards more casual dressing in the workplace and formal occasions. All these factors are generating growth in denim category in the US.
In February this year, US retailers imported 32 per cent more jeans compared to a year earlier for a value of US $ 607.3 million, according to the OTEXA.
This growth was also reflected in Bangladesh’s exports, which increased 29.07 per cent to US $ 122.82 million.
Our growth trajectory is also due to the fact that we are very niche and focused. We only stitch denim and value-add in fabrics that we procure from suppliers across geographical locations, which gives us price, quality and helps in timely delivery.
In today’s age, variety and agility have become the key to success in denim; the more diverse the supplier portfolio, the more we can leverage on the same and like the other vertically integrated entities, we don’t want to sell our fabric and become a competitor to our fabric suppliers.
We also are the frontrunners in adopting international best practices which has helped us to maintain our value proposition as a premium jeans supplier.
I believe we would be able to maintain this trend going forward by focusing more on R&D and innovation to move up the value chain.
AR: Talking of value-addition, Pacific Jeans has a very high end in-house design and development centre (Pacific Jeans Innovation Centre). What are some of its endeavours and how has such efforts helped to attain business sustainability?
Syed Md Tanvir: The essence of the time is to stay updated on the need of the client and end-customers.
Customers periodically seek trend inputs for their seasonal collection and thanks to our well-heeled team, we are more than able to comprehend each customer’s brand and product aesthetics and translate their inherent needs into product and, as we do seasonal range building in joint collaboration with our clients, it is also helping our buyers to have an upper hand in terms of design support.
We have a strong product development team of 150 people including expatriate specialists and local designers at Pacific Jeans Innovation Centre, who are continuously studying the global developments, the essence of which gets reflected in the macro/micro trends of our product development.
We create a lot of value in terms of perspective of production process innovation, new trends, finishing process and fabric development, which helps to build the confidence of our valued customers to consider us as the one-stop service provider.
AR: How do you foresee things this fiscal year considering Pacific suffered a net profit decline of around 55 per cent last fiscal year due to the pandemic and, what is your export target for this year?
Syed Md Tanvir: The global denim market is projected to reach a revised size of US $ 76.1 billion by 2026 growing at 4.8 per cent annually and Pacific Jeans is very much aware of and in sync with it.
To capitalise on the growth opportunities, we are adding new production units and our strategy is to diversify export destinations and try to exploit the untapped market while also move into new product categories.
We have two new denim facilities with combined production capacity of 30,000 pairs of denim jeans per day even as we look to enhance our capacities further by adding a new facility with capacity to produce 50,000 pairs of denim jeans per day by June 2023.
With this, our total production capacity will go up to 200,000 pairs of denim jeans/day by the end of 2023.
Our export was around US $ 450 million in the last fiscal year (of 2020-21) and in this fiscal (2021-2022) our export will reach around US $ 500 million.
We also want to diversify so that we can produce different categories of products depending on different categories of markets and customers.
AR: As the global denim market continues to grow, some are venturing into unchartered territories, while others seem keen on consolidating business in established markets…What is Pacific’s strategy?
Syed Md Tanvir: Currently, our main markets are Japan, Europe and the USA. However, we want to explore various other destinations as well and want to penetrate big markets such as China and India and other emerging Asian markets.
India is a very prospective market in terms of opportunities; it is predicted that almost a billion people will join the ranks of the middle class by 2025 in India.
Changing demographics and favourable trends in urbanisation show that a massive shift towards a middle-class society is already in the making and, keeping the same in perspective, there is a huge opportunity in India, which still remains unexplored by us.
AR: You had forayed into knitwear with Pacific Casuals in 2019… Any new development towards product diversification?
Syed Md Tanvir: Like I earlier said, we have come up with two new denim units; similarly last month only we opened Pacific Workwear at the CEPZ to produce workwear even though the production has not yet started in the new unit. The investment in Pacific Workwear is part of the process of moving to more high-value products.
As a group, we plan to keep working on product diversification, produce more high-value products and explore new markets. We have invested to bolster capabilities in knitwear and produce around 50,000 pieces of knit products per day.
With knits, it’s a different story as we all know without vertical integration, it is difficult to grow in knits. So, we are increasing our fabric-producing capacity and once it reaches the desired level, we will try to invest in spinning.
Our ultimate aim is to materialise the long-term vision of becoming a global lifewear solution company.