Rizvi Fashions Limited, a leading RMG manufacturer, aims at clocking US $ 100 million export turnover by 2025. The company was established by its Managing Director Shakil Rizvi in 2013 and has rapidly gained prominence in the industry due to its dedication to achieving the highest standards in manufacturing of basic product commodities such as boxers, underwear etc. The product portfolio of the company also includes trousers, jerseys, T-shirts, lingerie, babywear and various types of shorts.
It’s notable that Rizvi Fashions has orders lined up until FY ’24. While challenges are not absent, it’s important to highlight that the products it is catering to are not just fashionable but also fall under the category of basic commodity products, particularly boxers. Due to the substantial volumes involved in this category, it has proven to be a viable strategy for the company. This approach may result in smaller profit margins.
“In the current landscape, the general trend for profit margins in the RMG manufacturing industry typically hovers around 7 per cent-8 per cent per order, which requires diligent management to sustain operations. Given the industry’s low profit margins, it becomes essential to cover expenses such as worker and management salaries, all the while ensuring the factory remains operational throughout challenging times, including the recent disruptions like Covid, the Russia-Ukraine war and global economic slowdown,” mentioned Shakil.
Slow expansion, efficiency increment are key strategies
Setting up new factories can be a lengthy process, with a two-year investment period that includes land acquisition, construction and order acquisition. This waiting period for orders to materialise can be financially burdensome for new entrants as well as established players in these tough times. Adding to it, some banks in Bangladesh are currently unable to provide loans for further expansion due to financial constraints, leading to a reliance on foreign funds from institutions like World Bank or IMF. This is something Rizvi is encountering as a challenge when it comes to its expansion strategy which is why the company has decided to go for expansion of its sewing lines in the same premise where the company’s operations are already running.
Rizvi Fashions operates with a remarkable array of modern machines, totalling over 2378 sewing units and has the capacity to produce 2-2.5 million pieces of garments per month, depending on the type and style. The company’s dedicated team of 2800 employees, comprising both production and management teams, is committed to achieving clients’ production goals with utmost efficiency and on time.
Currently, Rizvi Fashions has 65 sewing lines, while it is aiming to increase it to 75-80 by 2025 in the already operational factories. This way, the company will add at least 350-525 sewing machines. While the maximum number of machines will be producing boxers and underwear, some lines would be dedicated to products such as lingerie and other knitted items.
“We are strategically expanding within the same product categories, focusing on acquiring bulk orders for boxers, which are expected to maintain consistent demand not just from the company’s primary markets – Germany, the UK and Europe – but also from non-traditional markets such as Africa, South America, the Middle East, Turkey and even India,” averred Shakil.
Shakil also mentioned the need to improve the efficiency of management personnel in his factories to achieve targets, as the industry has traditionally focused on worker-level efficiency but missed out on the development of management-level efficiency. “Measuring senior and top management’s performance and decision-making criteria is an area for improvement as they are the ones who are running the show,” shared
