Committed to providing excellence at all levels of production, Ananta Garments, established in 1992 is manufacturing and exporting woven bottoms, mainly denim for the US and European markets, for top brand, importers and retailers such as GAP, H&M, M&S Mode, Target and Walmart.With 4 factories – 3 for sewing and 1 for finishing, total machine strength of 4500 and more than 13,000 employees, the company is targeting a turnover of US $120 million for the year 2012-13, growing steady at 25-30 per cent YoY for the past 7-8 years. Now with the coming up of a new facility each for button manufacturing, suits and heavy sweaters, all in and around the city of Dhaka, Ananta is looking to touch a turnover of US $ 200 million.
Spearheading the Group, the young and US educated team headed by Sharif Zahir, MD, Directors Asif Zahir, Syed Ishtiaq Alam, Rahil Farhad and other several dynamic, young entrepreneurs, Ananta comprises a dynamic team with a forward thinking vision that defines the future growth strategy of the company. Aggressive, yet suave, the team makes a winning combination and speaks exclusively with Team Apparel Online (BD) about how Ananta is aligning to the rapidly changing dynamics of the global apparel industry the passion for growth is palpable.
AO: Bangladesh is enjoying best phase of garment manufacturing. What are the bottlenecks still holding it back?
I agree it’s almost revolutionary how the market economy is changing with a lot of global retail and fashion chains seeing a huge opportunity with Bangladesh. Recent recession and economic turmoil has bought a lot more focus on us. Everyone wants to include Bangladesh in their strategic plans and setup their base here; also with the cost going up in China they want to shift their base to Bangladesh.
As far as the bottlenecks are concerned, opportunities are there along with challenges and threats and if we have the right infrastructure support like good roads, electricity, gas connections and other things which we are somewhat lacking, then I think a lot more buyers will be attracted to Bangladesh. However, we are happy about the Government support, with all the regimes very supportive. Even during strikes there are no issues with the shipments as a whole in the industry. From customer’s point of view, most buyers and customers have shown patience working with Bangladesh and they like it because they see the potential here as a mature, performing sourcing base.
AO: Bangladesh has very few variations in the product basket. Is Ananta continuing to build on the same for its growth or does it have any diversification plans?
[bleft]We are growing very fast in our core category and this is our main strength making us one of the preferred vendors for all our customers we work for. We are a platinum vendor for H&M, worldwide there are a total of 8 such vendors, out of which 3 are in Bangladesh. For one of the US major retailers, we are actually one of the core vendors out of 14 selected vendors shortlisted from 80 vendors all over the world. Again out of 14 vendors, 5 are in Bangladesh…this speaks volumes for Bangladesh as a whole.” [/bleft]
We saw some opportunities, studied the same, spoke to our buyers, tried to figure out where is the gap in the demand and supply chain and started building and developing service lines within our product offerings and bundled them together. Nowadays, we are focused on manufacturing products that have future potential in Bangladesh for the next 10 to 15 years. We are trying to expand in core product areas.
The culmination of our market study made us get into a joint venture to produce men’s formal suits. It is a joint venture with Time International, a leading Group in Europe, specializing only in producing suits for past 20-30 years. This venture is going to help us in servicing a European mass retailer. It’s a very interesting and challenging project as we have promised to deliver quality which is much better than what one can get out of Asia. We are also planning to open a heavy knits factory which deals with jacquard sweaters. For the plant setup, we have tied up with a company in China that is producing and specializing in high-end products. The knits factory will produce close to 4 million metre per year. With these expansions we are now able to offer our customers a wider choice of products. The complimentary products like buttons will help to strengthen our core product and offer the same customers a wider product choice.
AO: Bangladesh is traditionally a CMT (Cut, Make & Trim) manufacturing base. Does your Group involve in “fully factored (design development to production)” or “CMT” manufacturing?
We are doing both, a healthy mix of large quantities with 20 per cent smaller volume. We have a design team catering to that particular setup. Even now bulk business is still profitable in Bangladesh. As there are not many factories that can handle a million piece deliveries over a month, for companies like us which are growing quite steadily and have substantive capacities, it’s good to have a mix and be prepared for the future of many styles.
AO: Is there any other investment made by Ananta Group in order to cater to the gaps of supply demand chain?
Yes, we have now invested in setting up a metal button plant which is already running. The button business is a 3-way joint venture –Ananta Group, Brandot International, headed by its President Martin Trust and TNS Buttons (HK), a Hong Kong and China based leading manufacturer of buttons. For almost 200 million denims being produced every year, most of the buttons and hardware were sourced out from Hong Kong and China. However, there are smaller companies in Bangladesh which manufacture buttons but they are not servicing customers at the level we can, realizing the opportunity we ventured into the manufacturing. The button factory is going to have a capacity of 5 million gross per year. I am proud of the fact that it is a unit which is not only socially, environmentally but also technologically the best.
AO: Overall factory improvement is critical to remain profitable. What technology initiatives you are taking to improve efficiency, productivity?
A lot of companies like ours are now investing in areas of production efficiency improvements, work study, industrial engineering, operational excellence to try and cope up with tight pricing and the buyers’ expectations. Every year whenever our buyers come visiting us they see a positive change; in general the industry is adopting latest technological advancements. It’s just a matter of putting right investment at the right time for the right customers.
We have recently invested in a lot of automatic machines for denims and for laundry. We have also implemented a customized Enterprise Resource Planning system (ERP). It is being installed in all the departments in the company. Systems like RFID bundle tracking systems have already been tested for full implementation.
AO: Lean is a latest fad…, is that so, or do you think it is value for you?
[bleft]Currently, the focus area for moving up the value-chain is better value additions, and that’s what we are focussing on. Right now we are targeting towards adding 60-70 per cent finishing elements to our products.” [/bleft]
We have actually incorporated lean initiatives in couple of our products and a lot of them have turned out to be very successful. In one of our plants we have weekly kaizen meetings conducted by the plant Director. In those meetings, everybody including the workers and the managers are asked to bring some ideas for improvement every week. We have seen some radical changes where small ideas like a small tool or a folder that someone is actually thinking of creating are being implemented. If you actually setup a right platform and also award people for it, there is a lot of participation you can get. Maybe at the worker level lean is still a very foreign concept because if you look at any company here versus a competitive company in another nearby country, for the same number of lines and machines, we produce a lot more because we are putting more helpers in the line which we can afford to do, to push the goods through. So on charts our efficiency is down in terms of operators we put per line, but still our output is a lot more. Efficiency is low, but as we all know it is a relative terminology. We have monthly KPI (Key Performance Indicator) meetings where we do track efficiency and reward workers based on efficiency. This we are doing for last 6 years and the system is working well for us.
AO: Productivity and production is an outcome of many processes on the shop floor and among them training, re-training and skill development is very important. What initiatives have you taken?
The maturity of the industry is very important for it to grow and the training and motivation of workers are critical for its growth. Now that we are getting more stable as a company, we have started to think of investing in such measures as we need now to have more skilled workers. We actually ran some in-house training for sewing operators; the idea was to put fresh workers into training institutes for a month at company’s cost, and try retaining them, we are successful in our objective.
We also have worker efficiency incentives in order to motivate the worker. We have a proper sourcing and merchandising team in order to have better efficiency levels. In terms of middle management we have tied up with companies and leading training firms who are facilitating and bringing everybody together. We have human resource restructuring programmes which help in training. Beyond that some key personnel get training at an ad hoc basis.
AO: Where do you see Ananta in the next 5 years and how you plan to achieve those targets?
We have different projects and a couple of joint ventures at various stages of implementation. Our company is open to the idea of yet more joint ventures. By the end of the year we will be employing around 18,000 people. We have invested in the sweater factory which has a huge potential, if this project does well, we can grow in these lines. It stands same for the suits and the metal button plant as well. For our main category, woven bottoms we have a plan of reaching somewhere around US $ 200 million turnover within the next 3 years. There is a lot to do on improving our services, offering better products with better value addition. We are trying to add more value added finishing capabilities for which there is an increasing and steady rise in the demand and dearth of supply; right now we are targeting towards adding 60- 70 per cent finishing elements to the product.
