Despite being a port city and the original apparel manufacturing hub of Bangladesh, Chittagong poses certain difficulties in providing proper industrial ecosphere for growth. Elaborating on the same, Nasir Uddin Chowdhary, Managing Director of Eastern Group discusses the pros and cons of being in Chittagong with Team Apparel Online…
Chittagong, which around 20 years back held 35 per cent share of total exports, has now fallen down to 15 per cent. “The Government is in support, but the demands for essentials outdo the supply,” shares Nasir Uddin. The company has three units – Eastern Apparels Ltd., Eastern Dresses Ltd., and Eastern Knitwear Ltd., all thriving well in Chittagong, despite the regional bottlenecks, which starts with underdeveloped infrastructure, five times more than the cost of land in Dhaka. The area also lacks continuous supply of gas as pipelines are not widespread which prevents companies from adding in-house washing plants. Sympathising with the Government, while adding that an LNG project is coming up in the next two years, Nasir Uddin is hopeful that it will improve the situation.
Adding to their woes, applying for bank loans is also not an easy process for industrialists in Chittagong area as head offices of all major banks are in Dhaka. In this way, the industry is centralised in Dhaka, with less incentives for surrounding areas.
“Moreover, Dhaka is the capital city, and all customers prefer to place orders there and many buyers don’t even bother to make further plans of flying to Chittagong,” says Nasir Uddin, who is still confident that this situation will change.
Decongest Chittagong with ‘plug & play factories’
To reorganize the apparel industry focused around Chittagong, Nasir Uddin suggests that the Government should develop ‘plug & play factories’, get the infrastructure ready and put it up for bids. This way, when gas will be available three years from now, the factories will be ready for people to come and set them up.
“China, in a similar fashion, and even Ethiopia, first developed infrastructure around the surrounding areas before inviting investors,” he proposes, while adding that the banks need to be more proactively involved. Hopefully by the MoU signed with BGMEA, in the next four years, 11 buildings with 6-storey each (altogether 12,00,000 sq. feet area), will be created and used as an example for other agencies, asserts Nasir Uddin.
The company which started by producing undergarments, is now known for bottomwears. While knits constitute 20 per cent of the product portfolio, the latest factory, which is also the biggest, has a capacity to produce 3,00,000 pieces per month of a basic 5-pocket pants.
The company which exports to USA mainly, with a few quantities to South Africa and Germany as well for brands such as JCPenney, K-Mart, Sears – which are its major buyers, is at present eyeing India and China as future markets.
“I will develop non-traditional markets other than USA in the next five years. Presently, Japan and South Africa are my priority markets,” shares Nasir Uddin.
It is a common observation that manufacturers in Bangladesh today fall over each other to meet the buyers’ need, no matter how low they go which is partly responsible for by-passing certain regulations and encouraging ‘unethical’ practices. There is a need to maintain a good costing practice among exporters. “Since methods of costing are not standardised within our industry, it leads to undercutting and unnecessary competition between companies,” adds Nasir Uddin.
Educating and decentralizing managerial authority
Although RMG is an owner-driven company, a lot of professional expertise is still required to run the company, and Nasir Uddin is happy that about 4,000 pass-out each year from design university in Dhaka and a design college in Chittagong, who he feels will help take the industry forward.