Started in 1991, DBL Group, employing around of 38,000 employees, is a diversified conglomerate of Bangladesh with business interests in apparels, textiles, textile printing, washing, garment accessories, packaging, ceramic tiles, pharmaceuticals, dredging, semiconductor design (VLSI), ICT and telecommunications.
Apparel Resources caught up with MA Jabbar, the dynamic Managing Director of the group in an exclusive interaction to know his thoughts and perspectives on a gamut of issues facing the industry in the backdrop of the existing situation (consequent to the outbreak of the coronavirus pandemic), which has created new obstacles and challenges for businesses.
How has been the business since the industry resumed operations after the countrywide shutdown on account of COVID-19?
MA Jabbar: The COIVD-19 pandemic has brought in new challenges for business. Business is no more the usual. Now one needs to do business with a special focus on hygiene issues and prevention of spreading of coronavirus amongst the employees.
In light of various challenges/bottlenecks, it would take some time for business to go back to the normal self.
In these changed circumstances, businesses are led to bring in several changes, be it in terms of strategy or approach. What about DBL?
MA Jabbar: As social distancing is currently paramount in our lifestyle and in working environment too, the pandemic has forcibly brought in changes in our way of working. Retailers are working remotely from home, but they are giving us the flexibility to meet with them as much as possible through virtual/online meetings to make business decisions faster and resolve operational issues when needed.
Previously, we had physical meetings, during which, we used to get approvals for products, and now they are giving us the authority to assess product and do self-approval with the ownership.
Cost negotiations, buying meetings, and garment fittings are now done jointly through video conferencing, and this has become the new normal way of doing production and operation process uninterruptedly, having a strong element of trust.
Any change in buyers/retailers’ sourcing strategy in view of the pandemic?
MA Jabbar: Most of our EU (European Union) customers’ online business is getting stronger, as end customers’ purchasing habits are tilting towards online for health and safety reasons. Online retailing, undoubtedly, is performing well now.
One of our online fashion brands, Zalando, intends to double its sourcing of products for its online customers.
Also, most of the retailers’ sourcing teams are now pushing us for shorter lead time delivery to minimise buying risks and keep stock/inventory low.
These are some of the changes that I have witnessed lately in terms of brands’ sourcing approach.
Going forward, what do you see as major challenges and opportunities from the industry’s perspective?
MA Jabbar: The economic recession is, undoubtedly, a big challenge and of immense pressure for both retailers and manufacturers in the coming days. The United Kingdom, officially, is in recession for the first time in 11 years. The UK economy has suffered its biggest slump on record between April and June, as coronavirus-induced lockdown measures pushed the country officially into recession.
Across the EU and North America, the markets have slowed down as many have lost their jobs or had impact on their income. Bangladesh, as a sourcing market, has been mostly supplying low-mid price products. Due to work from home, virtual meetings, webinars and online conferences, the demand for casualwear has considerably gone up, resulting in a blessing for the Bangladeshi exporters.
When the pandemic began to show its impact on the industry, there were massive order cancellations which were later reportedly reinstated. What is the overall scenario in this direction?
MA Jabbar: Honestly speaking, nobody was prepared for the business impact on account of the pandemic and as such it was chaotic for both the buyers and suppliers. Everyone was frantically trying to save financial losses. Initially, it resulted in huge arguments/difference of opinions, as most retailers asked for vast cancellations and held/pushed back the goods’ shipment.
However, finally, after a series of discussions, they stepped forward and almost took all the goods without any cancellations, which is a big help/support in business for us to sustain in a critical period like this.
What is the status of the current order bookings?
MA Jabbar: On account of the pandemic, in April-May, we thought business will decline in terms of volume, but unexpectedly, it increased. In fact, it looked even better than the normal times.
We were overbooked from the beginning of June till August 2020. The reason behind this, we assume, is the reduction of dependency on China and long-term lockdown in India. The less production capacity in other countries in comparison to Bangladesh has also benefitted us.
So, has there been a business shift from China as many claim?
MA Jabbar: Yes, it is true and it reflected in the excess orders we received from June to August. However, we still need to wait and watch how the market behaves in the next 6 months.
Recently, China has given duty-free access to 97 per cent of Bangladeshi products. How would this impact Bangladesh’s RMG sector and its exports?
MA Jabbar: China is a non-traditional market for Bangladesh, and RMG exports have been on the rise in China for the last 5 years. We feel China’s move to grant duty-free access to 97 per cent of Bangladeshi products will have a positive impact on RMG exports and will enable Bangladeshi exporters to establish their footprints in the growing Chinese market having a population, which is much bigger than that of Europe.
The RMG market will further grow, as China is also shifting from RMG manufacturing to hi-tech consumer and industrial products.
Personal Protective Equipment (PPE) is emerging as a strong product category. Despite the huge demand for PPE globally, Bangladesh seems to have some inherent challenges (availability of fabric, technical know-how, certification issues, etc.) to make the best of it. Your views on it?
MA Jabbar: Yes, PPE and face masks have emerged as some prospective product categories for the industry. Already more than a dozen factories have started manufacturing and exporting PPE and face masks to Europe and the USA. This will grow further, as some of the sourcing countries do foresee risks of sourcing from China due to the ongoing trade war with the USA.
In my opinion, technical know-how and certification are not big challenges. However, the main issue is in terms of availability of different types of non-woven fabrics for which Bangladesh is dependent on China and other countries.
How significant has been the fiscal support provided by the Government (for the industry) in such trying times?
MA Jabbar: The Government in Bangladesh responded very timely to support the garment industry and prevent it from collapsing by providing financial support. This did help the manufacturers to survive and bounce back. We are, indeed, very thankful to our Government for their crucial support which is reflected in the sector’s performance during the month of July.
However, investments are on hold for further expansions, as we carefully wait and watch how the business dynamics are changing. We are hopeful of getting further support from our Government once things start settling down. Our trade bodies are also working very closely with the Government for the RMG industry’s sustainability, as it is the backbone of our economy.