Owing to its objective of improving the industry’s image following the infamous Rana Plaza disaster while also serving as an inspiration for others to follow suit, Plummy Fashions Limited (PFL) is considered a forerunner in the realm of green manufacturing by many in Bangladesh.
The LEED-certified platinum knitwear manufacturing unit of Plummy Fashions is touted to be the highest-ranked knitwear manufacturing unit in the world, and the brain behind PFL is Md. Fazlul Hoque (Managing Director), a renowned name in the Bangladesh’s apparel manufacturing and export sector.
Recently, Apparel Resources caught up with the dynamic MD of PFL, who is also the ex-President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), for an exhaustive interaction to discuss a host of issues, including the changing face of manufacturing on account of the pandemic, current dynamics of the global apparel market, areas of growth opportunities in this changed world order, how PFL is leveraging its ‘greenest of the green’ tag to successfully negotiate the challenges, and not to mention, Bangladesh’s repute and standing in these changing times. Excerpts…
How has been the business since you resumed operations?
Fazlul Hoque: So far, it’s been quite satisfactory. In true sense, it is much better than what we apprehended when we opened our factories in May. Response from buyers across the world so far has been very good considering the existing global situation. Buyers from the EU look a bit more active than USA, but I hope the situation in USA will further improve in a very short span of time.
How Plummy Fashions, as a company, is adapting to the changing milieu. Any major challenge in this direction that you would like to talk about?
Fazlul Hoque: The biggest and the most important challenge was to make sure the health and safety of all our workers and staff members. It was really a tough task because had we failed to ensure a COVID-free workplace, it would not only kill our own business but also create a massive issue for the whole industry to deal with, as we had to open our factories amidst huge criticism from different quarters.
There was also a challenge to meet buyers’ demands for shorter lead time and declining price points. Having said that, I would like to mention that as of now, we are very happy that we could maintain a very safe workplace environment and even our team was able to very quickly cope with the changes to ensure even faster delivery despite the fact that initially when we opened factories, many supporting supplier units like those into accessories, print, embroidery, etc. had not yet started operations, which posed new challenges.
As far as price is concerned, it is one issue that we have been facing since the very first day we started this business and it will continue until our business lasts. But we feel happy that we could convince our buyers to offer us at least some workable price.
Being a green factory, has it helped Plummy Fashions to negotiate the challenges better?
Fazlul Hoque: Obviously, as the greenest knitwear factory in the world, we got the huge advantage by default to make sure a COVID-free workplace for everyone – workers, executives and the management. Besides, it was also helpful to convince our running buyers to keep their price as it was. In last few months, we got a very good response from some new buyers, which in true sense, is even a bit better than the pre-COVID period.
Good to know that there were a lot of apprehensions on how brands would react in this changed atmosphere. However, any changes that you may have noticed in terms of buyers’ approach lately, and how are you adapting to it?
Fazlul Hoque: The biggest change I observed in the last couple of months is that the buyers/retailers have become much more cautious in placing orders as the coronavirus situation is not fully under control yet and there are good chances of having a ‘second wave of COVID-19’. So, buyers are placing relatively smaller quantities per style, offering lesser price and looking for quicker delivery.
All these changes in buying patterns were not unexpected by us and as such it wasn’t much complicated to adjust either.
But one change in many buyers’ practice that is causing problem to the suppliers including us is the payment term, as we are being offered extra delayed payment for 60 to 120 days, which is in sharp contrast to the regular norm. As a result of this, exporters are really struggling to cope up with this new demand from the buyers.
Any paradigm shift that you foresee in this regard, going forward?
Fazlul Hoque: In addition to the issues that I have already talked about, few other strategical changes cannot be ruled out from the buyers’ end. They may be more careful in selecting the sourcing country and even the supplier factories in terms of health safety under the ‘new normal’ scenario.
Also, we could already see some big buyers planning to shut down more stores and concentrate on selling through online platforms, which might impact their sourcing strategy as well.
What is latest update on the order front?
Fazlul Hoque: Considering the overall global socio-economic scenario, order bookings for the whole industry is quite satisfactory as of today, but it is still far from the figures we could expect under normal conditions. Orders from Europe are coming in bigger volume compared to USA. But I think in the next 2 months, the US market will also improve a lot, which in turn will result in more orders from there. Overall, I think it will take another 6 months or so to see the order flow becoming normal and sustainable.
Keeping in consideration the situation, what could be the major challenges and areas of opportunity from the industry’s perspective?
Fazlul Hoque: The COVID-19 pandemic is still the biggest challenge for the industry as uncertainty continues to persist across the world. Until an effective and widely accepted vaccine is available, this uncertainty shall also prevail in the society at large, I believe. So, until then, the industry will have to bear this burden of uncertainty.
Besides arranging adequate finances to run the factories, repaying loans, etc. could also prove to be major hurdles for many/most factories for at least next one year or so, I feel.
On the opportunity side, exporting of personal health protection items like PPE, face masks emerged as new segment in recent months. Many of us are very optimistic with this new export opportunity in apparel sector, but personally, I don’t think this will bring a big favourable result for us in future.
Has there been any business shift from China to Bangladesh as was expected initially?
Fazlul Hoque: I personally believe orders are shifting from China to Bangladesh and this is predominantly because of the trade war between USA and China and also because buyers want to reduce their dependency on any particular destination on account of the pandemic-like situation. This has helped us, up to some extent, to record a good performance during July-September period. Even in the coming days, this trend will continue resulting in some positive growth for the industry.
Compared to what it was pre-COVID period, what is the current investments scenario in terms of capacity expansion, automation, etc.?
Fazlul Hoque: This is a really big issue. As I mentioned earlier, financing will be a big challenge to many factories in the coming days. The Government/Bangladesh Bank has already taken some steps to support the entrepreneurs, and I think after every quarter, the overall situation should be reviewed by the authorities to determine whether any further support is needed, and if needed, how it can be arranged.