“The launch of this very initiative is the first stepping stone to our pledge to the industry to move it from a basic producer to a mature manufacturer and a strategic partner of global apparel brands,” stated BGMEA President Dr. Rubana Huq on NIPOSH even as Sarwar Morshed, a Professor on Industrial and Production Engineering at the AUST and the project leader, said the outcome of the piloting in more than 50 factories was very strong. “Initially, 15 per cent improvement in productivity is possible easily, and it can be elevated up to 30 per cent by the adoption of lean manufacturing and OSH programme,” Sarwar claimed.
Meanwhile, the Bangladesh Bank is forming a Taka 1,000 crore fund to provide cheap loans to export-oriented industries including the RMG sector to upgrade technologies that they currently use.
Thanks to COVID-19, Bangladesh garment industry is going through some very trying times, which has once again brough the focus back on issues like efficiency increase and raising productivity so as to maintain business sustainability.
Given the current circumstance, all the stakeholders — whether NOGs, traders’ bodies or the Government — are working on various aspects to help the industry enhance productivity in garment factories and upgrade technologies to increase efficiencies.
Recently, the Ahsanullah University of Science and Technology (AUST) and the University of Southern Denmark rolled out a project in Bangladesh to train factory workers and mid-level managers as part of efforts to help the garment industry raise productivity.
The project, Network to Integrate Productivity and Occupational Safety and Health Improvement (NIPOSH) financed by the Danish Government will be implemented in collaboration with the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
As per the Senior Deputy Secretary of the BGMEA, Mohammad Monowar Hossain, each participating factory will be charged US $ 200 a year for implementing the project through training workers, mid-level and top managers. However, to be a part of the same, garment factories will have to apply, subsequent to which the BGMEA will select 30 factories.
Once the project comes to an end, the association will run it with the same module, as per Mohammad Monowar Hossain. While Peter Hasle, a Professor on Global Sustainable Production at the University of Southern Denmark, said in the garment industry, there are some challenges that impacted the value chain.
“The COVID-19 has also created challenges,” said Peter, adding, “Increasing productivity by 25 per cent by the next five years in the factories with almost no investment is possible.”
The adoption of NIPOSH will help in the reduction of production cost per piece significantly, and this would make the factories competitive, Peter said, while blaming poor housekeeping and inappropriately designed layout and workplaces for lower productivity and quality problems.
It will not require heavy investment; it will require motivating the workers and engagement of the workers and top management, Peter claimed.
Meanwhile, Winnie Estrup Petersen, Ambassador of Denmark in Bangladesh, said the global pandemic had created additional pressure on the garment sector. “This project will help in creating decent work. Although this is a small project, it will help many people,” she said.
Sales of apparels reportedly dropped around 60 per cent because of the fall in demand for garment items fuelled by income loss caused by the fallouts of the Coronavirus pandemic. Against this backdrop and for the sake of remaining competitive in the global apparel business, the enhancement of productivity has become even more critical by maintaining occupational health and safety (OHS), industry people said.
“We have done excellent in terms of environmental sustainability and labour standards as well. Unfortunately, Bangladesh has always been lagging in the area of productivity and innovation,” the BGMEA President underlined while adding that every year, the cost of production is increasing.
The minimum wage has been revised several times, said Rubana adding but factories have somehow not been able to enhance productivity and this is one of the major impediments for the sustenance of the industry.
“Apart from productivity improvement, the industry also requires to focus on building the capacity of product development as historically, we are just copying the designs provided by brands. As a result, we always have the lower hand while negotiating prices,” Rubana said, adding although the local industry has become big enough to claim the second place in the world in terms of exports, it has not matured enough to move up the supply chain.
“Besides, we are to face the challenges of the fourth industrial revolution. The industry needs to adopt digital sampling method, 3D prototyping, circular economy, and sustainability,” the BGMEA President underlined.
Meanwhile, in a separate development in this regard, aamra Resources Limited (ARL) has signed a Memorandum of Understanding (MoU) with BGMEA regarding collaboration on BGMEA Innovation Lab, which will reportedly be a first-of-its-kind, state-of-the-art, centre of excellence for research and innovation of garments technologies in Bangladesh.
The MoU signing was conducted in BGMEA office at Gulshan, Dhaka, on 14 December 2020, as part of which Lectra and aamra will work as partners to establish a state-of-the-art BGMEA innovation centre which will be a showcase of digitalisation and integration of industry 4.0 in the textiles sector.
“By coming forward for this BGMEA Innovation Lab, aamra has done BGMEA and the entire nation a huge service. To be innovative and adaptive to these changing times is a must, interoperability is a key requirement. Together we hope to set up the best possible centre for excellence and innovation,” reportedly stated Rubana even as the country’s central bank, the Bangladesh Bank is reportedly forming a Taka 1,000 crore fund to provide cheap loans to export-oriented industries to upgrade technologies that they currently use.
The eligible industries are of 32 types, all falling under top-priority and special development sectors. They include readymade garment factories making high-value additions in production, apart from pharmaceuticals, software and IT-enabled services, jute goods and footwear and leather goods.
The fund will run under a refinancing scheme, meaning banks will first give out the loans before being reimbursed by the central bank. The interest rate will range between 5 per cent and 6 per cent and will reportedly help make the export-oriented industries more vibrant in keeping with global trends.
The transformation can be brought about in 11 types of existing industrial production-related operations to replace outdated technologies with the latest ones such that industrial production gains momentum. Replacement of outdated machinery, adoption of technology for renewable energy and upgradation of machinery used in business operations and waste management will get priority.
Interested banks and non-bank financial institutions will have to sign a participation agreement with the central bank and they can then avail the fund at one percentage point less than the bank rate that happens to prevail at that time.
Subsequently, banks will be allowed to charge borrowers a maximum three percentage points higher than the rate at which they avail the fund and the tenures would range from three years to 10 years even as the interest rate for a borrower will depend on the time within which it makes the repayment.
It is 5 per cent for less than five years, 5.5 per cent for between five years and less than eight years, and 6 per cent for eight years to 10 years. Further, clients will also enjoy a maximum of one year’s grace period before they start paying the instalments.
Given, the kind of efforts being put in by the stakeholders, it is just a matter of time before the industry is able to realise its goal of increasing efficiency and productivity, keeping with the need of the changing times.