Textile Industry is the main foreign remittance earning sector for Bangladesh. This industry suffered a lot during the COVID -19 pandemic. Now the industry is trying to recover the gaps. According to many sources it is evident that most of the export-oriented garments factories are packed with business orders up to April 2022. Team Textile Focus talked with different factory owners regarding how to capitalize on this situation and what is the way forward to ensure maximum profit out of it. Mostafa Quamrus Sobhan, Chairman, Dragon sweater and spinning shared his views-
In Fact, it is true that a huge volume of orders is coming into Bangladesh. This is due to the fact that markets are opening up worldwide post lockdown and with easing of travel restrictions by various governments are boosting up consumer confidence to purchase goods and services. Confidence is also boosted due to the fact that almost half the world’s population is now vaccinated against covid 19 and it seems like that this disease is on track to become an endemic and may soon be regarded as a seasonal flu of a different kind.
However the market dynamics has changed and continues to change as more and more people switch to online portals for shopping due to its convenience , easy navigation options and real time stock data and selections which are available with just a few clicks or by swiping the screen. Globally we are seeing the rise of new name on the online scenarios who are becoming global or local online giants with extremely fast delivery mechanisms.
As orders move into Bangladesh, we need to be extremely careful about two factors-
1. Shortage of raw materials production in China due to energy crisis, global shortages of containers and vessels, high local Chinese internal demand will pose threats to the supply chain process and will result in high prices of yarns and fabrics, shortages and delivery disruptions.
2. The garments and sweater manufacturers must be careful with their costings and must keep room for unseen price movements and potential supply disruptions. They should cost in such a way so that at least 40% gross profit margins are maintained in each order. Failing to keep such may result in serious losses and will certainly lead to commercial unviability.
During my trips abroad I have noticed that Bangladeshi products are sold at the lowest price spectrums whereas similar products with same fabrics/yarns imported from Vietnam, Cambodia or elsewhere are being sold at a higher price spectrum.
This is a result of our internal rat race where we have expanded our capacities beyond reasonable measures. And seeing the influx supply opportunities as most buyers took full advantage of this situation by reducing the prices year after year to an undesirable level.
Therefore now the time is right to mend these mistakes and we must bargain with our existing buyers or hunt for new buyers who will pay reasonable prices which will sustain our long-term production viability as a company and help us to support the country with valuable export earnings.
