The McKinsey & Company has been monitoring the textile and clothing trade around the world, while particularly featuring the progress and prospects of Bangladesh's apparel industry over the past decade.
We sincerely appreciate McKinsey's engagement, which is one of the few research and fact based initiatives to highlight our apparel industry and its future potential.
In a recent report titled "What's next for Bangladesh's Garment Industry, after a decade of growth?" McKinsey & Company portrayed the unprecedented shifts that
Bangladesh's RMG industry has experienced over the last decade in terms of sustainability, workers empowerment, wellbeing, and areas of excellence in business.
However, we have found a few areas to supplement and complement the study.
We reached a high standard
The report highlights the transformation of the apparel industry over the past 10 years as it mentions "Today, Bangladesh's RMG sector is a frontrunner in transparency regarding factory safety and value-chain responsibility, thanks to initiatives launched in the aftermath of the disasters..."
The paradigm shift in the area of workplace safety and ethical manufacturing in Bangladesh are acclaimed globally. As a recognition of the high standard reached by Bangladesh's factories, the country ranked 2nd in Ethical Manufacturing index by QIMA and Just-Style.
With a score of 7.7, Bangladesh is only behind Taiwan in the ranking, which scored 8. Vietnam came in third, followed by Thailand, Pakistan, Turkey, China, India and Brazil. So, the high ethical manufacturing standard of Bangladesh's factories is well recognised by the brands and consumers around the world today.
Over the last decade, we amended the labor law twice and ensured the strict implementation of labor rules. With collaboration from ILO, we have been constantly working on building the capacity of our workers and the industry, particularly in the area of social dialogue and industrial relations.
Our government has established a central welfare fund for the workers, where more than 10 million dollars are being contributed annually from the RMG industry. Unionisation has also been made easier and less complicated.
Participation committee has been made mandatory in the factories, which is a stepping stone for improving the collective bargain capacity of the workers.
Furthermore, the revolution in green industrialisation is phenomenal. We now have 138 LEED (Leadership in Energy and Environmental Design) certified factories of which 35 are in the platinum category.
Thirty-nine of the top 100 LEED projects under the industrial category belong to Bangladesh. Moreover, 500 more factories are in the pipeline for certification. Apart from this, the sector's participation in initiatives regarding climate change and circularity is noteworthy too.
The BGMEA is working relentlessly to align the industry with SDGs [Sustainable Development Goals] and we are working in collaboration with the UNDP (United Nations Development Programme) and GRI (Global Reporting Initiative) to report sustainability performance of garment factories.
We have also joined the UNFCCC (United Nations Framework Convention on Climate Change), the German Green Button initiative, and a circular fashion project with GFA, which testifies the industry's strategic vision and committed efforts toward environmental excellence.
SMEs have a different dynamic
The point made in the report about SMEs, which are typically the most challenged subset of the industry, has a different dynamic.
While a good number of SMEs were closed down in the past eight years as the industry strived to be more compliant and safer, SMEs are absolutely crucial for employees, encouraging new entrepreneurs and ideal for customised smaller orders, especially for the emerging virtual marketplace.
Therefore, we are not ignoring the importance of the SMEs, rather prioritising them to add to the flexibility of the industry. Besides, we need factories which can adopt with the modular production model and smaller factories to pursue opportunities in the online market.
It requires capacity building, training and renovations. The BGMEA is going to launch a centre of innovation to facilitate knowledge in the industry, particularly in the area of virtual design and sampling, efficiency enhancement, and innovation.
Next decade will mark a major uplift
As far as the growth comparison with Vietnam is concerned, it should be mentioned that Bangladesh is unique in terms of its demography, and RMG is the major industrial sector of the country.
Given the investments we made in responsible manufacturing and the transformation – which helped Bangladesh achieve the business excellence as mentioned in the report – we believe the next decade will mark a major uplift in modernisation, automation, innovation, diversification, flexibility and efficiency.
Market diversification is one of the successful areas for us as our market share to non-traditional countries increased from 6.87% in Fiscal Year 2008-09 with the export value $848.87 million to 17.10% with $4,780.20 million in FY2019-20.
In fact this is one of the priorities of the present BGMEA Board. The government has recently announced a technology upgradation fund for the industry, which will help us significantly in this regard.
Fibre diversification will be a key to our industry's growth sustenance, and we are continuously promoting investments in the area of non-cotton, both in garment and in backward linkage industry.
This is a green field for FDI (foreign direct investments) and JV (joint ventures), as well as for local investors; and we believe special policy measures will be taken by our government to promote investments in these product categories.
In regards to workers' empowerment and the gender gap, we would like to add that the gender gap is absolutely minimal in Bangladesh's garment industry in a global comparison.
All recent survey reports and studies have revealed that the pay gap within the grades is minimal, though the women are absent in upper grades mostly. We totally agree and admit the fact that over the last [couple of] years, the participation of women in supervisory roles has not been satisfactory for many reasons.
The BGMEA is working to improve the scenario by creating the scope of Workers Education.
McKinsey very rightly forecasted the growth of the RMG industry in 2011. And, we have been able to achieve the milestone of predicted growth even through the unprecedented and challenging time posed by the Rana Plaza incident and the Covid-19 pandemic.
We believe that the journey of collaboration and growing together will continue in the coming years as far as the strengths and competitive advantage of Bangladesh is concerned and our vision is to make this industry more competitive, efficient, innovative, and diversified.
We have the manpower and skilled human resources, and carried out capacity building initiatives done in the past, we have tremendous infrastructure development activities going on in Bangladesh.
So, given all these facts we can certainly hope to become the most preferred apparel sourcing destination, which will not only benefit our customers, but will also immensely benefit our country's pursuit of economic emancipation.