ABM Shamsuddin, chairman and managing director of Hannan Group, is contesting the upcoming BGMEA election as the panel leader of Forum.
A freedom fighter, Shamsuddin was also the vice-president (Finance) of the BGMEA. He speaks with The Business Standard's Jasim Uddin about his plans on taking the apparel-makers' body to newer heights as a service-oriented organisation.
The second wave of the Covid pandemic is ongoing in the country. What might happen in the coming days?
Our big buyers are still under lockdown in different countries of Europe. I have learned from discussions with buyers that they will not lift the lockdown until a large portion of their population is not vaccinated. So, what might happen in the coming days depends on lifting the lockdown in Europe.
The quantity of orders in the factories is still very low. At present, on average, 50% of the factories are running with 20% to 25% fewer orders. However, the situation is improving slowly.
What other challenges does the RMG sector have besides corona?
The price of cotton is increasing in the international market. The price of yarn is also increasing. Meanwhile, buyers are also ordering at lower rates than before, making it very difficult for us to make profits. And if we can't make profits, how can we pay workers' salaries and bank loans? The owners' association, BGMEA, has nothing to do in this regard.
What should be done to overcome this situation?
The solution will not be easy as we have no alternative to cotton import for yarn production. Almost 100% of cotton is imported.
Cotton prices have risen in the global market. Its suppliers have turned the business into gambling. The owners of domestic spinning mills are also taking the opportunity of this gambling to make extra profits. The cotton suppliers are forcing the spinning mill owners to take advantage of the situation. In this situation, the condition of RMG business is worsening.
We cannot say anything to the government in this regard. We just cannot request the prime minister for workers' salaries by showing her the statistics of gambling. It is a sensitive situation. I have the need, but I don't have the language to express the need.
But I think the situation can be brought under control if the government takes strict measures.
Do you have any suggestion for the government?
Spinning mill owners are saying that they cannot offer a stable price for yarn as the price of cotton is increasing every day.
But the mills are not buying cotton every day. If one buys five thousand tonnes of cotton at a time, even if the price goes up later, the price of his yarn is not supposed to increase. Strict government surveillance is needed in this regard to keep the price of yarn reasonable. And if the government does not take the initiative, it is not possible for any particular organisation to resolve the crisis.
How would you deal with this challenge if elected?
There are constant challenges in the garment industry. It requires the combined efforts of all of us to overcome these challenges. We need to work together to solve the problems of the whole sector.
The demand for man made apparel is increasing in the global market and we still rely on cotton. How can it be reduced?
At present we have more potential in recycled products than man made. It is also a sustainable product. This could be a great opportunity for Bangladesh. The government can make it mandatory for every spinning mill to take steps to recycle 25 per cent of its capacity. For this the government can give the mill the benefit of tax holiday for a certain period of time.
You are running for president of BGMEA. What are your plans to move the organisation forward?
BGMEA is a service providing organisation. So those in charge will have to rethink how to make this organisation more service-oriented.
When I was the vice-president in 2007, I had numerous meetings with UD Automation. It took 14 years to do that. But a quarter is still active to thwart this automation, because nothing unfair can be done due to this automation. If elected, I will definitely keep the automation in place.
There are quite a few young people on your panel.
We are comparing the young people of our panel to supersonic Boeing 787 aircraft. I think this group is extraordinary and will work well.
What are your plans for market diversification?
We will focus on new markets if elected. Russia will be a much bigger market for us. So, we have to reach the Russian market. In Russia, it is winter all the time. As a result, there is an opportunity to sell our products there throughout the year. The cooperation of the government is needed here. I will work with maximum strength to capture the Russian market.