COVER STORY
INDUSTRY SPEAKS
Upul Pathirana, General Director-Head of Operations, Epic Designers Vietnam Ltd.
AOB: Can Vietnam surpass Bangladesh in apparel exports in near future?
Upul: It would be difficult for Vietnam to compete with Bangladesh( in near future) for exports to USA and that is mainly due to the price standpoint perspective. However, due to CPTPP, customers will enjoy the benefit of dutyfree importing to the countries that are part of this trade deal, which would result in increase
Md. Fazlul Hoque, Managing Director, Plummy Fashions Limited
AOB: Can Vietnam surpass Bangladesh in apparel exports in near future?
Fazlul: Although Vietnam is running close to Bangladesh, I still think Bangladesh can maintain the lead over Vietnam for the next few years at least.
AOB: Probability of Bangladesh to maintain lead …
Fazlul: Bangladesh would be able to maintain the lead because our apparel industry is also getting stronger every day with product( within apparel) of exports from Vietnam and this could become a threat to Bangladesh.
AOB: Probability of Bangladesh to maintain lead …
Upul: Production cost increases in Vietnam significantly and is far above that of Bangladesh; based on this aspect, I feel Bangladesh would still maintain the lead compared to Vietnam.
AOB: Catalysts for growth
Upul: Process improvement and automation could be the main drivers of growth for Bangladesh, which would help keep the manufacturing cost under control.
AOB: Bangladesh’ s strengths vis-à-vis Vietnam
Upul: Availability of workers is one of the positive factors for Bangladesh.
AOB: Concern areas that Bangladesh needs to address?
Upul: Process improvement and skill upgrading are two major areas that Bangladesh needs to improve upon.
and market diversification( like South America, China, etc).
On the other hand, we have already about 70 Green( LEED Certified) factories among which 14 factories earned LEED Platinum Certification with world class set-up. Another 200 more factories are in the pipeline to be developed with similar structures. This is and will enhance the image of the local apparel industry and will help a lot to attract the customers in order to boost our export significantly.
AOB: Catalysts for growth
Fazlul: Apart from the above-mentioned factors, continuous improvement of quality, delivery, productivity, infrastructure improvement, and lower rate of bank interest, etc., will be the major catalysts for Bangladesh.
AOB: Concern areas that Bangladesh need to address?
Fazlul: Although we have made a good progress in the field of productivity improvement, I believe that there is still a lot to improve in the coming days. Besides improvement in negotiation skills is another very important area which we need to address on a very serious note to emerge as the winner. to the labour-intensive nature of garment manufacturing, the industry is typically concentrated in locations with relatively low labour costs and Quang was bang on in identifying the‘ low-cost’ factor that has clinched the deal in Bangladesh’ s favour so far in the global arena. Boasting of abundant manpower, Bangladesh is now poised for a wage hike though with labour unions demanding base wage of Taka 16,000( US $ 190 approximately) as compared to what was US $ 65 in 2013. In comparison, labour wage in Vietnam increased from US $ 116-166( in 2016) to current US $ 170-220, which tips the balance in Bangladesh’ s favour to some extent.
Allied Factors
Apart from manpower and wage, there are many other factors – raw materials, infrastructure, workers’ skill set, manufacturing efficiency, supply chain connections, etc. – which are equally important in determining a country’ s lure as the preferred sourcing destination. Hence, even if Bangladesh and Vietnam stand neck-to-neck in many aspects, they have their inherent pros and cons that might go a long way in deciding who would have the last laugh. According to many, Vietnam still performs markedly better than Bangladesh and India when it comes to ease of doing business. While Vietnam’ s labour costs are not as low as that of Bangladesh, stable economic policies and focus on international trade makes it more of a peer to China.
Predominantly an island nation that shares maritime borders with Indonesia, Malaysia, Philippines, and Thailand, Vietnam has three major sea ports, Saigon Port( South), Hai Phong Port( North), and Da Nang Port( Central), with well-developed infrastructure while Bangladesh’ s main port is the Chittagong Port, which handles the significant bulk of the exports. However, Bangladesh is also now developing a deep-seaport at Payra in the Patuakhali district, which is expected to significantly take the load off Chittagong and give a further boost to apparel exports. To be further considered in this context is the US $ 1.7 billion
18 Apparel Online Bangladesh | MAY 2018 | www. apparelresources. com