Industry Opinion Episode 13 – Why is Our Product & Market Diversification Limited?

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Denim Focus presents Industry Opinion Powered by US Cotton Trust Protocol Episode 13 was on the topic “Why is our Product and Market Diversification limited?” Team Denim Focus received feedback from industry stakeholders.

Md. Shahidullah Azim, Vice president, BGMEA

Apart from USA & Europe, We should create new RMG market opportunities. As Asia has the fastest-growing population, we should also focus on Asia. Also, we are trying to diversify products such as man-made fiber &, etc. A lot of factories have plans for extensions & product diversification. But currently, we are facing an energy crisis moment. The production efficiency of most factories has been reduced by 30-40%. Currently, if the factory’s extensions & product diversification they may not get proper energy supply & other facilities. So, our government should take the necessary steps to solve the situation. Day by day the energy resources will be limited, so we should think of alternate options. If the factories do not get a proper energy supply, many factories will be shut down. And it will create unemployment & other issues which no one expects. If the government, factory owners & other organizations come forward & work together, we can overcome this situation.

Fateh Ul Islam, Managing Director, Green Smart Shirts Ltd. 

Bangladesh was a country only for primary products, but currently, the country is more in that situation. A lot of product diversification is coming up, new products are coming into Bangladesh. Talking about my company, my goal was only to manufacture shirts, but Covid-19 taught me to do something else. Currently, almost 50% of my company’s capacity is engaged in manufacturing ladies’ garments, and we are making very high-fashioned ladies’ garments that were never made in Bangladesh before. We are making blouses, ladies’ tops, dresses, ladies’ garments for brands like Tommy Hilfiger, Calvin Klein, etc. & we are doing well. Also, Bangladesh was not good at manufacturing outer wears, jackets, etc. But now many factories are making highly fashioned, critical & value added outerwear products. This type of many product orders is moving to Bangladesh now before these products used to be made in China or India. So, we can say that now many new products are coming into Bangladesh. Specially, the entrepreneurs are trying their best, and we are not limited to essential products. We have started to go into Good, Better & Best and this is how innovation can take place.

Subael Sarwar, Managing Director, Penta Group

One of the reasons behind the limited product diversification in Bangladesh is the lack of skilled manpower. If we hire skilled manpower from other countries like India, China, etc., or focus on the skill development of our manpower, we can overcome the situation. And when we can go for product diversification, we can also go for market diversification. Talking about market diversification, the marketing policy of the country is feeble. We have multiple new market opportunities such as Japan, Brazil, Argentina, etc. If we can strengthen our marketing policy and get proper support from our government, we can achieve market diversification.

Fahim Iqbal, Director, Patriot Group

Patriot Group is a 25 years old woven-based manufacturing company. Until the last five years, we only used to manufacture shirts for different buyers.  But to stay up to date with our competitors and achieve our export target, we must divert our products. Currently, we are doing pants, shirts, jackets, swimwear, outwear, etc., and we are also moving towards high-value-added functional products such as Police uniforms for Germany. This is how we have achieved product diversification & market diversification in our company. If any of the buyers cancel their work order, we have backup buyers, and our floor is full. So, I believe product diversification & market diversification play a vital role in the economy.

Shafayat Nur, Director, Patriot Group

I believe that in today’s world, diversification is an important thing both in the case of product & market. Regarding market diversification, the Bangladesh RMG market is traditionally USA & Europe-based. Patriot Group was also the same. But recently we have realized that this is not a good business policy. So, we are moving for new market opportunities such as japan, Korea, India, Brazil, etc. We first need to be open-minded to approach new market opportunities. While working with USA & European customers, their language is English, and they have some particular working systems. On the other hand, when we work with new markets, their language, culture, and the working system will be different. Here the factories need to be flexible. I believe Australia, Asia, and South America –are potential RMG markets. And so, Patriot Group is currently trying to maintain a 20-25% footprint in these markets. USA & Europe will be our traditional markets, but going for market diversification demands time.

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