Sparrow Group is one of the pioneers in Garments Manufacturing in Bangladesh. Sparrow was founded in 1984 by Professor Dr. Mahzharul Islam. Professor Dr. Islam was an eminent educationist and organizer of the Liberation war of Bangladesh. After the death of Professor Dr. Islam in 2005, Shovon Islam took over as Managing Director and Owner of Sparrow. Shovon Islam, son of Professor Islam, has completed is MBA from Stanford and worked as software engineer at Hewlett Packard for 24 years. The Group now has multiple manufacturing units with over 11,000 people and the revenue reaching 150+ Million US dollar (1500 Core Bangladesh Taka). Sparrow currently produces the highest quality garments for the World’s largest retailers such as GAP, Banana Republic, Ann Taylor, Talbots, Loft, American Eagle, KOHLs, Old Navy, Bass Pro, Mango and many others. Shovon Islam, Managing Director Sparrow Group recently talked with Team Denim Focus. He elaborately explained the industry situation after this corona crisis and shared the intellectual concept of expanding our RMG sector.
Denim Focus: How do you evaluate Pre Pandemic and Post Pandemic Industry situation?
Shovon Islam: Overall, the industry is not back like the pre-covid situation, however, with the grace of almighty, we are not washed up as we predicted. We were expecting to run the production line with just using 40-60% capacity as the way buyers were canceling the orders. Luckily the situation has been developed and currently it’s far better. If we talk about the cause behind this better situation, Firstly, we have been able to save the health and welfare of our employees. We didn’t get impacted as much as we thought. Garments is a huge industry. There are so many people working here. So we thought to have a massive infection. Secondly, the buyers were so worried about the way sales dropped and stores were getting shut down. However, a good substitution came with online selling. So, the order that was completely crushed again came back. And we got our order back in between June and July. The area where we supply product didn’t face the sale drop. As their Govt. provide the industry with tremendous subsidies and it was a huge amount of money. In that area, people had money in their hands, so they ordered cloth sitting in the home. Due to this new growth of online shopping, we didn’t face the predicted hit back like order push back, order cancellation, pack and hold situation. Thirdly, Our Govt. also gave us tremendous policy supports. Hon’ble Prime Minister provided us 4 months’ workers’ salary. That was critical support for us. We would have died if we didn’t have such support. On top of that, Our Central bank’s diversified facilities on loan support helped us to survive. So as an individual factory owner I can say, without this support our cash flow could run not more than 3-4 months. However, we still need more support. The whole industry needs more and more policy support. These 3 main factors really helped and saved us from the disaster.
Denim Focus: How do you see the 2nd wave of COVID 19?
Shovon Islam: The 2nd wave of COVID 19 have impacted the order flow from USA and Europe again. The Manufacturing side of BD RMG was not ready for this neither the Buyers nor retailers. This new wave have cast a huge shadow over Bangladesh RMG sector. We are again facing uncertainty from April onwards as the orders were drastically reduced.
The retail sell in USA is down almost 28% including the online sell for Oct-Dec quarter. Only Tesco in UK and Walmart is exception but they don’t sell Garments only.
Denim Focus: In terms of the functional Fashion Market, how much strength Bangladesh have, how can we explore and capture the market?
Shovon Islam: There are some certain couple of aspects. Number One is, I don’t know how long we have to live with this covid situation. As long as we will stay with this uncertain Covid situation, this PPE, safety care market will flourish. We will have such a functional product market. Bangladesh has already enlisted in this market pretty heavily. There is more opportunity for new investment. Another area of Functional product is product diversification. There is a huge geopolitical movement in the world due to covid-19. The production market has been moved away from China. The world has realized that it won’t be a wise idea to solely depend on China. That’s why the production order is moving from china. Bangladesh is getting benefitted from this industry movement. Bangladesh is getting orders that moved out of China. We must go immense production of this china move Out product category. We need to go for synthetic production. We are mostly a cotton-based woven- knitted producer. We can go for polyester, georgette, chiffon, satin production which have a huge market for a fashion product. Just from the basic cotton item, we can’t take the opportunity of the huge polyester and synthetic market. So we need to expand this production facility. A certain preparation period is needed. We also need Govt. policy support. Because working in this synthetic category is not easy. Bangladesh Customs, NBR are mostly creating a barrier. Bangladesh can hugely go for formal wear, women wear. That is the category come from china has a vast opportunity.
Denim Focus: Is Bangladesh moving forward to Value Addition?
Shovon Islam: Bangladesh is already in the value addition phase. We are globally recognized as one of the top garments producer countries. We are no longer a cheap product producer country. People in the world understood that Bangladesh can now produce anything, any product of any category. Bangladesh is producing value-added fashion products and basic items at the same time. Value addition is not always a big change. It is sometimes to handle very expensive and complicated fabric. In our country we do a lot of wastes during our production time due to carelessness, mistakes, wash rejection, pulling thread. Handling the fabric carefully is the main value addition. Product diversification, product embellishments are in the second phase.
Denim Focus: As a women category product producer, how do you expect this special market?
Shovon Islam: As you know that I am the 23% supplier of M&S’s womenswear including ladies blouses and shirts. Being in that position really gives me an immense opportunity to explore the market. Mostly we are competing with Vietnam and also trying to compete with China as well. I am still trying to snatch the order from Vietnam. The only thing we need now is a huge investment in good types of machinery. Because, womenswear is mostly made of rayon, chiffon, polyblend, georgette which need special care with fine sewing, flawless cutting, and sewing. Overall the machine we need must be very good. So that we must invest in smooth handling and what we also need is more skilled manpower. I have already started to invest in it. Due to lack of capital, I couldn’t invest more in the machine however I have focused on the skill development of our workers. During Pandemic, when buyers hold the order, we thought not to lay off workers rather emphasizing more on workers training. That’s why we are getting more orders now.
Denim Focus: In line with the growth of online marketing, what should be the marketing strategy of our Bangladeshi manufacturers?
Shovon Islam: We already have changed our marketing strategy into two parts. One is the development of the style of the garment. In BD, we use a huge amount of time just for making Techpack and rest of the time is used for the making of garments. As we are competing with China, we must show our design. At present, most of the time design is made with 3D technology. By using 3D technology, we can make the pattern, fit in dummy, and make the garments. After seeing this 3D dummy fitting, the buyer approves cutting. Technology has changed tremendously. Last 2-3 years we were playing with this technology however we were not sure about it. Due to covid situation, this technology-based sample developing, parts making, sample fitting, and presentation has emerged in the industry. We are doing our marketing online. We are sending this software-based design and getting the order from buyers. The second part of this marketing strategy is the use of HD technology. Our conference room, inspection room is covered with HD camera. So people can come and look at the product. Buyers are doing online inspection sitting from their country. Another thing is to mention that, due to covid situation, buyers couldn’t run liaison office. They directly empowered the factory. They told the factory to take responsibility. This term made us even more careful about product quality. This factory empowerment strategy is helping both buyers and our country.
Denim Focus: What is your perception about creating an online platform which initiative has been taken by BGMEA?
Shovon Islam: I absolutely agree with the concept. We really need an online platform for showcasing our own product. as we are not being able to participate in Los Angeles show, Paris show, New York Show. So we should have an online platform. And BGMEA must take the initiative for creating such a digital platform where we can place our own 3D designed product. After this covid situation, BGMEA’s first role is to unite the whole industry. They have to make sure for giving policy support from govt. BGMEA also should ensure a good training environment. Our current technology is old-fashioned; we have to cope with new technology that’s why we must train our workers for digital skills. BGMEA has to help us create that technologically skilled workforce.
Denim Focus: According to BGMEA we have the highest number of green factories, we are moving towards sustainability, however buyers are not offering prices according to this green investment. How do you explain this scenario?
Shovon Islam: Manufacturing garments sustainably is a good plan. But maybe we have stepped ahead of the market curve. Market demands for the Environment Impact Managing Score on the daily basis. If this score is lowered, then the buyer will be ensured that they are buying an environmentally friendly product. Due to covid, we are facing price pressure in the market. In many cases, we are not getting the order for such a sustainable product. A product is made with sustainability in a green factory where we use less energy, less water but we are not getting the right price. There is 2 cause. One is the market is not 100% ready for it. There is no high demand for such product, however, demand is getting created slowly but buyers are not willing to pay extra for it.
Another cause is we are not offering different categories of products. Just because of the green concept, buyers will not buy the usual product at an extra price. We must offer the customer a different and attractive shape or design with new fashion trends. I think the market will come and we will get the price. There is a lot more investment is needed to make a fashionable product. If this happens then the customer will buy more sustainable products and we will have a bigger market.