Focus on tech, RMG value addition, suggests IAF president

| Updated: November 23, 2022 17:17:34

Cem Altan Cem Altan

Bangladesh needs to focus on and invest in technology and backward linkage industry and produce value-added garment items to retain a larger share of export proceeds here in the country and get better prices from buyers, International Apparel Federation (IAF) President Cem Altan said.

Despite current slowdown in global apparel demand, he said, the upcoming holidays in western countries and Christmas would help push up the demand, ending the inventory of buyers and giving a boost to the apparel industries.

Buyers placed too much apparel work orders during and after the recent pandemic-induced lockdown and as a result they had a huge stock or inventory, slowing down the industry, he said.

"But I am sure that when the situation goes back to normal and stock starts slowly going down because of the upcoming holidays and Christmas, I think they (buyers) will come back and ask for quick deliveries and this will boom the industry again," Mr Altan said in an interview with The FE last week.

The IAF president was visiting Bangladesh on the occasion of the ‘Made in Bangladesh Week 2022’. The 37th IAF World Fashion Convention also took place during the mega event.

The IAF is the world's leading federation for apparel manufacturers, (SME) brands, their associations, and the supporting industry having membership from more than 40 countries.

Mr Altan said the Covid pandemic has caused the industry to slow down in the first half of 2022 and with the resuming of activities, the garment industries also picked up and increased their capacity and production.

"This really helped Bangladesh garment industry as well," he noted, citing data.

Referring to the Russia-Ukraine war, he said, "Unfortunately, it is still going on and we don't know when it would finish. It has caused a lot of problems, including the rise in costs of energy and raw materials that resulted in high inflation.

Families in the West, the US and others countries have to spend more money on basic needs, including food, house rent and education, putting apparel to their least priority list, he explained.

He, however, said that in garment industry there is no inflation as all want to pay the same prices while some of them want to reduce the prices 'which is no good'.

Mr Altan suggested that apparel entrepreneurs should say 'no' to such buyers, saying once they (exporters) start accepting lower rate, these buyers would ask for more reduction.

"Our industry needs profit so we can share the profits with all our workers," the IAF chief said.

"In Bangladesh we need to go for higher quality, value added garments and design backup. And by this way, customers will increase their prices."

Regarding sustainability, he said that from the beginning of 2023, the European Union will start asking for 'product passport' with the implementation of its new legislation as part of its move to reduce carbon emission.

The EU wants to reduce carbon emission by 55 per cent by 2030 and zero emission by 2050.

The product passport that would ensure traceability at every stage of production will also show the carbon emission level of products, he said, explaining that this might increase the costs of garment manufacturing.

The IAF president stressed the need for working together, saying the global textile and apparel industry has a bad reputation in this regard.

He, however, said, "Bangladesh is doing well in making green investment. Eight out of 10 USGBC LEED-certified factories are here in Bangladesh."

A total of 177 local garment factories, highest in the world, has so far received certificates from the US Green Building Council (USGBC) for Leadership in Energy and Environmental Design (LEED).

Bangladesh also needs to invest more in backward linkage industry to produce yarn, fabric, dying and other segments to retain its export receipts inside the country, he said.

"If $20 billion, out of $42 billion export earnings, goes out of the country, it does not mean you export $42 billion and it is not good," Mr Altan added.

He also recommended investing in recycling industry -- from spinning recycled to making finished recycled garments.

Responding to a question, he said the IAF is working with Sustainable Terms and Trade Initiative (STTI) for common audit standards, citing the business practices by global apparel buyers during the pandemic that included cancellation of orders and non-payment.

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