In these challenging times, I want to remind everyone of the importance of nurturing care, brotherhood, and genuine relationships. True unity doesn’t come from speeches, discussions, or videos—it comes from the deep, sincere connections we build with each other. May Allah make us people of true unity, removing artificiality and hypocrisy from our relationships, and replacing them with the strongest, most genuine ties.
I’ve walked a difficult path myself, especially during the caretaker government from 2006 to 2008, where I faced immense challenges with little support. Now, as we navigate the current turmoil, I urge those who have the means to be kind to those genuinely in need. My experience has shown me that political transitions often bring pressures that can overwhelm even the strongest businesses. The coming months and years may test us further, and I pray that Allah keeps us strong to face these challenges.
As someone who has witnessed the industry’s growth since childhood, experiencing its black and white sides, good times, and bad times, I believe it is imperative to research and implement alternatives to bond and BBLC facilities. The RMG sector is no longer just an industry; it is the lifeline for the livelihood and bread and butter of directly and indirectly 50 million people in this country, with many more relying on it in the future. No other sector can create such employment opportunities.
Therefore, we must think critically and secure not only the industry but also the future employment of our next generation. Today, I would like to share my thoughts on the past, present, and future of bond and BBLC policies. These policies have played a significant role in making this industry the second-largest exporter in the world, the highest employment sector, and the source of 82% of foreign earnings for the country.
Despite enduring immense challenges and pain over the past eight years, my love for the garment industry remains unwavering. From the struggles of 2008-2009 to recent betrayals, I’ve faced it all without bitterness. Even when support was absent, I continued to share good news and uplift others. The current crisis has only deepened my resolve to highlight the contributions of everyone in our community. Seeing your success fills me with pride and motivates me to share my experiences with the new generation.
This is a long discussion, so I have decided to publish it in parts. I am excited to share the first part of this article with you, our RMG textile students, employees, and owners. I also extend my thanks to Textile Today for providing a platform to share my thoughts.
The journey of the Bangladesh garment industry
The journey of the Bangladesh garment industry has been marked by remarkable milestones and significant challenges. Before delving into the role of BBLC and bonded warehouse facilities, it is essential to understand the industry’s early export processes and the transformation it underwent.
The early days: before bond and BBLC facilities
Back in 1978, when there were no facilities like BBLC and bonded warehouses, the first exports were achieved under challenging circumstances. Here are some notable milestones:
- First export by Reaz Garments Ltd (1978)
- Year: July-August 1978
- Quantity: 10,000 pcs
- Items: Men’s Shirts
- Destination: France
- Value: FF 130,000
- Buyer: Hollander France (Country’s First Buyer)
- Significance: Bangladesh RMG’s First Export
- Second export (1979)
- Quantity: 7,820 pcs
- Value: US$ 5,610
- Items: Ladies Blouse
- Destination: USA
- Buyer: Lloyds Mercantile Corp, NY
- Third export by Reaz Garments Ltd (1979)
- Quantity: 90,000 pcs
- Value: FF 1,314,000 (BDT 8 million)
- Items: Men’s Shirts
- Destination: France
- Buyer: Branbilla Cogros SA
During these initial exports by Reaz Garments Ltd, the process was cumbersome. Exporters had to submit the LC (Letter of Credit) to Bangladesh Bank, which would then issue an IMP (Import Permit) in favor of the exporter. Following this, fabric and trim LCs were opened with bank financing for a short period. Once the raw materials were shipped, exporters needed to submit shipping documents and obtain permissions from the Ministry of Textiles. At that time, all raw materials, including fabrics and cartons, were imported from Japan. This process was facilitated by supportive bureaucrats, bankers, and officials from the Ministry of Textiles, who recognized the vision of pioneering entrepreneurs.
There are a lot of names, but some notable figures who supported this process include:
- Customs: Soiab Ahamed (before and after bond, past NBR Chairman and caretaker government advisor)
- Customs: Fakir Asraf (after bond)
- Banker: Hayatur Rahaman (Was MD of Janata Bank, DGM in 1978)
- Banker: Shajan Kabir (after 1980, founder of EXIM Bank)
- Ministry of Textiles: Late Idrish Ali
- CCI: Chakkam Babu
These individuals truly saw the vision of entrepreneurs who aimed to export their products and helped turn that dream into reality.
The transformation: introduction of BBLC and bonded warehouse facilities
In the late 1980s, the garment industry in Bangladesh was on the verge of an industrial transformation. The legendary Nurul Quader played a pivotal role in this transformation. By forming a joint venture with Daewoo of Korea, he initiated the first industrial revolution in the RMG sector. A visionary and freedom fighter, Nurul Quader leveraged his bureaucratic influence to innovate and convince the government to implement the policies of BBLC and bonded warehouses. This breakthrough laid the foundation for the industry’s rapid growth and development, ultimately making Bangladesh the world’s second-largest garment manufacturer.
While neighboring countries are increasing their exports by offering various facilities such as free land, 40% subsidies on electricity, and 50% subsidies on wages, we face numerous obstacles. Historically, dishonest traders exploited bond benefits during importation and engaged in BBLC (Back-to-Back Letter of Credit) encasement practices, tarnishing our image with banks and the NBR (National Board of Revenue). Although these practices have significantly decreased, their legacy still impacts government-level policymaking. This has hindered our ability to fully leverage beneficial policies that could otherwise enhance our industry’s growth.
To be continued…
In the following parts, I will delve deeper into the complexities and current challenges of the BBLC and bonded warehouse policies. I will also propose innovative financial management strategies, drawing on insights from successful garments industry owners and leaders, to help sustain and propel the future growth of Bangladesh’s garment industry.
